The Issue The issue is whether the Agency for Health Care Administration properly determined that the application of Covenant Hospice, Inc. meets the statutory and rule criteria for a hospice program in Service Area (SA) 2B.
Findings Of Fact Hospice Care Hospice care is a medically coordinated group of services that is designed for people who have a terminal diagnosis with a life expectancy less than six months. Hospice care provides palliative care as opposed to curative care. The patients' and their families' needs are multi-dimensional and include physical, psychological, emotional, spiritual, and financial needs. Hospice care includes physician directed medical care, nursing services, social work services, bereavement counseling, and other ancillary services such as community education. Hospice care is reimbursed by Medicare, Medicaid, Champus/Tri-Care (for military populations), and some commercial insurance programs. For example, under the Medicare reimbursement system, hospices are reimbursed based on an identifiable flat per diem rate for a bundled package of services. Medicare does not reimburse hospices for bereavement services. The Medicare benefit is based on level of care. Routine home care is the basic level of care. Routine home care is provided as long as a hospice can care for a patient in a home-like environment. The second level of care is continuous care, which provides between eight and 24 hours of nursing care per day. The third level of care is inpatient care, which a hospice can provide in a hospital, a skilled nursing unit of a nursing home, or a freestanding hospice inpatient facility operated by a hospice. The fourth and final level of care is respite care. The primary reimbursement agent for hospice care is Medicare, but it is becoming more common for private insurers and health maintenance organizations to provide the benefit. Hospices also provide care to charity patients who have no source of payment and no or insufficient assets or income. Hospice SA 2B Hospice SA 2B comprises eight counties: Franklin, Gadsden, Jefferson, Leon, Liberty, Madison, Taylor, and Wakulla. SA 2B covers 5500 square miles. It has an average of 67 persons per square mile. While Leon County has 345 persons per square mile, Taylor, Franklin, Liberty, Madison and Jefferson Counties all have less than 30 persons per square mile. Liberty County is the least populated county in the state of Florida. Liberty County has a low-income population but is better off economically than some of the other counties in the SA. Madison County has a population of approximately 17,000, with mostly low-to-middle income families. The majority of residents in Madison County have a high school education or less. Like most rural communities, Madison County is resistant to change or "outside intervention." Only two SAs in Florida have fewer projected deaths than SA 2B. Those are SA 2A and SA 7C. The providers in SA 2A and SA 7C serve multiple SAs. The Parties AHCA AHCA is the state agency that is responsible for administering the CON program and laws in Florida. In conjunction with these duties, AHCA reviews applications for new hospice programs pursuant to Sections 400.601, 400.602, 400.609, 400.6095, 408.034, 408.035, 408.036, and 408.043, Florida Statutes, and Rules 59A-2 and 59C-1.0355, Florida Administrative Code. Covenant Covenant, formerly known as Hospice of Northwest Florida, is a not-for-profit community organization that was founded by a committee in 1982. The committee included community leaders and several hospitals in the Pensacola, Florida, area. Covenant began treating its first patients in 1984 and is currently licensed to provide hospice services in SA 1 and SA 2A. The following counties are located in SA 1: Escambia, Santa Rosa, Okaloosa, and Walton. The following counties are located in SA 2A: Holmes, Washington, Jackson, Calhoun, Bay and Gulf. Covenant obtained its first CON for SA 1 and three counties in SA 2A. Covenant later expanded to cover all of SA 2A. In 1994, Hospice of the Emerald Coast (formerly known as Bay Medical Hospice and hereinafter referred to as Emerald Coast) was the dominant provider in SA 2A, but Covenant became the dominant provider within six years after expanding its coverage. Emerald Coast also has expanded its coverage and is licensed now to provide hospice services in SA 1 and SA 2A. Emerald Coast is now gaining market share in SA 1. Covenant is licensed to provide hospice services in 26 southern Alabama counties. However, Covenant currently provides services in only nine or ten Alabama counties. Covenant currently shares its Alabama SAs with five or six other providers and is considering further expansion in Alabama. On average, Covenant serves 429 Florida hospice patients per day. It admits patients and provides service 24 hours a day, seven days a week, without regard to their ability to pay. Covenant's main office and its eight-bed inpatient/residential facility, the Joyce Goldberg Hospice Inpatient Residence, are located in Pensacola, Florida. The room and board residential component of the inpatient facility is not reimbursed by any government agency and most often provides services on a charitable basis. Covenant built the inpatient facility to provide services to the homeless. However, Covenant does not consider patients who present with subjective signs of imminent death to be appropriate for admission to the facility. Covenant performs a financial assessment of patients at the time of their admission to the inpatient facility. If the patient or his or her representative elect not to provide Covenant with financial data, patients and their families understand that the full rate per day for room and board will be charged on a monthly basis at the beginning of each month, even when there is little or no chance that Covenant will ever collect the amount owed. Patients that have the ability to pay for some or all of their treatment at the facility do so on a sliding scale basis. However, the bottom line is that Covenant admits patients to the inpatient/residential facility without regard to their ability to pay. Covenant historically has provided inpatient care to children in one of the area's children's hospitals, Sacred Heart Hospital. Providing inpatient hospice care to children in a special hospital is appropriate from a quality of care perspective. Covenant operates the following Florida branch offices: Okaloosa County at Niceville, Florida; Jackson County at Marianna, Florida, and Bay County at Panama City, Florida. Covenant operates Florida community support centers in Okaloosa County at Crestview, Florida, and in Walton County at Destin, Florida. Volunteers staff Covenant's community support centers. Among other activities, the centers conduct blood drives and provide space and volunteer training for organizations such as the American Cancer Society and various Alzheimers groups. Covenant provides the centers on a charitable basis. Covenant's growth and expansion has focused on serving persons in underserved areas and populations. Its mission is to provide direct care to dying patients, their families and friends, and to provide education to the community. Covenant is the 30th largest hospice in the United States. It serves the largest geographic area in Florida. Covenant's audited finances demonstrate the corporation's growth. In the past five years, Covenant has nearly tripled its number of patient days. Covenant has purchased management software and systems, with a useful life of five years, to facilitate support for a corporation twice its size. It has secured contracts for services with every hospital, nursing home, and assisted living facility in SA 1 and SA 2A. Covenant's vision is to create and foster a corporate culture of excellence. In order to achieve its goals, Covenant has recruited personnel from the for-profit industrial sector. As incentives for achievement of performance goals, Covenant pays bonuses to its top management. It also has a separate staff bonus pool. Covenant made a profit in 2001 despite paying such bonuses out of its operational funds. Covenant has achieved its growth and expansion, in part, by implementing a continuous quality improvement process in which it constantly looks for ways to improve its operations and services. Expansion into SA 2B will improve Covenant's operations by allowing it to spread its fixed overhead costs. Consistent with its objectives, Covenant chose to pursue accreditation from the Joint Commission on Accreditation of Health Care Organizations (JCAHO) four years ago. Covenant became accredited without outside consultation, using its own staff and resources. Since then, JCAHO has re-accredited Covenant, pursuant to a 98 percent survey report with no Type I recommendations. Covenant provides hospice care in a way that ensures sensitivity to cultural diversity and the hospice patient's cultural values. For example, Covenant has informational brochures and material in various foreign languages, including Vietnamese and Spanish. Covenant's policies and procedures comply with all applicable requirements of the U.S. Department of Health and Human Services related to discrimination in the workplace. They are sufficient to ensure confidentiality for any employee with HIV and to ensure protection of all other employees. Covenant provides substantial "unfunded" and "underfunded" programs to the community. Underfunded programs include palliative chemotherapy and palliative radiation therapy. In addition to unfunded community support centers, Covenant provides unfunded bereavement programs in schools and grief-in-the-workplace seminars. Through its physicians and medical teams, Covenant provides unfunded physician care for non-Medicare patients. In fact, Covenant provided approximately $1.5 to $1.7 million in unreimbursed care in the calendar year 2001, and anticipates that it will provide more such care in 2002. Covenant, like all not-for-profit organizations, must raise funds to pay for non-reimbursed expenditures that support charitable services. Covenant has developed a strategic plan to identify ways to measure its success in meeting the needs of underserved populations. As a part of its ongoing strategic planning process, Covenant determined that there was an unmet need for hospice services in SA 2B, the area currently exclusively served by BBH. After receiving requests from physicians for hospice services in SA 2B, Covenant approached BBH to offer assistance and support. Covenant also consulted with its health planner regarding the need for additional hospice services in SA 2B. After AHCA determined that there was a numeric need for an additional hospice in SA 2B, Covenant's chief executive officer (CEO) toured SA 2B to assess the potential for expansion and to look for potential properties. Eventually, Covenant became convinced that there were compelling reasons to apply for a CON in SA 2B because of an unmet need for hospice services. Covenant has strong reserves of ready cash and equivalents, including $2.9 million in cash and over $1 million in investments, to underwrite the SA 2B expansion. Covenant has approximately six times more working capital than BBH. The $84,000 stated in Covenant's application as required expenditures to develop the new program in SA 2B is insignificant compared to the corporation's ability to provide "unlimited funds" for the project. The fact that Covenant has sizable cash and investment reserves despite having to subsidize it SA 2A offices demonstrates its financial power. BBH Community volunteers began organizing BBH in 1981. After its incorporation in 1983 as a not-for-profit community organization, BBH commenced operation under a license that authorized it to provide hospice services only in SA 2B. On average, BBH serves 162 patients per day. BBH's main office is located in Tallahassee, Florida, but it operates the following branch offices and/or community support centers: Franklin County at Carrabelle, Florida; Gadsden County at Quincy, Florida; Jefferson County at Monticello, Florida; Madison County at Madison, Florida; and Taylor County at Perry, Florida. BBH plans to create additional branch offices/community centers in the following locations: Franklin County at Apalachicola, Florida; Gadsden County at Chattahoochee and Havana, Florida; and Wakulla County at Crawfordville, Florida. BBH also operates a 12-bed inpatient facility. The facility, known as The Hospice House is located in Tallahassee, Florida. It usually operates at 80 percent of its capacity. The Hospice House was built using funds raised in a capital funds campaign and $250,000 in community grants. The facility is designed so that family and friends can spend as much time as they can with their loved ones. The facility provides 24-hour care for various reasons, including pain management, respite care, routine residential care as an alternative to continuous care in a patient's home, transition care after leaving a hospital, and care for patients facing imminent death who for personal reasons do not want to die at home. Occasionally, The Hospice House helps local hospitals manage oncology floor bed shortages. BBH has a policy that requires paying patients to pay in advance on a weekly basis because many times patients do not stay at the facility for longer than a week. The rate charged depends on the patient's ability to pay. Frequently, patients stay at the facility for free due to their low-income status. BBH does not bill patients for services that it does not intend to collect. BBH has a 24-member Board of Directors. The Board is comprised of a broad mix of people with backgrounds in law, business, medicine, education, nursing, and insurance. BBH has one or more community advisory councils (CACs) for each county in SA 2B. The CACs hold public meetings in their respective counties each month. The purpose of the CACs is to support BBH's effort to reach out to civic and church groups and to advise BBH on how to gain acceptance in the SAs diverse communities. Like BBH's Board of Directors, the CACs are comprised of a broad group of people who are racially and ethnically diverse. The CACs include local clergy who assists BBH's outreach to the faith-based community. BBH has a minority advisory council (MAC) that supports BBH's outreach efforts in the African-American community. The MAC hosts lunches and dinners at churches and sponsors gospel sings that include education about hospice care. For example, a gospel sing that was conducted at Florida A&M University was preceded by an hour-long seminar on hospice care on National Public Radio. BBH has had an ethics committee since 1994. The purpose of the committee is to educate BBH's staff and the community about ethical issues. The committee routinely reviews BBH's policies and when necessary, reviews particular patient dilemmas. The ethics committee includes a rabbi, a protestant chaplain, a religion professor, a Muslim pharmacist, a social worker, a nurse, and other interested individuals. BBH is a member of the National Hospice and Palliative Care Organization (NHPCO). BBH is accredited by the Community Health Care Accreditation Program, one of the first accreditation programs. AHCA has approved BBH after every licensure survey with no deficiencies. BBH's mission is to provide care and education to terminally ill patients and their families. BBH's mission includes providing emotional support to anyone dealing with grief from loss of a loved one. BBH serves all individuals who meet the clinical criteria for admission to hospice, regardless of their ability to pay. It provides care to indigent patients without concern for financial reimbursement. BBH responds to patient referrals within 24 to 36 hours. BBH does not discriminate against any group on any basis. BBH delivers hospice services with a minimum of administrative costs. Out of the funds raised by BBH through charitable gifts, 86 cents of every dollar goes directly to patient care. BBH does not spend substantial funds on marketing or advertising. BBH has five interdisciplinary teams (IDTs). Each team has a medical director and staff who live in their IDT area. BBH has nurses who live in every county in the SA except Liberty County. The IDTs have separate back-up on-call nurses to provide coverage 24 hours a day, seven days a week. The on-call nurses can provide care to patients within 30 minutes of a call. BBH has a full-time medical director, four part-time IDT associate medical directors, and a part-time associate medical director for its inpatient facility. The associate medical directors meet with the IDTs weekly to review patient care. They also provide advice and education to other providers and physicians in the community. The IDT medical directors provide emergency consultation should an acute situation arise with a patient. In addition to its core services, BBH provides other services to the community and patients that are not reimbursed from any source. These services include grief counseling to adults and children, crisis intervention in schools after a student's death, and the music therapy program. BBH's music therapy program, which is non-reimbursed, is one of only two such programs in Florida that the National Association of Music Therapists has certified as a music therapy site and as a music therapist training site. BBH has the equivalent of five full-time staff members that provide music therapy through out SA 2B as requested by patients or recommended by an IDT. Over 30 percent of BBH's patients receive music therapy. BBH provided over 1,500 hours of music therapy in the six months prior to the hearing. Part of BBH's outreach efforts includes conducting physician education seminars. About 200 out of 320 local physicians in SA 2B periodically refer patients to BBH. BBH provides palliative chemotherapy and radiation treatment on a case-by-case basis. There is no persuasive evidence that BBH has ever denied a physician's recommendation for such services. At times, BBH has reimbursed a local hospital for palliative radiation services for BBH patients. BBH solicits feedback from patients, their families, and their physicians through surveys that are sent out three weeks after patients begin receiving care and again after patients pass away. BBH's committee for quality improvement reviews the results of the surveys on a monthly basis as part of BBH's continuing quality improvement program. Recent results show a high degree of patient and family satisfaction because they are equal to or higher than national palliative care statistics. Physician survey responses show 90 percent or better satisfaction. BBH follows up on any survey response that is less than "very good" from patients or "average" from physicians. Covenant's Application Covenant's Board of Directors duly authorized the filing of Covenant's letter of intent and application. The Executive Committee of Covenant's Board of Directors authorized the filing of the letter of intent on August 27, 2001. Covenant timely filed the letter of intent with AHCA on August 29, 2001. The Board of Directors authorized the filing of the application on August 30, 2001. Covenant filed the application with AHCA on September 4, 2001. After receiving an omissions letter from AHCA, Covenant timely filed its omissions response and complete application along with the appropriate application fee. AHCA has preliminarily approved Covenant's application to establish a new hospice program in SA 2B. AHCA's preliminary approval is subject to the following conditions: (a) Within the first two years of operation, Covenant must open a branch office in Perry, Taylor County, Florida; and (b) Covenant must establish a special non-cancer outreach program to educate the medical community on the effectiveness of hospice care for patients with non-cancer diagnoses. Fixed Need Pool Rule 59C-1.008, Florida Administrative Code, relates to CON application procedures in general. Rule 59C-1.0355, Florida Administrative Code, relates to specifically to hospice programs. Both rules contain provisions that relate to published fixed need pool projections. In this case, Covenant filed its application in response to a published fixed need for an additional hospice program in SA 2B. BBH has challenged that published need in DOAH Case No. 01-4415 CON. A Recommended Order in that case is being issued concurrently with the instant case. Conformance with District Health Plan Preferences Covenant's application is in conformance with the applicable district health plan as required by Section 408.035(1), Florida Statutes, and Rule 59C-1.030(2)(c), Florida Administrative Code. The applicable local health plan preferences are set forth in the District 2 CON Allocation Report, approved October 2000. With respect to the first local health plan preference, Covenant currently provides and commits to providing district-wide services. Covenant will provide the services 24 hours per day, seven days a week, regardless of a patient's ability to pay. As to the second local health plan preference, Covenant currently contracts with and commits to contracting with existing hospitals and nursing homes for the provision of inpatient care. The proposed program does not require the construction of a new facility or the addition of beds. Conformance with Agency Rule Criteria The application conforms to the requirements of Rule 59C-1.0355(3)(a), Florida Administrative Code, which requires hospice programs to comply with the standards for program licensure described in Chapter 400, Part VI, Florida Statutes, and Chapter 58A-2, Florida Administrative Code. Covenant has demonstrated that it meets these statutory and rule requirements. Some of the requirements, including but not limited to "quality of care," are discussed in detail below. The application is in conformance with the five-rule preferences set out in Rule 59C-1.0355(4)(e), Florida Administrative Code. As to rule preference one, Covenant evidences a commitment to serve populations with unmet needs. One such population includes non-cancer patients as discussed below. With respect to the rule preference two, Covenant proposes to provide the inpatient care component of its proposed program through contractual arrangements with existing health care facilities. Covenant does not propose the development of an inpatient facility. The application conforms to rule preference three. Covenant has demonstrated a commitment to serve the homeless, patients with AIDS and patients who do not have primary caregivers at home. Covenant is entitled to credit for rule preference four. Covenant proposes a project in SA 2B, which has eight counties. It intends to establish its main office in Tallahassee, Leon County, Florida, with a branch office in Perry, Taylor County, Florida. Covenant anticipates opening community support centers in Madison County and in Gadsden County during the third year of operation. Covenant has presented persuasive evidence that Madison and Taylor Counties are underserved as discussed below. The application meets the expectations of rule preference five. Covenant is committed to providing services not specifically covered by private insurance, Medicaid, or Medicare. These services include, but are not limited to, chaplain services, support for seriously ill patients not yet appropriate for hospice services, non-health care items such as hot water heaters and telephones that provide quality of life and allow patients to stay at home, bereavement services, and volunteer services. The application is in conformance with Rule 59C-1.0355(5), Florida Administrative Code. Covenant's proposal is consistent with the needs of the community and other criteria contained in local health council plans and the State Health Plan. Rule 59C-1.0355(5), Florida Administrative Code, specifically requires an applicant to provide letters of support from health care organizations, social services organizations, and other entities within the proposed SA that endorse the applicant's development of a hospice program. In order to comply with this provision, Covenant sent approximately 206 letters to individual and entities in SA 2B requesting support of its application. Even though health care providers in SA 2B have limited knowledge about or experience with Covenant, it received the following letters of support: (a) eight letters of support from physicians who practice in SA 2B; (b) three letters of support from hospitals located in SA 2B; (c) 18 letters of support from nursing homes and assisted living facilities located in SA 2B; and (d) six letters of support from other health care professionals and/or residents who live and work in or adjacent to SA 2B. These letters of support are sufficient to show compliance with Rule 59C-1.0355(5), Florida Administrative Code, despite the fact that AHCA received 160 letters of opposition to the proposed project from various individuals and entities in SA 2B. The application is in conformance with Rule 59C-1.0355(6), Florida Administrative Code, because it provides a detailed description of the proposed program. First, proposed staffing for the project will be 9.54 full-time equivalents (FTEs) in the first year of operation and 18.79 FTEs in the second year of operation. The volunteer staff will number about one per patient and will increase from about 15 in the first year to about 35 in the second year. The record contains competent evidence showing how Covenant will recruit and train its staff and volunteers. Second, Covenant expects to obtain patient referrals from hospitals and doctor's offices. Based on Covenant's prior experience in starting new hospice programs, the expected sources of patient referrals are reasonable and appropriate. Third, the application sets forth the projected number of admissions for the first two years, by payer type, by type of terminal illness, and by age groups. Covenant expects Medicare patients to comprise about 80 percent of the admissions. The majority of Covenant's patients will have diagnoses other than cancer, such as heart disease, emphysema, liver disease, and Lou Gehrig's disease. During the first year, Covenant expects to have 27 patients, under 65, and 82 patients, 65 and older. In the second year, Covenant expects to have 56 patients, under 65, and 184 patients, 65 and older. These projected utilizations are reasonable and achievable. Fourth, Covenant has identified the services to be provided by staff and volunteers and those to be provided through contractual arrangements. Covenant plans to provide direct care in the following areas: physician services, nursing services, home health aide services, dietary counseling, social work services, chaplain services, counseling services, and bereavement services. Physical, speech, and occupational therapy services will be provided through contractual arrangements. Fifth, Covenant will provide inpatient services through contractual arrangements with nursing homes and hospitals. Covenant has gained expertise in providing hospice care in nursing homes in its existing SAs. Sixth, the application sets forth provisions for serving persons without primary caregivers at home. Covenant's plan allows patients to be responsible for their own care as long as they are able to do so. When that is no longer possible, Covenant provides the patients with a list of alternatives. Seventh, Covenant will provide bereavement services to its patients before death and to patients' families and friends after death for at least one year. Covenant also provides grief counseling in schools and in the community. Covenant offers grief support to its staff and volunteers. Covenant uses seminars, workshops, and special programs to train and educate its staff, volunteers, and individuals in the community about particular bereavement topics. Next, Covenant will provide extensive community education activities concerning hospice programs. Some of these are discussed in detail below. As indicated above, Covenant has agreed to provide a special non-cancer outreach program to educate the medical community in SA 2B about the effectiveness of hospice care for non-cancer diagnoses. Finally, Covenant's application includes policies for the receipt, acknowledgement, management and utilization of fundraising activities. Covenant expects fundraising to account for 2-3 percent of net revenue for the proposed program. The application does not include specific proposed methods for fundraising activities in SA 2B. However, during the hearing Covenant provided sufficient evidence about its past experiences to support the conclusion that it will be successful in this regard. 80. Rules 59C-1.0355(6)(h) and 59C-1.0355(6)(i), Florida Administrative Code, do not apply here. Covenant does not intend to establish a freestanding inpatient facility in SA 2B. Covenant's proposals, expectations, and projections are reasonable and appropriate as they relate to the factors set forth in Rule 59C-1.0355(6), Florida Administrative Code. Based upon Covenant's experience, the proposed program as described in the application is conservative and achievable. Conformance with Applicable Statutory Criteria As stated above, the proposed project complies with the standards for licensure described in Chapter 400, Part VI, Florida Statutes. Specifically, the application conforms to the requirements of Section 400.606(1), Florida Statutes, because it provides a plan for the delivery of home, residential, and home-like inpatient hospice services to terminally ill persons and their families. Covenant's plan contains, but is not limited to, the following: (a) the estimated average number of terminally ill persons to be served monthly; (b) the geographic area in which hospices services will be available; (c) a listing of services which will be provided, either directly by the applicant or through contractual arrangements with existing providers; (d) provision for the implementation of hospice home care within three months after licensure; (e) the provision of inpatient care in nursing homes and other health care facilities; (f) the number and disciplines of professional staff to be employed; (g) the name and qualifications of potential contractors; (h) a plan for attracting and training volunteers; (i) the projected annual operating cost of the hospice; and a statement of financial resources and personnel available to the applicant to deliver hospice care. Some of these plans are discussed in detail herein. Rule 59C-1.0355(3)(b), Florida Administrative Code, requires an applicant to be in conformance with Sections 408.035 and 408.043(2), Florida Statutes. Covenant meets the standards sets forth in these statutes as indicated below. Section 408.035(1), Florida Statutes, requires consideration of the need for the proposed project in relation to the applicable district health plan. As discussed above, Covenant meets this criterion. Sections 408.035(2) and 408.035(7), Florida Statutes, relate to the need for the proposed project as evidenced by the availability, quality of care, efficiency, accessibility, and extent of utilization of existing health care facilities and health services in the applicant's SA. Covenant meets these statutory criteria for the following reasons: (a) SA 2B is characterized by lack of hospice competition; (b) The proposed project will ensure access to hospice care in the SA's rural communities; (c) Covenant's special non-cancer outreach program will increase utilization for patients with non-cancer diagnoses; (d) With projected admissions of 109 patients in year one, 240 patients in year two, and 305 patients in year three, the proposed project will achieve a 25 percent market share in the third year; and (e) Covenant is Medicare and Medicaid certified and has a history of providing quality of care. Sections 408.035(2) and 408.035(12), Florida Statutes, relate to the applicant's history of providing quality of care and its demonstrated ability to provide such care. Covenant meets these criteria because it has a quality assurance program that provides a comprehensive, centrally coordinated system by which Covenant can conduct an ongoing evaluation of patient care and family services. Covenant's Performance Improvement Plan (PIP) is discussed in detail below. Section 408.035(4), Florida Statutes, relates to whether the applicant will provide services that are not reasonably and economically accessible in adjacent SAs. It is preferable for hospice services to be delivered in patients' homes or in home-like environments. It is undisputed that residents of rural populations often are reluctant to accept hospice services from a local provider. It follows that rural populations would be even more reluctant to seek hospice services in an adjoining SA. Some SA 2B patients from Liberty and Franklin Counties receive hospice services in SA 2A. Additionally, some residents of Madison and Taylor Counties receive hospice services in SA 3A. However, there is no persuasive evidence that a significant number of the underserved patients in the rural populations of SA 2B ever received services in an adjoining county for any one year. To the contrary, the greatest weight of the evidence indicates that for a substantial number of patients in SA 2B, hospice services are not reasonably or economically accessible in adjoining SAs. Section 408.035(5), Florida Statutes, relates to the needs of research and educational facilities in the SA. This criterion does not apply because Covenant's proposed project is not located in a teaching hospital and does not involve research or formal education and training programs for physicians and other health care professionals. Section 408.035(6), Florida Statutes, relates to the applicant's resources, including health personnel, management personnel, and funds for capital and operating expenditures, that are available for project accomplishment and operation. Section 408.035(8), Florida Statutes, relates to the applicant's immediate and long-term financial feasibility. Covenant meets these criteria because it has demonstrated the short-term and long-term financial feasibility of the proposed project. Section 408.035(9), Florida Statutes, relates to whether the proposed project will foster competition to promote quality and cost-effectiveness. Covenant's proposed project will meet this criterion because it will provide the patients of SA 2B a choice of providers. Benefits accrue from competition among hospice providers because hospice utilization is strongly related to awareness and education. Competition creates an environment in which hospices must do more to educate the community, promoting quality of care. Covenant's proposed project also will increase the hospice penetration rate in SA 2B, thereby resulting cost effectiveness and overall savings to the health care system. This is true even though a large majority of patient care is provided by fixed price government payer sources that are not influenced by competition. Section 408.035(10), Florida Statutes, relates to proposed costs and methods of construction associated with the proposed project. This criterion does not apply because the proposed project does not involve any construction. Section 408.035(11), Florida Statutes, relates to the applicant's history of and commitment to providing health services to Medicaid patients and the medically indigent. In 2000, Covenant provided about 7.8 percent of its patient days to Medicaid patients. That same year, Covenant provided approximately $480,000 in non-billable services. In SA 2B, Covenant proposes to provide 10 percent of its patient days to Medicaid patients and 4 percent to charity. The record is clear that Covenant meets this statutory criterion. Section 408.043(2), Florida Statutes, relates to the need for and availability of hospice services in the community. The application is in conformance with the requirements of this statute because there is a need for additional hospice services in SA 2B, especially for non-cancer patients and in rural populations. Additionally, a new hospice program will promote competition. Need for an Additional Hospice Published Fixed Need Pool and Special Circumstances The hospice penetration rate is defined as the ratio of hospice admissions in a SA divided by the number of resident deaths for that SA. Hospice penetration has grown in Florida and the United States in recent years, due primarily to increased awareness among the lay and health care communities. In Florida, overall hospice penetration is currently about 40 percent. Like the rest of the state, Covenant has increased its utilization in the past few years. The licensing of Emerald Coast in SA 1 created a competitive environment with Covenant and resulted in increased admissions and penetration in SA 1. The same result was achieved in SA 2A when Covenant was licensed to serve all of SA 2A in competition with Emerald Coast. In contrast, BBH has been the sole provider in SA 2B, which has experienced a penetration rate gap that has persisted over a seven-year period. For the batching cycle at issue here, SA 2B has one of the lowest penetration rates (29 percent) in the state, ranking 26th out of 27 SAs. In the instant case, AHCA calculated a net numeric need under Rule 59C-1.0355, Florida Administrative Code, of 351, which exceeds the need threshold of 350, and indicates the need for one additional hospice program in SA 2B. The rule's methodology takes into account the demographic differences between SA 2B and the rest of the state. With a projected need of 1,209 patients for the planning horizon at issue here and only 858 BBH admissions for the relevant historical period, BBH would have needed 41 percent more admissions to close the penetration rate gap regardless of the fact that there is only a difference of one between 350 and 351. It is clear that the net numeric need here correlates to the local reality. Special Circumstances Rule 59C-1.0355(4)(d), Florida Administrative Code, identifies the following special circumstances that may merit approval of a new program even if there is no published need. These special circumstances are as follows: (a) that a specific terminally ill population is not being served; (b) that a county or counties within the SA of a licensed hospice program are not being served; and (c) that there are persons referred to hospice programs who are not being admitted within 48 hours (excluding cases where a later admission date has been requested.) AHCA did not review Covenant's application to determine whether a CON should be awarded based on special circumstances. Instead, AHCA gave preliminary approval to the proposed project based on the publication of need. However, AHCA's State Agency Action Report (SAAR) indicates that the agency considered and did not agree with Covenant that Madison and Taylor Counties were "underserved." AHCA also determined that there was a need for educational outreach to non-cancer patients in SA 2B and conditioned the award of the CON on Covenant's provision of that service. During the hearing, Covenant presented persuasive evidence that underserved non-cancer patients and underserved rural populations in SA 2B constitute special circumstances within the meaning of Rule 59C-1.0355(4)(d), Florida Administrative Code. The special circumstances would have warranted approval of Covenant's application in the absence of numeric need. Non-Cancer Patients Care to non-cancer patients has increased dramatically during the past 20 years. Generally, non-cancer patients comprise more than half of all hospice patients. The SA 2B penetration rate of non-cancer patients, under age 65 and age 65 and over, lags behind the overall state penetration rate. This is especially significant because the non-cancer deaths rates are higher in the panhandle of Florida than for the State as a whole. For the batching cycle applicable to this proceeding, the penetration rate gap in SA 2B was most remarkable for elderly non-cancer patients, who make up 69 percent of the net need of 351 patients. The current overall state penetration rate for non-cancer patients, age 65 and older, is 32 percent. In SA 1 and SA 2A, the current overall state penetration rate for non-cancer patients, age 65 and older, is 27.7 percent and 26.6 percent respectively. In SA 2B, the current penetration rate for non-cancer patients, age 65 and older, is 20.1 percent, indicating a gap of 11.9 percent with respect to the state penetration rate. The lack of availability of hospice services in SA 2B nursing homes is another indication of the underserved need of elderly non-cancer patients. Underserved Rural Populations SA 2B is underserved as a whole relative to the rest of the state. All counties in SA 2B, except Jefferson County, had a penetration rate lower than the state average. Comparing the overall penetration rate for SA 2B to the penetration rate for each county in the SA shows that Madison and Taylor counties are significantly underserved. Based upon the most recent data available from the United States, Health Care Finance Administration, there is a 30 percent penetration rate for SA 2B, but for Madison and Taylor counties, it was about 16 percent. For non-cancer diagnoses, the penetration rate was only 8 percent for Madison and Taylor counties, well behind the SA 2B's averages for non-cancer diagnosis. Covenant Hospice Programs Quality of Care Covenant's application is in conformance with the requirements of Rule 59C-1.0355(3)(a), Florida Administrative Code, which provides that the proposed program shall comply with the quality of care standards described in Chapter 400, Part VI, Florida Statutes, and Rule 58A-2, Florida Administrative Code. The best evidence of Covenant's ability to provide quality of care is the finding of no state or federal deficiencies on the three most recent State of Florida compliance surveys. On a yearly basis, Covenant develops a Performance Improvement Plan (PIP) based on its ongoing continuous quality improvement program. The PIP ensures Covenant's ongoing compliance with all state and federal regulations as well as the standards established by JCAHO and NHPCO. Covenant also reviews and updates its corporate and clinical policies and procedures to ensure on-going quality improvement. These policies and procedures are consistent with all state and federal regulations and professional guidelines. The policies and procedures are reasonable and appropriate for all operations, including medical and nursing care. Medical Direction and Medical Quality of Care Covenant's medical director is qualified to take an examination for certification in hospice palliative care. He has completed the American Medical Association's curriculum in Education for Physicians in End-of-Life Care. He is board-certified in geriatrics. In addition to the medical director, Covenant employs physicians as adjunct medical directors and branch office physicians. These doctors provide direct patient care when they make home and nursing home visits. They serve as consultants to IDTs or patients' attending physicians. Covenant's physicians also serve on its quality improvement committee and review records to ensure quality of care. Covenant provides access to physician care for all hospice patients. Physician coverage is available for all patients, 24 hours per day, seven days a week, as appropriate. Covenant physicians follow its clinical procedures manual, which is in conformance with all state and federal regulations and professional guidelines. Covenant provides high quality pharmaceutical services. The policies and procedures related to these services are appropriate to ensure compliance with all state and federal regulations. Partners in Care Program Covenant developed its PIC program in part to ensure appropriate education of its own staff and the community in general. However, the main purpose of the program is to educate and train the staff of nursing homes and other health facility settings. The PIC program promotes continuity and quality of care for patients in such facilities, which house about 47 percent of Covenant's patients. The PIC program is based on a procedures manual known as "The Grey Book." The procedures manual is a toolbox that facility staff can reference at any time. The manual has been instrumental in making the PIC program so successful in addressing the needs of critical patients in extreme pain and discomfort associated with certain terminal illness. Education and Outreach Covenant has a comprehensive education program. It develops an education calendar on a yearly basis and presents extensive educational programs to all applicable audiences. Covenant's education program includes a clinical education program that is designed to ensure high professional competency for nurses, social workers, home health aides, nursing aides, and other health care providers. For example, Covenant's program for nurses requires them to demonstrate "knowledge based competencies" within the first 30 days of employment and on an on-going basis. The competencies are important in achieving high quality of nursing care. Covenant has produced its own comprehensive educational modules on an array of topics. They are "in-depth" courses, not "Hospice 101" or survey courses. They deal with such issues as advanced pain management, advanced symptom management, physiology of dying, ethical issues in the end-of- life care, just to name a few. Many of the advanced training modules are approved by various professional organizations for continuing education credit, including continuing medical education credits. The use of the modules will facilitate hospice utilization and penetration wherever they are used. Another facet of Covenant's education and outreach program is its Patient and Family Handbook that Covenant gives to patients and their families. The handbook provides extensive resources and guidelines to patients and their caregivers. The handbook is clinically appropriate to ensure high quality of care. Covenant's education program also includes extensive and intensive community education. This part of the program increases hospice utilization or penetration by ensuring that the community knows about the availability of hospice services and understands the benefits of those services. Covenant has specific education materials directed to non-cancer diagnoses to ensure access to hospice patients with non-cancer diseases. The materials assist clinicians in determining when a terminally ill non-cancer patient is appropriate for hospice care. They provide the community with knowledge about the availability of hospice care for non-cancer patients. The use of the materials results in greater non- cancer admissions to hospice. In fact, Covenant provides educational programs for physicians to assist them in caring for all types and ages of hospice patients. Referring physicians routinely receive newsletters, written and edited by Covenant's medical staff. At times, Covenant provides one-on-one education of physicians, in-service training, and other modes of education as appropriate. Covenant maintains medical advisory groups in each area office. These groups meet on a regular basis for education and to provide participants input and feedback to Covenant. Covenant has developed educational materials in Spanish and Vietnamese in order to facilitate access to those minority populations. Covenant uses its community support centers to distribute the materials. In contrast, BBH provides far fewer educational opportunities to the community than Covenant. In some months, BBH only provided four or five programs. In other months, none of BBH's programs were provided by trained clinicians. Most of BBH's programs were introductory, not advanced or continuing education level presentations directed to health care professionals. BBH's education programs are insufficient to create adequate public and professional awareness of hospice services in an eight-county area. It appears that BBH has increased the number of programs it presents on a monthly basis after Covenant submitted its application. Rural populations often have religious or conservative belief systems that cause them to be reluctant to accept hospice services. Such barriers to access for hospice services can be overcome by sufficient and appropriate education and outreach to the community and to physicians or other health care providers. Competition of an additional hospice in SA 2B will stimulate additional education and outreach, resulting in higher levels of hospice utilization and penetration rate. Volunteer Program State and federal regulations require a hospice to involve community volunteers in the delivery of hospice services. Hospices use volunteers for a variety of functions including, reading to patients, transportation, housekeeping, and office administrative support. Covenant has developed a comprehensive and high quality volunteer program based upon excellent recruitment and training of volunteers. In an attempt to encourage more patients to remain at home for hospice care, the Escambia County Council on Aging reimburses Covenant for care-giver training and in-home respite care, charged on an hourly basis. Currently, Covenant has over 850 active, trained volunteers. Between 2/3 and 3/4 of Covenant's volunteers come from patient families and friends. Covenant's volunteer training program and manual comply with all state and federal regulations and professional guidelines. Faith in Action Programs Covenant has a special volunteer program referred to as the Faith in Action Program. Covenant developed the program in conjunction with initial Robert Wood Johnson Foundation grant funding. Currently, Covenant provides the service on an unfunded basis. The program sponsors activities to involve faith communities in the care of terminally ill members. Thus, the program enhances access to hospice care by members of the faith communities. Covenant also has established a Faith in Action AIDS Program. The program focuses on the needs of AIDS patients and their families. The educational component of the Faith in Action AIDS program teaches faith communities about the needs of HIV and terminally ill AIDS patients, including children. The Faith in Action AIDS program provides a high level of community service to the AIDS community. It links persons living with HIV to faith communities. It directly addresses many practical needs of individuals with HIV and AIDS. The program was initially grant-funded but is now supported by Covenant as a charitable service. The Faith in Action AIDS program utilizes approximately 75 trained volunteers. Currently the program is based in Pensacola and Escambia Counties and primarily serves those areas. However, Covenant is expanding the program through its SAs. Covenant also has developed a clinical AIDS program as a dedicated hospice program. Covenant provides excellent care and comprehensive services to hospice patients with AIDS and their loved ones through this special program. Chaplain Services Covenant's chaplains function as core members of the IDTs. They provide spiritual care to patients and their families, 24 hours per day, seven days per week. The chaplains are employees of Covenant who receive comprehensive hospice training. This ensures high quality services and proper professional development. For the most part, Covenant's chaplains are ordained ministers with five years of experience and a masters of divinity degree. Covenant's 14 full-time or part-time chaplains are distributed across Covenant's SAs. The program meets state and federal regulations and professional guidelines. Social Work and Bereavement Services Covenant's social work begins at admission with comprehensive assessments of the patients' and their families' needs. Bereavement services focus on the family and loved ones during the terminal illness and after the death of the patient. Both of these services provide extensive education to patients, their families, and the community. Covenant's social work and bereavement programs provide educational seminars and workshops in the community on an unfunded basis. Social workers and bereavement specialists are required to complete competency-based instruction in hospice social work. Covenant's corporate and clinical policies and procedures related to social work and bereavement ensure high quality of care. They meet or exceed all state and federal regulations and professional guidelines. Covenant's social workers are core members of the IDTs. The social worker networks with other members of the team to plan and implement services. They help the patient set and achieve goals. Children's Services Covenant provides children's services through a program that is dedicated to terminally ill children and their families or to children of terminally ill parents or grandparents. The children's program includes unfunded bereavement services even if the bereavement in not associated with a hospice patient. Covenant has been selected to participate in one of eight demonstration projects for children's hospice services known as Program for All Inclusive Care for Children (PAC). The PAC project is a Medicaid waiver program. It will allow hospices to interact with dying children and their families earlier than would be otherwise allowed for enrollment in hospice based upon Medicaid program requirements. Participation in the project is unfunded. Covenant's children's program is comprehensive and provides high quality of care. It meets or exceeds all state and federal regulations and professional guidelines. Competition and Impact of the Proposed Project on the Existing Provider Covenant's application is in conformance with the requirements of Section 408.035(9), Florida Statutes. The proposed project will foster competition and promote quality and cost-effectiveness. The effect of the competition will have a positive impact in the SA and increase hospice penetration, particularly for elderly patients with non-cancer diagnoses and rural populations, due in part to Covenant's comprehensive community education programs. There is no merit to the argument that SA 2B's penetration rates and population size are not sufficient to support two hospices. BBH's own strategic plan shows that its admissions and census will increase even if Covenant is approved. In fact, since AHCA preliminarily approved Covenant's application, BBH has taken numerous steps to increase its referrals and its community outreach and education. These actions show how the mere threat of competition has improved BBH's services. BBH has set a goal of increasing its referrals by 50 percent. Approval of the application will have an adverse impact on BBH only if it does not appropriately respond to the presence of a new provider in the area. Based upon data presented by BBH, its net assets have increased each year. At historical admissions and census levels below that projected by BBH, it actually made money and had an increase in net assets at the end of each year. There is no persuasive evidence that BBH will lose patients days or that its admissions will decrease if Covenant's application is approved. The most credible data indicates that BBH will have at least 970 admissions in year zero, 1,085 admissions in year one, 1,202 admissions in year two, and 1,219 admissions in year three. Covenant will have 0 admissions in year zero, 109 admissions in year one, 240 admission in year two, and 305 admissions in year three. By year three, BBH will still be the dominant provider in SA 2B with 75 percent of the market share. When AHCA approved Emerald Coast for an additional hospice program in SA 1, Covenant undertook certain actions to strengthen its position in the community and to become an even better and more effective provider of hospice services. As a result of these and other actions, the addition of a competitor in SA 1 did not have an adverse impact on Covenant. To the contrary, Covenant grew, increasing its admissions, referrals, fundraising, and volunteer participation. Competition from Emerald Coast brought heightened community awareness about the benefits of hospice services to SA 1. Because Covenant increased community education concurrent with the development of the new hospice program, there was no resulting confusion over the identities of the two programs. Nor did the approval of Hospice of the Emerald Coast erode the economic base of Covenant because Covenant took steps to strengthen its referral base. Emerald Coast did not have an office in Pensacola, or within sixty miles of Pensacola, until approximately May 2002. The admissions and census of Emerald Coast have grown since establishing that office. The change in the competitive environment in SA 1 resulted in increased admissions and penetration in that SA. Covenant increased its admissions and penetration in SA 2A after Covenant AHCA authorized Covenant to serve all of that SA. The same can be expected in SA 2B if AHCA approves Covenant's application to provide hospice services in SA 2B. With Covenant’s approval for an additional hospice service in SA 2B, BBH can and will be expected to do the same kinds of things that Covenant did in SA 1 to preserve market share. All of the things that Covenant can do to increase penetration or obtain market share, BBH can do to preserve market share. These activities include providing education and outreach, developing a referral base, and developing contacts with physicians, hospitals, nursing homes, and other health care facilities. In performing these activities, BBH has a competitive advantage in SA 2B based upon its experience, history, and reputation in the SA. For example, BBH already has contracts with all hospitals and nursing homes in SA 2B. BBH was financially viable at a service volume of 34,404 patient days in 1997, and at a volume of 35,721 patient days in 1999. Big Bend has been financially viable at substantially lower volumes than it will have in the future, even if Covenant is approved and operational in SA 2B. Approval of Covenant will not have an adverse impact on the ability of BBH to recruit and retain sufficient numbers of volunteers in SA 2B. BBH currently does not have difficulty recruiting and retaining sufficient numbers of volunteers, which evidences a substantial pool of volunteers in the SA. In addition, Covenant will draw its volunteers primarily from persons served by it, families and friends of Covenant patients. Covenant is willing to work with BBH cooperatively to ensure training and recruitment of sufficient numbers of volunteers. Approval of Covenant in SA 2B will not have an adverse impact on the ability of BBH to effectively raise funds. In SA 1 and SA 2A, Covenant has tailored its fundraising activities so that they do not conflict with Emerald Coast's efforts to raise funds. Covenant and Emerald Coast continue to grow their fundraising in both SAs. The fundraising pool in any SA is elastic and can be expanded. Hospice in particular opens up a new pool of potential donors. The additional education and community outreach provided by Covenant will increase hospice penetration, thereby increasing the pool of hospice donors. Both hospices can increase the fundraising base by utilizing grant revenue. Covenant is stronger today than it would have been without competition. As friendly competitors, Covenant and BBH will be able to engage in collaborative activities that benefit both hospices, including education and fundraising. Dale Knee, Covenant's CEO, did not always believe that competition would foster such benefits. In 1996, Emerald Coast, located in Panama City, Florida, applied for and was preliminarily approved for a CON in SA 1, which includes the Pensacola home office of Covenant. Mr. Knee testified extensively that the approval and development of another hospice in SA 1 would adversely impact Covenant and would not increase hospice penetration in SA 1. He now holds the opposite view based upon Covenant’s actual experience in a competitive environment. Approval of Covenant in SA 2B will increase access to hospice services. It will have a positive impact on the quality of care in the SA as utilization increases. This is consistent with the prior experience of Covenant. Further, the approval of Covenant will result in substantial cost savings to the health care system generally. Hospice care is more cost effective and less costly than conventional medical care, such as the pursuit of curative or maintenance treatments provided by hospitals, nursing homes, home health agencies, and other settings. The approval of Covenant will result in an overall savings of approximately $1.6 million by Covenant's third year of operation. This is true even through the large majority of patient care is provided from fixed price government payer sources. The approval of Covenant in SA 2B will make "continuous care" available to hospice patients. Continuous care is a required level of care under the Medicare conditions of participation. Continuous care is nursing care in excess of eight hours per day, sufficient to maintain the patient with critical needs at home. BBH currently does not provide continuous care to its patients. Instead, BBH uses home health aides with nurses in attendance for shorter periods of time that is billed to Medicare as routine home care. When a patient needs continuous care to remain at home, BBH places the patient in a hospital or its in-patient facility. Upon approval and initiation of operations, Covenant will make continuous care available to the hospice patients, improving quality of care and continuity of care in SA 2B. Financial Feasibility and Financial Schedules and Projections Schedule 1, Estimated Project Costs. Schedule 1 depicts the estimated project costs for the proposed project. The total estimated project cost is $82,648. The costs are based substantially on the start up experience of Covenant in its Dothan, Alabama, office. The $20,000 in cost proposed for recruitment and training of staff is reasonable and appropriate. The amount includes advertising for staff positions, start-up salaries, rent, utilities, and such expenses for a month of start-up operations. The projections for recruitment and training are consistent with prior start-up experience of Covenant. Covenant provided sufficient costs to hire an office manager for the Tallahassee office 30 days prior to opening. This is a reasonable planning assumption and would be sufficient to provide training and orientation. But this may not be necessary, because Covenant may transfer a manager from an existing office. Prior to initiation of operation, Covenant would need to hire an office manager, a registered nurse, a home health aide, a social worker, an administrative assistant, and a community educator. A medical director would not be necessary initially for the Tallahassee office prior to start-up. Start-up on the Dothan, Alabama, office entailed a different process than starting up a new office in Florida. In Alabama, the office had to become separately licensed by the State of Alabama. The next step in the process was for the office to apply for Medicare certification, which required Covenant to be admitting and treating Medicare eligible patients. This accounts for the fact that Dothan had a longer pre-opening period that is projected for the Tallahassee office. The initial Dothan staff spent a full week at Covenant in orientation. During the next five weeks the Dothan office manager worked in Covenant's Panama City, Florida, awaiting certification for Dothan. The Dothan start-up provides insight to Covenant’s success in initiating hospice start-up such as that proposed for SA 2B. Covenant began in Dothan by educating the medical community and others, particularly in the rural communities, where Covenant encountered a lack of understanding of hospice and some reluctance to acceptance of hospice services. Covenant's program in Dothan has shown a steady increase in census. This is true even though three other hospices serve the same service area. The census of the other three hospices has continued to increase as well, due to increased public awareness of hospice care generally. The $5,000 in Covenant's proposed costs for moveable equipment is reasonable, appropriate, and adequate. Covenant generally relies on donated equipment to meet such needs. Covenant already has on-hand equipment for use in SA 2B. This is consistent with prior start-up experience of Covenant, including the start-up of the Dothan office. Covenant intended the proposed costs for movable equipment in the application to cover incidental items only. The phone system for the Tallahassee office is already in inventory, and no expenditure would be necessary for a phone system. At the time of the application, Covenant had an extensive inventory of donated furniture and other items that could be used in the Tallahassee office. Covenant made a planning assumption that at the time of implementation, sufficient donated items would be on hand to furnish and equip the Tallahassee office. The expectation and assumption that furniture and other furnishing sufficient for the Tallahassee office would be available was reasonable based on the specific prior experience of Covenant. The line item of $5,000 for moveable equipment was placed in the budget as a contingency for incidental items, as needed. Donated equipment is not included in Schedule 1, Line 23, because it is not required to be included. Overall, the amounts projected on Schedule 1 of the application are reasonable and appropriate. They are conservative estimates and sufficient to cover all anticipated and expected costs. Schedule 2, Listing of Capital Projects. Schedule 2 sets out a complete listing of all projected and proposed capital projects planned by Covenant. The schedule completely and accurately depicts all such projects and expenditures that were planned, approved, or under way when Covenant submitted its application. Covenant's audited financial statements and balance sheets indicate that it has sufficient resources to fund the proposed project without adversely affecting Covenant's ability to fund other projects and expenditures. Schedule 3, Source of Funds. Covenant has available cash and other funding sources sufficient to fund the proposed project. There are no other demands on the applicant’s available cash. The information depicted in Schedule 3 is reasonable and appropriate. Schedule 4, Utilization of Existing Beds. Schedule 4 is not applicable to the application of Covenant. Schedule 5, Projected Utilization. The utilization projections set out in Covenant's Schedule 5 are reasonable and appropriate. The projections of patient days projections are obtainable and achievable. Schedule 6, Staffing. The staffing and FTE’s proposed by Covenant on Schedule 6A of the application for the first year and the second year of operations are reasonable and appropriate. The staffing projections are sufficient to ensure quality of care. The projections are consistent with the prior start- up experience of Covenant. They are based on a reliable computer model used by Covenant to staff its operations and administration. The staffing model generally supports staffing ratios for all disciplines, which meet or exceed guidelines established by the NHPCO. The salaries projected also were developed based on the actual experience and mid-range salaries of Covenant. The salaries are sufficient to recruit and retain sufficient numbers of qualified staff at the salary levels indicated in Schedule 6A. Covenant has been able to recruit and retain sufficient numbers of qualified staff, including registered nurses and licensed nurses, in its existing SAs at the salary levels indicated. The proposed nurse salaries are approximately equivalent to salaries paid in SA 1, SA 2A, and SA 2B, including the salaries paid in hospitals. Covenant's ability to recruit and retain nurses at the proposed salary levels is corroborated by the fact that some of the registered nurse salaries are higher in the Pensacola, Florida, metropolitan service area (MSA) than in the Tallahassee, Florida, MSA. Even with higher average salaries in Pensacola than in Tallahassee, Covenant has been able to recruit and retain sufficient numbers of registered nurses at the proposed salary levels. The ability of an organization to recruit and retain sufficient numbers of qualified staff is a function of several factors, including work environment, reputation of the employing organization, satisfaction and morale level of the staff, opportunity for staff development and growth, flexibility and respect of the organization for its staff and, of course, salary and benefits. Many such factors attract nurses and other staff specifically to Covenant. If approved in SA 2B, Covenant will not have a significant adverse impact on the ability of BBH to recruit and retain sufficient numbers of qualified staff. This is true because Covenant does not require that nurses have hospice experience. However, Covenant will recruit from the same pool of nurses and thus compete in its recruiting with hospitals, home health agencies, doctors' offices, and any other organization that employs nurses, including BBH. Any adverse impact on BBH's ability to recruit and retain nurses will be minimal. Further Covenant will recruit its staff across the entire eight-county area that comprises hospice SA 2B. Covenant will fill approximately 3.5 FTEs by the end of the first year. Those numbers are not sufficient to have an adverse impact on BBH's ability to recruit and retain sufficient numbers of staff, including nurses. Nor will Covenant have an adverse impact on the staffing costs in SA 2B by driving up staffing costs. It is undisputed that there is a shortage of nurses nationwide. Covenant will be able to recruit and retain sufficient numbers of skilled staff, including nurses, in SA 2B, notwithstanding that shortage, in part due to the positive work environment that it will provide. Schedules 7A and 8A, Projected Revenues and Expenses. Schedule 7A of the application depicts projected revenue for the proposed project. The starting point for the revenue projections is the utilization and patient day projections for the first two years of operation, set out in Schedule 5 of the application. The revenue projections are based upon an established rate for levels of care and payer source. They are based on obtainable volumes and payer source projections. Covenant used a reliable computer model in making the revenue projections. Covenant also projected revenues in a manner consistent with its experience. The overall revenue projections in Schedule 7A, the assumptions underlying their calculations, and the methodology used in making the projections are reasonable, appropriate, and conservative. Schedule 8A sets forth the projected income and expenses for the proposed project. Covenant used the same computer model discussed above and its experience to project income and expenses. The bottom line is that the project is expected to have a net operating surplus of $23,695 in the second year of operation. The income and expense projections, their underlying assumptions such as inflation factors, and the methodology used in making the calculations are reasonable, appropriate, and consistent with Covenant's experience. They are conservative in that they underestimate income and overestimate expenses. Of particular note is that the proposed non-operating revenues for year one and year two include grant revenues, donations, and fundraising. Additionally, property expenses include the cost of rent. Regarding health insurance costs, Covenant has experienced substantial increases in health care insurance premiums. However, health insurance premiums are a component of benefits, and Covenant’s overall benefit rates are conservative, sufficient, and reasonable. Finally, the projected general and administrative costs and ancillary costs, including contractual costs, are reasonable, appropriate, and conservative. Immediate or short-term financial feasibility is the ability of the applicant to secure the funds necessary to capitalize and operate the proposed project. Schedules 1, 2, and 3 and the audited financial statements of Covenant demonstrate that it has sufficient funds and cash-on-hand to fund the project. The capital projects listed on Schedule 2 do not adversely affect the ability of Covenant to fund the project, nor does the project adversely affect the ability of Covenant to carry out all projects listed on Schedule 2 of the application. Therefore, the project is financially feasible in the short term. Long-term financial feasibility is the ability of the project to reach a break-even point within a reasonable period of time and at a reasonable achievable point in the future. Based upon a review of the reasonableness of the volume and patient day projections, the staffing and income and expense projections, it was established by competent substantial evidence that the proposed project is financially feasible in the long term. It is important to note that the reasonableness of the income and expense projections depicted on Schedule 8A of the application, which result in a second year net operating surplus, are driven by the admissions and patient day projections. Persuasive evidence indicates that Covenant's admissions and patient day projections are reasonable and achievable. Financial feasibility analysis is different for hospices than for other organizations because hospices are not- for-profit entities. They rely to a great extent on grants, donations, and other non-operating revenue to sustain operations. Covenant has an excellent record in regard to fund- raising. It has strong reserves of ready cash and over $1 million in investments. This project would be financially feasible even if it did not show a net profit in the first two years of operation. Covenant has the ability to support the project, and the commitment to do so, such that the program would continue to operate as a viable operating entity.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That AHCA should grant Covenant a CON to establish an additional hospice program in SA 2B. DONE AND ENTERED this 7th day of November, 2002, in Tallahassee, Leon County, Florida. SUZANNE F. HOOD Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 7th day of November, 2002. COPIES FURNISHED: Michael D. Mathis, Esquire Agency for Health Care Administration 2727 Mahan Drive Fort Knox Building, Suite 3431 Tallahassee, Florida 32308-5403 J. Robert Griffin, Esquire J. Robert Griffin, P.A. 2559 Shiloh Way Tallahassee, Florida 32308 W. David Watkins, Esquire R. L. Caleen, Jr., Esquire Watkins & Caleen, P.A. 1725 Mahan Drive, Suite 201 Post Office Box 15828 Tallahassee, Florida 32317-5828 Lealand McCharen, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 3 Tallahassee, Florida 32308 Valda Clark Christian, General Counsel Agency for Health Care Administration 2727 Mahan Drive Fort Knox Building, Suite 3431 Tallahassee, Florida 32308
The Issue The issue in the case is whether statements made by an authorized representative for the Agency for Health Care Administration constitute unpromulgated rules in violation of applicable Florida law.
Findings Of Fact During a deposition taken on July 2, 2002, Jeffery Gregg, the authorized representative of AHCA, testified as to AHCA's understanding of the term "regional monopoly" as used in Section 408.043(2), Florida Statutes. Section 408.043(2), Florida Statutes, provides in relevant part, as follows: HOSPICES.--When an application is made for a certificate of need to establish or to expand a hospice, the need for such hospice shall be determined on the basis of the need for and availability of hospice services in the community. The formula on which the certificate of need is based shall discourage regional monopolies and promote competition . . . . The statute does not define the term "regional monopoly." Mr. Gregg testified that in the context of the statute, AHCA considers the term "region" to mean a Hospice Service Area. Mr. Gregg testified that he defines the term "regional monopoly" to mean a single licensed hospice program in a hospice service area. The definition of "regional monopoly" to mean a single licensed hospice provider in a hospice service area is a statement of general applicability that implements or interprets the statute. The definition is applicable to all hospice service areas that are served by a single licensed hospice program. The definition of "regional monopoly" is not based on internal management memoranda from AHCA, or on legal memoranda or opinions issued to an agency by the Attorney General, or on AHCA legal opinions rendered prior to their use in connection with an agency action. The definition of "regional monopoly" is not related to the preparation or modification of agency budgets. The definition of "regional monopoly," is not a statement, memoranda, or instruction to state agencies issued by the Comptroller as chief fiscal officer of the State and relating or pertaining to claims for payment submitted by state agencies to the Comptroller. The definition of "regional monopoly" is not related to contractual provisions reached as a result of collective bargaining. The definition is not based on memoranda issued by the Executive Office of the Governor relating to information resources management. The agency has not adopted a definition of "regional monopoly" by the rulemaking process set forth at Section 120.54, Florida Statutes. There is no evidence that adoption of the definition by rule is not feasible or practicable. Statement 2 The evidence fails to establish that, in either the July 2, 2002, deposition or in his testimony at hearing, Mr. Gregg offered the text of Statement 2 as a general statement of AHCA's position in reviewing all CON applications. The statement is not a reasonable extrapolation of general AHCA policy. Mr. Gregg's testimony during the deposition and at hearing indicate that his responses to questions were offered in the context of the AHCA review of the particular CON application at issue in DOAH Case Nos. 00-3203CON and 00-3205CON and are of limited applicability. There is no credible evidence that Statement 2 has been the subject of any substantive discussion at AHCA. Mr. Gregg acknowledged that the issue has not been the subject of much agency discussion and was unable to recall ever having discussed hospice issues with the AHCA agency head. Mr. Gregg also stated that he was thinking "off the top of his head." Mr. Gregg essentially testified that the agency feels that citizens are better served by having a choice of hospice care providers, especially in areas of relatively large populations. The opinion offered by Mr. Gregg was essentially grounded in his belief that the Governor supports choice in hospice care. The evidence fails to establish that Statement 2 is an appropriate extrapolation of general AHCA policy set forth during Mr. Gregg's testimony at deposition and hearing, therefore the evidence fails to establish that Statement 2 is a statement of general applicability that implements or interprets the statute.
The Issue Whether a need exists for an additional hospice in Agency for Health Care Administration service area 1. Whether the certificate of need application of Bay Medical Center to establish the hospice, on balance, meets the criteria for approval.
Findings Of Fact The Agency For Health Care Administration (“AHCA”) is the state agency which administers the certificate of need (“CON”) program for health care facilities and services in the state. AHCA published a need for one additional hospice program in service area 1, in Volume 22, Number 5 of the Florida Administrative Weekly (February 2, 1996). Bay Medical Center (“BMC”), which currently operates a hospice in service area 2A, is the applicant for CON 8377 to establish the additional hospice program in service area 1. Hospice of Northwest Florida, Inc. (“HNWF”) is an existing provider of hospice services in both service areas 1 and 2A. Service area 1 encompasses Escambia, Santa Rosa, Okaloosa, and Walton Counties. Adjacent service area 2A includes Bay, Holmes, Washington, Jackson, Calhoun and Gulf Counties. Hospice care is provided to terminally ill persons, defined as those with a life expectancy of six months or less if their disease runs its normal course. It is palliative and comfort-oriented, rather than curative. Clinical, pschosocial, and spiritual services are provided by an interdisciplinary team, which includes a physician, nurses, social workers, home health aides, chaplains, and bereavement counselors. In addition to paid staff, hospices also use volunteers. Social workers, chaplains, and bereavement counselors work with patients' families for up to a year following death. Services are provided in patients' homes, nursing homes, or acute care hospitals. Hospice care is less expensive than aggressive acute care for the terminally ill. It is estimated that every dollar of hospice care saves a dollar and a half in Florida. Hospice services began in the United States in the 1970’s and were approved for government reimbursement in the 1980’s. Routine home hospice care is reimbursed at a per diem rate, for which the hospice provides care, and pharmaceutical drugs and supplies. Hospices also receive financial support from fund raising activities, and typically provide substantial community services which are otherwise unfunded and not reimbursed. These include community outreach programs in churches and schools, and services to families in which a death was accidental. In 1985, the national hospice penetration rate or P Factor (the percentage of total deaths in which patients received hospice care) was approximately 8 percent. By 1995, the P Factor had increased to 17 percent, with the greatest rate of growth in the most recent five years. In Florida, approximately 29.6 percent of all deaths occur after a person has been admitted to a hospice program. In service area 1, the P Factor is 21 percent. Bay Medical Center BMC is a legislatively - created independent special governmental district, authorized initially to provide health care services to Bay County, but now also to surrounding areas. It operates a 353-bed public, not-for-profit full service hospital in Panama City, Florida, but does not receive tax support. Over 190 physicians staff BMC’s hospital with every specialty, except rheumatology, endocrinology, and neonatology. BMC’s tertiary services include an open heart surgery program. BMC also provides ambulatory or outpatient services. Since 1992, BMC has operated a hospice program in service area 2A, with offices in Panama City (on the campus of the BMC hospital) and in Marianna. The Marianna office opened in February 1997, as a result of the Florida Legislature's 1995 amendment to the enabling legislation allowing BMC to offer services beyond Bay County. The 1995 legislation also expressly authorizes BMC to provide hospice services and to create other organizations to further its mission. The Board of Directors of BMC created the Bay Medical Center Hospice (BMCH). BMCH is governed by a board of directors which is separate and distinct from the board of BMC, although BMC is the entity licensed to operate the hospice program in service area 2A. The BMCH board members live and work in each of the six counties of service area 2A. BMC, which holds the existing license, is the applicant in this proceeding. The board of BMC met on the day that the letter of intent was due, February 19, 1996. A few days prior to the meeting the Chairman of the Board executed the letter of intent, and sent it to a health planning consultant in Tallahassee. After the Board met and passed the resolution authorizing the filing of the letter of intent, the consultant filed the letter of intent with AHCA in Tallahassee. In service area 2A, BMCH has an average daily census of 58-64 patients. BMC projected and HNWF stipulated that BMC can reasonably attain 250 admissions for a total of 12,471 patient days in year one, and 300 admissions for 18,706 patient days in year two of operation in service area 1. BMCH currently advertises its hospice services on television and radio stations, and in newspapers with coverage extending into service area 1. Fund-raising events, including the holiday tree lighting program, are used to market hospice services. Hospice services are also explained in newsletters which reach 27,000 households and all physicians in the area. BMC purchased over 100 sixty-second radio spots, which aired on three stations over a two month period in 1996. The hospice radio spots reached an estimated 87,000 people an average of five times each. BMC estimates a total project cost of $129,591, if CON 8377 is approved, to extend hospice services into service area 1. BMC proposes to condition CON 8377 on the provision of a minimum of 12.8 percent Medicaid and 3.65 percent charity care by the end of the second year of operation, and the care of 7 AIDS patients (with a minimum of 350 total visits) each year. Hospice of Northwest Florida HNWF is an existing provider of hospice services in AHCA service areas 1 and 2A. It is the only licensed hospice in service area 1 and competes with only BMC in 2A. HNWF, organized by hospitals in Pensacola, was issued a CON in December 1982 and a license in 1983, to operate a hospice in Escambia, Santa Rosa, Okaloosa, Walton, Holmes, Washington and Jackson Counties. The home office of HNWF is located in Pensacola. HNWF admitted its first patients and families in January 1984. In 1987, HNWF opened a branch office in Fort Walton Beach, later apparently consolidated with a Niceville office, to serve Okaloosa and Walton Counties. An additional branch office was opened in Marianna in 1991. An adjunct medical director for the Marianna and Niceville offices was hired in 1996. In December 1995, HNWF received a CON waiver and its license was amended to allow it to operate in the remainder of service area 2A, in Bay, Gulf, and Calhoun Counties. HNWF then opened a branch office in Panama City, in August 1996. HNWF also operates, and is expanding from six to eight beds, a residential facility in Pensacola, to house hospice patients without homes or without at-home caregivers. Prior to opening the Panama City office, HNWF historically served Holmes, Washington, and Jackson Counties, while BMCH served patients in Bay, Gulf, Washington, and Calhoun Counties. From 1993 to the present time, HNWF has increased its contracts or agreements from the Pensacola hospital to all of the hospitals in the service areas, including two military hospitals, from none to virtually all assisted living facilities, and from five to all except two or three nursing homes. HNWF operates an extensive outreach and educational effort, including a monthly half-hour television show, which is estimated to reach over 200,000 people in Escambia and Santa Rosa Counties. Other efforts include radio talk show appearances, speaking engagements reaching over 5,000 people in 1996, and extensive direct physician contact. HNWF also relies on it chaplaincy and bereavement programs to extend information about hospice care, particularly to culturally diverse groups of people. Despite these efforts, the number of hospice patients in service area 1 has remained relatively constant. HNWF served 969 patients in calendar year (CY) 1995, and 963 in CY1996. HNWF contends that its lack of growth is due, in part, to declining referrals from nursing homes despite increased referrals from other sources. HNWF attributes the nursing home decline to government investigations of suspected excessive nursing home reimbursements. There is no waiting list for HNWF's services, and its goal is to admit patients within 24 hours of referral. HNWF criticized BMCH’s outreach efforts as inadequate and misdirected, attracting only “easy” patients, those easily diagnosed as qualified for hospice care by well-informed referral sources. On this basis, HNWF expects BMC to take hospice patients from HNWF and not from any growth in hospice patients. HNWF also expects competition from BMC to adversely affect its ability to provide enhanced and unfunded services, including bereavement services in schools, on military bases, and in work- places, and its ability to operate satellite offices and the residential facility. Revenues from patient care are supplemented by donations and grants. In 1992, HNWF established a foundation to coordinate fund raising efforts. The approval of the BMC application, according to HNWF, will also affect the types of hospice services available in the area. In general, more sophisticated hospice services can be provided by larger hospices, including palliative chemotherapy and radiation. BMC’s expert testified that HNWF will continue to be a large hospice with or without the approval of a CON for BMC, and that the additional program will create additional demand for the service. The parties stipulated that subsections 408.035(1)(m) and (3), Florida Statutes, and Rule 59C-1.0355(7) and (8), Florida Administrative Code, are not applicable to this proceeding. At hearing, the parties also stipulated that BMC's list of capital projects meets the requirements of subsection 408.037(2)(a). Rule 59C-1.0355(4)(a) - Numeric Need; Subsections 408.035(1)(b) - like and existing services; (d) - available alternatives Rule 59C-1.0355, the hospice rule, includes the formula for calculating the numeric need for hospice programs. Numeric need exists if the projected total number of hospice patients in service area one for the planning horizon (1400 for July 1997) minus the actual number of hospice patients in the base year (969 in calendar year 1995) is equal to or greater than 350 (in this case, 431). The statewide P Factor, 29.6 percent, is used in the formula to calculate the ratio of projected hospice patients to projected total deaths. The statewide rate represents the normative minimum applied to each service area by operation of the formula in the rule. In service area 1, the P Factor in the base year was 21 percent. The statewide P Factor is an average of rates for various disease categories and ages. Those rates range from a high of hospice care for 70.9 percent of deaths due to cancer in people 65 and over, to a low of 14.1 percent for people under 65 with all other diseases. BMC cites HNWF's relatively low hospice penetration rate as proof of the need for an additional hospice program to create and accommodate additional potential demand. HNWF asserts, however, that certain local circumstances cause the deviation from the statewide P Factor. HNWF also contends that more people received hospice services than the number used in the formula for the base year. The result, according to HNWF is an excess projected demand for hospice services by the July 1997 planning horizon. The extenuating local circumstances cited by HNWF, are the sizable active duty military population, the strong Medicaid AIDs program, the aggressiveness of home health agencies, the prevalence of cancer centers, and the established practice parameters of medical doctors in the service area. The number of active duty military in service area 1 is 23,162. The number of those who die from terminal illnesses is statistically insignificant, because it is military policy to retire personnel who are diagnosed with terminal illnesses, which enhances death benefits to survivors. BMC's expert confirmed that policy and the improbability of serving military patients, although HNWF has served military base families after active duty casualties. Military families represent some of those served by HNWF in the base year, who are not included in the numeric need formula as hospice admissions. In the numeric need formula, according to BMC's expert, military personnel are included in projected deaths to younger age cohorts from causes other than cancer. Of the 431 projected additional hospice admissions, BMC’s expert calculated that, at most, 3 projected hospice deaths of those result from including the active duty military population. By contrast, HNWF's expert testified that the military population of 23,162 multiplied by the statewide death rate of .008 results in an estimated 186 deaths, or approximately 62 hospice patients. The background information in support of the fixed need pool, prepared by AHCA, shows that AHCA calculates projected hospice patients by age and disease. The actual base year service area non-cancer deaths under 65 (1010) divided by the actual service area total deaths (4562), times total projected deaths (4816) gives the total projected deaths non-cancer under 65 (1066). Of the 1066 deaths, 150 are expected to be hospice patients. It is not reasonable to assume that 186 deaths will occur among active duty military, or that 62 of the 150 non- cancer hospice patients under 65 will be in that group. It is more reasonable to assume, as BMC's expert did and as the state numeric need methodology does, that the age cohort of that group has and will continue to have a significantly lower death rate and lower hospice admissions than the 65 and over population. HNWF's expert health planner was unable to distinguish service area 1 from the rest of the state in terms of the strength of the Medicaid AIDs waiver program, the presence of prisons, the existence of home health agencies, the presence of cancer centers, or physicians' practice patterns. Similarly, BMC's expert found no statistical relationship between home health agency visits and hospice utilization. BMC's expert also noted that some hospices provide services to prisoners. HNWF's expert agreed that there is no prohibition to providing hospice services to prisoners. In some areas of the state, such as Gainesville and Tampa, cancer centers co-exist with high levels of hospice utilization. There was no evidence to distinguish physicians' practice patterns in service area 1 from the areas of the state. The argument that HNWF served more than the reported 969 in the base year, through it AIDs support groups, in schools, and for families in which deaths were accidental also does not distinguish HNWF. The evidence shows that hospices typically provide services to persons other than patients and their families, and benefit in terms of marketing and fund-raising. The incidence of AIDS in service area 1 is below that of the state. That could affect the gap between 21 percent and 29 percent, by approximately 3 or 4 percent. Late referrals to hospice services can adversely affect utilization rates. The federal government program, Restore Trust, initiated a HCFA Inspector General's investigation into charges of waste, fraud, and abuse in nursing homes and home health agencies. The decline in referrals to hospice programs coincided with the investigation, while hospice referrals and admissions in non-nursing home settings increased. There is no evidence, however, that service area 1 nursing homes were subject to more intense scrutiny than any others in the state. In fact, the Executive Director of HNWF testified that the effects of Restore Trust were national. The active duty military population difference of 3 fewer projected hospice deaths, and the 3 or 4 percent gap in the P Factor due to the lower incidence of AIDs are insufficient to explain the gap between P Factors of 21 and 29 percent. BMC's expert's estimate that ninety percent of the gap results from the lower than average P Factor is, at most, reduced to eighty-six percent. From 1994 to 1996, as the hospice utilization statewide reached 27.7 percent, the rate increased from 22 to 27 percent in service area 2A. By contrast, the rate increased from 17 to 22 percent in service area 1. For the six months ending December 31, 1996, the rate in service area 1 declined to 18 percent, while that in service area 2A increased to 24 percent. One of the highest rates in service area 2A is in relatively rural Washington County, in which BMC and HNWF have the greatest overlap in services. HNWF has approximately 60 percent and BMC has 40 percent of the hospice market in Washington County. In western Washington County, hospice rates range from 27 to 100 percent, with the remainder of the county in the 18 to 27 percent range. In service area 2A, there has been a steady increase in hospice admissions for HNWF and BMC, except for a decline at BMC immediately after HNWF opened an office in Panama City. Subsection 408.035(1)(a) - need in relation to district and state health plans; Rule 59C- 1.0355(5) and (4)(e) District health plan allocation factor one favors applicants having hospice services available seven days a week, district-wide for 24 hours a day as needed, regardless of a client’s ability to pay. BMCH currently complies with the requirement in service area 2A and can do so in service area 1. By carefully selecting patients, hiring staff in appropriate locations to serve the patients, and expanding slowly geographically, as HNWF has done, BMC can meet the requirements. Initially, BMC will focus on adjacent Okaloosa and Walton Counties. District allocation factor two, for proposals to add beds or use existing inpatient facilities rather than construct new facilities, is met by BMC. By proposing to contract with existing hospitals and nursing homes, BMC also meets the preference in Rule 59C-1.0355(4)(e)2. State health plan preference one, for applicants who seek Medicare certification, is consistent with BMC’s current and proposed operations. State health plan preference two favors members of the National Hospice Organization ("NHO") and applicants accredited by the Joint Commission on Accreditation of Health Care Organizations ("JCAHO"). BMCH is a member of the NHO. BMC is JCAHO-accredited, after receiving a rating of ninety-six of a possible one hundred in the scoring system in December 1996. Recently, BMCH was separately surveyed by the JCAHO, and received favorable exit comments. BMCH is also annually surveyed by AHCA, which identified no deficiencies in its January 1996 report. BMCH and HNWF each had one complaint regarding practices and procedures in 1996. A BMCH nurse disposed of controlled drugs when no longer needed in the patient's home, without the required signature of the patient's family representative on the disposal record. HNWF received a complaint and disciplined the responsible admitting nurse who failed to convene the appropriate staff to timely prepare an Interdisciplinary Care Plan. Neither incident indicates that the hospices are not providing a high quality of care. It is reasonable to expect BMC hospice to meet the requirements of the preference and to provide appropriate hospice care. See, also, subsection 408.035(1)(b) and (c), on the quality of care of the existing hospice and the applicant’s ability to provide quality of care. In proposing to establish a physical presence in rural, underserved Walton County, BMC meets state preference three and the preference in Rule 59C-1.0355(4)(e)4. State health plan preference four for applicants proposing to meet unmet needs of specific groups, such as children, is consistent with BMC's current and proposed operations. The same preference is also a requirement of Rule 59C-1.0355(4)(e)1. State health plan preference five favors applicants proposing residential services to patients without at-home assistance. BMC proposes to provide caregivers or to use existing inpatient facilities to provide residential services. The proposal is, therefore, also consistent with Rule 59C- 1.0355(4)(e)3 as it relates to those who are without primary caregivers at home or who are homeless. The sixth and final state health plan preference, for hospices proposing to use additional beds in existing facilities rather than new construction, is not applicable to the BMC proposal. On balance, the BMC application meets the preferences in the rule, and in state and district health plans. Subsection 408.035(1)(b) and (1)(d) - availability and quality of like and existing services; other alternatives Alternatives to hospice care include home health, acute, and nursing home care, all of which are available. The state policy, as reflected in numeric need methodology, encourages the use of hospice services until every service area achieves the state norm. Consistent with that policy, theoretically, HNWF could be even more aggressive in marketing and outreach than it has been. Historically, for BMC and HNWF, however, hospice services are more available, more accessible, better utilized, and higher in quality of care in areas in which they compete. Subsection 408.035(1)(c) - economics and improvements of joint, cooperative or shared resources Because BMC operates an existing hospice, it is reasonable to expect economics of scale and improvements based on its experience, if it establishes a second hospice. BMC expects to use existing human resources and billing departments. Subsection 408.035(1)(f) - need for special equipment or services not available in adjoining areas The statutory criterion is inapplicable to the case. Subsection 408.035(1)(g) and (h) - need for research, educational, health professional training BMC's is not a proposal which is intended to assist a research or educational program. In-service and volunteer training programs are proposed for the benefit of its staff and to assure the quality of its own services. Subsection 408.035(1)(h) - available manpower, management personnel; (1)(i) - immediate and long-term financial feasibility of the proposal BMC has over $21 million in cash, and revenues and gains in excess of $4 million for the year ending September 30, 1995. BMC has and continues to generate sufficient funds to provide over $24 million for planned capital projects over the next two years, including $129,591 in costs for the additional hospice program. BMC’s proposal is financially feasible in the short term. HNWF claims that the BMC proposal is not financially feasible in the long term, based on understated salaries, wages, and benefits, travel expenses, depreciation, and interest. Salaries, wages, and benefits are based on the staffing ratios at BMCH, which, according to HNWF, serves a more concentrated population in Panama City. Initially, BMC plans to serve Okaloosa and Walton Counties from a Destin office, with staff appropriately located throughout the areas to timely and efficiently serve patients. BMC plans to hire 6.6 full time equivalent (FTEs) administrative staff and 11.4 FTEs patient care staff. HNWF asserts that BMC will need an additional 1.7 FTEs for nurses, 2.6 for home health aides, and 1 FTE for a social worker. HNWF also questioned the ability of BMC to implement its proposed children's programs without a registered nurse with pediatric experience. HNWF asserted that .4 FTE for a chaplain was inadequate, as is reliance primarily on volunteer chaplains. The adequacy of the proposed staffing is supported by calculating the 50 day average length of stay times the annual volume of 250 patients, times 1.6 (the projected worked hours per patient day), which equals 10.85 FTEs for patient care. BMC's 11.4 FTEs for patient care in year one is a reasonable, conservative complement of staff. In addition, HNWF received 19 percent of its 1996 hours worked from volunteers, and has a history of hiring specialized staff and establishing specialized programs and departments when justified by the demand for those services. For its first seven or eight years, HNWF was well- served by a volunteer medical director. The bereavement coordinator was hired in 1990. The children's bereavement specialist was hired in 1993, when bereavement and social services became separate departments. Travel expenses, projected by BMC, were also criticized by HNWF. HNWF would increase miles for each visit from 13.9, as estimated in BMC’s CON application, to 18.3 miles per visit as experienced by HNWF. One assumption, which invalidates HNWF’s projection of travel distances, is that each separate visit will originate and end at the Destin office, not that BMC staff would make some visits going directly from their residences to the patient's home, or that they would arrange schedules to make several visits without returning to the office between each visit. In addition, BMCH will initially cover two counties rather than the entire service area. As a result of a mathematical error in the BMC CON application, the depreciation expense for year one of operations is $25,578, not $21,962. HNWF's expert's adjustments to interest expenses assumed that any additional expenses would require additional borrowing. BMC, however, has not materially underestimated expenses, considering the $3,616 difference in depreciation. The pro forma is conservatively based on revenues and expenses without reliance on charitable donations, although hospices typically depend on donations to break-even financially. In 1996, HNWF received a total of $339,780 in contributions. To estimate what BMC might expect in District 1, it is reasonable to exclude from HNWF's experience, approximately $80,000 in interest on reserve invested income (used by HNWF in 1996) and $90,000 in grants, since BMC has not applied for any grants. The balance, representing memorials and fund-raising of $240,000 reasonably indicates the level of contributions which a new BMC hospice might expect in service area 1. That level, for BMC, is proportionately half that projected by BMC, or $60,000 to $80,000 in year one, and $130,00 to $185,000 in year two of operations. With a projected loss in income of $28,091 in year one, a projected profit of $74,054 in year two, and considering historical hospice fund-raising, BMC's operation of a hospice in service area 1 is reasonably expected to be financially feasible in the long term. Adverse Impact Subsection 408.035(1)(l) - probable impact on costs, effects of competition. Using BMC's experts' utilization projections for service area 1, HNWF projects that its net operating income will decline from a negative $408,070 to a negative $655,712 in year one, and from a negative $355,404 to a negative $612,696 in year two. Approximately $420,000 in total contributions to HNWF is expected each year, although that number has increased annually since 1993, from 183,750, to $224,415 in 1994, to $282,368 in 1995, and $339,780 in 1996. BMC suggests that the adverse impact analysis should consider HNWF's total operations in service areas 1 and 2A to determine financial feasibility. Health planning experts for both BMC and HNWF acknowledge that there are up to 431 more people available for hospice admissions than are currently receiving hospice services. They also agree that number will increase by approximately 100 a year as the population increases, and that the presence of a new hospice provider will increase hospice penetration rates. In addition, as HNWF's witnesses emphasized, nursing home hospice admissions were depressed temporarily due to a government investigation. BMC’s expert also noted that, as long as available admissions exist, increasing hospice utilization is largely a function of how the hospice delivers its services. For example, the historic requirement that patients have a caregiver at home has adversely affected HNWF’s penetration rate. As recently as November 1996, at least one referral source, Sacred Heart Hospital, in Pensacola was distributing an HNWF brochure which specifically required an eligible hospice patient to have “[a] capable caregiver in the home to meet the patient’s day-to-day basic needs." Essentially, the same requirement is included in a list of admissions criteria on page 49 of BMC's CON application. HNWF and BMC have both changed their policies and now admit patients without caregivers, which is reasonably expected to increase admissions of patients. With competition to identify and alleviate access barriers, HNWF and BMC are better able to increase hospice utilization rates by eliminating self-imposed constraints. Based on the rapid increase in hospice utilization in service area 2A after HNWF began to compete with BMC, it is reasonable to assume the same effect of competition in service area 1. By the year 2000, BMC's expert reasonably projects hospice penetration rates of 29 percent in service area 1, equaling the current statewide average. As the late entrant into a limited geographical area within the market, BMC is projected to capture approximately one-third of that market by the years 2000 to 2001, leaving two thirds for HNWF. At the same time BMC and HNWF are reasonably expected to divide in half the market in service area 2A. At those levels, HNWF will range, in total projected admissions for both service areas, from 1,186 to 1,400, from 1997 to 2001. The evidence that a BMC hospice in service area 1 will not adversely impact HNWF is more persuasive. The suggestion that health care providers or the public will be confused by the presence of BMCH in service area 1 is rejected. Subsection 408.035(1)(n) - The applicant’s past and proposed provision of health care services to Medicaid patients and the medically indigent. BMC is a disproportionate share Medicaid provider, having historically provided over 97 percent of all indigent care in Bay County. In 1995, the charity care write-off was over $8.5 million. The effect of approving BMC’s CON is increased hospice penetration in service area 1, caused by an expanding market for hospice services. As a disproportionate share provider of inpatient acute care services, BMC is uniquely capable of identifying and referring low income patients for hospice care. Subsection 408.035(1)(0) - The applicant’s past and proposed provision of services which promote a continuum of care in a multilevel health care system, which may include, but is not limited to, acute care, skilled nursing care, home health care, and assisted living facilities. BMCH is a part of a multilevel system with levels of care ranging from a 353-bed acute care tertiary hospital to a home health agency. Because of 1995 legislation, these services are available to persons beyond the boundaries of Bay County. Consistent with this statutory criterion, hospice services should also be extended.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency For Health Care Administration enter a Final Order issuing CON 8377 to Bay Medical Center to establish a hospice program in service area 1, conditioned on providing annually a minimum of 12.8 percent Medicaid care, 3.65 percent charity care, and service to a minimum of 7 AIDs patients with a minimum of 350 visits. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 19th day of May, 1997. ELEANOR M. HUNTER 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 19th day of May, 1997. COPIES FURNISHED: Richard Ellis, Senior Attorney Agency for Health Care Administration 2727 Mahan Drive Fort Knox Building 3, Suite 3431 Tallahassee, Florida 32308-5403 Darrell White, Esquire William B. Wiley, Esquire McFarlain, Wiley, Cassedy & Jones, P.A. Post Office Box 2174 Tallahassee, Florida 32315-2174 J. Robert Griffin, Esquire J. Robert Griffin & Associates, P.A. 2559 Shiloh Way Tallahassee, Florida 32308 Sam Power, Agency Clerk Agency For Health Care Administration 2727 Mahan Drive Fort Knox Building 3, Suite 3431 Tallahassee, Florida 32308-5403 Jerome W. Hoffman, General Counsel Agency For Health Care Administration 2727 Mahan Drive Fort Knox Building 3, Suite 3431 Tallahassee, Florida 32308-5403
The Issue Whether Petitioners, as members of the Florida Patient's Compensation Fund, are liable for additional assessments for Fund Years 1980-81 and 1981-82, as set forth in the Notice of Assessment filed on April 22, 1985. This proceeding arose as a result of petitions filed by two groups of hospitals contesting a Notice of Assessment issued by the Department of Insurance on April 22, 1985, based upon the certification by the Board of Governors of the Florida Patient's Compensation Fund to the Insurance Commissioner of a deficiency in the amount of money available to pay claims for the 1980-81 and 1981-82 fiscal Fund years. The proposed assessment seeks payment of the alleged deficiency in the total amount of $40,480,556.00 from health care providers who were members of the Fund during the Fund years in question, pursuant to Section 768.54, Florida Statutes. By Order, dated June 11, 1985, the two cases were consolidated into one proceeding, and the Florida Patient's Compensation Fund was granted intervention. Petitioners originally consisted of Southeast Volusia Hospital District and 58 other hospitals (Case No. 85-1650), and Tallahassee Memorial Regional Medical Center and 39 other hospitals (Case No. 85-1664). However, prior to final hearing, a majority of the hospitals from both groups voluntarily dismissed or otherwise withdrew their claims for relief in the proceeding. By Notice of Joinder, dated July 30, 1985, American Hospital, Northridge General Hospital and Pan American Hospital abandoned their claims in Case No. 85- 1650 and adopted the Amended Petition in Case No. 85-1664. As a result, the only remaining party of record in Case No. 85-1650 was St. Petersburg Osteopathic Hospital, Inc. which by Order, dated August 13, 1985, was ordered to show cause why it should not be dismissed as a party for failing to advise the Hearing Officer as to its status pursuant to Order dated July 12, 1985. No response to the Order to Show Cause having been received, it will be recommended herein that St. Petersburg osteopathic Hospital Inc. be dismissed as a party in Case No. 85-1650. Further, inasmuch as there are no longer any parties to that case, it will also be recommended for dismissal herein. By Prehearing Conference Order, dated July 11, 1985, Case No. 85-1664 was restyled to reflect Petitioners as Duval County Hospital Authority, et al. The parties remaining in Case No. 85-1664 at time of hearing were American Hospital of Miami, Inc., Duval County Hospital Authority, Gateway Community Hospital, Hialeah Hospital, Northshore Medical Center, Inc., Northridge General Hospital, Inc., Pan American Hospital, and St. Joseph's Hospital. By Prehearing Orders, dated July 11 and July 29, 1985, it was determined that questions concerning the setting or adequacy of base fees or additional fees, the statutory "cap" on physician assessments! the statutory cumulative "cap" on maintenance of the Fund per fiscal year, and the effect of payment limitations placed on the Fund by statute, were not properly at issue in this proceeding. However, one issue presented in the Amended Petition in Case No. 85-1664 as to whether the Fund has statutory authority to estimate reserves as a basis for an assessment was deemed to be an issue within the scope of this proceeding. The parties entered into a Prehearing Stipulation (Joint Exhibit 1), which included certain factual matters, subject to relevance, and the unresolved question of law as to whether the Fund and Department may include reserves on known claims other than those resolved by settlement or verdict in calculating the amount needed for assessments. At the final hearing, the parties stipulated that the Fund certification includes full credit for all previously noticed assessments, whether collected or not. They further stipulated as to the expertise of Charles Portero in claims handling and reserving practices. The parties also stipulated that there was no issue of fact as to the reasonableness of any individual claim reserve existing as of January 31, 1985, or included in the certification, except as to the Von Stetina claim. Testimony of Charles Portero concerning the Von Stetina claim was made confidential and the transcript of such testimony was extracted and submitted under seal pursuant to order of* *NOTE: Page 4 of the Recommended Order is omitted from the document on file with DOAH and, therefore, is not included in this research database. amount of the projected excess or insufficiency to the Insurance Commissioner with a request that he levy an assessment against Fund participants for that fiscal year. Petitioner hospitals were members of the Fund during one or more of Fund years 1980-81 and 1981-82 Each month, the Administrative Manager of the Fund follows a prescribed procedure to determine if an assessment is required for a particular Fund year, utilizing what is termed a "retrospective rating plan." The plan provides that assessments will not be levied in any year until the cash available for paying claims in that membership year is down to 50 percent of the loss and expense reserves for all known losses. It further provides that the amount should be sufficient to create enough cash flow to pay known reserved claims for the year showing such deficit. In reviewing the Fund's monthly financial report of January 1, 1985, it was determined that a sufficient deficit existed to warrant the levy of an assessment. Thereafter, an outside audit of the Fund accounts was conducted and presented to the Fund Board for Certification. On March 25, 1985, the Florida Patient's Compensation Fund certified a deficiency to the Department in the following amounts: 1980-81 Membership Year $14,866,718.00 1981-82 Membership Year 25,613,838.00 TOTAL $40,480,556.00 This certification was authorized by the Board of Governors of the Florida Compensation Fund on March 19, 1985. An audit substantiating the need for the assessment was performed by Catledge, Sanders and Sanders, certified public accountants. On April 22, 1985, the Department of Insurance issued a Notice of Assessment for Fund years 1980-81 and 1981-82. Notice was published in Volume II, No. 8 at page 1907 of the Florida Administrative Weekly on May 3, 1985. The Notice of Assessment announced the Department's intent to levy and authorize the Fund to collect an assessment in the amount certified by the Fund ($40,480,556.00). The Notice of Assessment further provided that the assessment be divided among the various classes of health care providers for each year as follows: (i) Physicians and Surgeons 1980-81 1981-8 Class 1 0 0 Class 2 0 0 Class 3 0 0 (ii) Hospitals $14,754,672 $25,388,773 (iii) HMO 35,621 161,102 Ambulatory Surgical Centers 76,425 63,963 Professional Associations 0 0 The Department computed the portion of the assessments to be paid by the different classes of health care providers for all years in question based upon the "indicated rate method," modified to all5w for the statutory proscription against assessing certain health care providers more than "an amount equal to the fees originally paid by such health care provider." This is the same method utilized in five previous assessment proceedings and specifically approved by the Florida Supreme Court in Department of Insurance v. Southeast Volusia Hospital District, 438 So. 2d 815, 821 (Fla. 1983). The appropriateness of the procedure has not been placed at issue in this proceeding. The amounts of the assessments sought by the Fund, and described in the Notice of Assessment, were calculated by the Fund by using the following formula: Total fees paid for the Fund year + Investment Income attributable to the Fund year + Amounts previously noticed as assessments Expenses allocated to that Fund year Amount paid on claims for that Fund year Amount reserved for all known claims for that Fund year The Fund used the same procedure calculating the amount of this assessment as it used in the first five assessments. The Department used the same procedure and methodology (indicated rate method) in allocating the assessment among the various classes as it used in the first five assessments. The amount of the assessment is based on the amount needed to pay known claims. This amount needed to pay known claims includes the amount reserved as the estimated loss and expense payments. The Fund follows standard industry reserving practices, as modified in several respects by its particular needs and procedures. Each claim is assigned to a claims supervisor who obtains information concerning the claims incident from the primary insurance carrier. The initial reserve on a claim is based on a variety of factors, including the type of injury, potential damages, liability considerations, geographic location, and the particular attorney for the claimant. After a determination that a reserve is needed on the file, the claims supervisor makes an initial determination of the amount which is referred to the claims manager for approval. Final approval of the posted reserve lies in the hands of the Claims Committee of the Fund. The figure is usually fixed at a sum for which it is believed that the claim could be settled and the potential liability arising from a jury verdict. The necessity of obtaining approval of the Claims Committee for the initial reserve and any subsequent changes creates a certain amount of delay in obtaining such decisions. Changes may be effected in the reserve when injuries are found to be greater than anticipated, or because of the discovery of additional facts affecting potential liability. It is not unusual for a particular claim to be submitted three or four times to the Claims Committee before it is settled.
Findings Of Fact The following Findings of Fact are based on the evidence presented at the hearing: The parties stipulated to the reasonableness of all established claim reserves reflected in the current assessment sought by the Fund. However, Petitioners questioned the reasonableness of the Fund reserve on the Von Stetina claim which had been included in a previous assessment. Although it is questionable as to whether the adequacy of such a prior reserve should be addressed in a proceeding contesting a subsequent assessment, it is clear that the determination of a deficit necessarily involves deductions or credits for prior reserves in determining a current deficit. In any event, the Von Stetina reserve was established according to the standards practices of the Fund, and no evidence was presented by Petitioners to show that it was unreasonable or otherwise incorrect either on January 31, 1985, when it was determined that a sufficient deficit existed to warrant the levy of an assessment, or at the present time. The Von Stetina case is presently pending in the judicial process and, accordingly, there is no basis at the present time to reduce the previously established reserve. (Stipulation, Testimony of Portero) As heretofore found, the Fund includes a "claim" as a basis for an assessment as soon as a reserve for the claim is established. Petitioners presented the testimony of an accountant who expressed the opinion that the term "claim" as used in pertinent statutes should be restricted to final judgments or settlements against a health care provider in excess of the provider's primary coverage. This "cash basis" methodology would require the entry of a final judgment or settlement before the claim could be considered in determining whether a deficit exists for any particular Fund year. On the other hand, expert testimony from the Fund's Claims Manager shows that the definition of "claim" as used by the Fund is basically in accordance with the generally accepted meaning and usage of that term by the insurance industry. The reserving practices of the Fund are found to constitute a reasonable basis for arriving at the projected amounts required to meet the claims made against the Fund account for a particular fiscal year. (Testimony of Cherry,Portero) It is further found that the present assessment was prepared in accordance with standard procedures, that the amounts proposed to be levied as an assessment for each Fund year in question represent a deficiency in the Fund account for such years, and that the proposed allocations of such amounts among the specified health care providers are appropriate. (Respondent's Exhibits 1-7, Joint Exhibit 1- Stipulation, Testimony of Portero)
Recommendation In view of the foregoing, it is RECOMMENDED that a final order be issued by the Department of Insurance dismissing Case No. 85-1650, and levying assessments in accordance with the Notice of Assessment, dated April 22, 1985, for the Fund years specified therein. DONE and ENTERED this 15th day of October, 1985, in Tallahassee, Florida. THOMAS C. OLDHAM Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 Filed with the Clerk of the Division of Administrative Hearings this 15th day of October, 1985. APPENDIX PETITIONERS' PROPOSED FINDINGS OF FACT Paragraphs 1-7: Adopted by Stipulation (Joint Exhibit 1) in Findings of Fact 1-3, 5, 8. Paragraphs 8-10: These are conclusions of law and are therefore rejected as not being Proposed Findings of Fact. See Conclusions of Law in Recommended Order. Paragraph 11: Rejected as unsupported by the evidence. See Finding of Fact 10. Paragraph 12: Adopted in Finding of Fact 8. Paragraph 13: First sentence rejected as unsupported by evidence. Remainder adopted in Finding of Fact 10. Paragraph 14: Rejected as unsupported by the Evidence. (Confidential Portion) Paragraphs 1-6: Irrelevant and unnecessary except as set forth in Findings of Fact 9. RESPONDENT'S PROPOSED FINDINGS OF FACT Paragraphs 1, 3-10: Adopted in Findings of Fact 1-8. Paragraph 2: Rejected as Conclusion of Law rather than Finding of Fact. Paragraphs 11 & 12: Substantially adopted in Findings of Fact 9 Copies furnished: Honorable William Gunter Insurance Commissioner The Capitol Tallahassee, Florida 32301 William C. Owen and W. Douglas Hall, Esquires Carlton, Fields, Ward, Emmanuel, Smith, and Cutler Post Office Drawer 190 Tallahassee, Florida 32301 David A. Yon, Esquire Department of Insurance 413-B Larson Building Tallahassee, Florida 32301 Clay McGonagill 241 East Virginia Street Tallahassee, Florida 32301 St. Petersburg Osteopathic Hospital, Inc. 401 15th Street, North St. Petersburg, Florida Information Copy to Neil H. Butler, Cathi C. O'Halloran and Ben Wilkinson, Esquires, Pennington, Wilkinson, Dunlap, Butler & Gautier Post Office Box 13527 Tallahassee, Florida 32317-3527
The Issue The issue is whether Petitioner’s application for a Certificate of Need to establish a new hospice program in Hospice Service Area 8B should be approved.
Findings Of Fact Parties (1) Hope Hope is a not-for-profit corporation. Hope has operated a hospice program in SA 8C -- Lee, Glades, and Hendry Counties –- since 1981. Hope is the sole provider of hospice services in SA 8C. Hope’s SA 8C hospice program is one of the largest hospices in Florida; in 2003, it had more than 3,200 admissions. Hope is licensed by the Agency and it is a Medicare- certified provider. Hope was accredited by the Community Health Accreditation Program (CHAP) in December 2003. CHAP is a nationally-recognized accrediting body for hospices. Hope’s main office is in Ft. Myers, which is in central Lee County. Hope also has offices in Lehigh Acres, which is in eastern Lee County, and a counseling center in Boca Grande, which is in northwest Lee County. Hope currently has approximately 50 inpatient hospice beds where it provides inpatient and respite care. Those beds are located in “hospice houses” in Ft. Myers and Cape Coral, which are both in Lee County. Hope has Agency approval for an additional 24 inpatient hospice beds. Those beds will be located in a “hospice house” that is currently under construction in Bonita Springs, which is also in Lee County. In addition to its Lee County offices and inpatient facilities, Hope has offices in Clewiston and Buckhead Ridge. Clewiston is in Hendry County, and Buckhead Ridge is in Glades County. Hope’s Clewiston office opened in 1996, and its Buckhead Ridge office opened in 2001. Prior to opening those offices, Hope served Glades and Hendry Counties from its Lehigh Acres office, which opened in 1993. Hope divides its patients amongst four care teams, each of which serves patients in a specific geographic region of SA 8C. One team serves patients in and around Lehigh Acres, Clewiston, and Buckhead Ridge; one serves patients in Cape Coral and Pine Island; one serves patients in Ft. Myers and North Fort Myers; and one serves patients in South Fort Myers and Bonita Springs. Each of Hope’s care teams includes multiple nurses, social workers, home health aides, chaplains, therapists, volunteers, and other professionals involved in the hospice care provided to Hope’s patients. The staffing of the care teams is sufficient to deliver high quality hospice care to the group of patients being served by each care team. Hope does not have a separate clinical admissions team; an “admission specialist,” whose function is more clerical than clinical, typically is the first Hope employee to visit the patient after he or she is referred to Hope. The admission specialist begins processing the patient's admissions paperwork; the initial clinical assessment of the patient and the completion of the admissions process occurs later that day, or sometimes the following day, when the patient is evaluated by a nurse and a social worker. The nurse and social worker that do the initial clinical evaluation of the patient are typically the same individuals that will be caring for the patient after he or she is admitted to Hope. The primary purpose of having the nurse and social worker that will be caring for the patient do the initial evaluation is to enhance continuity of care. Hope adheres to the “open access” philosophy, which is embodied in the “Hospice Service Guidelines” published by the National Hospice and Palliative Care Organization (NHPCO). NHPCO is the national trade association of hospices. The Guidelines are different from the “Standards of Practice for Hospice Programs,” which is also published by NHPCO. The Standards of Practice document was not introduced into evidence in this proceeding. The “open access” philosophy embodied in the Guidelines is not yet the standard of practice in the hospice industry; it is an “expectation” or benchmark that industry is moving towards. The goal of “open access” is to remove or minimize all barriers to accessing hospice care, including barriers associated with the availability of palliative chemotherapy and palliative radiation treatment. Proactive education and outreach activities to the community and to physicians and other referral sources is also part of the “open access” philosophy. As stated in Hope’s PRO and as more fully discussed below, Hope has adopted a “sales and marketing model” that it uses to “outreach to physicians and other referring entities, in order to enhance referrals and access to care.” Hope has recently won several national awards, including the 2003 Circle of Life Citation of Honor from the American Hospital Association and NHPCO for its “open access” policies, and the 2003 Pinnacle Award from the American Pharmacists Association Foundation for its pain and symptom management protocols. Hope is a financially-sound organization. Its audited financial statements from September 30, 2002, reflect that it had unrestricted net assets of $19.6 million, including $7.8 million in cash and $5.5 million in other current assets. Hope is a profitable organization. It had operating income of $4.65 million and $3.45 million during its fiscal years ending September 30, 2001 and 2002, respectively. Hope is a successful fundraising organization. Its financial statements reported contributions of approximately $2.9 million and $2.4 million for the fiscal years ending September 30, 2001 and 2002, respectively. Hope regularly distributes newsletters about its hospice program to the community and to physicians. Its community newsletter is published quarterly and is sent to approximately 30,000 persons; its physician newsletter is published bi-monthly and is sent to approximately 1,500 physicians and their staff. Hope’s employees regularly hold workshops and make presentations to community organizations, nursing homes, churches and other entities about the hospice services provided by Hope and the general benefits of hospice. Those community education and outreach efforts are only a small part of the “community development” activities that Hope uses to attract patients. Indeed, as discussed in Part F(2)(c) below, the primary focus of Hope's community and professional relations staff is to build and maintain relationships with physicians (primarily oncologists) and health care facilities that refer patients to Hope. Hope provides access to all hospice-eligible patients who request hospice services without regard to the patient’s ability to pay or payer status. (2) HON HON is a not-for-profit corporation. HON has operated a hospice program in SA 8B -– Collier County –- since 1983. HON is the sole provider of hospice services in SA 8B. HON is licensed by the Agency and it is a Medicare- certified provider. HON was certified by the Joint Commission on Accreditation of Health Care Organizations (JCAHO) in August 2001, and it was recently re-certified. JCAHO is a nationally- recognized accrediting body for hospices and other types of health care facilities. HON has five physical locations in Collier County. Four of the locations are west of Interstate 75 in or around Naples; the fifth location is in Immokalee, which is a rural community approximately 40 miles east of Naples. HON has approximately 30 inpatient hospice beds where it provides inpatient and respite care. Sixteen of the beds are in a “hospice house” that is co-located with HON’s main office in central Naples, and the remainder of the beds are located in space that HON leases from a nursing home in northern Naples. The beds at the nursing home opened in March 2003, and the “hospice house” opened in October 2003. Prior to opening those inpatient units, HON provided inpatient and respite care to its patients at Naples Community Hospital (NCH) pursuant to a contract. The NCH beds are still available to HON, as needed. HON had approximately 1,300 admissions in 2003, and at the time of the hearing, its average daily census (ADC) was approximately 245 patients. HON’s admissions and ADC have steadily grown since its inception, and absent a material change of circumstances (such as the approval of Hope’s CON application), the growth trend at HON is expected to continue as a result of the projected population growth in SA 8B and HON’s increasing penetration rate. HON provides hospice care to its patients through three care teams, which are based out of offices in and around Naples. The north care team serves patients in the northern portion of Collier County, including the Immokalee area. The south care team serves patients in the southern portion of the county. The central care team serves “specialty” patients throughout the county, which include patients residing in long- term care facilities and patients whose primary language is not English. Each care team includes one physician, a nurse manager, six-to-eight nurses, two-to-three social workers, a chaplain, three home health aides, a bereavement counselor, a volunteer coordinator, and a clerical support person. The staffing of the care teams is sufficient to deliver high quality hospice care to the group of patients being served by each care team. The only staff person based out of HON's Immokalee office is a social worker, but the members of the north care team who serve patients in the Immokalee area use the office for charting and other purposes. In addition to the care teams described above, HON has separate admissions teams consisting of nurses and social workers that are responsible for conducting the initial patient assessment and completing the admissions paperwork once a patient is referred to HON. HON’s admissions teams conduct admissions 24 hours a day, seven days a week. The admissions team nurses and social workers that conduct the initial patient assessment are not the same nurses and social workers that will be caring for the patient once he or she is admitted to HON. After admission, the patient will be assigned to one of the three care teams –- northern, central, or southern -– identified above. HON is a fiscally-sound organization. As of December 31, 2003, it had net assets of approximately $16.1 million, and no long-term debt. HON is a profitable organization. In 2003, HON had total revenues of approximately $15.5 million and net income of approximately $3.3 million. HON is a successful fundraising organization. It raised all of the funds necessary to construct its main office in 1992, and between August 2001 and December 2003, it was able to raise $10 million to improve its main office, expand its services, and construct its “hospice house.” HON holds a number of well-established fund-raising events in Collier County each year, which raise between $350,000 and $400,000 in donations annually. Those donations account for approximately one-third of HON’s annual donations. HON’s success in its fund-raising efforts is a reflection of the community’s support for, and its perception of HON, both historically and on an on-going basis. HON has approximately 230 employees, including full- time, part-time, and per diem staff. HON currently employs a full-time medical director, and five other physicians on a full-time or part-time basis. Prior to April 2003, however, the medical director was the only physician employed by HON. HON operates an extensive community education program about the hospice services that it provides. The program includes newsletters and regular participation in and presentations to a variety of community groups by HON employees. HON does not specifically focus on increasing referrals through sales and marketing efforts directed to oncologists or other physicians. HON provides a number of free services to the residents of Collier County in addition to the services that it provides to its hospice patients that are not reimbursed by Medicare. For example, HON provides a psychologist who conducts grief workshops for children in the community who have lost loved ones through death, and it provides counselors and other assistance to the Alzheimer’s Support Network in Naples to help the Network develop and implement programs for managing grief in Alzheimer’s families. HON provides access to all hospice-eligible patients who request hospice services without regard to the patient’s ability to pay or payer status. (3) Agency The Agency is the state agency that administers the CON program, and it is responsible for reviewing and taking final agency action on CON applications. Application Submittal and Review and Preliminary Agency Action The FNP published by the Agency for the April 2003 batching cycle identified a need for zero new hospice programs in SA 8B. That determination was challenged by Hope, but the challenge was subsequently withdrawn. Hope timely filed a letter of intent and a CON application in the April 2003 batching cycle through which it sought to establish a new hospice program in SA 8B, which is immediately to the south of SA 8C where Hope currently provides hospice services. Hope's SA 8B application was designated as CON 9695 by the Agency. In the same batching cycle, Hope also filed an application to establish a new hospice program in SA 8A, which is immediately to the north of SA 8C. That application is the subject of another pending proceeding at the Division, DOAH Case No. 03-2013, etc. Hope’s application complied with all of the applicable submittal requirements in the statutes and the Agency’s rules. The application was complete and all applicable filing fees were paid. The Agency comparatively reviewed Hope’s application with the CON application filed by Heartland, which also sought to establish a new hospice program in SA 8B. The Agency’s review complied with all of the applicable requirements in the statutes and the Agency’s rules. On August 22, 2003, the Agency issued its State Agency Action Report (SAAR), which summarized its comparative review of the applications filed by Hope and Heartland and recommended denial of both applications. The Agency published notice of its decision to deny Hope's and Heartland's applications in the September 12, 2003, volume of the Florida Administrative Weekly as required by the statutes and the Agency's rules. Hope and Heartland timely challenged the denial of their respective applications. Heartland withdrew its challenge to the denial of its application prior to the final hearing, and it did not participate in the hearing in any way. The Agency reaffirmed its opposition to Hope’s application at the hearing through the testimony of Jeffrey Gregg, the Bureau Chief of the Agency’s CON program. Hospice Care, Generally Hospice care is provided to patients who are at or near the end of their lives. To be eligible for hospice care, the patient must have been diagnosed with a terminal illness from which the patient is expected to die within six months if the disease runs its normal course. Hospice care is considered palliative care rather than curative care. The purpose of palliative care is to provide comfort to the patient rather than to cure the patient. Curative care is inconsistent with the eligibility requirement for hospice that the patient's illness be terminal. Hospice care includes a comprehensive range of services provided by physicians, nurses, social workers, chaplains, therapists, and volunteers, which address the psychosocial and spiritual needs of the patient in addition to the physical pain associated with the dying process. Hospice care also includes services provided to the patient’s family, including grief counseling during the dying process and after the patient’s death. Hospice care is collaboratively provided through care teams, or interdisciplinary teams (IDTs), which are composed of individuals in the various disciplines identified above. There are four general types or “levels” of hospice care: routine home care (RHC), continuous care, inpatient care, and respite care. More than 80 percent of all hospice care is RHC. The types of services provided in RHC vary based upon the patient’s needs, but they typically include health care services provided by a nurse or a home health aide and counseling provided by a social worker or chaplain. RHC is provided in the patient’s home. Continuous care involves the full-time placement of a nurse or home health aide in the patient’s home to manage a medical crisis that might otherwise require inpatient care. Inpatient care is for the management of a medical crisis or pain that is out of control. It is provided at a licensed inpatient hospice facility (commonly referred to as a “hospice house”) or at an acute care hospital pursuant to a contract between the hospice and the hospital. Respite care allows the patient to be temporarily relocated to a nursing home, hospital, or “hospice house” to give the patient's primary caregiver a break. Hospice care is covered by Medicare, and Medicare is the largest payer source for hospices, both generally and specifically in Hope’s and HON’s hospice programs. Medicare pays a per diem rate to the hospice that varies based upon the type of care being rendered. For example, the per diem rate for RHC in 2003 was approximately $115. The hospice receives the per diem rate for each patient, whether or not services are provided to the patient on a given day. Medicare-certified providers such as Hope and HON are required to comply with the Conditions of Participation in the Medicare regulations, 42 CFR Part 418, in order to receive reimbursement from Medicare for the hospice services that they provide to their patients. Hope and HON are also required to comply with the state licensure requirements in Part IV of Chapter 400, Florida Statutes, and Florida Administrative Code Rule 58A-2. The Medicare regulations require hospice providers to directly provide certain “core” services, including nursing, social work, and counseling. Other services, such as physician services, therapies, and medications, may be provided through third parties pursuant to a contract with the hospice. The Medicare regulations make the hospice responsible for all medical tests, durable medical equipment, biologicals, and other medically necessary services related to the patient’s terminal illness once the patient elects the Medicare hospice benefit. Hospices are required to admit hospice-eligible patients without regard to the patient’s ability to pay, and as stated above, Hope and HON each do so. The Medicare regulations require hospices to have a medical director, who is responsible for the overall medical supervision of the hospice's patients and for setting medical policies and procedures for the hospice. The medical director, or his or her physician designee, is required to participate in the development and maintenance of each hospice patient’s care plan. The patient’s care plan is required to be developed when the patient is first admitted to hospice, and it is required to be continually updated as warranted by the patient’s condition and needs. Development of the care plan is to be a collaborative process involving the hospice medical director, the IDT, any consulting physicians, the patient, and the patient’s family. There are four classes of physicians commonly involved in hospice care: referring, attending, consulting, and hospice. The referring physician is the physician that refers the patient to hospice after determining (in conjunction with the hospice medical director) that the patient is eligible for hospice. The attending physician is the physician that is primarily responsible for the patient’s care once the patient becomes a hospice patient. The consulting physician is a physician, typically one with some sort of specialty (such as oncology), who is consulted by the attending physician while the patient is a hospice patient. The hospice physician is the medical director of the hospice or other physician employed by the hospice. The attending physician will either be the referring physician or the hospice physician, depending upon whether the referring physician is comfortable with having primary responsibility for the patient’s care once the patient becomes a hospice patient. A referring physician who chooses not to be the attending physician might become a consulting physician, which is particularly common when the referring physician is a specialist such as an oncologist. The hospice physician is the attending physician for a majority of the patients at both Hope and HON. In order for a patient to be admitted to hospice, the hospice medical director must agree with the referring physician's assessment that the patient has a terminal illness that is expected to run its course in less than six months. Once a patient is admitted to hospice, the only physician who can separately bill Medicare for services rendered to the patient is the attending physician. For services rendered by the attending physician related to the patient’s terminal illness, the “professional component” (i.e., the patient examination or other hands-on physician care) of the attending physician’s bill is submitted to and reimbursed by Medicare; the “technical component” of the attending physician’s bill (e.g., medical tests, drugs administered) is submitted to and reimbursed by the hospice. For services unrelated to the patient’s terminal illness, the attending physician’s entire bill is submitted to Medicare for reimbursement. The hospice is not responsible for any portion of the bill. Other physicians, such as consulting physicians, submit their bills to the hospice rather than to Medicare. The hospice pays the consulting physician’s bill in the first instance. The professional component of the bill is then submitted by the hospice to Medicare for reimbursement above and beyond the per diem rate paid to the hospice; the technical component of the bill is paid by the hospice without any additional reimbursement from Medicare. Medicare contracts with a fiscal intermediary who is responsible for reviewing bills from Medicare-certified providers to determine whether the treatment was actually rendered and whether it was medically necessary and appropriate; however, because the technical component of the consulting physician's bill is paid by the hospice, not Medicare, it is not subject to review by the fiscal intermediary. Medicare reimburses physician services at a standard rate, which is typically referred to as the “Medicare allowable rate.” Generally, it is beneficial to the patient for hospice care to be initiated as early as possible after the patient is determined to meet the hospice eligibility criteria so that the patient and his or her family receives as much support as possible during the dying process. As a result, longer lengths of stay in hospice can be viewed as beneficial. Longer lengths of stay can also be viewed as detrimental to the extent that they are being motivated by the financial interests of the hospice and/or the consulting physicians, who each have the potential to benefit financially from a patient living longer in hospice. The hospice benefits because it receives a per diem payment for each day that the patient is enrolled in its program, and as discussed in Part F(2)(c) below, the consulting physician can benefit if he or she is able to continue to provide services to the patient that he or she otherwise may not have be able to provide without having to justify the medical appropriateness of the services. Longer lengths of stay are not necessarily an indicator of hospice quality of care, which depends more upon the services that the patient is receiving from the hospice than the length of time that the patient is enrolled in hospice. Longer lengths of stay are an indicator of the accessibility of hospice care because they tend to reflect that patients are being referred to, and admitted into hospice earlier in the dying process. Penetration rates, which are the ratio of hospice admissions in a service area (by age/disease cohort or overall) to the total number of deaths in service area (by age/disease cohort or overall), are a more well-accepted measure of the accessibility of hospice care than are lengths of stay. The FNP formula used by the Agency to determine need for additional hospice programs in a service area is driven in large part by the penetration rates achieved by the existing hospice(s) in the service area. Hospices in Southwest Florida and Relevant Demographics of Hospice Service Areas 8B and 8C Southwest Florida is divided into three hospice service areas, 8A, 8B, and 8C. SA 8A consists of Charlotte and DeSoto Counties; SA 8B consists of Collier County; and SA 8C consists of Lee, Glades, and Hendry Counties. Each of those service areas currently has a single hospice provider: Hospice of Southwest Florida, Inc., in SA 8A; HON in SA 8B; and Hope in SA 8C. There are no approved, but not yet licensed hospice programs in any of those service areas. The 2002 population of SA 8B was approximately 276,000. The population is projected to grow by 21.3 percent over the next five years. Approximately 24 percent of the SA 8B population is in the 65 and older (“65+”) age cohort, which is higher than the statewide average of 17 percent. The 65+ age cohort is the group most likely to utilize hospice services. 108. The three-year average death rate in SA 8B is 0.009131, which is slightly lower than the statewide average of 0.010218. 109. The number of deaths in SA 8B is projected to increase by 14.1 percent -- from 2,398 to 2,736 -- over the July 2004 through June 2005 planning horizon applicable to this case. Spanish is the most common second language in SA 8B, and it is particularly prevalent in and around the Immokalee area. SA 8B and SA 8C are similar in that most of the population is concentrated in the western portions of the service areas along the coast and the eastern portions of the service areas are rural and sparsely populated. SA 8B and SA 8C are also demographically similar. For example, both service areas are less densely populated than the state as a whole; both service areas are growing at a faster rate than the state as a whole; the percentage of each service area’s population in the 65+ age cohort is the same and is higher than the statewide average for that age cohort; the median household net worth in both service areas is higher than the statewide average; both service areas had similar mortality rates and a similar array of causes of death for their residents; and both have a single, well-established hospice provider. Because of the similarities between SA 8B and SA 8C, they should have similar hospice penetration rates. Any material differences between the penetration rates in the service areas can be attributed to differences in the management and operation of HON and Hope. For calendar year 2002, which is the period reflected in the FNP, the overall penetration rate for SA 8B (44.3 percent) was higher than the overall statewide penetration rate (43.8 percent), but it was significantly lower than the overall penetration rate for SA 8C (54.7 percent). The data for calendar year 2003, which was the most current available at the time of the hearing, reflects a significant increase in the overall penetration rate in SA 8B to 53.7 percent. That rate is higher than the statewide penetration rate of 48 percent, and it is only slightly lower than the 55.3 percent penetration rate in SA 8C. Hope’s Proposed SA 8B Hospice Program Hope’s proposed SA 8B hospice program is essentially an expansion of its existing SA 8C program’s service area. The policies and procedures that Hope utilizes in its existing program will be implemented in its proposed SA 8B program. The policies include Hope’s commitment to serving patients and families without regard to caregiver status, homelessness, or HIV/AIDS status, and without regard to their ability to pay. The procedures include the protocols and algorithms used by Hope’s nurses to help them manage the most common pain symptoms found in hospice patients, including anxiety, fatigue, and depression, as well as Hope's detailed protocols for pediatric hospice patients. The protocols are used by the hospice nurses as a guide in the assessment of the patient; the identification of treatment options; the administration of medications, when indicated and pre-authorized by the physician; and the facilitation of the nurse’s communications with the physician and pharmacist about the patient’s condition and course of treatment. Hope intends to establish an office in Naples to serve central and south Collier County. The office will be located in leased space; no new construction is proposed. Hope intends to serve northern Collier County from its existing Bonita Springs office, which is in Lee County close to the border of Collier County. Hope intends to serve the Immokalee area from its existing Lehigh Acres office, which is closer to the Immokalee area than is Naples. Additionally, Hope conditioned the approval of its application on its establishment of a “counseling and education center” in Immokalee during the first two years of operation of its proposed SA 8B hospice program. Hope is not proposing any inpatient hospice beds as part of its SA 8B program. Hope intends to provide inpatient and respite care through contractual arrangements with existing nursing homes and hospitals in Collier County and/or through the use of its inpatient facilities in Lee County. Hope’s proposed SA 8B hospice program will provide a comprehensive range of hospice services, including physician services, nursing services, home health aide services, social services, and all other services required by state and federal law. Hope intends to provide services that are not reimbursed by Medicare or other insurance, such as bereavement services, chaplain services, and massage, music, art, and pet therapies. Hope currently provides those services in its existing hospice program in SA 8C. Hope expects to receive the vast majority of its referrals to its proposed SA 8B hospice program from physicians’ offices, which is consistent with its experience in SA 8C. Hope projected in its CON application that a majority of its patients from Service Area 8B will have diagnoses other than cancer, which is consistent with HON's experience in SA 8B. Hope projected in its application that approximately 86 percent of the admissions at its proposed SA 8B hospice program will be Medicare patients, approximately six percent of the admissions will be Medicaid patients, and approximately two percent of the admissions will be charity patients. The application states that these figures are consistent with Hope’s experience in SA 8C, and the evidence establishes that they are reasonable. Hope projected in its application that its proposed SA 8B hospice program will have 183, 259, and 304 admissions in its first three years of operation. By the seventh year of operation, Hope projected that its proposed SA 8B hospice program will have 529 admissions. Those figures represent 15 percent (year 1), 20 percent (year 2), 22 percent (year 3), and 30 percent (year 7) of the projected hospice admissions in SA 8B. Those market shares are at the high end of the range of the market shares achieved by other recent start-up hospice programs that entered into single-provider markets; however, under the circumstances of this case, the market shares projected by Hope are actually somewhat understated. In projecting the total number of hospice admissions in SA 8B, Hope assumed that the overall penetration rate in the service area would increase each year based on its presence in the market. The assumption of an increasing penetration rate is reasonable, but attributing that increase to Hope’s presence in the market is not. Indeed, the evidence reflects that penetration rate in SA 8B has been steadily increasing over the past several years to levels consistent with and even higher than the rates projected by Hope in its application. Hope’s projected admissions translate into ADCs of 32.9 patients (year 1), 51.4 patients (year 2), 61.6 patients (year 3), and 107 patients (year 7). The ADC figures are based upon a 65.7-day average length of stay (ALOS) in year one, which increases to 74-day ALOS in year seven. The ALOSs and ADCs projected by Hope are consistent with Hope’s experience in SA 8C and are reasonable in light of Hope’s “open access” policies. The methodology used to calculate the projected admissions and the ADCs is reasonable, and Hope will be able to achieve its projected utilization levels. Indeed, as more fully discussed in Part G below, the projected admissions are actually understated because the penetration rate and market share assumptions made by Hope are too low. Hope projected in the application that the total project costs for the establishment of its proposed SA 8B hospice program will be $144,208. The largest line-item cost -- $59,818 –- is for “preoperational staffing, recruiting and training.” The projected costs are reasonable. Hope intends to fund the costs of its proposed SA 8B hospice program with "cash on hand" and operating revenues from its existing SA 8C hospice program. Hope has sufficient financial resources to fund the costs of its proposed SA 8B hospice program along with its other ongoing capital projects, including its proposed establishment of a hospice program in SA 8A. Hope projected in its application that it will need 12.88 full-time equivalents (FTEs) to staff its proposed SA 8B hospice program in its first year of operation, and that it will need an additional 7.12 FTEs (for a total of 20 FTEs) in its second year of operation. It was stipulated that the projected staffing levels are reasonable, and the evidence establishes that Hope will be able to recruit the necessary FTEs at the salaries projected in its application. In addition to the FTEs projected in the application, Hope will utilize volunteers to “provide both patient and administrative support.” Hope projects that its proposed SA 8B hospice will have approximately one volunteer per patient, or approximately 30 volunteers in the first year of operation and 50 volunteers in the second year of operation. Hope has been successful in recruiting and retaining volunteers in SA 8C. It will likely be able to recruit and retain sufficient volunteers for its proposed SA 8B hospice program despite the seasonal fluctuations in the availability of volunteers in SA 8B; indeed, SA 8C experiences similar seasonal fluctuations in the availability of volunteers. The payer mix and revenues projected in Schedule 7A of Hope's application and the expenses projected in Schedule 8A of the application are reasonable. Hope projected in its application that its proposed SA 8B hospice program would generate a net loss from operations of $18,509 in its first year, and that it would generate a net profit from operations of $87,027 in its second year. These projections are reasonable. Hope projected that it will have non-operating revenue of $63,310 and $92,697 in the first and second years of operations. Those amounts include “donations/memorials and bequests” that Hope expects to receive as well as a net of $10,000 -- $15,000 in revenues and $5,000 in expenses -- in fundraising revenues. Although Hope’s application states that the fundraising revenue “included in the financial projections is in line with the historical experience at Hope Hospice,” Hope’s audited financial statements reflect that Hope received contributions of $2.47 million and $2.97 million for the fiscal years ending September 30, 2001 and 2002, respectively. Even if 33 percent of those contributions were attributed to fund- raising expenses, which is the ratio used in the application to project the fundraising income, the $10,000 of net fund-raising revenue projected by Hope for its proposed SA 8B program is significantly understated.1 Alleged “Special Circumstances” Hope identified five “special circumstances” in its CON application which, in its view, support the approval of its proposed SA 8B hospice program. As more fully discussed below, the preponderance of the evidence does not support Hope’s claims. Inadequate Service to Persons Under 65 The first special circumstance alleged in Hope’s CON application is that persons under the age of 65 are being underserved by HON. The justification offered by Hope for this special circumstance was statistical data; there was no testimony from physicians or community witnesses related to this special circumstance. The primary statistical data relied upon by Hope are the penetration rates in SA 8B for cancer and non-cancer patients under the age of 65 for the calendar-year 2002 time period reflected in the FNP calculations. Because HON is the only hospice provider in SA 8B, the penetration rates for the service area reflect the penetration rates achieved by HON. The penetration rates for those age/disease cohorts are components of the formula by which the Agency calculates the hospice FNP; the penetration rate for cancer patents under the age of 65 (“U65C patients”) is the P1 factor, and the penetration rate for non-cancer patients under age 65 (“U65NC patients”) is the P3 factor. HON’s penetration rate for U65C patients for calendar-year 2002 was 57.3 percent, which was lower than the statewide average of 74.8 percent for that age/disease cohort. HON’s penetration rate for U65NC patients for calendar-year 2002 was 10.7 percent, which was lower than the statewide average of 14.7 percent for that age/disease cohort. By contrast, the penetration rate achieved by Hope in SA 8C for those age/disease cohorts in calendar-year 2002 was higher than the relevant statewide averages; its penetration rate for U65C patients was 89.3 percent, and its penetration rate for U65NC patients was 16.9 percent. The data for calendar-year 2003, which was the most current available at the time of the hearing, shows a significant increase in HON’s penetration rates for persons under the age of 65; its penetration rate for U65C patients was 96.21 percent (as compared to the statewide average of 82.6 percent), and its penetration rate for U65NC patients was 16.82 percent (as compared to the statewide average of 15.98 percent). HON’s penetration rates in those age/disease cohorts is higher than the penetration rates achieved by Hope in SA 8C over the same time period; Hope’s penetration rate in calendar- year 2003 for U65C patients was 87.85 percent, and its penetration rate for U65NC patients was 14.75 percent. To the extent that the lower penetration rates in SA 8B for patients under the age of 65 in calendar-year 2002 reflected a “gap” in the hospice services provided by HON or an “unmet need” in SA 8B, that gap no longer exists and the unmet need is being met. Accordingly, the first special circumstance alleged by Hope in its application was not proven. Denial of Access to Persons on Palliative Chemotherapy and Palliative Radiation The second special circumstance alleged in Hope’s CON application was that persons who are receiving or may need to receive palliative chemotherapy or palliative radiation (hereafter “palliative chemo/radiation”) are being denied delayed access to hospice by HON. Palliative Chemo/Radiation, Generally Palliative chemo/radiation are medical treatments whose primary purpose is to reduce the size of the patient’s malignant tumors, thereby relieving the pressure exerted by those tumors on other organs and reducing the pain associated with that pressure. Unlike curative chemotherapy and radiation whose purpose is to cure the patient’s cancer and to allow the patient to have a normal life expectancy, the purposes of palliative chemo/radiation are symptom reduction and improved quality of life during the dying process. Palliative chemo/radiation is typically administered by oncologists, who are physicians that specialize in the treatment of cancer. The treatments are typically administered in the oncologist’s office. The toxicity of the chemotherapy and the resulting side-effects (e.g., fatigue, nausea, etc.) have to be weighed against the benefits of the treatment for each patient. Similarly, the burdens of radiation treatment (e.g., interruption of other pain control measures to transport the patient to the radiation facility) have to be weighed against the benefits of the treatment for each patient. In some cases, particularly as the patient’s tumor burden increases, the burdens associated with palliative chemo/radiation will outweigh the benefits. Palliative chemo/radiation is expensive. The average cost of a treatment is $750, but the cost can be as high as $2,500 per treatment, and the treatments are typically administered on a weekly basis. The costs of the chemotherapy drugs and the radiation treatments are a larger component of those costs than are the costs of the physician services related to the administration of the drugs/treatments. An oncologist administering palliative chemo/radiation to a non-hospice Medicare patient submits his or her bills directly to Medicare and those bills are subject to review by the fiscal intermediary as described above. When palliative chemo/radiation is administered to a hospice Medicare patient by an oncologist who is acting as a consulting physician, the professional component of the palliative chemo/radiation bill is paid by Medicare as a “pass- through” charge submitted by the hospice; the technical component (i.e., the chemotherapy drugs and the radiation treatment itself) is paid by the hospice, not Medicare. Oncologists make more money on the drugs that are administered as part of the palliative chemo/radiation treatment than they do on the professional services related to the administration of the drugs. Because the costs of palliative chemo/radiation that are not passed-through to Medicare typically exceed the per diem payment that the hospice receives from Medicare for the patient, the costs of the patient’s palliative chemo/radiation are effectively being subsidized by the per diem payments received by the hospice for other patients. As a result, it is important for hospices that provide large amounts of palliative chemo/radiation to increase their admissions and/or their ALOS in order to remain profitable. Most hospice patients who are receiving palliative chemo/radiation were receiving that treatment at the time of their admission to hospice. It is far less common that a patient not receiving palliative chemo/radiation at the time of his or her admission to hospice is started on that course of treatment after being admitted to hospice. At the time the patient is admitted to hospice, the oncologist is in the best position to determine whether the patient is benefiting from palliative chemo/radiation because he or she has an established physician-patient relationship with the patient; however, the hospice medical director is still required to do an independent assessment (typically through a review of the patient’s medical records) of the appropriateness of palliative chemo/radiation as part of the development of the patient’s initial care plan. Once the patient is a hospice patient, the hospice medical director is responsible for the implementing and monitoring the patient’s care plan and, as a result, the medical director should be the physician making the ultimate decision (with the input of the consulting oncologist, the IDT, the patient, and the patient’s family) as to the continuation or termination of palliative chemo/radiation treatments. To that end, it is important for the medical director to monitor the effectiveness and appropriateness of the palliative chemo/radiation being administered to the hospice’s patients. Hospices have a financial incentive not to provide, or not to continue to provide palliative chemo/radiation to their patients because the hospice is not reimbursed for a large part of the high costs associated with those treatments; however, the evidence was not persuasive that the disincentive to providing palliative chemo/radiation is as significant as Hope’s witnesses suggested.2 HON’s Approach to Palliative Chemo/Radiation in Service Area 8B HON does not categorically deny palliative chemo/radiation to its patients, and it does not refuse to admit or delay the admission of patients who are receiving palliative chemo/radiation.3 HON provides palliative chemo/radiation to its patients where it shown that the treatments are actually benefiting the patient and that the benefits outweigh the burdens on the patient. The consulting oncologist is involved in the benefit-burden analysis, but he or she does not have sole discretion as to whether palliative chemo/radiation will be continued. Among other things, HON’s medical director uses a fatigue algorithm and the “Palliative Care Practice Guidelines in Oncology” published by the National Comprehensive Cancer Network in evaluating the benefit and burden to the patient of continuing palliative chemo/radiation. HON’s medical director also uses objective information such as laboratory results and imaging data, which HON requires the consulting oncologist to provide, in the benefit-burden analysis. HON’s approach is consistent with the Medicare regulations, which vest the ultimate responsibility for the patient’s pain and symptom management in the hospice medical director, not the consulting oncologist. It is also consistent with the “Medical Director Model” published by the American Academy of Hospice and Palliative Medicine. The amount of palliative chemotherapy provided by HON in 2000, 2001, and 2002, was higher than the “national average,”4 when measured on a cost per patient served basis or cost per patient day basis. The amount of palliative radiation provided by HON in 2002 was also higher than the “national average” when measured on a cost per patient served basis or cost per patient day basis; it was lower than the “national average” in 2000 and 2001. HON does not defer to the oncologist’s determination that the patient’s palliative chemo/radiation should be continued once the patient becomes a hospice patient. The determination as to whether to continue the palliative chemo/radiation is made as part of the development and monitoring of the patient’s care plan. HON's medical director is ultimately responsible for developing the patient's care plan, which is done with the input and collaboration of the patient, patient’s family, the IDT, and the consulting oncologist. HON reimburses the consulting oncologist at 100 percent the Medicare-allowable rate for palliative chemo/radiation administered by the oncologist. Hope’s Approach to Palliative Chemo/Radiation Hope’s approach to palliative chemo/radiation is much different from HON’s approach, and Hope intends to replicate its existing policies in its proposed SA 8B hospice program. The differences start in the way that Hope interacts with its referral sources, particularly physician groups such as Florida Cancer Specialists (FCS). FCS has over 40 medical oncologists with offices in Ft. Myers, Naples, and several other cities in southwest Florida. Hope generates the vast majority of its admissions from physicians. In 2002, for example, approximately 90 percent of its referrals -- 3,002 out of 3,335 -- were from physicians. The disproportionate number of physician referrals at Hope is explained, at least in part, by Hope’s “aggressive and assertive” sales and marketing efforts directed to physicians. In that regard, Hope’s “professional relations coordinators” have been trained by a sales and marketing professional to spend most of their time where it is likely to generate the most sales. Hope employs four professional relations coordinators, who along with a professional relations director and a community relations coordinator, make up Hope’s Professional Relations Department. That Department is Hope’s “sales and marketing arm.” Hope’s professional relation coordinators most frequently visit physicians’ offices, and primarily oncologists’ offices such as FCS. Indeed, the professional relations coordinator whose region included FCS’s Ft. Myers office testified that she visits FCS, on average, three to five times per week. The professional relations coordinators’ primary purpose when visiting physicians’ offices is to encourage physicians to make earlier referrals to Hope, thereby increasing the Hope’s ALOS and utilization. Another significant difference in Hope’s approach to palliative chemo/radiation is the degree of control that the oncologist continues to have over the patient’s course of treatment after the patient is enrolled in hospice. Hope's medical director does not routinely monitor or determine the effectiveness and appropriateness of the palliative chemo/radiation administered to its patients; instead, that monitoring is done by the oncologist administering the treatments. As a result, the treatments continue as long as the oncologist determines that they are benefiting the patient.5 Stated another way, for those patients at Hope receiving palliative chemo/radiation, the consulting oncologist effectively controls the patient’s care plan, at least to the extent of the pain management through palliative chemo/radiation, without any significant input from or oversight by Hope’s medical director or the IDT. Another difference is that Hope uses a third party administrator (TPA) to pay the bills submitted by the consulting oncologists and other physicians. The TPA performs essentially ministerial duties in processing the bills for payment. It does not do a chart review or any other analysis to determine whether the palliative chemo/radiation or other services billed by the physician were actually delivered or whether those services were medically- appropriate. The practical effect of using the TPA to pay the bills submitted by the consulting oncologists is that those components of the bills that are not passed through to Medicare –- e.g., the cost of the chemotherapy drugs or radiation treatments –- are not subjected to any type of utilization review. The TPA pays the bills submitted by consulting oncologists (and other consulting physicians) at 100 percent of the Medicare allowable rate, typically within 30 days after the bill is submitted. Hope’s use of the TPA to pay its consulting physicians, in conjunction with the level of control that it gives to its consulting oncologists over the administration of the patient’s palliative chemo/radiation treatments, creates an incentive for oncologists to refer their patients to Hope. The incentive is not financial in the sense that the oncologist will be reimbursed at a higher rate, but rather it is based upon the reimbursement being made without subjecting the treatment or the bills to the same level of review that they would be subject to if the patient was not enrolled in hospice and the oncologist billed Medicare directly. The end-result of Hope’s policies related to palliative chemo/radiation can be seen in the level of expenditures made by Hope for those services, both to FCS and in total, as compared to HON and the “national average.” Hope paid FCS over $1.1 million in 2002, and over $1.7 million in 2003 for services rendered by FCS physicians to patients at Hope, which primarily consisted of palliative chemo/radiation services. No other physician group received more reimbursements from Hope than did FCS. In 2002, Hope’s total palliative chemo/radiation expenditures were approximately nine times (i.e., $1.83 million to $207,000) higher than HON’s palliative chemo/radiation expenditures even though Hope only had four times (i.e., 1,344 to 331) as many cancer admissions as did HON. In 2003, Hope’s palliative chemo/radiation expenditures were more than 12.5 times (i.e., $2.58 million to $201,500) higher than HON’s palliative chemo/radiation expenditures even though Hope only had 2.3 times (i.e., 1,333 to 571) as many cancer admissions as did HON. Similarly, on a per-cancer admission basis, Hope’s palliative chemo/radiation expenditures were approximately two times that of HON in 2002 ($1,365 to $625) and approximately 5.5 times that of HON in 2003 ($1,937 to $353). The disparity between Hope’s and HON’s palliative chemo/radiation expenditures is comparable to the disparity between Hope’s expenditures and the “national average.” Ultimate Findings Related to Palliative Chemo/Radiation as a “Special Circumstance” The evidence was not persuasive that hospice patients on or in need of palliative chemo/radiation in SA 8B are being underserved by HON despite the fact that HON provides considerably less palliative chemo/radiation than does Hope in the adjacent SA 8C. If anything, the evidence suggests that those services are being overutlized in SA 8C. The evidence was also not persuasive that HON has policies that inappropriately deny or unreasonably delay access to hospice for patients on or in need of palliative chemo/radiation, even though HON’s approach to providing those services differs markedly from Hope’s approach. If anything, the evidence suggests that Hope improperly delegates too much authority and control to the consulting oncologist over the management of hospice patients on palliative chemo/radiation. Accordingly, the second special circumstance alleged by Hope was not proven. Inadequate Service to African-Americans The third special circumstance identified in Hope’s CON application is that African-Americans are not being adequately served by HON. Hope expressly abandoned this alleged special circumstance at the hearing through the testimony of its health planner and the stipulations of its counsel. Inadequate Intensive Hospice Care The fourth special circumstance alleged in Hope’s CON application is that intensive hospice care (i.e., inpatient care and continuous care) is not being adequately provided by HON. Hope expressly abandoned this alleged special circumstance at the hearing through the testimony of its health planner and the stipulations of its counsel. Inadequate Service to the Immokalee Area The fifth special circumstance alleged in Hope’s CON application is that the Immokalee area is being underserved by HON. Immokalee is an unincorporated area in northeastern Collier County composed of zip codes 34142 and 34143. It is approximately 40 miles from Naples. Immokalee has approximately 20,000 year-round residents, and its population grows to as many as 40,000 residents during the growing season. Immokalee is a rural, economically-disadvantaged area, and it is generally underserved for health and social services. In 1993, a charitable organization donated a building in Immokalee to HON. HON remodeled the building to include eight hospice residential beds and office space for the care team members serving patients in the Immokalee area. HON closed that office in the fall of 1994 because the residential beds were not being sufficiently utilized. HON sold the building (for the cost of the renovations that it made to the building) to an organization that provides social services to residents of the Immokalee area. HON has continuously provided hospice services to residents of the Immokalee area since 1983 when it began operating in SA 8B, even though it only had physical office space in the Immokalee area for a short time in the mid-1990’s. HON’s service of the Immokalee area is similar to Hope’s service of Glades and Hendry Counties, which are the rural counties served by Hope in SA 8C. Hope did not have a physical office in those counties until 1996 (Hendry County) and 2001 (Glades County), but according to Hope’s chief executive officer, Hope was still able to adequately serve those counties. HON continued to serve patients in the Immokalee area after it closed its Immokalee office in the fall of 1994. HON remained involved in the Immokalee community after it closed its Immokalee office, but prior to April 2002 its involvement was minimal, and did not include the same level of proactive community education and outreach that it is currently doing.6 HON has recently become more visible in the Immokalee community. For example, HON placed advertisements (in both English and Spanish) in the 2003-04 phone books the serve the Immokalee area; it is now regularly advertises in the local Immokalee newspapers (in both English and Spanish); and it recently joined the Immokalee Chamber of Commerce. HON has also recently engaged in a number of proactive community education and outreach activities in the Immokalee area. For example, a HON representative regularly participates in the meetings of the Immokalee Interagency Council, which is a collection of social service agencies that meet monthly to coordinate with each other in an effort to ensure that there are no gaps in the social services provided to Immokalee residents. HON’s renewed involvement in the Immokalee community began in April 2002 when it assigned a “social services coordinator," Kathleen Hill, to the Immokalee area. Ms. Hill was based out of HON’s main office in Naples, but she was in the Immokalee area “a minimum of two to three times a week” meeting with patients and communicating with community organizations regarding the hospice services offered by HON. Ms. Hill continued in that position until April 2003. HON decided to reestablish an office in the Immokalee area in mid-2002, well before April 2003 when Hope submitted its letter of intent to the Agency for its proposed SA 8B hospice program. That decision was based, in part, on a need to reduce the crowded conditions at HON’s main office by moving staff to satellite offices. HON’s new Immokalee office opened in August 2003. The office is staffed by social worker Lillian Cuevas, who is primarily responsible for providing education and information about hospice and HON to community organizations in the Immokalee area. Ms. Cuevas has actively engaged in those education and outreach efforts since she filled Ms. Hill’s position in September 2003. No direct patient care is provided out of the Immokalee office, but the office is used by the care team members serving patients in the Immokalee area as a place to do charting work. HON’s current Immokalee office serves essentially the same functions as the “counseling and education center,” which Hope committed in its application to open within two years after the approval of its proposed SA 8B hospice program. HON penetration rate in the Immokalee area in 2002 was 29.35 percent. That rate is considerably lower than the penetration rate achieved by HON for SA 8B as a whole, which is not unexpected given the geographic and demographic characteristics of the Immokalee area. The penetration rate achieved by HON in the Immokalee area in 2002 was lower than the 36.44 percent7 overall penetration rate achieved by Hope in the two rural counties that it serves, but it was higher than the 26.92 percent penetration rate achieved by Hope in Glades County alone. The difference in the penetration rates achieved by HON and Hope in the rural areas of their respective service areas is not material, and that difference does not in and of itself constitute a special circumstance that would warrant the approval of a new hospice program in SA 8B, particularly since the physical presence that Hope has proposed for Immokalee is essentially the same as that which HON currently has. In sum, the evidence fails to establish that the Immokalee area is or has been underserved by HON. Moreover, HON’s recent reestablishment of an office in the Immokalee area is expected to help HON increase its penetration rate in the Immokalee area and ensure that that the area continues to be adequately served in the future. Indeed, Hope’s health planner testified that he does not know whether Immokalee continues to be an underserved area in light of HON’s recent reestablishment of an office in the area. Accordingly, the fifth special circumstance alleged by Hope in its application was not proven. Impact on HON As stated above, Hope projected in its application that it will have 183, 259, and 304 admissions at its proposed SA 8B hospice program in its first three years of operation. Those figures also represent the number of “lost admissions” at HON since HON is currently the sole provider of hospice services in SA 8B; however, as discussed below, those figures are materially understated. First, in projecting the total number of hospice admissions for SA 8B, Hope used penetration rates that are lower than those actually achieved by HON. The penetration rates used by Hope were based upon the assumption that “gap with the Service Area 8C penetration rates” would be closed by the seventh year of operation of Hope’s proposed SA 8B hospice program; however, the calendar- year 2003 data reflects that the “gap” between the penetration rates in SA 8B and SA 8C has effectively been closed already. The effect of using the lower penetration rates is that the total number of hospice admissions for SA 8B projected in the application for 2003 and beyond are materially understated and not reliable. On this issue, the projections made by HON’s health planner regarding the total number of hospice admissions for SA 8B during Hope’s first three years of operation –- i.e., 1,490 (year 1), 1,605 (year 2), and 1,736 (year 3) -- are more reasonable than Hope’s projections in the application. Second, the projections in the CON application assume that Hope’s proposed SA 8B program will take an equal percentage of the cancer and non-cancer patients that would have otherwise been served by HON. Specifically, in the first year of operation, Hope projects that it will get 15 percent of SA 8B’s cancer patients and 15 percent of the service area’s non-cancer patients; in the second year of operation, Hope projects that it will get 20 percent of each category’s patients; and in the third year of operation, Hope projects that it will get 22 percent of each category’s patients. The assumption that Hope will take an equal number of cancer and non-cancer patients from HON each year is not consistent with the evidence regarding Hope’s “open access” philosophy towards palliative chemo/radiation or the testimony of oncologists in SA 8B regarding their intent to refer their patients to Hope rather than HON if Hope’s application is approved.8 Indeed, based upon that evidence and testimony, it is reasonable to expect that Hope will get a significantly larger percentage of the cancer patients in SA 8B than will HON. On the issue of the percentage of cancer patients that Hope will take from HON, the projections of HON’s health planner are more reasonable than the projections of Hope’s health planner.9 Specifically, it is reasonable to expect that Hope will get 25 percent, 50 percent, and 75 percent of the cancer patients in SA 8B in its first three years of operation. The effect of Hope's getting a larger percentage of the service area’s cancer patients is that its total admissions and, hence, HON’s “lost admissions” will more likely be 289, 533, and 787 in its first three years of operation.10 Those admissions translate into projected market shares for Hope of 19.4 percent, 33.2 percent, and 45.3 percent in its first three years of operation, based upon the total number of admissions projected by HON’s health planner for SA 8B over that period. Those market shares are reasonable and attainable, even after taking into account HON’s status as the long-time incumbent hospice provider with considerable community support. The ultimate effect of the “lost admissions” is that HON’s ADC will be 169 patients (rather than 210 patients) in the first year of operation of Hope’s proposed SA 8B hospice program; 151 patients (rather than 226) in the second year of Hope’s program; and 134 patients (rather than 245 patients) in the third year of Hope’s program.11 The financial impact on HON of the “lost admissions” is significant, both in terms of the lost patient revenues from the admissions and the lost donations and bequests that HON would have otherwise received from those patients. That financial impact is material, even though HON has a strong balance sheet because the impact will be cumulative and continuing in nature. The “lost admissions” would require HON to eliminate certain services that it currently provides, including a number of “non-core” services (e.g., massage and pet therapies) that enhance the hospice experience of the patient and his or her family; however, the evidence was not persuasive that HON would have to eliminate as many services as it projected in Exhibit HON-28. Indeed, HON provided those services in the past when its census was at levels similar to those which would result from “lost admissions” to Hope.12 To the extent that Hope’s entry into SA 8B would adversely impact HON’s ability to recruit and retain staff and/or volunteers, that impact is mitigated by HON’s expectation that it would need to cut services and staff as a result of the admissions that it would lose to Hope. The evidence was not persuasive that Hope’s entry into SA 8B will benefit HON by increasing awareness of hospice services and thereby increasing the overall penetration rate for hospice services in the service area, particularly since the calendar-year 2003 data reflects that the penetration rate in SA 8B is already 53.7 percent, which is the fifth highest in the state and only 2.9 percentage points lower than SA 9C, which has the highest penetration rate in the state at 56.6 percent. In sum, the approval of Hope’s application will have a material and adverse impact on HON from a financial and programmatic perspective because HON will be transformed from a growing hospice into one with a declining census, which in turn, will limit HON’s ability to provide the same range and quality of services that it currently provides. Applicable Statutory and Rule Criteria Section 408.035, Florida Statutes (2004)13 (a) Subsections (1), (2), and (5) (Need for Proposed Services; Accessibility of Existing Services; and Enhancing Access) As stated above, there is no numeric need for a new hospice program in SA 8B under the Agency’s rule methodology. Statistically speaking, HON is adequately meeting the need for hospice services in SA 8B. Its penetration rate has consistently been higher than the statewide average, and the calendar-year 2003 data, which was the most current available at the time of the hearing, shows that HON's penetration rate is one of the five highest in the state. Because a hospice’s penetration rate is, a measure of the hospice’s success in making its services accessible to terminally-ill patients in its service area, there is no need for an additional hospice in SA 8B from an access-to-care perspective. There is also no need for an additional hospice program in SA 8B from a quality of care perspective. HON is accredited by JCAHO and it performs well on the annual state licensure surveys, which provide objective measures the high quality of care at HON. The anecdotal evidence presented by Hope regarding the inappropriate medication and/or treatment of HON patients and the routine overmedication of HON patients was not persuasive. Most of that testimony was from individuals who had no specialized training or experience in hospice and palliative care or the unique medication issues associated with dying patients in hospice. The fact that certain medications are discontinued by HON upon the patient’s admission into hospice is not in and of itself an indicator of a quality of care problem at HON. Indeed, it is entirely appropriate for the hospice medical director to reevaluate each medication that the patient is taking at the time of his or her admission to hospice in order to determine (in conjunction with the patient, patient’s family, and the patient’s other physicians) whether those medications are appropriate since the goals of care in hospice are pain management rather than curative care. The evidence establishes that HON’s medical director does precisely that before discontinuing medications that the patient is taking at the time of his or her admission to hospice. The evidence was not persuasive that HON requires its patients to execute do-not-resuscitate orders (DNRs) as a condition of admission such that patients who do not have DNRs are being denied or delayed access to hospice care by HON. Instead, the evidence establishes that HON discusses DNRs with its patients at the time of admission and on an ongoing basis, consistent with the guidelines of the American Medical Directors Association, but that it does not require its patients to execute a DNR as a condition of admission. The evidence was not persuasive that access to hospice care needs to be “enhanced” for any subset of the population in SA 8B, particularly those allegedly underserved groups identified in Hope’s application. See Parts F(1), (2), and (5) above. To the contrary, the evidence establishes that HON is providing sufficient and appropriate outreach in SA 8B regarding the hospice services that it provides. Moreover, to the extent that Hope’s proposed SA 8B hospice program would “enhance” access to hospice for patients on palliative chemo/radiation because of Hope’s aggressive sales and marketing efforts designed to get oncologists to refer their patients to Hope earlier, the evidence was not persuasive that such “enhancements” are appropriate under the Medicare regulations or necessarily beneficial to the patient. In sum, criteria in Section 408.035(1), (2), and (5), Florida Statutes, weigh against the approval of Hope’s application. Subsection (3) (Applicant’s Quality of Care) Hope provides quality care at its existing hospice program in SA 8C.14 Hope has several ongoing initiatives through which it continuously evaluates its internal operations and delivery of services to its patients. The purpose of those initiatives is to enhance the quality of care that Hope provides. It is reasonable to expect that Hope will provide quality care in its proposed SA 8B hospice program because it intends to utilize its current policies and procedures in its proposed program, including its pain and symptom management protocols which guide the treatment of almost all of Hope’s patients at its existing SA 8C program. The protocols, which help to ensure that patients receive consistent and quality hospice care, are not unique to Hope. Indeed, HON has developed similar pain and symptom management protocols that guide the treatment of almost all of its patients. HON provides high quality care at its existing hospice program in SA 8B.15 Indeed, the quality of care that will be provided by Hope in its proposed program is lower than that provided by HON in at least two respects. First, Hope has fewer bilingual direct-care employees than does HON. Only five of Hope’s direct-care employees are bilingual. As a result, Hope relies upon volunteer interpreters to enable its direct-care employees to communicate with patients and families for whom English is not the primary language. By contrast, HON has 25 direct-care employees, including its medical director, who are bilingual in Spanish and English; and it has approximately 15 other direct-care employees who speak French, Creole, Portuguese, Polish, Armenian, Thai/Laotion, sign language, and/or German in addition to English. This allows HON’s direct-care employees communicate directly (rather than though an interpreter) with the patient and his or her family, and it also fosters sensitivity to the patient’s cultural/ethnic values. HON has Spanish versions of its brochures, caregiver’s guide, admissions forms, and other materials, which it provides to patients and families whose primary language is Spanish rather than English. Hope also provides some of its documents and forms in Spanish as well as English. Second, even though Hope’s ALOS exceeds the ALOS at HON and the “national average,” the amount that Hope spends on nursing costs is lower than the “national average” and the amount spent on nursing costs by HON, both on a per patient basis and on a per patient-day basis. In 2002, for example, Hope’s ALOS was 62.51 days, HON’s ALOS was 49.13 days, and the “national average” was 47.79 days. In that same year, Hope’s nursing expenditures were $1,158.09 per patient (or $18.53 per patient-day) whereas the “national average” was $1,540.43 per patient (or $33.06 per patient-day) and HON’s nursing expenditures were $2,250.84 per patient (or $45.82 per patient day). The effect of the higher ALOS and lower expenditures on nursing at Hope is that its patients are staying longer but receiving less, or less-intense direct patient care than HON’s patients.16 There are slight differences in the admissions processes at Hope and HON –- e.g., HON uses designated admissions teams of nurses and social workers for the initial clinical assessment of its patient in order to streamline and eliminate delays in the admission process, whereas the initial clinical assessment of Hope’s patients is done by the nurse and social worker that will be caring for the patient in order to promote continuity of care; however, the evidence was not persuasive that those differences make the admission process and/or the overall quality of care at Hope materially better than that at HON, or vice versa. In sum, Hope satisfies the criterion in Section 408.035(3), Florida Statutes, because it has a history of providing quality care in its existing SA 8C hospice program and it has the ability to provide quality care in its proposed SA 8B hospice program; however, this criterion does not materially weigh in favor of the approval of Hope’s application because HON is currently providing high quality care in SA 8B. Subsections (4) and (6) (Availability of Resources and Financial Feasibility) Hope has adequate personnel and funds to expand its current hospice program into SA 8B as proposed in its CON application. Hope has adequate financial resources to fund the cost of its proposed SA 8B hospice program and its other ongoing and proposed capital projects, including its proposed SA 8A expansion. As a result, Hope’s proposed SA 8B hospice program is financially feasible in the short-term. Hope’s proposed SA 8B hospice program is projected to generate a net profit from operations in its second year (see Finding of Fact 141), and as a result, Hope’s proposed SA 8B hospice program is financially feasible in the long-term. In sum, Hope’s application satisfies the criteria in Section 408.035(4) and (6), Florida Statutes. Subsection (7) (Fostering Competition that Promotes Cost-effectiveness) The establishment of a new hospice in SA 8B will necessarily increase competition for hospice care in the service area because there is currently only one hospice in SA 8B; however, the evidence was not persuasive that such competition would benefit the hospice patients in SA 8B or the community at large. The evidence was not persuasive that fostering competition is a consideration that should be given significant weight in the hospice context because hospice care does not lend itself to competition in the traditional sense because its “consumers” are terminally-ill patients and their families. Indeed, Hope’s chief executive officer acknowledged that the free market system should not drive the establishment of hospices, and that not all standard business approaches are appropriate for the hospice industry. Moreover, the evidence was not persuasive that competition between Hope and HON would promote cost- effectiveness. To the contrary, Hope’s entry into SA 8B would likely result in a dramatic increase the utilization of palliative chemo/radiation services in the service area, which as discussed above, is costly. Accordingly, the criterion in Section 408.035(7), Florida Statutes, weighs against approval of Hope’s application. Subsection (8) (Costs and Methods of Construction) Hope is not proposing any new construction in connection with its proposed SA 8B hospice program, and as a result, the criterion in Section 408.035(8), Florida Statutes, is not applicable. Subsection (9) (Medicaid and Charity Care) Hope did not condition the approval of its CON application on the provision of a minimum level of patient days to Medicaid and/or charity patients. The financial projections in Schedule 7A of Hope’s application assume that six percent of the patient days at its proposed SA 8B hospice program will be attributable to Medicaid patients and that two percent of its patient days will be attributable to charity patients. The evidence is insufficient to evaluate the significance of the percentages of Medicaid and charity care patient days projected by Hope. For example, the record does not reflect how those percentages compare to the statewide average for hospices and/or HON’s actual experience in SA 8B. The evidence is also insufficient to evaluate Hope’s past provision of hospice care to Medicaid and charity patients; even though the notes accompanying Schedule 7A state that the proposed payer mix (and, hence, the Medicaid and charity patient-day percentages) is based upon “the experience of the applicant and the proposed service area,” the record does not include Hope’s Medicaid cost reports or other data showing its actual experience in SA 8C. Nevertheless, it is clear from the evidence that Hope has a history of providing free services for the benefit of the local community that it serves. For example, Hope provides its bereavement services to the entire community, not just hospice patients and families; it offers a bereavement camp known as Rainbow Trails for children who have a death in the family even if the deceased was not a hospice patient; and it provides crisis counseling to the children in the local schools as needed. Hope also administers a “VOCA” program that works with the local State Attorney’s office and the Florida Highway Patrol to counsel persons who are victims of crime or who are involved in serious traffic accidents. Approximately 80 percent of the cost of the VOCA program is funded by a grant Hope received from the Attorney General’s Office; the remaining 20 percent is funded by Hope. The significance of the free services provided by Hope is mitigated by the fact that HON provides similar free services to the community. See Finding of Fact 51. Moreover, the criterion in Section 408.035(9), Florida Statutes, is not entitled to great weight in this proceeding because Hope, like HON and all other hospices, is required by law to serve all hospice-eligible patients who request hospice services regardless of their ability to pay. Subsection (10) (Designation as a Gold Seal Nursing Home) Hope is not proposing the addition of any nursing home beds and, as a result, the criterion in Section 408.035(10), Florida Statutes, is not applicable. (2) Section 408.043(2), Florida Statutes The statutory criteria in Section 408.043(2), Florida Statutes -- “need for and availability of hospice services in the community” –- encompass essentially the same issues as the criteria in Subsections (1), (2) and (5) of Section 408.035, Florida Statutes, and, the findings related to those subsections equally apply to the evaluation of Hope’s application under Section 408.043(2), Florida Statutes. See Part H(1)(a) above. (3) Rule Criteria Florida Administrative Code Rule 59C-1.0355(4)(e) Florida Administrative Code Rule 59C-1.0355(4)(e)1. provides that preference will be given to an applicant who commits to serve populations with “unmet needs.” Hope committed in its application to open a "counseling and education center" in Immokalee during the first two years of the operation of its program, and it committed to engage in a “special outreach program to educate the medical and consumer communities in Service Area 8B about the effectiveness of hospice care for patients under the age of 65.” Those commitments are aimed at two of the population groups in SA 8B that Hope contends are being underserved by HON; however, as discussed in Parts F(1) and (5) above, Hope failed to prove that those population groups are being underserved by HON or that they have "unmet needs." Florida Administrative Code Rule 59C-1.0355(4)(e)2. provides that preference will be given to an applicant who proposes to provide inpatient care through contractual arrangements with existing health care facilities unless the applicant demonstrates a more cost-effective alternative. Hope plans to provide inpatient care “through contractual arrangements with existing nursing homes and hospitals or through the use of its three existing and approved facilities in Lee County.” This approach is reasonable, and the record does not reflect whether there is a more cost-effective alternative. Florida Administrative Code Rule 59C-1.0355(4)(e)3. provides that preference will be given to an applicant who has a commitment to serve patients without primary caregivers at home, the homeless, and patients with AIDS. Hope plans to serve homeless patients, patients without caregivers at home, and patients with AIDS in its proposed SA 8B program; it has a history of serving such patients in its existing hospice program, as does HON. The fact that HON has a history of serving such patients reduces the weight given to the preference in Florida Administrative Code Rule 59C-1.0355(4)(e)3., in evaluating Hope’s application. Florida Administrative Code Rule 59C-1.0355(4)(e)4., which gives preference to an applicant who commits to establish a physical presence in the underserved county or counties of a three-county hospice service area, is inapplicable because there is only one county in SA 8B. Florida Administrative Code Rule 59C-1.0355(4)(e)5. provides that preference will be given to an applicant who proposes to cover services that are not specifically covered by private insurance, Medicaid, or Medicare. Hope plans to provide services that are not covered by private insurance, Medicaid, or Medicare, including chaplain services, therapies (e.g., massage, pet, music, art), and bereavement services to families of non-hospice patients; it has a history of providing such unreimbursed services as part of its existing hospice program, as does HON. The fact that HON has a history of providing similar unreimbursed services reduces the weight given to the preference in Florida Administrative Code Rule 59C-1.0355(4)(e)5. in evaluating Hope’s application. Florida Administrative Code Rule 59C-1.0355(5) Florida Administrative Code Rule 59C-1.0355(5) requires the applicant for a new hospice program to include evidence showing that that its proposal is “consistent with the needs of the community and other criteria contained in the local health council plans.” The applicable local health council plan includes the following preferences related to hospice care: Preference shall be given to applications that indicate a willingness to serve patients with HIV/AIDS and the homeless, as well as traditionally underserved populations. Preference shall be given to applications that propose either new or use of unused inpatient facilities that best provide for the care of patients and families. Preference shall be given to applications that demonstrate a commitment to provide services that do not impose barriers to care, such as requiring a caregiver or providing intensive palliative care. Preference shall be given to applications that exceed 80% occupancy level during the period of January through March on an annual basis, and in the event of multiple locations under one license, any individual location applies. Preference shall be given to applications that meet the minimum volume requirement as specified in the rule within the applicant’s core service area. The local health plan criteria are not as significant because of the 2004 amendments to the CON law –- Chapter 2004- 383, Laws of Florida -- which effectively eliminated the local health plan as a consideration in CON review. In any event, except for the third and fifth preferences, the local health plan preferences are either inapplicable or materially similar to the preferences in Florida Administrative Code Rule 59C-1.0355(4)(e) discussed above. Thus, the findings related to that rule equally apply to the evaluation of Hope’s application under Florida Administrative Code Rule 59C-1.0355(5). With respect to the third preference, Hope demonstrated that its policies do not discourage the admission patients receiving intensive palliative care, such as palliative chemo/radiation. Indeed, as discussed in Part F(2)(c) above, Hope’s polices effectively encourage the admission of those patients. Thus, to the extent that the local health plan preferences are still relevant, Hope is entitled to the third preference; however, for the reasons stated above in Part F(2)(d), that preference is not given significant weight in relation to the other statutory and rule criteria. With respect to the fifth preference, the minimum volume requirement in the Agency’s hospice rule is 350 admissions per year, which represents the volume arguably necessary to support a comprehensive range of hospice services. Hope projected in its application that its proposed SA 8B hospice program would achieve that volume by its fourth year of operation and, as discussed in Part G above, it is more likely to achieve that volume by its second year of operation. Moreover, Hope’s proposed SA 8B program is essentially an expansion of its existing hospice program, which had more than 3,200 admissions in 2003. With respect to the consistency of Hope’s application with the needs of the community, Hope's proposed SA 8B hospice program is not inconsistent with the needs of patients in the service are under the age of 65, patients in the service area in need of palliative chemo/radiation, and/or patients in the Immokalee area; however, as discussed in Part F above, Hope failed to establish that there was an "unmet need" in those areas that needs to be addressed through the establishment of a new hospice program in SA 8B. Florida Administrative Code Rule 59C-1.0355(5) also requires the applicant to include letters of support from various types of entities and organizations in the service area endorsing the hospice program being proposed by the applicant. Hope’s application includes letters of support from physicians, nursing homes, members of the Immokalee community and other individuals, and religious and community organizations. Five of the nine physician letters were from oncologists, three of whom are FCS oncologists. Hope’s application does not include any letters of support from an acute care hospital in SA 8B, even though the application states that Hope may provide respite and inpatient care through contractual arrangements with the local hospital. Florida Administrative Code Rule 59C-1.0355(6) Florida Administrative Code Rule 59C-1.0355(6), quoted below, requires the applicant to include a detailed description of its proposed hospice program in the CON application. Among other things, the rule requires the application to include the projected number of admissions for the first two years of operations, the arrangements for providing inpatient care, and proposed community education and fundraising activities. Hope’s application included all of the information required by Florida Administrative Code Rule 59C-1.0355(6); the description of the project in the application is reasonable and attainable; and as discussed above, Hope will likely exceed the number of admissions projected in its application.
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Agency issue a final order denying Hope’s application, CON 9695, to establish a new hospice program in SA 8B. DONE AND ENTERED this 24th day of January, 2005, in Tallahassee, Leon County, Florida. S T. KENT WETHERELL, II Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 24th day of January, 2005.
The Issue The issues in this case are whether the Agency for Health Care Administration (AHCA) should grant Hospice Integrated’s Certificate of Need (CON) Application No. 8406 to establish a hospice program in AHCA Service Area 7B, CON Application No. 9407 filed by Wuesthoff, both applications, or neither application.
Findings Of Fact Hospice Hospice is a special way of caring for patients who are facing a terminal illness, generally with a prognosis of less than six months. Hospice provides a range of services available to the terminally ill and their families that includes physical, emotional, and spiritual support. Hospice is unique in that it serves both the patient and family as a unit of care, with care available 24 hours a day, seven days a week, for persons who are dying. Hospice provides palliative rather than curative or life- prolonging care. To be eligible for hospice care, a patient must have a prognosis of less than six months to live. When Medicare first recognized hospice care in 1983, more than 90% of hospice cases were oncology patients. At that time, there was more information available to establish a prognosis of six months or less for these patients. Since that time, the National Hospice Organization (“NHO”) has established medical guidelines which determine the prognosis for many non-cancer diseases. This tool may now be used by physicians and hospice staff to better predict which non- cancer patients are eligible for hospice care. There is no substitute for hospice. Nothing else does all that hospice does for the terminally ill patient and the patient’s family. Nothing else can be reimbursed by Medicare or Medicaid for all hospice services. However, hospice must be chosen by the patient, the patient’s family and the patient’s physician. Hospice is not chosen for all hospice-eligible patients. Palliative care may be rejected, at least for a time, in favor of aggressive curative treatment. Even when palliative care is accepted, hospice may be rejected in favor of home health agency or nursing home care, both of which do and get reimbursed for some but not all of what hospice does. Sometimes the choice of a home health agency or nursing home care represents the patient’s choice to continue with the same caregivers instead of switching to a new set of caregivers through a hospice program unrelated to the patient’s current caregivers. There also is evidence that sometimes the patient’s nursing home or home health agency caregivers are reluctant, unfortunately sometimes for financial reasons, to facilitate the initiation of hospice services provided by a program unrelated to the patient’s current caregivers. Existing Hospice in Service Area 7B There are two existing hospice providers in Service Area 7B, which covers Orange County and Osceola County: Vitas Healthcare Corporation of Central Florida (Vitas); and Hospice of the Comforter (Comforter). Vitas Vitas began providing services in Service Area 7B when it acquired substantially all of the assets of Hospice of Central Florida (HCF). HCF was founded in 1976 as a not-for-profit organization and became Medicare-certified in 1983. It remained not-for-profit until the acquisition by Vitas. In a prior batching cycle, HCF submitted an application for a CON for an additional hospice program in Service Area 7B under the name Tricare. While HCF also had other reasons for filing, the Tricare application recognized the desirability, if not need, to package hospice care for and make it more palatable and accessible to AIDS patients, the homeless and prisoners with AIDS. HCF later withdrew the Tricare application, but it continued to see the need to better address the needs of AIDS patients in Service Area 7B. In 1994, HCF began looking for a “partner” to help position it for future success. The process led to Vitas. Vitas is the largest provider of hospice in the United States. Nationwide, it serves approximately 4500 patients a day in 28 different locations. Vitas is a for-profit corporation. Under a statute grandfathering for-profit hospices in existence on or before July 1, 1978, Vitas is the only for-profit corporation authorized to provide hospice care in Florida. See Section 400.602(5), Fla. Stat. (1995). HCF evaluated Vitas for compatibility with HCF’s mission to provide quality hospice services to medically appropriate patients regardless of payor status, age, gender, national origin, religious affiliation, diagnosis or sexual orientation. Acquisition by Vitas also would benefit the community in ways desired by HCF. Acquisition by Vitas did not result in changes in policy or procedure that limit or delay access to hospice care. Vitas was able to implement staffing adjustments already contemplated by HCF to promote efficiencies while maintaining quality. Both HCF and Vitas have consistently received 97% satisfaction ratings from patients’ families, and 97% good-to- excellent ratings from physicians. Initially, Vitas’ volunteer relations were worse than the excellent volunteer relations that prevailed at HCF. Many volunteers were disappointed that Vitas was a for-profit organization, protested the proposed Vitas acquisition, and quit after the acquisition. Most of those who quit were not involved in direct patient care, and some have returned after seeing how Vitas operates. Vitas had approximately 1183 hospice admissions in Service Area 7B in 1994, and 1392 in 1995. Total admissions in Service Areas 7B and 7C (Seminole County) for 1995 were 1788. Comforter Hospice of the Comforter began providing hospice care in 1990. Comforter is not-for-profit. Like Vitas, it admits patients regardless of payor status. Comforter admitted approximately 100 patients from Service Area 7B in 1994, and 164 in 1995. Total admissions in Service Areas 7B and 7C for 1995 were 241. For 1996, Comforter was expected to approach 300 total admissions (in 7B and 7C), and total admissions may reach 350 admissions in the next year or two. As Comforter has grown, it has developed the ability to provide a broader spectrum of services and has improved programs. Comforter provides outreach and community education as actively as possible for a smaller hospice. Comforter does not have the financial strength of Vitas. It maintains only about a two-month fiscal reserve. Fixed Need Pool On February 2, 1996, AHCA published a fixed need pool (FNP) for hospice programs in the July 1997 planning horizon. Using the need methodology for hospice programs in Florida found in F.A.C. Rule 59C-1.0355 (“the FNP rule”), the AHCA determined that there was a net need for one additional hospice program in Service Area 7B. As a result of the dismissal of Vitas’ FNP challenge, there is no dispute as to the validity of the FNP determination. Other Need Considerations Despite the AHCA fixed need determination, Vitas continues to maintain that there is no need for an additional hospice program in Service Area 7B and that the addition of a hospice program would adversely impact the existing providers. Essentially, the FNP rule compares the projected need for hospice services in a district using district use rates with the projected need using statewide utilization rates. Using this rule method, it is expected that there will be a service “gap” of 470 hospice admissions for the applicable planning horizon (July, 1997, through June, 1988). That is, 470 more hospice admissions would be expected in Service Area 7B for the planning horizon using statewide utilization rates. The rule fixes the need for an additional hospice program when the service “gap” is 350 or above. It is not clear why 350 was chosen as the “gap” at which the need for a new hospice program would be fixed. The number was negotiated among AHCA and existing providers. However, the evidence was that 350 is more than enough admissions to allow a hospice program to benefit from the efficiencies of economy of scale enough to finance the provision for enhanced hospice services. These benefits begin to accrue at approximately 200 admissions. Due to population growth and the aging of the population in Service Area 7B, this “gap” is increasing; it already had grown to 624 when the FNP was applied to the next succeeding batching cycle. Vitas’ argument ignores the conservative nature of several aspects of the FNP rule. It uses a static death rate, whereas death rates in Service Area 7B actually are increasing. It also uses a static age mix, whereas the population actually is aging in Florida, especially in the 75+ age category. It does not take into account expected increases in the use of hospice as a result of an environment of increasing managed health care. It uses statewide conversion rates (percentage of dying patients who access hospice care), whereas conversion rates are higher in nearby Service Area 7A. Finally, the statewide conversions rates used in the rule are static, whereas conversion rates actually are increasing statewide. Vitas’ argument also glosses over the applicants’ evidence that the addition of a hospice program, by its mere presence, will increase awareness of the hospice option in 7B (regardless whether the new entrant improves upon the marketing efforts of the existing providers), and that increased awareness will result in higher conversion rates. It is not clear why utilization in Service Area 7B is below statewide utilization. Vitas argued that it shows the opposite of what the rule says it shows—i.e., that there is no need for another hospice program since the existing providers are servicing all patients who are choosing hospice in 7B. Besides being a thinly-veiled (and, in this proceeding, illegal) challenge to the validity of the FNP rule, Vitas’ argument serves to demonstrate the reality that, due to the nature of hospice, existing providers usually will be able to expand their programs as patients increasingly seek hospice so that, if consideration of the ability of existing providers to fill growing need for hospice could be used to overcome the determination of a FNP under the FNP rule, there may never be “need” for an additional program. Opting against such an anti-competitive rule, the Legislature has required and AHCA has crafted a rule that allows for the controlled addition of new entrants into the competitive arena. Vitas’ argument was based in part on the provision of “hospice-like” services by VNA Respite Care, Inc. (VNA), through its home health agency. Vitas argued that Service Area 7B patients who are eligible for hospice are choosing VNA’s Hope and Recovery Program. VNA’s program does not offer a choice from, or alternative to, hospice. Home health agencies do not provide the same services as hospice programs. Hospice care can be offered as the patient’s needs surface. A home health agency must bill on a cost per visit basis. If they exceed a projected number of visits, they must explain that deviation to Medicare. A home health agency, such as VNA, offers no grief or bereavement services to the family of a patient. In addition to direct care of the patient, hospice benefits are meant to extend to the care of the family. Hospice is specifically reimbursed for offering this important care. Hospice also receives reimbursement to provide medications relevant to terminal illnesses and durable medical equipment needed. Home health agencies do not get paid for, and therefore do not offer, these services. It is possible that VNA’s Hope and Recovery Program may be operating as a hospice program without a license. The marketing materials used by VNA inaccurately compare and contrast the medical benefits available for home health agencies to those available under a hospice program. The marketing material of VNA also inappropriately identify which patients are appropriate for hospice care. VNA’s Hope and Recovery Program may help explain lower hospice utilization in Service Area 7B. Indeed, the provision of hospice-like services by a non-hospice licensed provider can indicate an unmet need in Service Area 7B. The rule does not calculate an inventory of non-hospice care offered by non-hospice care providers. Instead, the rule only examines actual hospice care delivered by hospice programs. The fact that patients who would benefit from hospice services are instead receiving home health agency services may demonstrate that existing hospice providers are inadequately educating the public of the advantages of hospice care. Rather than detract from the fixed need pool, VNA’s provision of “hospice-like” services without a hospice license may be an indication that a new hospice provider is needed in Service Area 7B. Although a home-health agency cannot function as a hospice provider, the two can work in conjunction. They may serve as a referral base for one another. This works most effectively when both programs are operated by the same owner who understands the very different services each offers and who has no disincentive to refer a patient once their prognosis is appropriate for hospice. The Hospice Integrated Application Integrated Health Services, Inc. (IHS), was founded in the mid-1980’s to establish an alternative to expensive hospital care. Since that time it has grown to offer more than 200 long term care facilities throughout the country including home health agencies, rehabilitative agencies, pharmacy companies, durable medical equipment companies, respiratory therapy companies and skilled nursing facilities. To complete its continuum of care, IHS began to add hospice to offer appropriate care to patients who no longer have the ability to recover. IHS is committed to offering hospice care in all markets where it already has an established long-term care network. IHS entered the hospice arena by acquiring Samaritan Care, an established program in Illinois, in late 1994. Within a few months, IHS acquired an additional hospice program in Michigan. Each of these hospice programs had a census in the thirties at the time of the final hearing. In May of 1996, IHS acquired Hospice of the Great Lakes. Located in Chicago, this hospice program has a census range from 150 to 180. In combination, IHS served approximately 350 hospice patients in 1995. In Service Area 7B, IHS has three long-term care facilities: Central Park Village; IHS of Winter Park; and IHS of Central Park at Orlando. Together, they have 443 skilled nursing beds. One of these—Central Park Village—has established an HIV spectrum program, one of the only comprehensive HIV care programs in Florida. When the state determined that there was a need for an additional hospice program in Service Area 7B, IHS decided to seek to add hospice care to the nursing home and home health companies it already had in the area. Since Florida Statutes require all new hospice programs in Florida to be established by not-for-profit corporations (with Vitas being the only exception), IHS formed Hospice Integrated Health Services of District VII-B (Hospice Integrated), a not- for-profit corporation, to apply for a hospice certificate of need. IHS would be the management company for the hospice program and charge a 4% management fee to Hospice Integrated, although the industry standard is 6%-7%. Although a for-profit corporation, IHS plans for the 4% fee to just cover the costs of the providing management services. IHS believes that the benefits to its health care delivery system in Service Area 7B will justify not making a profit on the hospice operation. However, the management agreement will be reevaluated and possibly adjusted if costs exceed the management fee. In return for this management fee, IHS would offer Hospice Integrated its policy and procedure manuals, its programs for bereavement, volunteer programs, marketing tools, community and educational tools and record keeping. IHS would also provide accounting, billing, and human resource services. Perhaps the most crucial part of the management fee is the offer of the services of Regional Administrator, Marsha Norman. She oversees IHS’ programs in Illinois and Missouri. Ms. Norman took the hospice program at Hospice of the Great Lakes from a census of 40 to 140. This growth occurred in competition with 70 other hospices in the same marketplace. While at Hospice of the North Shore, Ms. Norman improved census from 12 to 65 in only eight months. Ms. Norman helped the Lincolnwood hospice program grow from start up to a census of 150. Ms. Norman has indicated her willingness and availability to serve in Florida if Hospice Integrated’s proposal is approved. IHS and Ms. Norman are experienced in establishing interdisciplinary teams, quality assurance programs, and on-going education necessary to provide state of the art hospice care. Ms. Norman also has experience establishing specialized programs such as drumming therapy, music therapy for Alzheimer patients and children’s bereavement groups. Ms. Norman has worked in pediatric care and understands the special needs of these patients. Ms. Norman’s previous experience also includes Alzheimer’s care research conducted in conjunction with the University of Chicago regarding the proper time to place an Alzheimer patient in hospice care. Through its skilled nursing facilities in Service Area 7B, IHS has an existing working relationship with a core group of physicians who are expected to refer patients to the proposed Hospice Integrated hospice. Although its skilled nursing homes account for only six percent of the total beds in Service Area 7B, marketing and community outreach efforts are planned to expand the existing referral sources if the application is approved. IHS’ hospices are members of the NHO. They are not accredited by the Joint Commission on the Accreditation of Health Care Organizations (JCAHO). Hospice Integrated would serve pediatric patients. However, IHS’ experience in this area is limited to a pilot program to offer pediatric hospice care in the Dallas/Ft. Worth area, and there is little reason to believe that Hospice Integrated would place a great deal of emphasis on this aspect of hospice care. The Hospice Integrated application proposes to provide required grief support but does not include any details for the provision of grief support groups, resocialization groups, grief support volunteers, or community grief support or education activities. In its application, Hospice Integrated has committed to five percent of its care for HIV patients, 40% for non-cancer patients, ten percent for Medicaid patients, and five percent indigent admissions. These commitments also are reflected in Hospice Integrated’s utilization projections. At the same time, it is only fair to note that IHS does not provide any charity care at any of its Service Area 7B nursing home facilities. The Hospice Integrated application includes provision for all four levels of hospice care—home care (the most common), continuous care, respite care and general inpatient. The latter would be provided in one of the IHS skilled nursing home facilities when possible. It would be necessary to contract with an inpatient facility for acute care inpatient services. The federal government requires that five percent of hospice care in a program be offered by volunteers. With a projected year one census of 30, Hospice Integrated would only require 3-4 volunteers to meet federal requirements, and its year one pro forma reflects this level of use of volunteers. However, Hospice Integrated hopes to exceed federally mandated minimum numbers of volunteers. The IHS hospice programs employ volunteers from all aspects of the community, including family of deceased former hospice patients. Contrary to possible implications in the wording of materials included in the Hospice Integrated application, IHS does not approach the latter potential volunteers until after their bereavement has ended. The Wuesthoff Application Wuesthoff Health Services, Inc. (Wuesthoff) is a not- for profit corporation whose sole corporate member is Wuesthoff Health Systems, Inc. (Wuesthoff Systems). Wuesthoff Systems also is the sole corporate member of Wuesthoff’s two sister corporations, Wuesthoff Memorial Hospital, Inc. (Wuesthoff Hospital) and Wuesthoff Health Systems Foundation, Inc. (Wuesthoff Foundation). Wuesthoff Hospital operates a 303-bed acute care hospital in Brevard County. Brevard County comprises AHCA Service Area 7A, and it is adjacent and to the east of Service Area 7B. Wuesthoff Hospital provides a full range of health care services including open heart surgical services, a Level II neonatal intensive care unit and two Medicare-certified home health agencies, one located in Brevard and the other in Indian River County, the county immediate to the south of Brevard. Wuesthoff Foundation serves as the fundraising entity for Wuesthoff Systems and its components. Wuesthoff currently operates a 114-bed skilled nursing facility which includes both long-term and short-term sub-acute beds, as well as a home medical equipment service. Wuesthoff also operates a hospice program, Brevard Hospice, which has served Brevard County residents since 1984. Over the years, it has grown to serve over 500 patients during 1995. Essentially, Wuesthoff’s application reflects an intention to duplicate its Brevard Hospice operation in Service Area 7B. It would utilize the expertise of seven Brevard Hospice personnel currently involved in the day-to-day provision of hospice services, including its Executive Director, Cynthia Harris Panning, to help establish its proposed new hospice in 7B. Wuesthoff has been a member of the NHO since the inception of its hospice program. It also had its Brevard Hospice accredited by JCAHO in 1987, in 1990 and in March, 1996. As a not-for-profit hospice, Wuesthoff has a tradition of engaging in non-compensated hospice services that benefit the Brevard community. Wuesthoff’s In-Touch Program provides uncompensated emotional support through telephone and in-person contacts for patients with a life-threatening illness who, for whatever reason, are not ready for hospice. (Of course, Wuesthoff is prepared to receive compensation for these patients when and if they choose hospice.) Wuesthoff’s Supportive Care program provides uncompensated nursing and psychosocial services by hospice personnel for patients with life-threatening illnesses with life expectancies of between six months and two years. (These services are rendered in conjunction with home health care, which may be compensated, and Wuesthoff is prepared to receive compensation for the provision of hospice services for these patients when they become eligible for and choose hospice.) Wuesthoff’s Companion Aid benefits hospice patients who lack a primary caregiver and are indigent, Medicaid-eligible or unable to pay privately for additional help in the home. If approved in Service Area 7B, Wuesthoff would hope to duplicate these kinds of outreach programs. For the Supportive Care program, that would require its new hospice program to enter into agreements with home health agencies operating in Service Area 7B. While more difficult an undertaking than the current all-Wuesthoff Supportive Care program, Wuesthoff probably will be able to persuade at least some Service Area 7B home health agencies to cooperate, since there would be benefits to them, too. Wuesthoff proposes to use 38 volunteers during its first year in operation. As a not-for-profit organization, Wuesthoff has had good success recruiting, training, using and retaining volunteers in Brevard County. Its experience and status as a not-for-profit organization will help it meet its goals in Service Area 7B; however, it probably will be more difficult to establish a volunteer base in Service Area 7B than in its home county of Brevard. Wuesthoff’s proposed affiliation with Florida Hospital will improve its chances of success in this area. Key to the overall success of Wuesthoff’s proposed hospice is its vision of an affiliation with Florida Hospital. With no existing presence in Service Area 7B, Wuesthoff has no existing relationship with community physicians and no existing inpatient facilities. Wuesthoff plans to fill these voids through a proposed affiliation with Florida Hospital. In existence and growing for decades, Florida Hospital now is a fully integrated health care system with multiple inpatient sites, including more than 1,450 hospital beds, in Service Area 7B. It provides a full range of pre-acute care through post-acute care services, including primary through tertiary services. Approximately 1,200 physicians are affiliated with Florida Hospital, which has a significant physician-hospital organization. Wuesthoff is relying on these physicians to refer patients to its proposed hospice. Florida Hospital and Wuesthoff have signed a letter of intent. The letter of intent only agreed to a forum for discussions; there was no definite agreement concerning admissions, and Florida Hospital has not committed to sending any particular number of hospice patients to Wuesthoff. However, there is no reason to think that Wuesthoff could not achieve a viable affiliation with Florida Hospital. Wuesthoff has recent experience successfully cooperating with other health care providers. It has entered into cooperative arrangements with Jess Parrish Hospital in Brevard County, with Sebastian River Medical Center in Indian River County, and with St. Joseph’s Hospital in Hillsborough County. Wuesthoff’s existing hospice provides support to children who are patients of its hospice, whose parents are in hospice or whose relatives are in hospice, as well as to other children in the community who are in need of bereavement support services. Wuesthoff employs a full-time experienced children’s specialist. Wuesthoff also provides crisis response services for Brevard County Schools System when there is a death at a school or if a student dies or if there is a death that affects the school community. Camp Hope is a bereavement camp for children which is operated by Wuesthoff annually for approximately 50 Brevard children who have been affected by death. Wuesthoff operates extensive grief support programs as part of its Brevard Hospice. At a minimum, Wuesthoff provides 13 months of grief support services following the death of a patient, and more as needed. It employs an experienced, full- time grief support coordinator to oversee two grief support specialists (each having Masters degree level training), as well as 40 grief support volunteers, who function in Wuesthoff’s many grief support groups. These include: Safe Place, an open grief support group which meets four times a month and usually is the first group attended by a grieving person; Pathways, a closed six-week grief workshop offered twice a year primarily for grieving persons three to four months following a death; Bridges, a group for widows under age 50, which is like Pathways but also includes sessions on helping grieving children and on resocialization; Just Us Guys and Gals, which concentrates on resocialization and is attended by 40 to 80 people a month; Family Night Out, an informal social opportunity for families with children aged six to twelve; Growing Through Grief, a closed six-week children’s grief group offered to the Brevard County School System. Wuesthoff also publishes a newsletter for families of deceased hospice patients for a minimum of 13 months following the death. Wuesthoff also participates in extensive speaking engagements and provides seminars on grief issues featuring nationally renowned speakers. Wuesthoff intends to use the expertise developed in its Brevard Hospice grief support program to establish a similar program in Service Area 7B. The Brevard Hospice coordinator will assist in implementing the Service Area 7B programs. In its utilization projections, Wuesthoff committed to seven percent of hospice patient days provided to indigent/charity patients and seven percent to Medicaid patients. Wuesthoff also committed to provide hospice services to AIDS patients, pediatric patients, patients in long-term care facilities and patients without a primary caregiver; however, no specific percentage committments were made. In its pro formas, Wuesthoff projects four percent hospice services to HIV/AIDS patients and approximately 40% to non-cancer patients. The narrative portions of its application, together with the testimony of its chief executive officer, confirm Wuesthoff’s willingness to condition its CON on those percentages. In recent years, the provision of Medicaid at Brevard Hospice has declined. However, during the same years, charity care provided by Brevard Hospice has increased. In the hospice arena, Medicaid hospice is essentially fully reimbursed. Likewise, the provision of hospice services to AIDS/HIV patients by Brevard Hospice has declined in recent years—from 4.9% in 1993 to 1.4% in 1995. However, this decline was influenced by the migration of many AIDS patients to another county, where a significant number of infectious disease physicians are located, and by the opening of Kashy Ranch, another not-for-profit organization that provides housing and services especially for HIV clients. Financial Feasibility Both applications are financially feasible in the immediate and long term. Immediate Financial Feasibility Free-standing hospice proposals like those of Hospice Integrated and Wuesthoff, which intend to contract for needed inpatient care, require relatively small amounts of capital, and both applications are financially feasible in the immediate term. Hospice Integrated is backed by a $100,000 donation and a commitment from IHS to donate the additional $300,000 needed to open the new hospice. IHS has hundreds of millions of dollars in lines of credit available meet this commitment. Wuesthoff questioned the short-term financial feasibility of the Hospice Integrated proposal in light of recent acquisitions of troubled organizations by IHS. It recently acquired an organization known as Coram at a cost of $655 million. Coram recently incurred heavy losses and was involved in litigation in which $1.5 billion was sought. IHS also recently acquired a home health care organization known as First American, whose founder is currently in prison for the conduct of affairs at First American. But none of these factors seriously jeopardize the short-term financial feasibility of the Hospice Integrated proposal. Wuesthoff also noted that the IHS commitment letter is conditioned on several “approvals” and that there is no written commitment from IHS to enter into a management contract with Hospice Integrated at a four percent fee. But these omissions do not seriously undermine the short-term financial feasibility of the Hospice Integrated proposal. Hospice Integrated, for its part, and AHCA question the short-term financial feasibility of the Wuesthoff proposal, essentially because the application does not include a commitment letter from with Wuesthoff Systems or Wuesthoff Hospital to fund the project costs. The omission of a commitment letter is comparable to the similar omissions from the Hospice Integrated application. It does not undermine the short-term financial feasibility of the proposal. Notwithstanding the absence of a commitment letter, the evidence is clear that the financial strength of Wuesthoff Systems and Wuesthoff Hospital support Wuesthoff’s hospice proposal. This financial strength includes the $38 to $40 million in cash and marketable securities reflected in the September 30, 1995, financial statements of Wuesthoff Systems, in addition to the resources of Wuesthoff Hospital. Hospice Integrated also questions the ability of Wuesthoff Systems to fund the hospice proposal in addition to other planned capital projects. The Wuesthoff application indicates an intention to fund $1.6 million of the needed capital from operations and states that $1.4 million of needed capital in “assured but not in hand.” But some of the projects listed have not and will not go forward. In addition, it is clear from the evidence that Wuesthoff Systems and Wuesthoff Hospital have enough cash on hand to fund all of the capital projects that will go forward, including the $290,000 needed to start up its hospice proposal. Long-Term Financial Feasibility Wuesthoff’s utilization projections are more aggressive than Hospice Integrated’s. Wuesthoff projects 186 admissions in year one and 380 in year two; Hospice Integrated projects 124 admissions in year one and 250 in year two. But both projections are reasonably achievable. Projected patient days, revenue and expenses also are reasonable for both proposals. Both applicants project an excess of revenues over expenses in year two of operation. Vitas criticized Hospice Integrated’s nursing salary expenses, durable medical equipment, continuous and inpatient care expenses, and other patient care expenses as being too low. But Vitas’ criticism was based on misapprehension of the facts. The testimony of Vitas’ expert that nursing salaries were too low was based on the misapprehension that Hospice Integrated’s nursing staffing reflected in the expenses for year two of operation was intended to care for the patient census projected at year end. Instead, it actually reflected the expenses of average staffing for the average patient census for the second year of operation. Vitas’ expert contended that Hospice Integrated’s projected expenses for durable medical equipment for year two of operation were understated by $27,975. But there is approximately enough overallocated in the line items “medical supplies” and “pharmacy” to cover the needs for durable medical equipment. Vitas’ expert contended that Hospice Integrated’s projected expenses for continuous and inpatient care were understated by $23,298. This criticism made the erroneous assumption that Hospice Integrated derived these expenses by taking 75% of its projected gross revenues from continuous and inpatient care. In fact, Hospice Integrated appropriately used 75% of projected collections (after deducting contractual allowances). In addition, as far as inpatient care is concerned, Hospice Integrated has contracts with the IHS nursing homes in Service Area 7B to provide inpatient care for Hospice Integrated’s patients at a cost below that reflected in Hospice Integrated’s Schedule 8A. Vitas’ expert contended that Hospice Integrated’s projected expenses for “other patient care” were understated by $19,250. This criticism assumed that fully half of Hospice Integrated’s patients would reside in nursing homes that would have to be paid room and board by the hospice out of federal reimbursement “passed through” the hospice program. However, most hospices have far fewer than half of their patients residing in nursing homes (only 17% of Comforter’s are nursing home residents), and Hospice Integrated made no such assumption in preparing its Schedule 8A projections. In addition, Hospice Integrated’s projections assumed that five percent of applicants for Medicaid pass-through reimbursement would be rejected and that two percent of total revenue would be lost to bad debt write-offs. Notwithstanding Vitas’ attempts to criticize individual line items of Hospice Integrated’s Schedule 8A projections, Hospice Integrated’s total average costs per patient day were approximately the same as Wuesthoff’s--$19 per patient day. Vitas did not criticize Wuesthoff’s projections. On the revenue side, Hospice Integrated’s projections were conservative in several respects. Projected patients days (6,800 in year one, and 16,368 in year two) were well within service volumes already achieved in hospices IHS recently has started in other states (which themselves exceeded their projections). Medicaid and Medicare reimbursement rates used in Hospice Integrated’s projections were low. Hospice Integrated projects that 85% of its patients will be Medicare patients and that ten percent will be Medicaid. Using more realistic and reasonable reimbursement for these patients would add up to an additional $74,000 to projected excess of revenue over expenses in year two. Wuesthoff also raised its own additional questions regarding the long-term financial feasibility of the Hospice Integrated proposal. Mostly, Wuesthoff questioned the inexperience of the Hospice Integrated entity, as well as IHS’ short track record. It is true that the hospices started by IHS were in operation for only 12-14 months at the time of the final hearing and that, on a consolidated basis, IHS’ hospices lost money in 1995. But financial problems in one hospice inherited when IHS acquired it skewed the aggregate performance of the hospices in 1995. Two of them did have revenues in excess of expenses for the year. In addition, Hospice of the Great Lakes, which was not acquired until 1996, also is making money. On the whole, IHS’ experience in the hospice arena does not undermine the financial feasibility of the Hospice Integrated application. Wuesthoff also questioned Hospice Integrated’s assumption that the average length of stay (ALOS) of its hospice patients will increase from 55 to 65 days from year one to year two of operation. Wuesthoff contended that this assumption is counter to the recent trend of decreasing ALOS’s, and that assuming a flat ALOS would decrease projected revenues by $262,000. But increasing ALOS from year one to year two is consistent with IHS’ recent experience starting up new hospices. In part, it is reasonably explained by the way in which patient census “ramps up” in the start up phase of a new hospice. As a program starts up, often more than average numbers of patients are admitted near the end of the disease process and die before the ALOS; also, as patient census continues to ramp up, often more than average numbers of patients who still are in the program at the end of year one will have been admitted close to the end of the year and will have been in the program for less than the ALOS. Finally, while pointing to possible revenue shortfalls of $262,000, Wuesthoff overlooked the corresponding expense reductions that would result from lower average daily patient census. It is found that both proposals also are financially feasible in the long term. State and Local Plan Preferences Local Health Plan Preference Number One Preference shall be given to applicants which provide a comprehensive assessment of the impact of their proposed new service on existing hospice providers in the proposed service areas. Such assessment shall include but not be limited to: A projection of the number of Medicare/Medicaid patients to be drawn away from existing hospice providers versus the projected number of new patients in the service area. A projection of area hospice costs increases/decreases to occur due to the addition of another hospice provider. A projection of the ratio of administrative expenses to patient care expenses. Identification of sources, private donations, and fund-raising activities and their affect on current providers. Projection of the number of volunteers to be drawn away from the available pool for existing hospice providers. Both applicants provided an assessment of the impact of their proposed new service on existing hospice providers in the proposed service areas (although both applicants could have provided an assessment that better met the intent of the Local Health Plan Preference One.) There was no testimony that, and it is not clear from the evidence that, one assessment is markedly superior to the other. There also was no evidence as to how the assessments are supposed to be used to compare competing applicants. Both applicants essentially stated that they would not have an adverse impact on the existing providers. The basis for this assessment was that there is enough underserved need in Service Area 7B to support an additional hospice with no adverse impact on the existing providers. Vitas disputed the applicants’ assessment. Vitas presented evidence that it and Comforter have been unable, despite diligent marketing efforts, to achieve statewide average hospice use rates in Service Area 7B, especially for non-cancer and under 65 hospice eligible patients, that the existing hospices can meet the needs of the hospice-eligible patients who are choosing hospice, and that other health care alternatives are available to meet the needs of hospice-eligible patients who are not choosing hospice. Vitas also contended that the applicants will not be able to improve much on the marketing and community outreach efforts of the existing providers. In so doing, Vitas glossed over considerable evidence in the record that the addition of a hospice program, by its mere presence, will increase awareness of the hospice option in 7B regardless whether the new entrant improves upon the marketing efforts of the existing providers, and that increased awareness will result in higher conversion rates. Vitas’ counter-assessment also made several other invalid assumptions. First, it is clear from the application of the FNP rule that, regardless of the conversion rate in Service Area 7B, the size of the pool of potential hospice patients clearly is increasing. Second, it is clear that the FNP rule is inherently conservative, at least in some respects. See Finding 24, supra. The Vitas assessment also made the assumption that the existing providers are entitled to their current market share (87% for Vitas and 13% for Comforter) of anticipated increases in hospice use in Service Area 7B and that the impact of a new provider should be measured against this entitlement. But to the extent that anticipated increased hospice use in Service Area 7B accommodates the new entrant, there will be no impact on the current finances or operations of Vitas and Comforter. Finally, in attempting to quantify the alleged financial impact of an additional hospice program, Vitas failed to reduce variable expenses in proportion to the projected reduction in patient census. Since most hospice expenses are variable, this was an error that greatly increased the perceived financial impact on the existing providers. While approval of either hospice program probably will not cause an existing provider to suffer a significant adverse impact, it seems clear that the impact of Wuesthoff’s proposal would be greater than that of Hospice Integrated. Wuesthoff seeks essentially to duplicate its Brevard Hospice operation in Service Area 7B. Wuesthoff projects higher utilization (186 admissions in year one and 380 admissions in year two, as compared to the 124 and 250 projected by Hospice Integrated). In addition, Wuesthoff’s primary referral source for hospice patients—Florida Hospital—also is the primary referral source of Vitas, which gets 38% of its referrals from Florida Hospital. In contrast, while also marketing in competition with the existing providers, Hospice Integrated will rely primarily on the physicians in Orange and Osceola Counties with whom IHS already has working relationships through its home health agencies and skilled nursing facilities. Hospice Integrated’s conservative utilization projections (124 admissions in year one and 250 in year two) will not nearly approach the service gap identified by the rule (407 admissions). In total, Hospice Integrated only projected obtaining 6% of the total market share in year one and 12% in year two, leaving considerable room for continued growth of the existing providers in the district. The hospice industry has estimated that 10% of patients in long-term care facilities are appropriate for hospice care. IHS regularly uses an estimate of five percent. Common ownership of skilled nursing facilities and hospice programs allows better identification of persons with proper prognosis for hospice. These patients would not be drawn away from existing hospice providers. In addition to the difference in overall utilization projections between the applicants, there also is a difference in focus as to the kinds of patients targeted by the two applicants. The Hospice Integrated proposal focuses more on and made a greater commitment to non-cancer admissions. In addition, IHS has a good record of increasing hospice use by non-cancer patients. In contrast, Wuesthoff’s proposal focuses more on cancer admissions (projecting service to more cancer patients than represented by the underserved need for hospice for those patients, according to the FNP rule) and did not commit to a percentage of non-cancer use in its application. For these reasons, Wuesthoff’s proposal would be expected to have a greater impact and be more detrimental to existing providers than Hospice Integrated. Hospice Integrated also is uniquely positioned to increase hospice use by AIDS/HIV patients in Service Area 7B due to its HIV spectrum program at Central Park Village. It focused more on and made a greater commitment to this service in its application that Wuesthoff did it its application. To the extent that Hospice Integrated does a better job of increasing hospice use by AIDS/HIV patients, it is more likely to draw patients from currently underutilized segments of the pool of hospice-eligible patients in Service Area 7B and have less impact on existing providers than Wuesthoff. Vitas makes a better case that its pediatric hospice program will be impacted by the applicants, especially Wuesthoff. Vitas’ census of pediatric hospice patients ranges between seven and 14. A reduction in Vitas’ already small number of pediatric hospice patients could reduce the effectiveness of its pediatric team and impair its viability. Wuesthoff proposes to duplicate the Brevard Hospice pediatric program, creating a pediatric program with a specialized pediatric team and extensive pediatric programs, similar to Vitas’ program. On the other hand, Hospice Integrated proposes a pediatric program but not a specialized team, and it would not be expected to compete as vigorously as Wuesthoff for pediatric hospice patients. The evidence was not clear as to whether area hospice costs would increase or decrease as a result of the addition of either applicant in Service Area 7B. Vitas, in its case-in- chief, provided an analysis of projected impacts from the addition of either hospice provider. As already indicated, Vitas’ analysis incorporated certain invalid assumptions regarding the fixed/variable nature of hospice costs. However, Vitas’ analysis supported the view that Wuesthoff’s impact would be greater. Wuesthoff’s ratio of administrative expenses to patient care expenses (24% to 76% in year one, dropping to 22% to 78% in year two) is lower than Hospice Integrated’s (26% to 71%). Wuesthoff also appears more likely to compete more directly and more vigorously with the existing providers than Hospice Integrated for private donations, in fund-raising activities, and for volunteers. Local Health Plan Preference Number Two Preference shall be given to an applicant who will serve an area where hospice care is not available or where patients must wait more than 48 hours for admission, following physician approval, for a hospice program. Documentation shall include the number of patients who have been identified by providers of medical care and the reasons resulting in their delay of obtaining hospice care. There was no direct evidence of patients who were referred for hospice services but failed to receive them. Local Health Plan Preference Number Three Preference shall be given to an applicant who will serve in addition to the normal hospice population, an additional population not currently serviced by an existing hospice (i.e., pediatrics, AIDS patients, minorities, nursing home residents, and persons without primary caregivers.) State Health Plan Factor Four Preference shall be given to applicants which propose to serve specific populations with unmet needs, such as children. State Health Plan Preference Number Five Preference shall be given to an applicant who proposes a residential component to serve patients with no at- home support. When Medicare first recognized hospice care in 1983, more than 90% of hospice cases were oncology patients. Although use of hospice by non-cancer patients has increased to 40% statewide, it lags behind in Service Area 7B, at only 27%. Both applicants will serve non-cancer patients. But Hospice Integrated has made a formal commitment to 40% non-cancer patient days and has placed greater emphasis on expanding the provision of hospice services for non-cancer patients. The clinical background of employees of IHS and Hospice Integrated can effectively employ NHO guidelines to identify the needs of AIDS patients and other populations. In its other hospice programs, IHS has succeeded in achieving percentages of non-cancer hospice use of 60% and higher. Wuesthoff projects over 40% non-cancer patient days, and is willing to accept a CON condition of 40% non-cancer patient days, but it did not commit to a percentage in its application. In Service Area 7B, there are 1,200 people living with AIDS and 10,000 who are HIV positive. Both applicants would serve AIDS/HIV patients, but Hospice Integrated has demonstrated a greater commitment to this service. Not only does IHS have its HIV spectrum program at Central Park Village, it also has committed to five percent of its care for HIV patients. Wuesthoff has agreed to serve AIDS/HIV patients, projects that about four percent of its patient days will be provided to AIDS/HIV patients, and would be willing to condition its CON on the provision of four percent of its care to AIDS/HIV patients. But Wuesthoff did not commit to a percentage in its application. Both applicants will serve children, but Wuesthoff has demonstrated greater commitment and ability to provide these services. Ironically, Wuesthoff’s advantage in the area of pediatric hospice carries with it the disadvantage of causing a greater impact on Vitas than Hospice Integrated’s proposal. See Findings 101-102, supra. While neither applicant specifically addressed the provision of services to minorities, both made commitments to provide services for Medicaid patients and the indigent. Hospice Integrated’s commitment to Medicaid patients is higher (ten percent as compared to seven percent for Wuesthoff). But the commitment to Medicaid patients is less significant in the hospice arena because Medicaid essentially fully reimburses hospice care. Meanwhile, Wuesthoff committed seven percent to indigent/charity patients, as compared a five percent commitment to the indigent for Hospice Integrated. But there was some question as to whether Wuesthoff was including bad debt in the seven percent. Both applicants will provide care for patients without primary caregivers. Earlier in its short history of providing hospice, IHS required patients to have a primary caregiver. However, that policy has been changed, and IHS now accepts such patients. Wuesthoff has long provided care for patients without primary caregivers. Local Health Plan Preference Number Four Preference shall be given to an applicant who will commit to contracting for existing inpatient acute care beds rather than build a free-standing facility. State Health Plan Preference Number Six Preference shall be given to applicants proposing additional hospice beds in existing facilities rather than the construction of freestanding facilities. Neither applicant plans to build a free-standing facility for the provision of inpatient care. Both plan to contract for needed inpatient acute care beds, to the extent necessary. IHS’ common ownership of existing skilled nursing facilities in Service Area 7B allows Hospice Integrated access to subacute care at any time. However, not all physicians will be willing to admit all hospice patients to skilled nursing facilities for inpatient care, and Hospice Integrated also will have to contract with acute care facilities to cover those instances. Wuesthoff relies on its proposed affiliation with Florida Hospital for needed inpatient care for its proposed Service Area 7B hospice. State Health Plan Preference Number Two Preference shall be given to an applicant who provides assurances in its application that it will adhere to the standards and become a member of the National Hospice Organization or will seek accreditation by the JCAHO. Both applicants meet this preference. Wuesthoff’s Brevard Hospice has JCAHO as well as membership in the National Hospice Organization (NHO). IHS’s hospices are NHO members, and Hospice Integrated’s application states that it will become a member of the NHO. Wuesthoff’s JCAHO accreditation does not give it an advantage under this preference. Other Points of Comparison In addition to the facts directly pertinent to the State and Local Health Plan Preference, other points of comparison are worthy of consideration. General Hospice Experience Wuesthoff went to great lengths to make the case that its experience in the hospice field is superior to that of Hospice Integrated and IHS. Wuesthoff criticized the experience of its opponent as being short in length and allegedly long on failures. It is true that IHS was new to the field of hospice when it acquired its first hospice in December, 1994, and that it has had to deal with difficulties in venturing into a new field and starting up new programs. Immediately after IHS acquired Samaritan Care of Illinois, Martha Nickel assumed the role of Vice-President of Hospice Services for IHS. After several weeks in charge of the new acquisition, and pending the closing of the purchase of Samaritan Care of Michigan from the same owner set for later in 1995, Nickel uncovered billing improprieties not discovered during IHS’ due diligence investigations. As a result, IHS was required to reimburse the Health Care Financing Administration (HCFA) approximately $3.5 million, and the purchase price for Samaritan Care of Michigan was adjusted. After this rocky start, IHS’ hospice operation settled down. Hospice Integrated’s teams have completed five to seven start up operations and understand what it takes to enter a new market, increase community awareness, and achieve hospice market penetration. Personnel who would implement Hospice Integrated’s approved hospice program have significant experience establishing new hospice programs, having them licensed and receiving accreditation. Without question, IHS’ Marsha Norman has the ability to start up a new hospice program. In contrast, Wuesthoff has operated its hospice in Brevard County since 1984. It is true that Wuesthoff’s Brevard Hospice appears to have been highly successful and, compared to the IHS experience, relatively stable in recent years. But, at the same time, Wuesthoff personnel have not had recent experience starting up a new hospice operation in a new market. Policies and Procedures A related point of comparison is the status of the policies and procedures to be followed by the proposed hospices. Wuesthoff essentially proposes to duplicate its Brevard Hospice in Service Area 7B and simply proposes to use the same policies and procedures. In contrast, IHS still is developing its policies and procedures and is adapting them to new regulatory and market settings as it enters new markets. As a result, the policies and procedures included in the Hospice Integrated application serve as guidelines for the new hospice and more of them are subject to modification than Wuesthoff’s. Regulatory Compliance A related point of comparison is compliance with regulations. Wuesthoff contends that it will be better able to comply with Florida’s hospice regulations since it already operates a hospice in Florida. In some respects, IHS’ staffing projections were slightly out of compliance with NHO staffing guidelines. However, Ms. Norman persuasively gave her assurance that Hospice Integrated would be operated so as to meet all NHO guidelines. One of IHS’ hospice programs was found to have deficiencies in a recent Medicare certification survey, but those deficiencies were “paper documentation” problems that were quickly remedied, and the program timely received Medicare certification. In several respects, the policies and procedures included in Hospice Integrated’s application are out of compliance with Florida regulations and will have to be changed. For example, the provision in Hospice Integrated’s policies and procedures for coordination of patient/family care by a social worker will have to be changed since Florida requires a registered nurse to fill this role. Similarly, allowance in the policies and procedures for hiring a lay person in the job of pastoral care professional (said to be there to accommodate the use of shamans or medicine men for Native American patients) is counter to Florida’s requirement that the pastoral care professional hold a bachelor’s degree in pastoral care, counseling or psychology. Likewise, the job description of social worker in the policies and procedures falls below Florida’s standards by requiring only a bachelor’s degree (whereas Florida requires a master’s degree). Although IHS does not yet operate a hospice in Florida, it has three long-term care facilities and two home health agencies in Service Area 7B, as well as 25 other skilled nursing facilities and several other new home health care acquisitions in Florida. Nationwide, IHS has nursing homes in 41 different states, home health care in 31 different states, and approximately 120 different rehabilitation service sites. Through its experiences facing the difficulties of entering the hospice field through acquisitions, IHS well knows federal regulatory requirements and is quite capable of complying with them. IHS also has had experience with the hospice regulations of several other states. There is no reason to think that Hospice Integrated will not comply with all federal and state requirements. Wuesthoff now knows how to operate a hospice in compliance with federal and state regulatory requirements. But, while Wuesthoff’s intent was to simply duplicate its Brevard Hospice in Service Area 7B, that intention leads to the problem that its board of directors does not have the requisite number of residents of Service Area 7B. Measures will have to be taken to insure appropriate composition of its board of directors. 140. On balance, these items of non-compliance are relatively minor and relatively easily cured. There is no reason to think that either applicant will refuse or be unable to comply with regulatory requirements. Not-for-Profit Experience Wuesthoff clearly has more experience as a not-for- profit entity. This includes extensive experience in fund- raising and in activities which benefit the community. It also gives Wuesthoff an edge in the ability to recruit volunteers. See Findings 56-58, supra. Ironically, Wuesthoff’s advantages over Hospice Integrated in these areas probably would increase its impact on the existing providers. See Finding 105, supra. Presence and Linkages in Service Area 7B Presently, Wuesthoff has no presence in Service Area 7B. As one relatively minor but telling indication of this, Wuesthoff’s lack of familiarity with local salary levels caused it to underestimate its Schedule 8A projected salaries for its administrator, patient coordinator, nursing aides and office manager. IHS has an established presence in Service Area 7B. This gives Hospice Integrated an advantage over Wuesthoff. For example, its projected salary levels were accurate. Besides learning from experience, Wuesthoff proposes to counter Hospice Integrated’s advantage through its proposed affiliation with Florida Hospital. While IHS’ presence and linkages in Service Area 7B is not insignificant, it pales in comparison to Florida Hospital’s. To the extent that Wuesthoff can developed the proposed affiliation, Wuesthoff would be able to overcome its disadvantage in this area. Wuesthoff also enjoys a linkage with the Service Area 7B market through its affiliate membership in the Central Florida Health Care Coalition (CFHCC). The CFHCC includes large and small businesses, as well as Central Florida health care providers. Its goal is to promote the provision of quality health care services. Quality Hospice Services Both applicants deliver quality hospice services through their existing hospices and can be expected to do so in their proposed hospices. As an established and larger hospice than most of IHS’ hospices, Brevard Hospice can provide more enhanced services than most of IHS’. On the other hand, IHS has been impressive in its abilty to expand services to non-cancer patients, and it also is in a better position to provide services to AIDS/HIV patients, whereas Wuesthoff is better able to provide quality pediatric services. Wuesthoff attempted to distinguish itself in quality of services through its JCAHO accreditation. Although Hospice Integrated’s application states that it will get JCAHO accreditation, it actually does not intend to seek JCAHO accreditation until problems with the program are overcome and cured. Not a great deal of significance can be attached to JCAHO hospice accreditation. The JCAHO hospice accreditation program was suspended from 1990 until 1996 due to problems with the program. Standards were vague, and it was not clear that they complied with NHO requirements. Most hospices consider NHO membership to be more significant. None of IHS’s new hospices are even eligible for JCAHO accreditation because they have not been in existence long enough. Bereavement Programs Wuesthoff’s bereavement programs appear to be superior to IHS’. Cf. Findings 44, and 63-64, supra. To some extent, Wuesthoff’s apparent superiority in this area (as in some others) may be a function of the size of Brevard Hospice and the 14-year length of its existence. The provisions in the policies and procedures included in the Hospice Integrated application relating to bereavement are cursory and sparse. IHS relies on individual programs to develop their own bereavement policies and procedures. The provisions in the policies and procedures included in the Hospice Integrated application relating to bereavement include a statement that a visit with the patient’s family would be conducted “if desired by the family and as indicated by the needs of the family.” In fact, as Hospice Integrated concedes, such a visit should occur unless the family expresses a desire not to have one. Continuum of Care One of IHS’ purposes in forming Hospice Integrated to apply for a hospice CON is to improve the continuum of care it provides in Service Area 7B. The goal of providing a continuum of care is to enable case managers to learn a patient’s needs and refer them to the appropriate care and services as the patient’s needs change. While IHS already has an integrated delivery system in Service Area 7B, it lacks hospice. Adding hospice will promote the IHS continuum of care. Since it lacks any existing presence in Service Area 7B, granting the Wuesthoff application will not improve on an existing delivery system in the service area. I. Continuous and Respite Care Though small components of the total hospice program, continuous or respite hospice care should be offered by every quality provider of hospice and will be available in IHS’ program. Wuesthoff’s application failed to provide for continuous or respite hospice care. However, Wuesthoff clearly is capable of remedying this omission. Result of Comparison Both applicants have made worthy proposals for hospice in Service Area 7B. Each has advantages over the other. Balancing all of the statutory and rule criteria, and considering the State and Local Health Plan preferences, as well as the other pertinent points of comparison, it is found that the Hospice Integrated application is superior in this case. Primary advantages of the Hospice Integrated proposal include: IHS’ presence in Service Area 7B, especially its HIV spectrum program at Central Park Village; its recent experience and success in starting up new hospice programs; its success in expanding hospice to non-cancer patients elsewhere; Hospice Integrated’s greater commitment to extend services to the underserved non- cancer and AIDS/HIV segments of the hospice-eligible population; and IHS’ ability to complete its continuum of care in Service Area 7B through the addition of hospice. These and other advantages are enough to overcome Wuesthoff’s strengths. Ironically, some of Wuesthoff’s strengths, including its strong pediatric program and its ability (in part by virtue of its not- for-profit status) and intention generally to compete more vigorously with the existing providers on all fronts, do not serve it so well in this case, as they lead to greater impacts on the existing providers.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the AHCA enter a final order approving CON application number 8406 so that Hospice Integrated may establish a hospice program in the AHCA Service Service Area 7B but denying CON application number 8407 filed by Wuesthoff. RECOMMENDED this 6th day of May, 1997, at Tallahassee, Florida. J. LAWRENCE JOHNSTON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 SUNCOM 278-9675 Fax FILING (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 6th day of May, 1997. COPIES FURNISHED: J. Robert Griffin, Esquire 2559 Shiloh Way Tallahassee, Florida 32308 Thomas F. Panza, Esquire Seann M. Frazier, Esquire Panza, Maurer, Maynard & Neel, P.A. NationsBank Building, Third Floor 3600 North Federal Highway Fort Lauderdale, Florida 33308 David C. Ashburn, Esquire Gunster, Yoakley, Valdes-Fauli & Stewart, P.A. 215 South Monroe Street, Suite 830 Tallahassee, Florida 32301 Richard Patterson Senior Attorney Agency for Health Care Administration Fort Knox Building 3, Suite 3431 2727 Mahan Drive Tallahassee, Florida 32308-5403 Sam Power, Agency Clerk Agency for Health Care Administration Fort Knox Building 3, Suite 3431 2727 Mahan Drive Tallahassee, Florida 32308-5403 Jerome W. Hoffman General Counsel Agency for Health Care Administration 2727 Mahan Drive Tallahassee, Florida 32308-5403
The Issue Whether Petitioner is entitled to recover certain Medicaid funds paid to Respondent pursuant to section 409.923(1), Florida Statutes, for hospice services Respondent provided through three program locations (Melbourne, Boynton Beach, and Dade) during the audit period between September 1, 2009, and December 31, 2012; and the amount of sanctions, if any, that should be imposed pursuant to Florida Administrative Code Rule 59G-9.070(7)(e).
Findings Of Fact Parties AHCA is the state agency responsible for administering the Florida Medicaid Program. § 409.902, Fla. Stat. (2018). Medicaid is a joint federal and state partnership to provide health care and related services to certain qualified individuals. Vitas is a provider of hospice and end-of-life services in Florida. During the relevant periods, Vitas maintained hospice programs headquartered in Melbourne, Dade, and Boynton Beach, each enrolled as a Medicaid provider with a valid Medicaid provider agreement with AHCA. Hospice Services Hospice is a form of palliative care. However, hospice care is focused upon patients at the end-of-life-stage, while palliative care is for any patient with an advanced illness. Both hospice and palliative care patients are generally among the sickest patients. Hospice is focused upon serving the patient and family to provide symptom management, supportive care, and emotional and spiritual support during this difficult period when the patients are approaching their end-of-life. Hospice care, as with Vitas, uses an interdisciplinary team ("IDT") to provide comfort, symptom management, and support to allow patients and their families to come to terms with the patient's terminal condition, i.e., that the patient is expected to die. Each patient is reviewed in a meeting of the IDT no less than every two weeks. For hospice, a terminally ill patient must choose to elect hospice and to give up seeking curative care and aggressive treatments. At all times relevant to this proceeding, Vitas was authorized to provide hospice services to Medicaid recipients. As an enrolled Medicaid provider, Vitas was subject to federal and state statutes, regulations, rules, policy guidelines, and Medicaid handbooks incorporated by reference into rule, which were in effect during the audit period. Medicaid Hospice Benefit Medicaid recipients are eligible to have their hospice services covered by Medicaid if a physician, using his/her clinical judgment, determines and certifies that the patient is terminally ill with a life expectancy of six months or less if the disease runs its normal course. See 42 C.F.R. §§ 418.3 and 418.22. The Florida Medicaid Hospice Services Coverage and Limitations Handbook, the January 2007 edition ("Handbook"), governs whether a service is medically necessary and meets certification criteria for hospice services. Pages 2 through 4 of the Handbook identify six areas of documentation (often referred to throughout this proceeding as "the six bullet points") for a physician to consider when making a determination regarding a patient's initial certification for hospice eligibility. These include: Terminal diagnosis with life expectancy of six months or less if the terminal illness progresses at its normal course; Serial physician assessments, laboratory, radiological, or other studies; Clinical progression of the terminal disease; Recent impaired nutritional status related to the terminal process; Recent decline in functional status; and Specific documentation that indicates that the recipient has entered an endstage of a chronic disease. The Medicaid hospice provider must provide written certification of eligibility for hospice services for each patient. The Handbook also provides certification of terminal illness requirements as follows: For each period of hospice coverage, the hospice must obtain written certification from a physician indicating that the recipient is terminally ill and has a life expectancy of six months or less if the terminal illness progresses at its normal course. The initial certification must be signed by the medical director of the hospice or a physician member of the hospice team and the recipient's attending physician (if the recipient has an attending physician). For the second and subsequent election periods, the certification is required to be signed by either the hospice medical director or the physician member of the hospice team. Certification is required for each election period. A patient may elect to receive hospice services for one or more of the election periods. The election periods include: an initial 90-day period; a subsequent 90-day period; and subsequent 60-day time periods. The Handbook provides guidance regarding the election periods as follows: The first 90 days of hospice care is considered the initial hospice election period. For the initial period, the hospice must obtain written certification statements from a hospice physician and the recipient's attending physician, if the recipient has an attending physician, no later than two calendar days after the period begins. An exception is if the hospice is unable to obtain written certification, the hospice must obtain verbal certification within two days following initiation of hospice care, with a written certification obtained before billing for hospice care. If these requirements are not met, Medicaid will not reimburse for the days prior to the certification. Instead, reimbursement will begin with the date verbal certification is obtained . . . . For the subsequent election periods, written certification from the hospice medical director or physician member of the interdisciplinary group is required. If written certification is not obtained before the new election period begins, the hospice must obtain a verbal certification statement no later than two calendar days after the first day of each period from the hospice medical director or physician member of the hospice's interdisciplinary group. A written certification must be on file in the recipient's record prior to billing hospice services. Supporting medical documentation must be maintained by the hospice in the recipient's medical record. AHCA's Audit Florida law obligates AHCA to oversee the activities of Florida Medicaid recipients and providers in order to ensure that fraudulent and abusive behavior occur to the minimum extent possible and, when appropriate, to recover overpayments and impose sanctions on providers. § 409.913, Fla. Stat. Among other duties, AHCA is required to conduct (or cause to be conducted) audits to determine possible fraud, abuse, and overpayments in the Medicaid program. § 409.913(2), Fla. Stat. The statutes define "overpayment" as "any amount that is not authorized to be paid by the Medicaid program whether paid as a result of inaccurate or improper cost reporting, improper claiming, unacceptable practices, fraud, abuse, or mistake." § 409.913(1)(e), Fla. Stat. When an overpayment is identified, AHCA is required to recover the overpayment and impose sanctions as appropriate. § 409.913, Fla. Stat. When making a determination that an overpayment has occurred, the agency shall prepare and issue an audit report to the provider showing the calculation of overpayments. § 409.913(21), Fla. Stat. The Department of Health & Human Services, Centers for Medicare and Medicaid Services ("CMS"), contracted with HI to perform an audit of Vitas on AHCA's behalf. HI, in turn, retained a PRO, Advanced Medical Reviews ("AMR") to provide physician reviews of claims during the audit process in order to determine whether an audited claim was eligible for payment. HI is an approved Medicaid Integrity Contractor that is assigned by CMS to Florida and was instructed to perform audits of Florida hospice providers who had been paid with Medicaid funds for the audit period. HI received the Medicaid billing information from AHCA and developed an audit plan in conjunction with AHCA MPI staff. Per Vitas' Medicaid Provider Agreements, Vitas agreed "to comply with local, state, and federal laws, as well as rules, regulations and statements of policy applicable to the Medicaid program, including Medicaid Provider Handbooks issued by AHCA." To that end, Vitas also agreed to maintain its records for at least five years to satisfy all necessary inquiries by AHCA. The stated objective of the audit, as reflected in the FARs, was "to determine whether the recipients met eligibility for hospice services and payments were in accordance with applicable Federal and State Medicaid laws, regulations, and policies." For the purpose of the audit, the recipient files to be reviewed were selected using the following criteria: The recipient was not dually eligible (eligible for both Medicaid and Medicare); and The hospice coverage was greater than or equal to 182 days based on the recipient's first and last date of service within the audit period. In addition, HI excluded recipients who had at least one malignancy (cancer) primary diagnosis and had a date of death less than one year from the first date of service with this provider. HI, in its capacity as an authorized contractor of CMS, contacted Vitas and requested medical files for those 250 recipients who met HI's selection criteria for the audit. HI then forwarded the 250 recipients' medical files to HI nurse claims analysts for initial detailed review. If, after review of Vitas' medical records, the HI claims analyst determined that a recipient was eligible for Medicaid hospice services, the analyst would clear the file and remove it from further consideration. As a result, 63 files were determined to have sufficient documentation to support approval of the claim. If, however, based upon the initial review, the analyst had any questions or concerns about a particular file, he or she would set it aside for later peer review by an independent physician who would make the ultimate determination with regard to hospice eligibility. In this case, 187 recipients' medical records were peer-reviewed by a physician who made a determination concerning whether the medical records supported the recipient's eligibility for Medicaid hospice. Of the 187 files, 118 were determined to be ineligible in whole or part for Medicaid hospice. HI contracts with PROs, which provide physicians to perform the peer review. Initially, HI contracted with AMR to provide peer review services. Section 409.9131(2)(c), provides that a "peer" is "a Florida physician who is, to the maximum extent possible, of the same specialty or sub-specialty, licensed under the same chapter, and in active practice." Often recipients in hospice care see multiple physicians. HI staff, therefore, reviewed the recipients' medical records to determine the names of Respondent's physicians treating the recipients whose medical records were being audited. Thereafter, HI staff obtained the specialty or subspecialty of Respondent's physicians from the Florida Department of Health, Board of Medicine, website. The most common specialties were Internal Medicine and Family Medicine. HI instructed AMR to appoint peers who are: (1) licensed in Florida, (2) in active practice, and (3) to the maximum extent possible have a specialty in Internal Medicine or Family Medicine. In this case, HI, through AMR, initially employed the services of five Florida physicians who reviewed the 187 recipient files at issue. The findings of the peer reviewers were presented in the Draft Audit Reports ("DARs"). Physicians Tania Velez, M.D. (specializing in family medicine), Terese Taylor, M.D. (specializing in family medicine), and Anita Arnold, D.O. (specializing in cardiovascular disease, interventional cardiology, and internal medicine), discontinued providing services as peers following the publication of their opinions in the DARs. These physicians were initially responsible for reviewing 25 recipient files. Todd Eisner, M.D. (specializing in internal medicine and gastroenterology), reviewed and rendered his opinion as to the hospice eligibility of five recipients in the DARs. Ankush Bansal, M.D. (specializing in internal medicine), reviewed the hospice eligibility of 88 recipients. Subsequent to the petitions being filed in this matter, Dr. Bansal opted to no longer participate in this matter. AHCA, therefore, requested HI to have all of Dr. Bansal's cases re- reviewed by another peer physician. AMR could not provide peer physicians who could complete the re-reviews in the desired time frame, so HI sent the re-reviews to another PRO, Network Medical Review ("NMR"). HI gave NMR the same instructions it gave to AMR with respect to how to select peers. HI, through NMR, selected Dr. Kelly Komatz (specializing in pediatrics, and hospice and palliative Care) and Dr. Charles Talakkottur (specializing in internal medicine) to perform the re-reviews of Dr. Bansal's claims. Dr. Komatz reviewed one patient file in dispute. Dr. Talakkottur reviewed 76 recipient files in dispute. Audit Methodology There is no statutory definition of "terminal illness" and no guidelines for the term are provided by rule or in the Handbook. In performing their respective peer reviews, the peer physicians were instructed to use their clinical experience, generally accepted medical standards, and the Handbook. Two peer reviewers with similar experience could review the same record and come to different conclusions as to a terminal diagnosis. The same goes for a determination as to a life expectancy of six months or less. Both are subjective by nature. Similarly, there are no AHCA guidelines to determine when the criteria of serial physician assessments, laboratory, radiological or other studies, have been met. The same is true for what constitutes sufficient documentation of clinical progression of the terminal disease, recent impaired nutritional status, recent decline in functional status, and specific documentation that a recipient has entered the end-stage of a chronic disease. Local Coverage Determinations ("LCDs") are Medicare guidelines that are disease specific and nationally recognized tools used to assist physicians in determining hospice eligibility. Florida does not use LCDs with respect to Medicaid. However, HI developed a document, titled the "Summary Lead Sheet—Medical Review Methodology Documentation/LCD's," which was approved by CMS. This documentation was then provided to AHCA and sent to the claims analysts and initial peer reviewers to perform their review of Medicaid reviews in this audit. To evaluate the likely terminality of a recipient's condition for benefit eligibility, LCDs direct physician reviewers to use certain clinical indicators including: Palliative Performance Scale ("PPS") scores; Functional Assessment Staging ("FAST") scores; Activities of Daily Living ("ADL") scores, which measure the patient's abilities in bathing, dressing, feeding, transferring, continence, and ambulation; Body Mass Index ("BMI"); and New York Heart Association ("NYHA") classifications. The Handbook makes no reference to LCDs or these clinical indicators. Nor does it prohibit their use. In fact, these clinical indicators are part of the "generally accepted standard of medical practice" to be considered in the context of "medical necessity" as defined by sections 409.913 and 409.9131. LCDs are not all-inclusive of all the different conditions for which a person may be eligible for hospice. Resultantly, LCDs are an appropriate tool to use in prognosticating whether a patient has a terminal illness with a life expectancy of six months or less. However, a patient's failure to meet the LCD for a specific disease does not per se disqualify the patient from Medicaid hospice eligibility. The peer reviewers were instructed, "Please do not break up a certification period with partial approved and partial denied dates." Pursuant to this instruction, if a patient meets hospice eligibility for any portion of a certification period, they should be approved for the entire period. None of the doctors involved in this case, from either side, actually examined the patients. All of the doctors conducted essentially a desk audit review of the medical records. Issuance of the DARs and FARs Based upon the peer reviews, DARs were prepared by HI, which identified overpayment of Medicaid claims totaling $6,943,664.74, relating to 118 recipients. The DARs were transmitted to Vitas. Vitas, through its medical directors, provided a response to the DARs. Vitas contested every alleged overpayment and maintained that all recipients in question were eligible for the Medicaid hospice benefit at all times. After receiving Respondent's responses, HI forwarded the responses to AMR so that the AMR peer review physicians could evaluate the responses and amend any of their conclusions, as appropriate. While the peer review physicians agreed with Vitas' responses in certain limited instances, the peer review physicians mostly disagreed, and, as a result, HI prepared the FARs. The FARs were then submitted to, and approved by, CMS. CMS provided the FARs to AHCA with instructions that Florida was responsible for furnishing the FARs to Vitas and initiating any state recovery process needed to collect the overpayment. The FARs prepared by HI contain the determinations of the peer review physicians concerning whether each of the recipients at issue had a terminal diagnosis with a life expectancy of six months or less if their disease progressed at its normal course. The FARs concluded that 92 recipients were ineligible for at least a portion of their stay with a cumulative overpayment of $5,401,615.18. Vitas timely filed three petitions, one for each location, with AHCA's agency clerk. On or about February 6, 2017, AHCA referred the three cases to DOAH. On February 14, 2017, the undersigned entered an Order of Consolidation, and the three cases are now proceeding under DOAH Case number 17-0792MPI. During the course of the underlying proceeding, the parties first stipulated that 67 of the original 92 recipients identified in the FARs were at issue. Throughout the course of these proceedings, however, the parties have moved closer and disputed less ineligibility determinations. As a result, of the original 250 recipients' medical files reviewed, only 61 remain in dispute. AHCA now seeks the revised overpayment of $3,847,755.95, with a corresponding reduction in the fines of $906,715.29 for a grand total of $4,754,471.24. The Experts Due to the nature of the review and "re-review" process, the vast majority of the final hearing was comprised of the testimony of each parties' experts regarding whether particular recipients met the criteria of Medicaid hospice benefit eligibility. For each recipient, an AHCA and a Vitas expert reviewed the medical records and provided an opinion as to whether the six bullet points of the Handbook were satisfied to determine whether the recipient was "terminally ill with a life expectancy of six months or less if the disease runs its normal course." The following physician experts were tendered and accepted for AHCA: Dr. Talakkottur, Dr. Eisner, and Dr. Komatz.1/ The following physician experts were tendered and accepted for Vitas: Dr. Shega and Dr. Vermette. Because the determinations of whether a recipient met the applicable criteria are highly subjective, it is important to distinguish between the relative qualifications of the experts. AHCA's Experts Dr. Talakkottur Dr. Charles Talakkottur was presented by AHCA as an expert in internal medicine. He has maintained an active practice in Florida for over nine years and reviewed and issued his opinion as to the hospice eligibility of 76 recipient files in dispute. Of those 76 recipient files, Dr. Talakkottur initially determined that 59 recipients were ineligible for at least a portion of the period that Vitas billed for hospice Medicaid services. In subsequent reviews, Dr. Talakkottur overturned two more files, leaving 57 recipients ineligible for at least a portion of the Medicaid services billed by Respondent. As discussed above, negotiations continued between the parties during the course of the final hearing. This resulted in Dr. Talakkottur testifying about 48 of the remaining disputed recipients' Medicaid hospice eligibility. Dr. Talakkottur admits patients to hospice from his practice, which requires him to make the type of prognosis determination, such as those at issue in this proceeding. However, Dr. Talakkottur is not now nor ever has been board- certified in hospice and palliative medicine. He has never been a Certified Hospice Medical Director. He has never signed a certification for hospice eligibility nor worked for a hospice. Dr. Talakkottur's practice is named TLC Medical, Aesthetics & Pain Management. The website for his practice shows that he provides Botox, IPL Photofacial, Juvederm/Dermal Fillers, Laser Hair Removal, Medical Marijuana, Medical Services, Medical Weight Loss, Medicare Doctor in Tampa, and Pain Management. Although advertised on his website, Dr. Talakkottur acknowledged he is not certified to provide medical marijuana treatment. Neither Dr. Talakkottur's practice website nor his practice YouTube page advertise hospice or end-of-life care services. Dr. Talakkottur never discussed the Handbook with anyone at AHCA. He did not receive any training from AHCA, CMS, HI, or NMR on how to perform the audit. Dr. Talakkottur was provided certain instructions from NMR on how to perform his reviews. The instructions state, "Please do not break up a certification period with partially approved/partially denied dates (i.e. if certification period is 01/01/2015 through 02/01/2015, and any dates within that period are deemed medically necessary, please approve the entire certification period)." Dr. Talakkottur acknowledged, however, that he did not follow this instruction. Dr. Talakkottur's testimony regarding the many patients he reviewed clarifies that he applied the six bullet points from the Handbook to his reviews of both certification and recertification decisions. However, the six bullet points are prefaced with a paragraph beginning: "Documentation to support the terminal prognosis must accompany the initial certification of terminal illness." In other words, the six bullet points are not applicable to recertification decisions. A patient must still have a prognosis of less than six months to be recertified, but the six bullet points no longer represent the appropriate factors. In fact, the Handbook clarifies that "[f]or subsequent election periods, written certification from the hospice medical director or physician member of the interdisciplinary group is required." In light of this clear distinction, deference to the clinical judgment of the hospice physicians becomes more significant for recertification periods. Dr. Talakkottur did not lend any credence to the "real-time" decisions of the hospice physicians. Instead, Dr. Talakkottur sought out ways to deny coverage and frequently based his decisions on bullet points that the patient was not required to satisfy to support eligibility. Dr. Talakkottur opined that he would not want to consider a patient's severity of comorbidities when prognosticating six months life expectancy or less. He often reviewed patients myopically, considering only the primary diagnosis. By way of explanation, he opined that in his professional opinion taking into account comorbidities was wrong because a condition such as an "ant bite" or a scratch is a comorbidity. In contrast, the other experts in this proceeding convincingly testified that the patient's whole condition should be evaluated in determining the prognosis of life expectancy of six months or less, including the presence and severity of comorbidities. Although Dr. Talakkottur was properly selected as a peer reviewer and qualified as an expert in internal medicine, his testimony was deemed less credible than that of the Vitas medical experts, Dr. Shega and Dr. Vermette. Dr. Eisner Dr. Eisner performed the peer review for 13 recipients, 12 of whom remain in dispute. Dr. Eisner's background is in internal medicine and gastroenterology. He held a board certification in internal medicine between 1993 and 2003. In 1995, Dr. Eisner was board-certified in gastroenterology, a board certification that he continues to maintain. At some point around 2003, the certification standards changed such that Dr. Eisner was no longer required to maintain his board certification in internal medicine in order to remain board- certified in gastroenterology. Since 1995, 100 percent of Dr. Eisner's practice has been focused on gastroenterology. Dr. Eisner routinely makes life expectancy prognostications for his patients. Further, Dr. Eisner also refers patients to hospice on a regular basis. In so doing, Dr. Eisner is called upon to make the type of prognosis determination similar to those at issue in this proceeding. Dr. Eisner does not treat patients for the following specific diseases: diabetes, hypertension, Chronic Obstructive Pulmonary Disease ("COPD"), HIV/AIDS, cerebral degeneration, cerebral vascular disease, cardiovascular disease, malignant neoplasm of the brain, heart disease, dementia, Alzheimer's, adult failure to thrive, or debility. He was only familiar with those diseases as comorbidities to a principal diagnosis related to a gastroenterological disease and does not treat those primary diseases. While cardiology, critical care, geriatric, infectious disease, medical oncology, and pulmonary disease are also subspecialties of internal medicine, Dr. Eisner has not done a fellowship in any subspecialty other than gastroenterology and does not hold himself out as an expert in any internal medicine subspecialty other than gastroenterology. Dr. Eisner did not recall receiving any instructions other than the Handbook but acknowledged he did not read the entire Handbook to perform his review. Dr. Eisner was not aware of what documentation must accompany the initial certification for a terminal disease for Medicaid hospice purposes or what documentation must accompany a subsequent certification for Medicaid hospice purposes. Contrary to the testimony of Dr. Talakkottur, Dr. Eisner acknowledged that the presence and severity of comorbidities should be considered when making a clinical determination of life expectancy of six months or more. Although Dr. Eisner was qualified both as a peer reviewer and an expert in this proceeding, his lack of any recent experience in a practice area other than gastroenterology diminished the weight given to his testimony concerning non- gastroenterology related illnesses and conditions. Dr. Komatz Dr. Komatz re-reviewed the records of one recipient that remains in dispute. Dr. Komatz holds an active Florida medical license and is board-certified in pediatrics and hospice and palliative medicine. She has been board-certified in hospice and palliative medicine since 2010. As part of her practice, Dr. Komatz currently cares for hospice patients, refers patients to hospice, and certifies patients for hospice care. According to Dr. Komatz, when determining the eligibility of a patient for hospice, a practitioner must look at the patient's overall level of function, medications, and needs regarding such things as the use of oxygen and equipment to assist with daily living. The determination is then made taking into account these and other factors regarding the patient's current state. In her professional opinion, it is not uncommon to see a patient who has a prognosis of six months or less actually live for longer than six months. Significantly, Dr. Komatz opined as an expert for AHCA that it is important for a physician to be board-certified in hospice and palliative care in order to be competent to review a hospice record because the hospice training teaches the practitioner more about disease trajectory, the interdisciplinary team and how that works in conjunction with the patient. It also provides experience as to how hospice operates in general. In addition, she noted that the person best able to determine hospice eligibility is someone who has been trained in hospice care and/or practices in that field on a regular basis. Dr. Komatz acknowledged that it is possible that two physicians could review the same medical records and reach different conclusions about the hospice eligibility of a patient. When reviewing the initial certification requirements, Dr. Komatz stated that most hospice beneficiaries forego further laboratory or radiologic studies. She also opined that the condition of hospice patients can plateau or improve due to the hospice care being received. Likewise, it would not be fair to look for a progression of functional decline in a patient if the patient was already at the lowest functional level. She stated that "specific documentation that indicates the recipient has entered an end-stage of a chronic disease" is vague and is merely a summary of the other specific initial certification requirements. Consequently, most of the six bullet points are rarely applicable. Dr. Komatz stated that to be eligible for hospice services, a patient need not meet all the initial certification six bullet points, but instead it is a "totality of circumstances" standard based on the medical record of the patient. Dr. Komatz worked as a subcontractor for NMR. She only communicated with NMR personnel regarding the audit. She had no contact with HI or AHCA. Dr. Komatz was provided the NMR instruction sheet, which instructs reviewers not to break up certification periods to perform her review. Dr. Komatz was qualified both as a peer reviewer and an expert in this case. Due to her regular and direct experience in hospice and palliative care, her testimony, particularly as to prognostication of life expectancy and the practice of hospice and palliative care generally, was given great weight. Vitas' Experts Dr. Shega Dr. Shega was accepted as an expert in hospice and palliative care and geriatric medicine. He is the National Medical Director for Vitas. In that role, he oversees the four regional directors, as well as the medical directors that report to them, and also oversees physician services. Dr. Shega testified regarding the disputed recipients in the Melbourne and Boynton Beach programs. Dr. Shega attended Northwestern University Medical School, performed his residency and internship at the University of Pittsburgh, and performed a two-year academic fellowship in geriatric medicine at the University of Chicago. He is board- certified in geriatrics and hospice and palliative medicine. He is licensed to practice medicine in Florida and Illinois and actively treats hospice patients roughly six to eight weeks per year. Dr. Shega is currently an associate professor of medicine at the University of Central Florida. Prior to that, he has held positions as an associate professor of medicine at the University of Chicago, an assistant professor of medicine at Northwestern, an assistant professor of medicine at the University of Chicago, and an instructor of medicine at the University of Chicago. While at Northwestern, he was the director of its hospice program for several years and also worked in a hospice as a team physician for the University of Chicago. Dr. Shega was part of the University of Chicago leadership committee in geriatrics and palliative medicine where he helped to oversee its clinical operations. He has also served on numerous geriatric and hospice-related committees. Dr. Shega is a member of the American Geriatric Society and the American Academy of Hospice and Palliative Medicine, and through being an associate editor for the "Pain and Aging" section of Pain Medicine, has a membership to the American Pain Society. He currently performs one to two teaching presentations a week across the country and has published over 40 peer-reviewed articles on topics related to hospice and palliative care. Dr. Shega was recently the co-managing editor of a nine-book series that discusses the background of hospice and palliative care, pain management, non-pain symptoms, psychological and social symptoms, pediatric care, and chronic illnesses and end- of-life illnesses, congenital hyperinsulinism ("CHI"), COPD, dementia, renal disease, and neurologic disorders. Dr. Shega was qualified as an expert in this case. Due to his regular and direct experience in hospice and palliative care, his testimony, particularly as to prognostication of life expectancy, and the practice of hospice and palliative care generally, was given great weight. However, the credibility given to Dr. Shega's testimony was tempered by the fact that he is directly employed by Vitas and was involved in overseeing or facilitating Vitas' response to the DARs, wherein Vitas contested every finding and sought reimbursement for every alleged overpayment. Dr. Vermette Dr. Vermette was accepted as an expert in hospice and palliative care, and family medicine. During the final hearing, he testified regarding the disputed recipients in the Dade program. Dr. Vermette is the Vitas Medical Director for the Claims Review Group. In that capacity, his duties are to review charts and perform support and training of other medical directors and physicians throughout the country in how to review charts and documentation. Dr. Vermette attended medical school at the University of Texas, Southwestern Medical School in Dallas. He then attended a three-year residency program in family medicine at the University of Texas Health Science Center in Houston followed by service in the military as a medical doctor, achieving the rank of Major. Dr. Vermette is licensed to practice medicine in a number of states, including Florida. He is board-certified in family medicine and hospice and palliative medicine. He is also certified as a Hospice Medical Director, which is designed to recognize expertise in hospice and palliative medicine. Dr. Vermette is certified as a registered medical auditor. Dr. Vermette has held faculty positions as a clinical instructor at the University of Texas Health Science Center, an associate professor of medicine at the University of Nebraska, a clinical preceptor for Texas A&M University and the University of North Texas, and currently serves as a volunteer faculty member at the Drexel School of Medicine and a voluntary clinical instructor at the Mercy Health System in Philadelphia. Dr. Vermette currently has staff privileges to provide hospice and palliative care medicine at Mercy Fitzgerald Hospital, Mercy Hospital, and Methodist Hospital in Philadelphia. In 1998, Dr. Vermette began referring patients to hospice and following them as their attending physician. In 2009, Dr. Vermette began working part-time for Vitas and routinely followed patients in the inpatient units ("IPUs") in Fort Worth. He would spend two out of every four weeks rounding and seeing hospice patients in the IPU. He then began doing some of the call activities, some home team visits, and participating in interdisciplinary care team meetings. He moved to Philadelphia in 2012 and continued treating Vitas hospice patients. At that time, he also began performing chart reviews for Vitas. Dr. Vermette sought licensure to practice in Florida shortly after Vitas became aware of this audit and that his pursuit of licensure in Florida was intended to facilitate his provision of expert witness services in this case. Dr. Vermette admitted that, even though he is licensed in Florida, he has never treated nor evaluated a single patient in Florida. In fact, the first time that Dr. Vermette read the Handbook was as part of his preparation to testify in this case. Dr. Vermette was qualified as an expert in this case. However, like the testimony of Dr. Shega, the credibility given to Dr. Vermette's testimony was tempered by the fact that he is directly employed by Vitas and was involved in overseeing or facilitating Vitas' response to the DARs, wherein Vitas contested every finding and sought reimbursement for every alleged overpayment. SPECIFIC CLAIMS FOR RECIPIENTS AT ISSUE Patient 2, D.A.2/ Melbourne Recipients Patient D.A. was a 48-year-old female, admitted to hospice on 07/15/09, with a terminal diagnosis of end-stage HIV/AIDS. The claim periods at issue are 09/01/09 to 09/12/09 and 02/15/10 to 05/31/10. D.A. was evaluated face-to-face by Dr. Peterson, the Associate Medical Director for Vitas, on 07/14/09, the day before her admission. Based on his clinical assessment, he determined the patient was hospice appropriate because she had HIV/AIDS, debility, and failure to thrive, with significant recent weight loss, and dysphagia, secondary to esophageal candidiasis.3/ D.A. was admitted to hospice with two active infections, profound weight loss over the previous two- to three-month period (per her self-reporting), peripheral neuropathy, lethargy, and fatigue; she spent most of her time in bed. She had discontinued her antiretroviral HIV-targeted treatment. She was noted to have a BMI of 18 at the time, which is considered severe malnutrition and which negatively impacted her prognosis. On admission, D.A. reported 10 of 10 pain in both legs from her HIV-related peripheral neuropathy. She was described as thin, cachectic (physical wasting with loss of weight and muscle mass due to disease), and had difficulty ambulating. D.A. was also noted to have a medical history of syncope (fainting), urinary tract infections ("UTIs"), and fractures. D.A. was started on medications for the infections, Mycelex for thrush, and Bactrim double-strength for her lung infection. D.A.'s blood work was done on 07/16/09, which showed the patient had a CD4 count of 89. Dr. Shega testified that while her CD4 count was above 25, given D.A.'s clinical status, hospice care was appropriate because the patient was more than likely at end-stage HIV/AIDS. After her July admission, D.A. started gaining weight with the support of the Vitas interdisciplinary team. She had no recurrent refractory infection and the status of her fractures improved as well. D.A.'s clinical status improved such that at the end of the first 90-day period, she no longer could be evaluated with a prognosis of six months or less, and was discharged on 09/12/09. D.A. was readmitted to hospice on 02/15/10 with a diagnosis of end-stage HIV/ADIS. At that time, D.A. was lethargic, weak, had a flat affect and responded with one-word answers. She required assistance with bathing and ambulating, and had a PPS score of 50 percent.4/ On 02/26/10, D.A. was noted to have some secretions and dyspnea (shortness of breath) with exertion. She was believed to have a recurrence of thrush and was started on Mycelex troches. On a 03/02/10 physician visit, the patient was noted to have difficulty swallowing, decreased ability to ambulate, was slightly confused, and displayed white patches on her oral pharynx, suggestive of candidiasis. A subsequent physician evaluation on 03/19/10 noted D.A. was suffering from a severe sore throat, weighed 96 pounds, and had a poor appetite, low blood pressure, and ongoing significant loss of muscle mass. On 05/17/10, D.A. was noted to have a temperature of 99.7, shortness of breath, thrush, and was placed on medication to help with her discomfort. On 05/31/10, a nurse saw D.A. and noted her weight had dropped to 94 pounds, her PPS declined to 40 percent. A hospital bed was ordered because the patient was spending 90 percent of the time in bed, due to fatigue and weakness. Dr. Eisner testified that this patient was not Medicaid hospice eligible because her candidal esophagitis is a treatable condition, it was treated, and her PPS score improved and she gained weight. Further, Dr. Eisner pointed out some likely inaccuracies in the recorded weights of D.A. However, Dr. Eisner provided an opinion regarding this patient outside his expertise as shown by his inability to provide any specific indicators with regard to prognosticating if an HIV/AIDS patient had six months or less to live. AHCA has not met its burden by the greater weight of the evidence that D.A. was not eligible for Medicaid hospice services, and it is not entitled to recover an overpayment. Patient 3, D.G. Patient D.G. was a 48-year-old female who was admitted to hospice with a terminal diagnosis of debility unspecified. Debility is a condition similar to "failure to thrive," which usually denotes a patient with poor conditioning due to multiple medical problems. The dates at issue are 09/30/09 to 10/20/09 and 11/12/09 to 12/25/09. D.G. was hospitalized on three occasions within several months of her initial hospice admission. At the second hospital admission on 09/15/09, she experienced respiratory failure requiring intubation and a tracheostomy and was placed on a ventilator, secondary to influenza and pneumonia. She experienced a myocardial infarction (heart attack or "MI"), acute renal failure requiring dialysis, and had multiple infections. She required a percutaneous endoscopic gastrostomy ("PEG") tube for feeding and a dialysis catheter. D.G. was placed in a skilled nursing facility upon the second hospital discharge, but soon signed out against medical advice and refused further dialysis. On 09/23/09, she was readmitted to the hospital with bacteremia, secondary to her dialysis catheter being infected. In addition, she had a UTI and a skin infection on her abdomen. While hospitalized, D.G. displayed an extremely high potassium level, which could trigger ventricular arrhythmia (irregular heartbeat). Her hospital physician deemed her to be hospice appropriate and referred her to hospice. Upon initial evaluation, the admitting nurse was unsure how to most appropriately list D.G.'s terminal diagnosis, as her multiple comorbidities included a left leg amputation above the knee due to severe peripheral vascular disease; ongoing dry gangrene on her right leg and foot; coronary artery disease resulting in a recent heart attack; renal failure requiring dialysis; COPD with recent respiratory failure from pneumonia; and Crohn's disease, requiring multiple surgeries. The terminal diagnosis of debility unspecified was deemed the most appropriate. When admitted to hospice on 09/30/09, Patient D.G. was very ill and in substantial pain, requiring increased pain medication. Shortly after admission, D.G. developed a change in level of consciousness. Patient D.G. suffered a seizure on 10/20/09. Her family revoked hospice care, and D.G. was transferred back to the hospital for more aggressive treatment. On 11/10/09, D.G. again presented to the hospital emergency room ("ER"), this time with abdominal pain and right lower extremity pain, confusion, and a low albumin of 3.0. D.G. was supposed to follow up with hospice, but did not do so. She was found to have a PPS of 40 percent, was disoriented, and was at risk of aspiration. She also had an ongoing ulcer on her right leg from the peripheral vascular disease with gangrene. D.G. returned to the ER the following day, 11/11/09, and at that time, was admitted to the hospital. Upon hospital admission, D.G. had a PPS of 30 percent and a BMI of 23. She was disoriented, lethargic, had shortness of breath at rest or minimal exertion, and had lower extremity edema on the right side with a foot ulcer. She was now on oxygen, two to three liters. On 11/12/09, D.G. was transferred from the hospital to the Vitas IPU for symptom management of uncontrolled pain, agitation, anxiety, and wound care. D.G. was diagnosed with debility and failure to thrive due to the multitude of medical conditions noted above. During the months prior to this second hospice admission, she had undergone serial physician assessments and laboratory and radiologic studies. She had also had multiple admissions to the hospital and ER. Over the course of the second hospice period, D.G. had a PPS of 40 percent, then a PPS score of less than 40 percent, and finally, a PPS score of 30 percent. Dr. Shega testified that a patient's PPS score of 30 or 40 percent is supportive of a prognosis of six months or less, if the illness runs its normal course. After a brief stay in the Vitas IPU, D.G. returned home for care. On 12/04/09, she was dependent in 5 of 6 ADLs. On 12/11/09, her dry gangrene converted to wet gangrene and additional medication was started. She became lethargic and was given antibiotics, but her condition worsened, and she was transferred back to the IPU with a 10 of 10 pain, and low-grade fever. D.G. met specific indicators of "rapid decline and disease progression" from the LCD for debility. She exhibited dependence in more than 3 of 6 ADLs, a PPS below 70 percent, recurrent infections, worsening pressure wounds, increased pain, increased respiratory symptoms, and changes in lucidity. At final hearing, Dr. Eisner testified that D.G. "improved to the point that hospice was revoked on 12/25/09." Dr. Eisner was incorrect, however, because the record reflects D.G. was placed back in hospice IPU on 12/24/09, as she continued to deteriorate, refused evaluation by staff and threatened to call the police if wound care was attempted. The following day, D.G. revoked hospice a second time and went back to the hospital to seek aggressive treatment. Dr. Eisner concluded that D.G. did not meet the standard of six or less months to live; rather, D.G. suffered from a chronic condition, Crohn's Disease. However, this does not account for D.G.'s multitude of significant comorbidities. AHCA has not met its burden by the greater weight of the evidence that D.G. was not eligible for Medicaid hospice services, and it is not entitled to recover an overpayment. Patient 6, J.R. Patient J.R. was a 58-year-old male with a terminal diagnosis of end-stage heart failure. The claim period at issue is only one week, 01/24/11 to 01/31/11. During the period at issue, J.R. suffered NYHA Class IV heart failure. Class IV is the worst classification and supportive of hospice appropriateness. J.R. had a PPS of 50 percent and had active symptoms that supported a life expectancy of six months or less if the illness ran its normal course. Dr. Eisner credibly testified that by 01/24/11, J.R. had improved to a point that his life expectancy was greater than six months. J.R.'s disease was no longer progressing to the point of impairment, and his functional capacity had improved. However, AHCA approved benefits for Patient J.R. for the time frame 04/19/10 through 01/23/11. The one-week time frame at issue fell within the last 60-day benefit period approved by AHCA, which began on 12/15/10. According to the instruction provided to the reviewers, this week must be approved. AHCA has not met its burden by the greater weight of the evidence that J.R. was not eligible for Medicaid hospice services, and it is not entitled to recover an overpayment. Patient 7, R.A. Patient R.A. was a 59-year-old male with a terminal diagnosis of COPD who was admitted to Respondent's care on 03/21/11. The dates at issue are less than two months, from 03/21/11 to 05/01/11 and 05/04/11 to 05/16/11. R.A. had a medical history of non-small cell lung cancer, which had been treated with chemotherapy and radiation. He also had a history of hypertension, depression, peripheral vascular disease, arthritis, chronic back pain, gastroesophageal reflux, and seizures. The precipitating event leading to his hospice admission was a hospitalization for pneumonia. At the time of discharge from the hospital, the original plan was for R.A. to be discharged to a skilled nursing facility. The hospital had trouble finding a skilled nursing facility willing to take the recipient because of his social problems, so it appears the hospice placement was a placement of convenience as indicated in a physician's visit note dated 03/28/11, where it was noted, "Case manager is involved in the case to help him out and for possible placement. We will continue with the present medications at this point." In fact, R.A. told Vitas' staff that he would like to have an aid to help him with ADLs and his medications until he gets better, and Vitas' staff suggested R.A. should be referred for home care services. R.A. lived alone. Instead, R.A. entered hospice care. The initial certification documentation incorrectly indicated that R.A. had end-stage lung cancer; however, he had previously been diagnosed with lung cancer, which was in remission at the time of his hospice admission. R.A. revoked hospice care to return to the hospital for aggressive treatment of pneumonia. The certification documentation for R.A.'s second admission again incorrectly listed R.A. as having an end-stage diagnosis of lung cancer, despite the recipient telling Respondent that he was negative for cancer during his first admission. Respondent's certifying physician stated there was a new finding of mediastinal lymphadenopathy, a swelling of the lymph glands in the chest areas, which could be consistent with a reoccurrence of his primary process. Dr. Talakkottur, however, explained that R.A.'s lymph glands could have been enlarged for a number of reasons, such as if he had a cold, a blockage of lymph fluid, or pneumonia. Because R.A. had been suffering from bouts with pneumonia, enlarged lymph glands was not conclusive evidence of a reoccurrence of lung cancer. The initial nursing assessment prepared 05/04/11, notes that R.A. had been diagnosed during his last hospitalization with pneumonia and was complaining of cough and congestion. A nurse noted in her assessment that the recipient continued to express his desire to live alone, but she noted he may need a higher level of care. Dr. Talakkottur credibly testified that this recipient did not suffer from a terminal illness; rather, R.A. suffered from a chronic disease-—COPD. He had been diagnosed with COPD five years prior to his first hospice admission. R.A. was sick, but he was not likely to expire within the next six months. He just needed assistance with minor care, housekeeping, and occasionally with ADLs. He was not hospice appropriate and could have been served in a home health setting. The medical records contained in this recipient's file do not support a finding that the Medicaid hospice eligibility standard was met. Based upon the greater weight of evidence in this case, it is determined that this recipient was not eligible for Medicaid hospice services and that AHCA is entitled to recover an overpayment of $20,467.42.5/ Patient 8, T.F.C. Patient T.F.C. was a 57-year-old female with a terminal diagnosis of malignant neoplasm of the corpus uteri. The dates at issue are 06/16/11 to 02/21/12. T.F.C. was diagnosed on 04/25/11 with high-grade serous adenocarcinoma by her treating oncologist. Her uterus and one of her fallopian tubes were removed due to cancer. After surgery, she was seen as an oncology outpatient during May 2011. On 06/12/11, T.F.C. presented to the ER with low back pain, which was not relieved with morphine. Her computed tomography ("CT") scan revealed severe left-side hydronephrosis, hydroureter, left pelvis and a spiculated soft tissue, whose density measured 3 x 2 centimeters. During the dates at issue, her PPS ranged from 40 to 60 percent, although she required increased pain medication and experienced three infections. She had a series of physician assessments and lab work, both while in the hospital and on outpatient visits. Dr. Shega testified that an oncologist from MD Anderson Cancer Center referred T.F.C. to hospice. There is, however, no file evidence to support this testimony, and it is difficult to understand how Dr. Shega knew this fact to be true. The only certification was that of the written certification prepared by Vitas' physician. Dr. Rebecca Moroose of MD Anderson Cancer Center of Orlando saw T.F.C. on 11/02/11. In her progress note, Dr. Moroose reflected upon the T.F.C's severe left hydronephrosis while hospitalized in June, which was believed to be associated with a mass "suspicious for recurrence." Dr. Moroose further reported that since being on hospice care, T.F.C. had excellent symptom control and that most of her pain was associated with her midline abdominal surgical scar and an associated mass found. Dr. Moroose planned to contact Vitas for clearance to obtain a CT imaging of the abdomen to reassess T.F.C.'s disease. On 11/07/11, a CT of her abdomen and pelvis with contrast, was performed and a comparison made to CT of June 2011. Two masses were discussed and compared to the earlier study. The seroma in the anterior abdominal wall of her vertical midline surgical incision was stable and felt not to represent a malignancy but rather a benign fluid collection. The second mass was much less conspicuous in the current study and represented a significant reduction in size compared to the previous study and was believed to possibly represent fibrotic tissue or residual disease. No clear evidence exists from the hospital records and/or MD Anderson Cancer Center that either mass is a definite recurrence of the disease. T.F.C.'s functional status remained static during her first admission. She was able to feed herself, her BMI was consistent with obesity, she could make her needs known, and when the nursing notes assessed her cognitive function, the recipient was consistently reported to be alert and oriented "times three." T.F.C. often reported her pain as zero, on a scale of zero to ten, and her PPS was between 40 and 60 percent. T.F.C. had no inpatient or continuous care stays while in hospice. T.F.C.'s need for increased pain medication appears to be related to issues she was having with her bladder, including kidney stones. She revoked hospice care on 02/21/12, to go to the hospital, to be treated for pain in her abdomen, which was related to kidney stones. Additionally, while in the hospital, she underwent a procedure to insert a stent to facilitate urination. Although T.F.C. had a history of bladder and UTIs, none of Vitas' recertifications or addenda to the recertifications report the recipient having either a bladder or UTI during the disputed period. Although T.F.C. suffered from a terminal illness, the medical records for this recipient do not support a diagnosis of six months or less if the disease runs its normal course. As Dr. Talakkottur testified, the medical records do not demonstrate a clinical progression of the terminal illness. During the period in dispute, T.F.C.'s condition overall remained static. Based upon the greater weight of evidence in this case, it is determined that this patient was not eligible for Medicaid hospice services and that AHCA is entitled to recover an overpayment of $36,221.03. Patient 9, A.J. Patient A.J. was a 74-year-old female with end-stage cerebral degeneration, with two recent hospitalizations prior to hospice admission. The dates at issue are 09/01/10 to 04/22/12. Upon admission to Vitas hospice, A.J. had a PPS of 30 percent and was dependent for 6 of 6 ADLs, with a FAST score of 7c. A.J. had an altered level of consciousness and was at high risk of aspiration. A.J. had a history of strokes and transient ischemic attacks ("TIA" or "mini-strokes"), with encephalomalacia in the left frontal and right thalamus, hypertension, coronary artery disease, increased lipids, dementia, psychosis with hallucinations, anemia, diabetes, chronic renal insufficiency, a history of gastrointestinal ("GI") bleed, and peripheral vascular disease. In terms of her functional state at initial certification, A.J. was bedbound, not fully capable of following commands, had sarcopenia (muscle wasting) in all four extremities, was very feeble, lethargic and oriented times zero, which meant she did not know who she was, where she was, or when it was. During the period at issue, A.J.'s PPS remained at 30 percent, she was dependent in 6 of 6 ADLs, her FAST score was always above 7, she was oriented to zero or one, and she was incontinent. A.J. had several infections during this time frame. A FAST score above 7 in a dementia patient is consistent with a terminal prognosis, according to the LCDs. Dr. Talakkottur testified that, in his opinion, A.J.'s condition was chronic, not end-stage. His opinion was based on his evaluation that A.J. did not decline during her stay in hospice. Dr. Shega, with ten years' experience as co-director of the Memory Disorders Clinic at the University of Chicago, strongly disagreed, opining that based on her medical history, including two recent hospitalizations, and the evaluation upon admission, A.J.'s dementia was end-stage. During her hospice stay, she continued to lose weight, had temporal wasting and muscle loss, began to experience contractures, and was sleeping more. Furthermore, citing the medical literature, Dr. Shega opined that A.J.'s health did decline in light of her three infections. Two weeks after her initial admission to hospice, A.J. was placed on continuous care due to nausea and vomiting, with no oral intake for two days. Later that same month, she was admitted to a hospital while remaining on hospice. A.J. met the disease specific criteria from the LCD for dementia and related disorders. As noted above, she had a FAST score of 7c, which indicates she was speaking six words or fewer, was 6 of 6 ADLs, and was incontinent. While A.J.'s time in hospice stay was certainly longer than anticipated, a review of her complete medical history presented a dementia patient with a prognosis of six months or less should the disease run its normal course, and she continued to decline. A.J. clearly met the criteria for admission to hospice for the dates at issue. AHCA has not met its burden by the greater weight of the evidence that A.J. was not eligible for Medicaid hospice services, and it is not entitled to recover an overpayment. Patient 10, M.A. Patient M.A. was a 56-year-old male with end-stage liver disease and end-stage COPD. The period in dispute is 10/10/10 to 04/30/11. M.A. had been hospitalized twice just prior to hospice admission, the first for 13 days beginning 08/03/10, with a second admission on 08/30/10. M.A. was hospitalized the second time with chest pain and dyspnea. M.A. remained in the hospital (almost six weeks) until referred to hospice by his hospital physician due to abdominal pain and ascites. Ascites, the accumulation of fluid in the peritoneal cavity, causing abdominal swelling, can occur as a result of liver failure. M.A.'s medical history included end-stage liver cirrhosis, chronic COPD, a history of GI bleed, esophageal varices, portal hypertension, alcohol abuse, diabetes, chronic renal insufficiency, anemia, coronary artery disease, and a left frontal cerebrovascular accident ("CVA" or stroke). In Dr. Talakkottur's opinion, Patient M.A. did not have end-stage liver disease because, in part, there was no report of blood in the stool or of vomiting blood. Although Dr. Talakkottur asserted ascites was not present in this patient, on cross-examination, he acknowledged ascites was noted in January 2011. In fact, M.A. was referred to hospice directly from an extended hospital stay for abdominal pain and ascites. Dr. Talakkottur also testified that M.A. had not been prescribed Lasix or Aldactone for ascites during his hospice stay. Dr. Shega, however, testified to the patient's substantial ascites, despite his being given a very high dose of diuretics, including Aldactone. Contrary to Dr. Talakkottur's testimony, the draft audit report acknowledges M.A. also had ascites on 12/29/10 and in March and April 2011. Dr. Shega opined that although M.A. did not specifically meet the LCDs for end-stage liver disease alone, the fact that he also had end- stage COPD, in combination with his substantial symptom burden, refractory ascites, and encephalopathy with forgetfulness, which worsened over the patient's stay, made the patient appropriate for hospice. M.A. exhibited shortness of breath at rest and with activity and was on 3.5L oxygen per nasal cannula. Over the course of the period at issue, M.A.'s dependency for ADLs generally trended higher, as did his level of pain, while his cognitive status worsened. The recertification signed on 03/24/11 reported cachexia and muscle wasting. While upon admission M.A. could walk a handful of steps by himself, by the end of the period, he was essentially bedbound. M.A.'s health clearly declined over the period at issue. Given his history of recent, lengthy hospitalizations, his numerous comorbidities with significant symptom burden, and his decline in functional status, M.A. clearly met the criteria for admission to hospice for the dates at issue. AHCA has not met its burden by the greater weight of the evidence that M.A. was not eligible for Medicaid hospice services, and it is not entitled to recover an overpayment. Patient 11, D.C. Patient D.C. was a 47-year-old female with a terminal diagnosis of adult failure to thrive. The three claim periods at issue are 12/21/10 to 02/10/11; 04/25/12 to 07/16/12; and 10/04/12 to 12/29/12. D.C. had a longstanding diagnosis of refractory Crohn's disease. At the time of her appropriateness evaluation in December 2010, she resided in a nursing home, which would have required a physician's order to agree that the patient was hospice appropriate. She had a PPS of 40 percent, was dependent in 2 of 6 ADLs, weighed 103 pounds, and suffered from alopecia (loss of hair). Her pain level was 7 of 10. Prior to admission to hospice, D.C. had been hospitalized twice in 2010, the first time in March for sepsis and endocarditis, and the second time on 07/30/10, for GI surgery, with complications of three fistulas, which placed her at high risk for infection. D.C.'s comorbidities included protein-calorie malnutrition, ongoing abdominal pain, anemia, reactive airway disease, neuropathy, peptic ulcer, a history of duodenal ulcer and GI bleed, ileostomy, depression, peripheral vascular disease, coronary artery disease, and cellulitis. The patient was very hesitant to eat, as food equaled pain. During the course of her first certification period, D.C.'s medical condition stabilized, and she was discharged on 02/10/11 due to an extended prognosis. Upon D.C.'s second hospice admission, her PPS was 40 percent, she was dependent on 5 of 6 ADLs, with a recent loss of weight and a BMI of 21.6. Her pain was recorded at 7 of 10 and she had developed a stage 2 sacral wound, in addition to two wounds on her abdomen. Her comorbidities remained the same as at the first admission, with the exception of a benign tumor above her heart, which was removed. During the course of her second certification period, Patient D.C.'s medical condition again stabilized and she was discharged on 07/16/12 due to an extended prognosis. Upon admission to hospice the third time, D.C.'s comorbidities remained the same. Her PPS score was 40 percent. In early December 2012, however, D.C. began to develop paranoia, was agitated and anxious, and required continuous care to have her antipsychotic medication titrated. On 12/15/12, D.C. fell and again was placed on continuous care for her paranoia and the fall. On 12/25/12, D.C. was involuntarily committed to the Halifax Hospital psychiatric unit. Her mother requested she be returned to the Halifax ER on 12/29/12 for a worsening altered mental state, at which time she was described as unresponsive. Her family revoked the hospice benefit, and D.C. was transferred to an inpatient hospice house in another program closer to the family's home. Dr. Talakkottur testified Crohn's Disease is a chronic disease and one could live for 20 to 30 years or more. Crohn's Disease is characterized by periods of dormancy or being well- controlled and periods of exacerbation. It should be noted, however, that at the time of the first admission, D.C. had already lived 39 years with the disease. Dr. Shega testified he believed that D.C. was hospice appropriate for each of the three periods in dispute due to her chronic condition, coupled with recent infections and weight loss. However, Dr. Shega admitted that it is common for a person suffering from Crohn's Disease to have weight fluctuations. Moreover, Dr. Shega admitted that many of the weight measurements in D.C.'s medical records were unreliable. D.C. met all applicable criteria for admission to hospice for the first period in dispute. However, as to the second and third periods in dispute, Dr. Talakkottur more credibly testified that D.C.'s medical records did not support an end-stage progression of any kind of disease; rather, she experienced exacerbations of her chronic illness, which she has had for the preceding 39 years prior to her hospice admission. Based upon the greater weight of evidence in this case, it is determined that this recipient was not eligible for Medicaid hospice services during the second and third periods in dispute and that AHCA is entitled to recover an overpayment in an amount to be determined. Patient 12, C.W. Patient C.W. was a 42-year-old male with a history of stroke in 2003 and a terminal diagnosis of end-stage cerebrovascular disease. The dates at issue are 02/17/10 to 01/05/11 and 01/31/11 to 05/23/11. In 2003, seven years prior to his hospice admission, C.W. experienced a stroke. Additionally, since 2006, C.W. had cardiomyopathy, which is a disease of the heart reflective of an ejection fraction ("EF") of 35 percent or less. Dr. Shega opined that although the stroke was in 2003, it "could have left him extremely debilitated." Furthermore, C.W. also suffered from HIV, heart failure, and had been recently hospitalized for the removal of skin lesions in his groin area prior to his first admission. C.W. was discharged from his first admission for extended prognosis. For the second admission, Dr. Shega testified that C.W. had experienced a urinary tract infection ("UTI") precipitating his readmission to hospice. Ultimately, C.W. was discharged for extended prognosis, and Dr. Shega stated C.W. was appropriate for discharge because although C.W. had a couple of acute conditions during this stay, his weight and functional status stabilized, he did not have another infection, and he did not show any other decline. Dr. Talakkottur credibly opined that C.W. experienced issues related to his stroke and cardiomyopathy for quite some time prior to his admission to hospice. Therefore, C.W. had not experienced any change in health to warrant admission to hospice. While C.W. suffered from HIV, Dr. Talakkottur testified his HIV viral load was undetectable, meaning the viruses in his bloodstream were very low. Furthermore, Dr. Talakkottur opined that C.W.'s comorbidity of HIV was of no concern because the recipient also continued to receive his highly active antiretroviral therapy. Dr. Talakkottur further opined with respect to C.W.'s second admission that a UTI is not an indicator of end-stage cerebrovascular disease. C.W. had a Foley catheter, and it is common for recipients with a Foley catheter to develop UTIs. The medical records contained in this patient's file do not support a finding that the Medicaid hospice eligibility standard was met. Based upon the greater weight of evidence in this case, it is determined that C.W. was not eligible for Medicaid hospice services during either period in dispute and that AHCA is entitled to recover an overpayment of $61,721.28. Patient 13, J.M. Patient J.M. was a 59-year-old male with a longstanding history of medical noncompliance with treatment plans and substance abuse, who was admitted with a terminal diagnosis of end-stage COPD after six ER visits or hospitalizations in just over six months. The dates at issue are 03/29/12 to 06/15/12 and 08/31/12 to 12/31/12. J.M.'s PPS upon admission was 50 percent, and he had shortness of breath at rest and exertion. His comorbidities included known fatty liver with history of ascites, CVA times two, UTIs, diabetes type 2, gastritis, hypertension, gastroesophageal reflux disease, heart failure with diastolic dysfunction in left ventricular with amyloidosis, myocardial infarction ("MI" or "heart attack") times two, pulmonary embolism, obesity, and bipolar disorder. J.M. suffered from COPD for many years preceding his hospice admission. He used oxygen on an as-needed basis, preceding and during his hospice stay. J.M. was also a polysubstance abuser. Dr. Talakkottur opined that J.M.'s issues were not the result of a progression of his terminal illness; rather, his decline was associated with his substance abuse. When J.M. was not abusing drugs and was compliant with his medication for his COPD, he had a good quality of life. Conversely, when he abused drugs and was noncompliant with his medication for COPD, he seemed to decline more. Dr. Shega testified that J.M.'s six ER visits/hospitalizations factored into his opinion that the recipient's COPD was end-stage. The nurse completing the Appropriateness Evaluation form noted under hospitalizations that the recipient visits a hospital at least monthly. The recipient tested positive for cocaine during those hospitalizations. The hospital attributed J.M.'s abdominal pain to cocaine use during the latter visit. Dr. Shega testified it was known that J.M. was a controlled substance abuser, particularly cocaine. Although J.M. suffered from a chronic illness, the medical records do not support a diagnosis of six months or less if the disease ran its normal course. Instead, as Dr. Talakkottur testified, the medical records demonstrate J.M. had an issue with medication compliance. For instance, nurses routinely had to remind J.M. to take his nebulizer treatment. However, when he took his medication, he appeared to have no respiratory distress and the intervention was effective. The medical records contained in J.M.'s file do not support a finding that the Medicaid hospice eligibility standard was met. Based upon the greater weight of evidence in this case, it is determined that J.M. was not eligible for Medicaid hospice services and that AHCA is entitled to recover an overpayment of $31,736.82. Patient 16, M.W. Patient M.W. was a 61-year-old female diagnosed with multiple sclerosis ("MS"). The claim periods at issue are 08/26/11 to 08/14/12 and 12/16/12 to 12/31/12. The patient's comorbidities included multiple basal cancer cell removals, arthritis, a history of gallstones, ileus, depression, osteoporosis, COPD, and glaucoma. MS is a condition that affects the neurological system. There are different kinds of MS, yet the most common type is called relapsing-remitting MS, which affects 80 percent of MS recipients. A patient with relapsing-remitting MS is similar to patients with other chronic illnesses in that a patient will have events or flare-ups that may occur roughly every 12 to 18 months or more. MS affects the quality of life more than it affects the quantity of life. M.W. suffered from MS since she was 34 years old, so she had dealt with the effects of MS for 27 years. Dr. Shega opined that this recipient was hospice eligible because of the recent decline in her functional status and nutritional decline. Dr. Shega stated his recollection was this patient could ambulate prior to her hospice admission. However, he later admitted M.W. was unable to walk for the past three to four years and had used a wheelchair for the past five to six years. Furthermore, on cross-examination, Dr. Shega admitted that the BMI for M.W. was miscalculated, and her BMI was in the normal range (22.8). In contrast, Dr. Talakkottur testified this patient was merely experiencing flare-ups of her chronic condition. Dr. Talakkottur opined that patients with terminal MS experience deteriorating respiratory function, which is evidence of the final decline. Dr. Talakkottur also noted that Respondent's month-to-month reports demonstrated unexplained discrepancies in M.W.'s reported scores for PPS, MMA, and ADLs. Furthermore, the medical records did not demonstrate M.W. had any deterioration in her respiratory function or any other terminal progression. If anything, as Dr. Talakkottur testified, the medical records show improvement for dependence with ADLs and her PPS score remained static. The medical records contained in this recipient's file do not support a finding that the Medicaid hospice eligibility standard was met. Based upon the greater weight of evidence in this case, it is determined that this recipient was not eligible for Medicaid hospice services and that AHCA is entitled to recover an overpayment of $54,133.32. Patient 17, T.D. Patient T.D. was a 45-year-old female with a terminal diagnosis of end-stage heart disease. The claim period at issue is 04/14/11 to 12/23/11. The patient was diagnosed with NYHA Class IV heart failure as evidenced by shortness of breath at rest, worsening with exertion, and three and a half liters of oxygen via nasal cannula. Her PPS was 50 percent. She requested hospice and was referred to hospice by her primary physician because she required increased support and only wanted palliative treatments. Prior to her admission to hospice, T.D. had multiple encounters requiring physician management and an ER visit on 02/02/11 for a respiratory infection. She also suffered from ischemic cardiomyopathy, had a defibrillator placed in 2008, and suffered from diabetes requiring an insulin pump, peripheral neuropathy, COPD, sleep apnea, arthritis, spinal stenosis, gastroesophageal reflux disease, and history of TIAs. She was on 13 different medications. Dr. Shega opined that the NYHA classification is the predictor most tightly correlated with patient mortality. In this case, while T.D.'s EF changed, her symptom burden did not change. Dr. Talakkottur acknowledged that throughout the claim period at issue, the patient was a Class IV. Dr. Talakkottur testified that in his opinion hospice eligibility was not established, in part because the patient had no jugular venous distention ("JVD") on physical exam. Dr. Shega opined that in hospice care, forced expiratory volume in one second ("FEV1s") are done to characterize the patient's underlying pulmonary status. While outside hospice total volume tests are frequently done to establish a diagnosis, in this case diagnosis had been established and Vitas was prognosticating, not diagnosing. Between 04/29/11 and 11/08/11, T.D. had an abdominal infection requiring antibiotics; she had an episode of thrush; she had a titration of her pain medication due to discomfort; she had another episode of cellulitis in the abdomen; her PPS dropped to 40 percent and her ADLs were 4 of 6; she experienced a respiratory infection requiring antibiotics; she required antibiotics for a vaginal boil; she had an abdominal wound; methadone was prescribed for increased pain; methadone dosage was increased due to swelling; and methadone was again increased because of worsening pain. T.D. was discharged on 12/23/11 for extended prognosis. Dr. Shega testified that while he understood why that call was made, he offered the opinion that the patient still had a prognosis of six months or less. In addition to the reasons set forth above, during the course of the admission period, her PPS went from 50 to 40 percent, back up to 50 percent and, then declined again to 40 percent. She also experienced poor intake and chest pains during this time. T.D. was evaluated as a NYHA Class IV throughout her hospice admission. She had had multiple physician encounters in the months prior to her admission and was referred to hospice by her primary care physician. She continued to have multiple episodes of infection and wounds while in hospice care. For these reasons, this patient met the hospice admission guidelines for the claim period at issue. AHCA has not met its burden by the greater weight of the evidence that T.D. was not eligible for Medicaid hospice services, and it is not entitled to recover an overpayment. Patient 18, R.J. Patient R.J. was a 52-year-old male with terminal COPD. The claim dates at issue are 11/18/10 to 01/11/11. Immediately prior to admission to hospice, R.J. had been hospitalized for 12 days (from 11/06/10 to 11/18/10) for COPD exacerbation. He had hypercapnic, hypoxic respiratory failure and was unable to breathe on his own. He was on oxygen and placed on a BiPAP. Upon hospice admission, in addition to having disabling dyspnea at rest, R.J. was poorly responsive to bronchodilators and had an enlarged right atrium. His PPS was 40 percent, a BMI of 20, a very low weight of 114, and was dependent 4 of 6 ADLs. The patient was referred to hospice while in the hospital by his treating physician. His comorbidities included HIV, history of substance and alcohol abuse, arthritis, thrush, and bladder infections. Upon admission, R.J. was prescribed treatment of three liters of oxygen via cannula, continuous. A nebulizer treatment was used, using aerosolized medication to penetrate into the pulmonary system. On 12/03/10, the patient experienced a respiratory rate of 20, had an 8 of 10 abdominal pain, and was noted to be confused and agitated. On 12/09/10, R.J. had a pulmonary function test with an FEV1 of 0.42, which was 18 percent of predicted. An FEV1 less than 30 percent of predicted is associated with a severe airflow obstruction, supportive of a prognosis of six months or less. R.J. continued to have confusion and agitation through 12/14/10, when he was oriented times two. While it was true that R.J. did not suffer a COPD exacerbation or infection during the months at issue, Dr. Shega testified he had declined in respiratory status since admission, noting a second, severely reduced FEV1 to 10 percent. On 12/31/10, R.J. had elevated blood pressure, and continued to exhibit confusion, agitation and cognitive loss. He also continued to have dyspnea with low activity tolerance. R.J. exhibited specific indicators of "progression of end stage pulmonary disease" and "severe chronic lung disease" from the LCD for pulmonary disease. As noted above, he had hospitalizations due to his COPD immediately prior to admission to hospice and an FEV1 of less than 30 percent. His 12-day hospitalization, his poor nutritional status, his comorbidities and decline in respiratory status during the eight weeks at issue all support a finding that Patient R.J. was hospice appropriate during the claim period at issue. AHCA has not met its burden by the greater weight of the evidence that R.J. was not eligible for Medicaid hospice services, and it is not entitled to recover an overpayment. Patient 21, W.C. Patient W.C. was a 55-year-old female with congestive heart failure. She had ischemic cardiomyopathy, suggesting poor blood flow in her coronary arteries, impacting how well it pumps. The claim periods at issue are 10/06/11 to 10/25/11 and 11/30/11 to 11/27/12. W.C. was hospitalized for a cardiac catheterization on 08/29/11, and then hospitalized in September 2011 and again on 10/02/11 with heart failure exacerbation, the latter hospital stay being immediately prior to her first admission to hospice. She presented with chest pain and shortness of breath and had a low EF of 20 percent. W.C. also had an extremely low albumin of 2.2 indicating malnutrition, which was a factor in her refractory and recurrent edema. Both the hospitalist and cardiologist who treated W.C. on her most recent hospitalization referred her for hospice care. W.C. previously had cardiac bypass surgery, a history of chronic renal insufficiency, anemia, hypertension, bipolar disorder and was an insulin dependent diabetic. She had a defibrillator implanted twice, but it had to be removed each time due to infection. She also suffered from chronic lung disease. Likely due to her underlying mental health issues, W.C. had a longstanding history of noncompliance with her medication regimen. Despite W.C.'s multiple clinical issues, on 10/11/11 W.C.'s history and physical raised a question whether she was too functional for hospice services. Given her recent clinical history, W.C. was monitored for two weeks to evaluate and her case was forwarded to medical review to determine hospice appropriateness. On 10/16/11, W.C. complained of chest pain, her BMI had declined from 27.2 to 22.5, and she was experiencing edema. W.C. also experienced paroxysmal nocturnal dyspnea, and required three pillows at night for comfort and dyspnea. On 10/25/11, W.C. revoked the hospice benefit to return to the hospital for aggressive treatment for shortness of breath. During that stay she experienced a MI (heart attack), and ongoing ischemic cardiomyopathy with a low EF of 20 percent. W.C. was readmitted to hospice on 11/30/11, following discharge after a five-day hospitalization. Dr. Shega admitted this recipient was a challenge to diagnose for disease progression because she had good days and bad days, and that one of Respondent's physicians, who treated her struggled with whether she was chronic or end-stage. Dr. Talakkottur opined this patient did not appear to be end-stage. W.C. had a normal volume status with sporadic periods of edema (swelling in the legs). W.C. had no heart arrhythmia, no tachycardia (fast heart rate), no hypotension (low blood pressure), and no hemodynamic instability (unstable blood pressure to support normal organ function). If anything, the problems experienced by W.C. were the result of her noncompliance with her medications and not that her disease had reached a terminal state. In fact, when Vitas discharged this patient, they noted that she was noncompliant with her medications. W.C. was independent for ADLs, lived alone, drove herself, and was still active in the community. The medical records contained in W.C.'s file support a finding that the Medicaid hospice eligibility standard was met for the first period but not the second. Based upon the greater weight of evidence in this case, it is determined that this recipient was not eligible for Medicaid hospice services during the second period and that AHCA is entitled to recover an overpayment in an amount to be determined. Patient 22, B.A. Patient B.A. was a 51-year-old female diagnosed with end-stage cerebrovascular disease. The claim periods at issue are 05/01/12 to 09/19/12 and 09/24/12 to 12/31/12. Prior to her admission to hospice, B.A. had two recent hospitalizations due to complications from a stroke suffered in December 2011. A PEG was placed during the second hospitalization on 04/21/12, for dehydration and fever. Over a period of five months, B.A.'s weight declined from 180 to 123 pounds, with a BMI of 20.5. Upon initial admission to hospice, B.A. was thin and frail, lethargic, short of breath with minimal exertion, incontinent, and had a stage one ulcer on her coccyx. B.A. was nonverbal, dependent in 6 of 6 ADLs and had a PPS score of 30. Her comorbidities were severe dementia, diabetes, carotid artery disease, and hypertension. Patient B.A. suffered a change in consciousness (likely seizures) and revoked hospice on 09/19/12 when she was admitted to a hospital. An MRI was conducted in the hospital, which showed diffused cerebral atrophic changes and evidence of decreased blood flow/oxygen to the brain. B.A. was discharged from the hospital and readmitted to hospice on 09/24/12, at which time she was unresponsive, with a PPS of 10, a documented weight of 110, and a FAST score of 7f. Just after her second hospice admission, she had a temperature of 100 on 09/25/12. On 10/10/12, she developed a stage two sacral ulcer. During this second admission period, B.A.'s weight continued to decline and she showed signs of muscle wasting. Dr. Talakkottur's re-review and deposition testimony was that Patient B.A.'s "records did not support progression of end-stage pulmonary disease, as evidenced by increasing visits to the emergency department for pulmonary infections or respiratory failure." As pointed out by Dr. Shega, however, Patient B.A. was never admitted for end-stage pulmonary or respiratory disease, but rather for cerebrovascular disease and cerebral degeneration. Dr. Talakkottur did not offer final hearing testimony regarding Patient B.A. Instead, AHCA offered his deposition testimony. In his deposition, he acknowledged he had not made note of B.A.'s significant weight loss. B.A. met the disease specific criteria from the LCD for dementia and related disorders. As noted above, she had a FAST score of 7c or less, which indicates she was speaking six words or fewer, was dependent in 6 of 6 ADLs, and was incontinent. For the audit periods in question, it is undeniable that Patient B.A.'s prognosis of six months or less was correct, and she was Medicaid hospice eligible during all of the dates at issue. AHCA has not met its burden by the greater weight of the evidence that B.A. was not eligible for Medicaid hospice services, and it is not entitled to recover an overpayment for either period. Patient 23, E.G.D. Patient E.G.D. was a 70-year-old female diagnosed with adult failure to thrive. The patient was initially admitted to hospice on 01/06/10 and deemed eligible for hospice through 03/23/10. The dates at issue are 03/24/10 to 4/16/10 and 5/20/10 to 12/21/10. On 03/23/10, E.G.D. was noted to weigh 95 pounds, with a BMI of 19.9. She also experienced dysphagia and increased agitation. She had edema on the lower extremities, a PPS of 40 percent, and her ADLs were 11 of 12.6/ Patient E.G.D. had been hospitalized during the prior year with a MI in June 2009. Her comorbidities also included diabetes mellitus, hypertension, advanced Alzheimer's disease, coronary artery disease, ischemic cardiomyopathy, a pacemaker, and recurrent falls. On 04/02/10, while the patient's weight had increased to 95 pounds while on hospice care, her PPS was 40 percent and her FAST score remained at 7b. E.G.D. had impaired communication, was confused, had edema in her periphery, and had an acute UTI requiring antibiotics. Although the patient's weight had increased, her BMI was still under 20. E.G.D. was discharged on 04/16/10 for extended prognosis. She was readmitted to hospice on 05/20/10, after having been hospitalized for an acute heart attack, with hypoxic respiratory failure, resulting in low oxygen and respiratory distress. She had also been diagnosed with pneumonia during her hospital stay and had shortness of breath with minimal exertion making her a NYHA Class III. Due to her recent MI and an injection fraction of 20 percent, upon readmission to hospice, E.G.D. was diagnosed with end-stage heart disease. E.G.D.'s FAST score was 7f, she was 6 of 6 ADLs, had a PPS of 20 percent, and her weight had declined in the preceding month from 99 to 92 pounds. She was nonverbal and continued to be an aspiration risk. Her skin turgor was noted as poor and she was incontinent. Dr. Talakkottur opined that while E.G.D. had suffered a second heart attack, it was an acute event and not a terminal prognosis. He further argued that this patient's condition was chronic because there were no signs of angina, no shortness of breath, and no extended neck veins in a JVD test. In response, Dr. Shega noted that in the plan of care review, E.G.D. exhibited dyspnea at rest, had a FAST score of 7f, had a decreased level of consciousness and was lethargic. In Dr. Shega's opinion, JVD does not define end-stage heart failure. Rather, it just defines whether a patient is having an acute heart failure exacerbation at that time. Furthermore, research has shown that physicians, other than cardiologists, are not necessarily good at assessing JVD. According to Dr. Shega, Dr. Talakkottur also failed to take into account this patient's comorbidities, including end- stage dementia, which was likely a contributing factor to her sleeping 18 to 20 hours a day during her second admission and affecting her prognosis. 215. On 05/25/10, 06/08/10, and 06/22/10, E.G.D.'s cardiovascular condition was NYHA Class IV, with dyspnea at rest. During the benefit period beginning 09/17/10, this patient continued to be described as NYHA Class IV. And, while her weight increased to 110 pounds, she was still sleeping up to 20 hours a day, dependent in all ADLs, and had a PPS of 30 percent. During the last benefit period at issue, Patient E.G.D. continued to be NYHA Class IV, and had worsening edema. By 12/21/10, she was essentially unresponsive and the family revoked hospice to seek aggressive care in the hospital related to decreased appetite and decreased responsiveness. Dr. Talakkottur opined that there was nothing in the record to support a diagnosis of NYHA Class IV or significant symptoms of heart failure. In response, Dr. Shega pointed out those portions of the medical record that supported the fact E.G.D. had NYHA Class IV symptoms. As far as alleged lack of reports of frequent ER visits or hospitalizations, this patient was hospitalized for an acute MI less than a year prior to her initial hospice admission, was hospitalized again for a second heart attack immediately prior to her second hospice admission, and the family revoked hospice on 12/21/10 to readmit her to the hospital at the end of the last benefit period. AHCA has not met its burden by the greater weight of the evidence that E.G.D. was not eligible for Medicaid hospice services, and it is not entitled to recover an overpayment for either period. Patient 25, M.M. Patient M.M. was a 57-year-old male admitted to hospice with a primary diagnosis of systemic lupus erythematosus ("SLE"). The dates at issue are 02/01/12 to 12/31/12. M.M. was first diagnosed with lupus in 1974, and also had a history of vasculitis, which resulted in several fingers amputated secondary to necrosis. M.M. also suffered from glomerulonephritis, an autoimmune disease that attacks the kidney. Other comorbidities included multiple surgeries on his right knee, a left ankle surgery with ultimate fixation, neuropathy, hypertension, morbid obesity, umbilical hernia, Cushing syndrome, diabetes, and a history of gastric ulcers, hepatic steatosis, sleep apnea, peripheral vascular disease, coronary artery disease, and chronic renal insufficiency. In the six months prior to hospice admission, M.M. had been admitted to the hospital four times: to amputate several fingers; for ileus; for chest pain; and for shortness of breath. M.M.'s primary care physician referred him to Vitas for end-stage SLE. Patient M.M. was initially admitted to hospice on 02/01/12. At that time, his PPS was 30 percent and his pain registered 8 of 10. He also suffered multiple weeping wounds on his lower extremities from edema upon admission and throughout his stay in hospice. His long time primary care physician noted, "in the face of aggressive medical care, the patient's condition continues to deteriorate." Over the claim period at issue, M.M. required multiple increased levels of care for pain management and decline in his overall condition. M.M. required continuous care on 03/14/12 for increased pain; on 09/27/12 for pain and change in level of consciousness; and on 10/27/12 for confusion, agitation, delusion and falls. M.M. required hospice inpatient care on 08/23/12 for shortness of breath and fever; and on 10/01/12 for a fall, nausea, vomiting, and low blood pressure. After a fall, M.M. was taken to the ER in July 2012 for a laceration on his left foot. He required another trip to the ER in December 2012 for a fall. In November 2012, he became severely anemic, requiring three units of blood. On direct, Dr. Talakkottur acknowledged that anemia is one of the symptoms of SLE. In his re-review, Dr. Talakkottur opined that M.M.'s condition overall was static throughout the claim period and questioned whether the patient even had SLE. In response, Dr. Shega noted that M.M.'s primary treating physician's records documented he had SLE. In addition, he noted M.M.'s multiple infections requiring antibiotics, as well was requiring numerous IPU and continuous levels of care during the period at issue. Dr. Talakkottur's re-review acknowledged that Patient M.M.'s functional performance had declined during the hospice stay to a PPS of 30 percent on his last recertification, dated 11/21/12. Dr. Talakkottur also testified that M.M.'s recorded weight was inconsistent and that he was addicted to pain medication. While there are acknowledged weight inconsistencies in the record, it is clear the patient was obese and his weight was not a factor in his prognosis. As to whether M.M. was addicted to pain medication, Dr. Shega opined that this patient was in severe pain and needed multiple titrations of opioid treatment to manage the patient's pain and attempt to improve his quality of life at the end. While he was dependent on pain medication, there was no evidence M.M. was addicted. Patient M.M.'s terminal condition was documented by his primary care physician, as well as by four hospitalizations in the six months prior to hospice admission, the multiple times he was placed in the IPU or on continuous care during hospice care, his ongoing edema with infections, a hospital admission in July 2012, and a trip to the ER in December 2012. M.M.'s extensive, well-documented comorbidities supported a prognosis of six months or less. For the foregoing reasons, Patient M.M. was Medicaid hospice eligible during all of the dates at issue. AHCA has not met its burden by the greater weight of the evidence that M.M. was not eligible for Medicaid hospice services, and it is not entitled to recover an overpayment. Boynton Beach Recipients Patient 2, H.P. Patient H.P. was a 51-year-old female admitted to hospice with a terminal diagnosis of end-stage HIV/AIDS. H.P. had two admissions to hospice: 01/03/11 to 05/16/11; and May 2011 to October 3, 2011. The period that is in dispute is the last eleven days of H.P's first admission: 05/05/11 to 05/16/11. H.P. was discharged for extended prognosis. At the time of admission on 01/03/11, H.P. exhibited pain, diarrhea, poor oral intake, a very low CD4 count, and was weak. She had a history of noncompliance with her plan of care, anemia, chronic pain which included neuropathy from her HIV/AIDS, and a history of blood clots to her leg and her lung. This patient also had a history of kidney stones, depression, seizures, insomnia, frequent UTIs, diabetes, and asthma. On 05/05/11, H.P. was transmitted to an IPU and was simultaneously evaluated for extended prognosis and determined that the patient, on that date, had a prognosis that more likely than not, she would live longer than six months. Vitas began working to discharge this patient on 05/05/11, but was unable to make appropriate accommodations for her until 05/16/11. The discharge of H.P. took longer because H.P. had very few financial resources, had HIV/AIDS, and was Haitian with an alien resident card, all of which complicated the placement process. None of H.P.'s family that was contacted by Vitas would accept H.P. in their home, including her daughter, niece, and sister. H.P. also refused to go to a nursing home. Vitas contacted multiple Assisted Living Facilities (ALFs) and made nine attempts to secure placement, but the ALFs were full or refused to accept H.P. Dr. Shega opined that during this time, the patient had a terminal illness with a life expectancy of six months or less if the terminal illness ran its normal course. Dr. Eisner did not know the specific indicators with regard to prognosticating whether an HIV/AIDS patient had six months or less to live despite being offered as an appropriate peer reviewer. The period at issue was during H.P.'s initial 90-day recertification period. According to the audit instructions provided to some peer reviewers, if any day during a certification period was approved by a peer reviewer, then the entire certification period was to be approved. Dr. Eisner claimed he was not provided this document to perform the audit. Drs. Talakkottur and Komatz, however, were provided such instructions. According to the audit instructions, the period at issue is required to be approved. H.P. was Medicaid hospice eligible during all of the dates at issue. AHCA has not met its burden by the greater weight of the evidence that H.P. was not eligible for Medicaid hospice services, and it is not entitled to recover an overpayment. Patient 3, G.L. Patient G.L. was a 54-year-old male, admitted to hospice initially with a terminal diagnosis of adult failure to thrive and later, prostate cancer. The claim period at issue is 02/01/2012 to 12/31/2012. Dr. Komatz testified that during the disputed period, G.L.'s medical records demonstrated the recipient was stable on consecutive visits and exams and was not showing progression of his hospice diagnosis. Dr. Komatz testified that G.L.'s PPS score remained consistently at 50 percent, which, to her, showed the patient was stable at that point in time and was not showing further decline. Dr. Komatz's opinion was also based upon the fact that G.L. was independent with respect to his ADLs. Dr. Shega opined that during this time, the patient had a terminal illness with a life expectancy of six months or less if the terminal illness ran its normal course. Although G.L.'s PPS was stagnant at 50 percent, when coupled with G.L.'s increasing pain and other symptoms, cancer literature indicates that G.L.'s life expectancy was six months or less. Dr. Shega testified that it was his belief that Dr. Komatz did not take into account G.L.'s disease progression as indicated by the ever- increasing pain and increasing dosage of oxycodone given to treat the increasing pain. AHCA demonstrated that the medical records regarding this patient's weight were inaccurate. However, the patient's weight appears to have increased or remained relatively stable. Furthermore, Dr. Shega testified that he could not find any documentation to support the proposition that G.L.'s cancer had metastasized or to support that his prostate cancer had metastasized to the pancreas. The medical records contained in G.L.'s file do not support a finding that the Medicaid hospice eligibility standard was met during the disputed period. Based upon the greater weight of evidence in this case, it is determined that G.L. was not eligible for Medicaid hospice services and that AHCA is entitled to recover an overpayment of $51,686.51. Patient 5, G.R. Patient G.R. was a 41-year-old female admitted to hospice with a terminal diagnosis of debility unspecified. The claim periods at issue are 02/26/10 to 08/19/11 and 09/28/11 to 12/31/12. At 40 days old, G.R. contracted a measles infection, with a high fever, which had essentially left her disabled for her entire life. She had been nonambulatory and nonverbal for many years prior to her entering hospice care. G.R. was initially admitted to Vitas on 02/26/10. At the time of admission, G.R. had a PPS of 20 percent, was dependent in 6 of 6 ADLs, and had a FAST score of 7f. She exhibited muscle wasting and was nonverbal, disoriented, and drowsy. She had shortness of breath at rest, a Stage I ulcer on her foot, and had a PEG tube due to her high risk for aspiration. Just prior to admission, she had a UTI and was hospitalized. However, those hospital records were not provided to support her initial admission. G.R. also had a history of recurrent pneumonia. She presented extremely contracted, stiff, and weak. Dr. Shega admitted that although a physician's note indicated G.R. had been in a steady decline as she had been previously ambulatory and interactive, G.R., in fact, had been nonambulatory for 15 years prior to her hospice admission. During the first disputed period, shortly after admission, G.R. developed cellulitis around the PEG tube site that required antibiotics. Also, during the first admission, she developed pneumonia, a lower respiratory tract infection, and required Levaquin for ten days. G.R. was discharged for extended prognosis on 08/19/11. She was then seen by Dr. Patrick Kavanaugh, a non- Vitas treating physician, who re-referred G.R. back to Vitas hospice because he believed the patient was hospice appropriate. G.R. was readmitted on 09/28/11 with a terminal diagnosis of cerebral degeneration. She had a PPS of 20 percent, was dependent in all ADLs, had a FAST of 7f, was in a fetal position, contracted and unresponsive, was a very high aspiration risk, had difficulty swallowing, and was noted to have increased congestion. She was on Xanax, Tylenol, Benadryl, and nebulizers. During the second admission period, G.R. had skin breakdown on her left and right heels, had problems with congestion and aspiration, had worsening shortness of breath, and became more unresponsive such that by the end of the second period, she could not track people with her eyes. Skin breakdowns are specific indicators of nutritional impairment. Her condition also worsened such that by the end of the second period, G.R.'s secretion treatment had gone from medication only to also requiring manual suction to prevent aspiration. Dr. Talakkottur stated, in his rationale for denying the dates at issue, that G.R.'s skin was intact, which is inaccurate. Dr. Talakkottur also indicated that the patient's aspiration and congestion was chronic, but failed to take into account that those symptoms worsened over G.R.'s second period of hospice care. AHCA has not met its burden by the greater weight of the evidence that G.R. was not eligible for Medicaid hospice services during the second period in dispute, and it is not entitled to recover an overpayment for that period. The medical records contained in G.R.'s file do not support a finding that the Medicaid hospice eligibility standard was met for the first period in dispute. Based upon the greater weight of evidence in this case, it is determined that this recipient was not eligible for Medicaid hospice services for the first disputed period and that AHCA is entitled to recover an overpayment in an amount to be determined. Patient 6, S.B. Patient S.B. was a 30-year-old male admitted to hospice with a terminal diagnosis of cirrhosis of the liver. The claim period at issue is 10/06/11 to 01/03/12. S.B. was admitted directly to hospice from Broward Health Medical Center where he was hospitalized for liver failure and delirium tremens secondary to alcohol use. Liver failure was exhibited by an international normalized ratio ("INR") of 1.52 and an albumin of 2.2, a total bilirubin up to 28.5, ammonia of 86, and elevated liver function tests. S.B. had an altered level of consciousness and was disoriented. S.B. had a PPS initially of 30 percent that increased to 50 percent shortly thereafter with some ADL difficulty. S.B. had encephalopathy, decreased oral intake, and anemia. Both Dr. Talakkottur and Dr. Shega agree that this patient suffered from delirium tremens, which is basically a severe condition associated with alcohol withdrawal. Patients with liver disease often develop ascites. If the patient's condition is severe, a paracentesis procedure can be performed to remove the fluid. While the recipient was in the hospital, a paracentesis was attempted. S.B.'s paracentesis, however, was unsuccessful because there was no fluid to actually remove. Additionally, Dr. Shega admitted there was no evidence of ascites refractory to treatment in the medical records. Patients with liver disease often develop variceal bleeding, which are enlarged blood vessels in the gastrointestinal tract. If left untreated, the enlarged blood vessels can rupture and cause a patient to bleed to death. A patient with variceal bleeding has an increased risk of a poor prognosis and a more limited life expectancy. Dr. Shega admitted he could not recall evidence of variceal bleeding in the medical records for S.B. Dr. Talakkottur credibly testified that soon after S.B.'s acute episode of delirium tremens for alcohol withdrawal, he returned to being alert and oriented times three. In Dr. Talakkottur's opinion, S.B. could have been more appropriately served in an outpatient setting for his delirium tremens, which, in essence, was episodic. The medical records contained in this patient's file do not support a finding that the Medicaid hospice eligibility standard was met during the disputed period. Based upon the greater weight of evidence in this case, it is determined that this recipient was not eligible for Medicaid hospice services and that AHCA is entitled to recover an overpayment of $40,025.67. Patient 8, J.F. Patient J.F. was a 60-year-old male, admitted to hospice on 04/15/11, with a terminal diagnosis of cerebrovascular disease. The claim period at issue is 04/15/11 to 09/28/12. J.F. suffered a severe stroke and was hospitalized in March 2011, about a month prior to hospice admission. An MRI showed multiple infarcts that resulted in dysphagia, shortness of breath, confusion with disorientation, and poor oral intake. The patient was then readmitted to the hospital for a gallbladder- related acute infection and, at that point, the patient was referred by a hospitalist for evaluation of hospice services. On admission, J.F. had a PPS of 20 percent with comorbidities of diabetes, hypertension, depression, bipolar disorder, increased lipids, atrial fibrillation, and coronary artery disease. J.F. was extremely overweight. J.F.'s terminal diagnosis of cerebrovascular disease was evidenced by the severe stroke, poor functional status, significant dysphagia, and high risk for aspiration that is known to be associated with a poor prognosis, and two recent hospitalizations. A physician assessment indicated the patient was hospice appropriate and referred J.F. to Vitas indicating that the patient had a terminal disease. Upon admission, J.F. was extremely ill and required continuous care until 05/02/11, with recurrent fevers, shortness of breath, cough, and poor oral intake that ultimately resolved. In September 2011, he was noted to be incontinent, dependent in 6 of 6 ADLs, with a FAST score of 7d. J.F. continued to have issues with the shortness of breath and coughing with meals. In October 2011, he had increased weakness and cough, and his family called 911; and J.F. went to the ER where he was found to have severe bradycardia with a pulse of 48. There was concern the patient might be having a heart attack. The ER physician indicated that the chest x-ray showed cardiomegaly, or an enlarged heart, and also noted that the patient had mild heart failure at the time of admission to the hospital. The patient also had low-grade fever and an albumin of 2.6, documenting very poor nutritional status. From November through December 2011, the patient transitioned from the hospital to home on continuous care to further manage his dyspnea and lethargy. During that time, J.F. continued to have difficulty swallowing and had episodes of apnea for 10 to 20 seconds. From January through April 2012, J.F. had severe depression, was emotionally labile and weak, and still had problems coughing. Dr. Shega testified that depression is a complication of stroke and associated with a higher mortality. J.F. was put on an antidepressant, which improved his agitation and aggression, and he became more compliant with the medication regimen, but continued to have dysphagia. J.F. had high blood pressure and, given the labile hypertension, Vitas was concerned that it would precipitate a stroke. J.F.'s prognosis remained six months or less, so his blood pressure medications were continually adjusted. By the end of August 2012, J.F. demonstrated significant improvement by going from dependent for care in 6 of 6 ADLs, which he was the whole stay, to having the ability to feed himself; he also had improvement in dysphagia at that time. Consequently, Patient J.F. was discharged from Vitas for extended prognosis. J.F. met all applicable criteria for admission to hospice for the disputed period. Dr. Talakkottur also acknowledged that J.F. was acutely ill at admission to Vitas, was dependent in 6 of 6 ADLs until he was discharged, was confined to bed and chair and transferred from bed to chair with a Hoyer lift throughout his hospice stay, was incontinent of bladder and bowel throughout his stay, and had a FAST score that did not improve to better than 7a throughout his stay. AHCA has not met its burden by the greater weight of the evidence that J.F. was not eligible for Medicaid hospice services, and it is not entitled to recover an overpayment. Patient 10, A.R. Patient A.R. was an 83-year-old female, admitted to hospice on 1/10/11, with a terminal diagnosis of adult failure to thrive. The claim period at issue is 01/10/11 to 07/02/12. Upon admission, Patient A.R. had a recent ER visit in December 2010 at Columbia Hospital for mental status changes and a UTI, she had a PPS of 30 percent, was bedbound, and required assistance with 6 of 6 ADLs. Also at admission, A.R. had two right foot wounds and was disoriented. She was a nursing home resident in Palm Beach. An order was obtained from the physician for a hospice evaluation and services. A.R.'s comorbidities were mixed dementia of Alzheimer's and vascular disease, with history of stroke, hypertension, hip fracture with repair, coronary artery disease, UTI, pneumonia, diabetes, and increased lipids. A.R.'s weight over the previous five to six months, obtained from the medical record, dropped from 117 to 103 pounds (about a 12 percent loss) with a BMI of 20.5, reduced oral intake along with dysphagia and risk for aspiration on a pureed diet. A.R. had unstageable wounds on her heels in April 2011. She continued to lose weight in May 2011 (as of 5/16/11, she had a weight of 97.5 pounds with poor oral intake) and by July 2011, she continued to have a poor appetite and was known to be pocketing her food. Dr. Shega testified this meant her dementia was so severe that she would forget to swallow, which not only impacted her food intake, but also increased her risk of aspiration. Patient A.R.'s weight continued to decline and then, after her weight got to about 95 pounds, multiple interventions were put in place at the end of September to improve her nutritional status, including increasing her resource supplements to three times a day, and increasing her dosage of Remeron, a known appetite stimulant, as well as an antidepressant. A.R.'s weight increased to 102 pounds in December with a fair appetite, but still noted dysphagia and pocketing food. By January 2012, A.R.'s weight increased slightly, then decreased to 100 pounds, before increasing back to 103 pounds. Her weight then decreased to 97 pounds in February 2012, documenting A.R.'s extremely unstable condition. In April 2012, A.R. continued to have dysphagia on a pureed diet and a poor appetite. By June and July 2012, A.R.'s weight stabilized around 100 pounds, and she did not appear to be declining; consequently, she was discharged from Vitas for extended prognosis. Dr. Shega testified that Patient A.R. also had progressive contractures due to her severely debilitated condition. Dr. Shega noted that at each recertification period, A.R.'s prognosis was six months or less if her illness ran its usual course. A.R.'s fluctuating weight, as much as three to five percent per month at times, created a poor prognosis and put her at high risk of death, and she met Medicaid hospice eligibility without having documented ongoing infections or fevers. Dr. Talakkottur acknowledged that, during her entire hospice stay, Patient A.R. was on a pureed diet and required crushed pills due to dysphagia; and as a precaution against aspiration, was dependent in 6 of 6 ADLs, was confined to bed and chair, was incontinent of bladder and bowel, had a FAST level of no better than 7a, and had a PPS never higher than 40 percent. AHCA has not met its burden by the greater weight of the evidence that A.R. was not eligible for Medicaid hospice services, and it is not entitled to recover an overpayment. Patient 13, W.G. Patient W.G. was a 61-year-old male, admitted to hospice on 10/19/09, with a terminal diagnosis of end-stage cerebrovascular disease. The claim period at issue is 10/19/09 to 06/12/12. W.G. suffered a stroke in his 50s. Between 07/29/09, and 10/19/09, his nursing home requested he be evaluated for admission to hospice care. Vitas completed two Appropriateness Evaluation forms during this period for W.G. and, on both occasions, Vitas concluded that he was not eligible to receive the hospice benefit because his condition simply was not terminal. Ultimately, on 10/19/09, W.G. was admitted to hospice care with a reported terminal diagnosis of end-stage cerebrovascular disease. Respondent altered his terminal diagnosis to debility on 10/20/09. Dr. Shega opined that W.G. was eligible for hospice services because the patient had an ER visit prior to admission, became wheelchair bound, and had worsening dysphasia requiring an endoscopy. However, Dr. Shega admitted that the hospital visit and the endoscopy procedure both preceded the two Appropriateness Evaluations where Respondent failed to certify W.G. as eligible for hospice care. Moreover, the two Appropriateness Evaluation forms where Respondent declined to certify W.G. as eligible list his PPS score as 40 percent, yet the third Appropriateness Evaluation by which Vitas certified W.G. as eligible for hospice lists his PPS score as 30 percent. Notably, however, the next time W.G.'s PPS score is recorded in Vitas' records, it is back up to 40 percent. In this case, it is clear from W.G.'s medical records that he did not evidence deterioration in his nutritional status, pain control, breathing, or complication of his cardiovascular condition. Although W.G. received continuous care (a higher level of hospice medical attention) on occasion, W.G. returned back to his baseline status after each time of heightened care. Dr. Talakkottur credibly testified that patients who experience a stroke can have residual deficits, i.e., they may not be able to move an entire side of their body or walk, yet they live with the deficits for 20 or 30 years. In Dr. Talakkottur's opinion, W.G. was such a recipient who experienced deficits, yet he did not have a terminal diagnosis with a life expectancy of six months or less to live. Based upon the greater weight of evidence in this case, it is determined that this recipient was not eligible for Medicaid hospice services and that AHCA is entitled to recover an overpayment of $169,928.96. Patient 14, A.G. Patient A.G. was a 58-year-old male, admitted to hospice on 05/31/12, with a terminal diagnosis of end-stage liver disease. There are two claim periods at issue: 05/31/12 to 08/20/12 and 08/28/12 to 12/31/12. Patient A.G. was hospitalized at Broward Health on 05/18/12 with abdominal pain, imaging documenting cirrhosis with splenomegaly, no ascites, but significant liver dysfunction evidenced by a low platelet count, which supported portal hypertension associated with cirrhosis, elevated ammonia of 127, an INR of 1.4, albumin of 2.6, and a total bilirubin of 1.5. Chronic pancreatitis was also present and the patient had an elevated lipase of 392. A.G. had an altered level of consciousness with lethargy, and was at risk for aspiration. At admission A.G. was oriented times zero and only minimal arousal to painful stimuli. A.G. demonstrated a significant decline in liver function with encephalopathy, and the patient's primary care physician, who knew the patient very well, indicated that he thought A.G. had deteriorated and was hospice appropriate. Dr. Shega further testified that A.G. was Medicaid hospice appropriate at the time of admission to Vitas because the patient's laboratory values indicated severe liver dysfunction, including the INR and the albumin, along with elevated ammonia to corroborate the patient's confused mental status. A.G.'s clinical progression was documented by the primary care provider noting that the disease had taken a turn for the worse. Although the patient's weight was 188, he had an albumin of 2.5, which is very low, and demonstrated a decline in functional status with a PPS of 50 percent and some ADL impairment, which supported Dr. Shega's opinion that the patient had a prognosis of six months or less if the illness ran its normal course. During A.G.'s initial stay in hospice from 05/31/12 to 08/20/12, he had changes in mental status and lethargy indicative of hepatic encephalopathy. He also had dyspnea. Patient A.G. had two continuous care episodes: the first for lethargy and the second for pain and shortness of breath. He also required an IPU stay. Just prior to A.G. coming off service, he had an episode of thrush on 08/07/12 that required treatment with nystatin. Thereafter, A.G. went missing and was subsequently noted to be incarcerated. Being incarcerated does not disqualify a patient from Medicaid hospice eligibility. A.G. was readmitted to Vitas hospice on 08/28/12. Dr. Shega testified that A.G. was Medicaid hospice eligible at that time because he had lost weight from 188 to 180, continued to have abdominal pain rated 8 of 10, had shortness of breath with minimal exertion, had ascites, abdominal distension, and lower extremity edema. From 08/28/12 to 12/31/12, A.G. was dependent in 3 of 6 ADLs, his PPS score decreased to 40 percent, then to 30 percent, he had a poor appetite, and while his weight increased to 185 pounds, he continued to have lethargy, occasionally having shortness of breath with activity. By 12/31/12, his weight had decreased to 170 pounds. Dr. Shega testified that A.G. was eligible for Medicaid hospice services during the second admission period. On 11/17/12, the patient was receiving methadone at ten milligrams every eight hours for pain, which is a high dose, and he continued to need breakthrough medication for pain. A.G. continued to have shortness of breath with activity and continued to have weakness, nausea and vomiting, 3 of 6 ADL dependency, and a PPS of 40 percent. A.G.'s treating physician believed the patient was still hospice appropriate because of the ongoing pain requiring methadone for management, the shortness of breath with oxygen, and the nausea and vomiting which required an inpatient stay. Dr. Talakkottur acknowledged that while A.G. presented with an INR of 1.4 and an albumin of 2.6, a normal INR is 1.1 or below and a normal albumin is 3.5 or above. Consequently, A.G.'s INR and albumin levels were well outside of normal. Dr. Talakkottur also acknowledged A.G. had an altered mental status and lethargy, dysphagia, chronic pancreatitis, and comorbidities of congestive heart failure, COPD, diabetes, cirrhosis, hepatitis C, gallbladder disease, depression, schizophrenia, drug and alcohol abuse, a history of suicide attempts, and needed assistance with bathing and toileting. Dr. Talakkottur agreed that a patient is not disqualified from Medicaid hospice eligibility because of a past incarceration or for being a drug addict. Talakkottur acknowledged that A.G. also had ascites, edema, a PPS score that declined to 40 percent, and required oxygen. AHCA has not met its burden by the greater weight of the evidence that A.G. was not eligible for Medicaid hospice services, and it is not entitled to recover an overpayment. Patient 15, L.C. Patient L.C. was a 50-year-old female, admitted to hospice on 09/15/10, with a terminal diagnosis of stomach cancer (malignant neoplasm of the stomach). The four claim periods at issue are 09/15/10 to 10/26/10; 11/07/10 to 02/09/11; 03/11/11 to 03/24/11; and 03/23/12 to 04/05/12. Patient L.C. had a rare type of stomach cancer. Dr. Shega testified that in patients who have a more diffuse disease that is inoperable, the five-year survival rate is about 40 percent with treatment--if they pursue treatment--but the survival rate is unknown if the patient does not pursue treatment because most patients elect to pursue treatment. However, L.C.'s cancer was inoperable, which, by definition, means it was already diffuse. Patient L.C. had chemotherapy treatment on 09/06/10, prior to the first admission, and thereafter elected comfort care over more anti-tumor treatment. At the appropriateness evaluation, her PPS was 50 percent. Her previous weight four to five months prior to the first admission was 160 pounds and her weight at admission was 145 pounds, or a 9.4 percent weight loss. Patient L.C.'s BMI was 23.4. She reported 10 of 10 pain and had presented to the North Broward Medical Center ER with severe pain and was directly admitted to the Vitas IPU from the ER. In addition to pain, Patient L.C. reported poor oral intake and unintentional weight loss. L.C.'s primary care physician signed the oral certification of a prognosis of six months or less and was the attending physician for the patient. The Vitas medical director approved the admission, and given her underlying mental health, recommended a psychology consult and the use of methadone as the long-acting opioid to try to manage her pain. L.C. was seen by her primary oncologist, who referred the patient for hospice services and agreed with the admission. Patient L.C. had a history of Hepatitis C; hypothyroidism; schizoaffective disorder; bipolar disorder; a longstanding history of substance abuse; including crack cocaine; multiple suicide attempts; hypertension; tobacco use; and COPD. During the first period at issue, 09/15/10 to 10/26/10, Patient L.C. developed abdominal symptomatology, including pain, nausea, vomiting, cramping, and had underlying psychological/psychosocial challenges. L.C. was in the IPU for pain control for several days and then transitioned home, continued to have pain and titration of some of the medications, was switched from methadone to a Fentanyl patch due to some concerns in the home with possible diversion and abuse. L.C. then went to the IPU for an extremely high heart rate. Her PPS fluctuated, going as high as 80 percent. However, Dr. Shega testified that studies show that a high PPS score is still supportive of a terminal prognosis in cancer patients not receiving antitumor therapy. On 10/26/10, L.C. revoked services to pursue more aggressive treatment in the hospital, no longer wishing to follow the hospice plan of care. Patient L.C.'s second admission in Vitas hospice began on 11/07/10. Just prior to that, she was in the hospital and then readmitted to hospice service in her home. Her PPS was back down to 50 percent. Her previous weight had been 145 pounds and was now reported to be 130 pounds, with a BMI of 22, or a ten percent weight loss. L.C. reported 10 of 10 pain. While L.C. was in the hospital, she received one treatment with Gleevec, an antitumor treatment, and was then sent back for hospice services. Her case was discussed with her oncologist who agreed with the readmission to hospice. During the second period, 11/07/10 to 02/09/11, Patient L.C. was admitted to the IPU for pain, continued to have cachexia, her weight fluctuated, and she needed more Fentanyl to control her pain. She had substantial symptoms, including weight loss, muscle wasting, pain, shortness of breath with activity, agitation, depression, anxiety, early satiety, and nausea. Although L.C.'s PPS rose to 80 percent, she had a substantial symptom burden and was hospice appropriate. L.C. was discharged from Vitas hospice for not following the plan of care on 02/09/11. Patient L.C. began her third admission in Vitas hospice on 03/11/11, which lasted until 03/24/11. At the time of admission, L.C. was at home, had a PPS of 60 percent, her weight had decreased to 110 pounds, with a BMI of 18, reported 10 of 10 pain, and decreased oral intake. During the third admission, L.C. was admitted to the IPU. After the IPU admission, the patient was home for a very short period of time and came back to the IPU, but, ultimately, was discharged again for not being compliant with the plan of care. L.C. was readmitted to Vitas hospice for the fourth time on 03/23/12, until she was discharged again on 04/05/12, for not following the plan of care. Just prior to this fourth admission to Vitas, L.C. was on Heartland Hospice, and had been hospitalized at Holy Cross Hospital. At that time, when she ultimately revoked services from Heartland and transitioned to Vitas hospice, she had a PPS of 30 percent. Her weight was 110 pounds. A CT scan dated 03/21/12 noted that the patient had a large heterogeneous necrotic mass, which meant the mass was so big it outgrew its blood supply and the tumor cells died. It measured 20.5 by 20.5 by 20 centimeters (which is the size of two grapefruits) in the upper abdomen, compatible with malignancy or metastasis, origin uncertain. The mass encased portions of the stomach. Obstruction could not be excluded. L.C. had lost significant body weight, but her tumor's growth was leaving her weight the same. She also lost significant muscle mass. Dr. Shega testified that he had seen that occur several times in patients with this type of tumor. L.C.'s cancer was metastatic and the Vitas admission nurse noted on 03/22/12 that her treating physician in the hospital found that she had a days to a week prognosis that was very grim. During the brief fourth admission, L.C. had a large symptom burden and struggled while in the Vitas IPU trying to control her pain. Contrary to the opinion expressed by Dr. Talakkottur, the fact that L.C. may have been a drug addict had no bearing on whether she was terminally ill or her prognosis. AHCA has not met its burden by the greater weight of the evidence that L.C. was not eligible for Medicaid hospice services, and it is not entitled to recover an overpayment for the four periods in dispute. Patient 17, D.D. Patient D.D. was an 84-year-old female initially admitted to hospice with a terminal diagnosis of adult failure to thrive. The three claim periods at issue are 09/27/10 to 03/21/11; 05/20/11 to 12/12/12; and 12/15/12 to 12/31/12. On 09/20/10, D.D. was admitted to the hospital for upper abdominal pain, nausea, vomiting, and was diagnosed with pancreatitis, complicated by a pseudocyst. Pseudocysts are associated as a complication of pancreatitis and associated with a significant mortality, particularly in older adults. Upon her initial admission to hospice, D.D. had a PPS of 30 percent, was dependent in 6 of 6 ADLs, bilateral lower extremity contractures, a weight decrease of 190 to 170 pounds, and an albumin of 2.1, which was consistent with severe protein calorie malnutrition. She also exhibited muscle wasting with a Stage II ulcer on her coccyx/sacrum that was open and draining. She had symptoms of abdominal pain, shortness of breath with exertion, decreased appetite, and bilateral lower extremity edema. She was considered at risk for aspiration, had a history of pneumonia, and had a UTI within the six months preceding admission. Patient D.D. also had a history of dementia, cholelithiasis with increased liver function tests, diabetes, arthritis, osteoporosis, reflux, and hypertension. D.D. was incontinent and confused. D.D. left hospice care on 03/21/11. She was experiencing a life-defining condition of a small bowel obstruction and a UTI that, if not treated at an acute care hospital, would have caused her death. Instead, her family elected to revoke the hospice benefit and pursue aggressive treatment. D.D. returned to Vitas hospice care on 05/20/11. She had again been admitted to the hospital with the small bowel obstruction, secondary to recurrent pancreatitis, along with complications from a COPD exacerbation that required IV steroids, bacteremia that required IV antibiotics, and anemia requiring a blood transfusion. At the second admission date, she had a PPS of 30 percent, was dependent in 6 of 6 ADLs, had contractures, and weighed 150 pounds. Her albumin was noted during her hospital stays at 1.9 to 2.1, again documenting severe protein calorie malnutrition. She had two right leg wounds, was a high risk for aspiration and had a very poor appetite with little oral intake. She had hypotension and was noted to have been in a steady decline for the past year. On 07/26/11, D.D. developed an acute infection that required antibiotics with Keflex. On 12/15/11, D.D. experienced shortness of breath requiring oxygen and pedal bilateral edema at two to three. On 04/09/12, three days after D.D. had a UTI, she experienced difficulty swallowing, profound muscle wasting, and was at grave risk of infection and skin breakdown. Her muscle wasting had progressed to bilateral temporal wasting. The Vitas physician noted that "[t]he patient is only alive today due to the excellent care given by her family as her debilitated state continues to put her at grave risk of infection and skin breakdown." On 07/11/12, D.D. was again seen by a Vitas physician. On this date, it was noted D.D. was becoming weaker with unexplained weight loss. On 08/22/2012, D.D. was seen by a Vitas physician who noted she continued to lose weight, was bedridden, and continued to decline. The patient was eating less, needed total care with ADLs, and had a history of UTIs. The Vitas physician stated: "[t]he patient is getting weaker. I saw the patient because the patient was weaker, and the patient, according to the daughter, is more lethargic all the time." In October 2012, D.D. had intermittent wounds including Stage II wounds on her back and right foot. During that month, the family also requested additional assistance taking care of D.D. at home, which is a service Vitas provides and is required to provide by statute. She then had another wound develop on 11/19/12. On 12/12/12, the family again revoked hospice. At that time D.D. developed a life-defining episode of diverticulitis. She had blood in her stool and was put on IV antibiotics in the hospital. She had an electrocardiogram ("EKG") which showed an atrial arrhythmia. Her hemoglobin was all the way down to 7.2--the normal range is 11 to 12. A hemoglobin of 7.2 is a severe level indicative of needing transfusions to prevent cardiac damage. Without an aggressive level of care, she most likely would have died. D.D. returned to hospice care on 12/15/12. At this time her terminal diagnosis was debility. She continued to be bedbound, contracted, dependent in all of her ADLs, with a PPS of 30 percent. Her albumin drawn from her latest hospitalization was still low at 2.7. She also had slightly worsening dysphagia. AHCA has not met its burden by the greater weight of the evidence that D.D. was not eligible for Medicaid hospice services, and it is not entitled to recover an overpayment for the periods in dispute. Patient 18, M.S.V. Patient M.S.V. was a 77-year-old female admitted to hospice with a terminal diagnosis of respiratory failure. The three claim periods at issue are 06/28/11 to 08/10/11; 03/22/12 to 05/03/12; and 05/11/12 to 07/03/12. On 05/21/11, M.S.V. was admitted to the hospital with respiratory failure secondary to chronic obstructive pulmonary disease and interstitial lung disease, resulting in a very prolonged ICU stay. She had a tracheostomy and a PEG tube placed at that time. Her albumin was below normal at 2.7. She also had a pH of 7.11, which means her blood level was acidic instead of normal, which put her tissues at increased risk of death, such as heart arrhythmias. She also had a UTI and was on a ventilator. Her carbon dioxide level was 193--normal is 40--and her oxygen level was low at 64. Dr. Shega stated that studies show that when a carbon dioxide level ("PCO2") is over 75, the patient is admitted for acute exacerbations, sent to the ICU, and put on a ventilator, the six-month survival rate is 33 percent. In the months leading up to this hospitalization, M.S.V. had a GI issue that led to her having a colostomy. The colostomy was reversed during that hospital stay. The patient also had a history of tuberculosis, hypertension, and anemia. On 06/29/11, a non-Vitas physician certified M.S.V. had a life expectancy of six months or less. This was her primary care physician and attended the patient while in hospice. Her PPS was 30 percent at admission. A PPS below 70 percent is appropriate for hospice admission according to HI's instructions. During the first dates at issue, M.S.V. was admitted to the IPU and had challenges with secretions and choking and needed suctioning. She also had low-grade fevers during her IPU stay and episodes of tachypnea. She subsequently improved and was discharged for extended prognosis. M.S.V was readmitted to Vitas on 03/22/12. Prior to this, M.S.V. was admitted to the hospital with severe respiratory distress, was in the ICU again, was on a ventilator with a pseudomonas pneumonia that was complicated by a clostridium difficile colitis, a very severe infection of the large colon. On 03/31/12, M.S.V. needed five liters of oxygen on the trach collar, which is a substantial amount of oxygen, continued to have cough, secretions, congestion, and needed to be suctioned three times a day to remove green secretions. On 04/14/12, M.S.V. had confusion, was forgetful, and had dyspnea. She had rhonchi, cough, secretions, congestion with dyspnea, was still on five liters of oxygen, had abnormal lung findings and still required suctioning. She was on continuous care at that time. Continuous care is provided when a hospice patient has substantial skilled needs to manage their symptoms. Therefore, the hospice placed a nurse in the patient's home up to 24 hours a day to manage those symptoms. On 04/16/12, M.S.V. experienced shortness of breath and was very dyspneic with any type of exertion. She had weakness and required assistance with all ADLs. On 05/03/12, M.S.V. revoked hospice care. She had been in the IPU with a severe exacerbation of her respiratory symptoms requiring a seven-day course of Levaquin to help treat the increased secretions. She was also started on Prednisone for COPD exacerbation. She continued to struggle with secretions and near the end of the stay, she was having more lethargy, confusion and congestion. She revoked hospice care to seek aggressive care in the hospital. On 06/19/12, M.S.V. was seen at an acute care hospital and was diagnosed by a non-Vitas physician with end-stage pulmonary fibrosis. M.S.V.'s terminal diagnosis during the third period at issue was end-stage pulmonary fibrosis. On 06/20/12, M.S.V. had a heart rate of 124, which was markedly elevated with 100 being the upper limit of normal. She also had an elevated respiratory rate, was confused, agitated, somnolent, trying to take off her oxygen, and required Thorazine and Ativan to help control her symptoms. She had orthopnea, wheezing, cough, secretions, congestion, diminished breath sounds, required suctioning times four of thick yellow mucus, and was on continuous care and five liters of oxygen. M.S.V. developed respiratory infections during both the second and third claim periods in dispute. On 07/03/12, M.S.V. developed a temperature of 100.5, had agitation, anxiety, shortness of breath, increased congestion and increased lethargy. Her PPS was 30 percent at that time. She also was on Ativan and Thorazine and on eight liters of oxygen. She was congested with rhonchi, wheezes, rales, and dyspnea. She had shortness of breath at rest. She needed suctioning and was started on antibiotics. M.S.V.'s family then revoked hospice care for aggressive treatment. Dr. Talakkottur opined that because M.S.V. did not have increased ER visits, she was not showing evidence of decline. However, M.S.V. was hospitalized three times surrounding the dates at issue, had multiple instances of IPU and continuous care during hospice, and experienced multiple infections. Dr. Talakkottur also did not follow the standard of the Florida Handbook in that he denied a period due to no "significant" deterioration in the patient's condition. This is not a guideline for hospice eligibility--clinical progression of the terminal disease is a guideline. That progression is not required to be "significant" by any metric. AHCA has not met its burden by the greater weight of the evidence that M.S.V. was not eligible for Medicaid hospice services, and it is not entitled to recover an overpayment for the periods in dispute. Patient 29, R.S. Patient R.S. was a 62-year-old male initially admitted to hospice with a terminal diagnosis of cerebral degeneration. The claim period at issue is 06/21/11 to 07/08/11. During the lead up to the dates at issue, R.S.'s status began to improve and Vitas was undertaking a review to determine if discharge was appropriate. On 06/21/11, R.S. suffered a fracture of the right clavicle while in an assisted living home. Fractures alone are associated with subsequent increased mortality in older adults (over age 60). In older adults, the fracture alters their homeostasis because they have homeostenosis. Any small change in the person's condition can lead to dramatic subsequent outcomes that increase the risk of mortality. The cause of death after the fall is variable, but it is often related to conditions, such as R.S.'s underlying condition. R.S. suffered from comorbidities of dementia, hypertension, paranoid schizophrenia, a history of seizures, benign prostatic hypertrophy of the prostate, a history of dysphagia, history of substance abuse, increased lipids, reflux, and a history of coronary heart disease. R.S. was also confused, nonverbal, and on oxygen. On 06/30/11, R.S. was a fall risk, was supervised at all times, and his mobility had substantially declined. R.S. was on Ativan to treat his anxiety and agitation, which also increased the fall risk and the risk of aspiration. Ativan was a new medication for R.S. prescribed to treat the anxiety and agitation and increased the risk of subsequent aspiration. Dr. Shega testified that agitation is a known manifestation of pain in persons with dementia. Particularly in a nonverbal patient who cannot say it hurts, he/she has to express himself/herself other ways. The American Academy of Neurology Guidelines for care of persons with dementia state that clinicians need to assess patients for pain and that includes agitation and dementia. R.S. was on morphine and Tylenol and then also on the Ativan to help control the agitation; however, all those medications can increase risk of aspiration. On 07/08/2011, R.S. was transferred to the ER for choking. He was in respiratory failure when he arrived and died shortly thereafter. Dr. Shega opined that the cause of death was related to his terminal diagnosis as fractures in patients with advanced dementia often change the trajectory of their illness and dramatically increases their likelihood of dying within six months. Dr. Talakkottur acknowledged that dementia patients can progress to the point that they can no longer swallow. It was undisputed that R.S. died of choking. Dr. Talakkottur inaccurately saw no correlation between R.S.'s fracture and his demise the following month. Dr. Shega's testimony was more credible than that of Dr. Tallakottur. AHCA has not met its burden by the greater weight of the evidence that R.S. was not eligible for Medicaid hospice services, and it is not entitled to recover an overpayment. Patient 21, A.D. Patient A.D. was a 63-year-old male admitted to hospice with a terminal diagnosis of adult failure to thrive. The claim periods at issue are 10/21/09 to 03/24/10 and 05/13/10 to 02/28/11. Just prior to hospice admission, A.D. had been hospitalized for heart failure which required a BiPAP. At admission to hospice, A.D. had a PPS of 30 percent, weight that had decreased from 150 to 140 pounds, a BMI of 22.2, shortness of breath at rest and with minimal exertion, lower abdominal pain, weakness, and difficulty ambulating. A.D. had comorbidities of COPD; polysubstance abuse including cocaine; marijuana; alcohol; and tobacco; hypertension; atrial fibrillation; coronary artery disease with stents being placed; gastroesophageal reflux disease; medical noncompliance; increased lipids; and depression. A.D. was certified to have a prognosis for a life expectancy of six months or less if the terminal illness ran its normal course by the independent third-party physician who treated A.D. in the hospital. On 10/22/09, A.D. was noted to have an EF of 15 percent. EF alone is not a predictor of reduced life- expectancy. Dr. Shega noted that it is the relationship between the EF and the patient's symptom burden that predicts increased mortality and hospice appropriateness. Dr. Talakkottur testified that a normal EF is above 55 percent. On 10/23/09, A.D.'s respiratory rate was elevated at 24. He was hypotensive with a blood pressure of 90 over 60, required morphine for pain, was lethargic but arousable, had chest pain, was on oxygen, and was short of breath with exertion. On 12/08/09, A.D. was placed on continuous care. He experienced dizziness when he sat up, which Dr. Shega opined was probably related to the patient's low blood pressure of 80 over 50, consistent with a severe NYHA Class. On 03/24/10, A.D.'s terminal diagnosis was changed to end-stage heart disease. He had chest pains and an extremely low heart rate of 40. A.D. revoked hospice care and was admitted to the acute care hospital with a severe life-defining infection in the defibrillator pocket. An infection of a pacemaker is a rare occurrence. A.D. required a transesophageal echo on 14/15/10. A transesophageal echo is a probe down the patient's esophagus to determine how the heart is functioning. Usually, a transesophageal echo is done when there is concern about endocarditis or infection of the heart valves. On 05/13/10, A.D. was readmitted to Vitas. His EF was again 15 percent and his PPS was 30 percent. He was drowsy, was an aspiration risk, and was NYHA Class IV with chest pain and dyspnea at rest and exertion. Symptoms of heart disease are not just shortness of breath. They also include chest pain, fatigue, weakness, or palpitations. At the second admission, A.D. was again certified to have a prognosis for a life expectancy of six months or less if the terminal illness ran its normal course by the independent third-party hospital physician. He received morphine for shortness of breath and still had shortness of breath with exertion. During the second period at issue, A.D. had a trajectory very consistent with end-stage heart disease with intermittent periods of shortness of breath or chest pain at rest or with minimal exertion. At times, he would show minor improvement in cardiac status, then decline. He did gain weight during this period but continued to exhibit NYHA Class III and Class IV disease status. He became weaker and spent more time in bed. His nutritional status improved, but other parameters fluctuated or remained end-stage, particularly the NYHA Class. He also experienced hypotension. A.D. ultimately passed away in hospice during an approved period. A study done by Joan Lunny published in the Journal of the American Medical Association("JAMA") on heart failure and end-stage lung disease patients showed that the patients have exacerbations, get worse, then improve. They may plateau. They may improve a little, but will then get worse again. This is visually displayed in the HI presentation "The Role and Function of Hospice Reviewers, "which depicts via a line graph the saw- tooth nature of the progression of the diseases. (Vitas Ex. 4). A.D. disease trajectory followed this chart. Dr. Talakkottur stated that A.D. showed no signs of acute cardiac disease at either admission, which is contrary to the medical records showing he had NYHA Class III or IV symptoms at both admissions. Dr. Talakkottur also stated that a low EF was not concerning in this patient because it could rebound in six months. However, as indicated above, A.D.'s EF was at 15 percent on the date of each admission, 10/21/09 and 05/13/10. Dr. Talakkottur also stated that this patient was not terminal as evidenced by a lack of increased utilization of health care, such as ER visits and hospitalizations. However, the patient had been hospitalized just prior to each admission to hospice. AHCA has not met its burden by the greater weight of the evidence that A.D. was not eligible for Medicaid hospice services, and it is not entitled to recover an overpayment for the periods in dispute. Patient 23, S.V.D. Patient S.V.D. was a 44-year-old female admitted to hospice with a terminal diagnosis of end-stage liver disease with cirrhosis. The claim period at issue is 12/03/10 to 07/30/11. Just prior to hospice admission, S.V.D. had been hospitalized for vaginal bleeding, with a hemoglobin down to 2.5, which caused her to be admitted to the coronary care unit where she had a procedure in the hospital to help mitigate future bleeding, including an ablation and a dilation and curettage. She had an INR of 1.5 and an albumin of 2.1. She was jaundiced and had a bilirubin of 6. The upper range of normal for bilirubin is 1.1. She had a history of encephalopathy and multiple paracentesis. A paracentesis performed 11/29/10 removed five liters of fluid and a subsequent paracentesis on 12/03/10 removed four liters. Dr. Talakkottur opined that J.V.D. was not hospice appropriate because she failed to display signs of a terminal prognosis. Her PPS scores were between 30 and 50 percent, she was alert and oriented on the order of two to three, and she was able to ambulate throughout the period. Moreover, her albumin rose to 3.4, which was an improvement and marker of liver function. She had no recurrent or intractable infections, no respiratory problems, and her nutritional status remained good. However, upon admission, S.V.D. had an extremely elevated ammonia level, progressive malnutrition, and continued to use alcohol. She had a PPS of 40 percent, a BMI of 21.5, muscle wasting, weakness, shortness of breath, and a poor appetite. While the normal range for ammonia is 20 or less, S.V.D.'s ammonia level was 74. A BMI of 22 or less is considered significant nutritional impairment. On 12/03/10, a non-Vitas physician certified that S.V.D. had a life expectancy of six months or less if the terminal illness ran its normal course. On 12/08/10, S.V.D. had an INR of 1.53. This was drawn because S.V.D. needed another paracentesis, which occurred in the Vitas IPU on 12/09/10, and removed 1.5 liters of fluid. During the period at issue, S.V.D. exhibited impaired nutritional status with weight loss and muscle wasting, including bilateral temporal wasting. She also had jaundice, fatigue, periods of confusion, and encephalopathy. On 05/18/11, S.V.D.'s weight had decreased to 104 pounds with continued muscle wasting and bilateral temporal wasting with a poor appetite. She may have been abusing alcohol and was having worsening leg pain, probably from peripheral neuropathy related to alcohol. She had shortness of breath with minimal activity, was sometimes sleepy, alert and oriented, times two, with periods of confusion, which supported a diagnosis of encephalopathy. She required more assistance with ADLs and her PPS was 30 percent. S.V.D. had progression of her disease and was more easily fatigued, lost muscle mass, ascites, decreased appetite and weight loss, was sleeping sometimes for a whole day, and at times was too tired to eat. Dr. Talakkottur testified that S.V.D.'s nutritional status improved. Although her appetite did improve after the dates at issue, during the dates at issue, it was severely compromised. He also stated that he could not find any evidence of a compromised nutritional status. This statement was patently refuted by the record. Dr. Talakkottur argued as a reason for denying eligibility that the patient did not have further paracentesis. However, when the third paracentesis was drawn on 12/09/10, after admission to hospice, the fact that no future paracentesis would be drawn was not known. This is the type of revisionist review that is improper and cannot be used to deny eligibility after the fact. AHCA has not met its burden by the greater weight of the evidence that S.V.D. was not eligible for Medicaid hospice services, and it is not entitled to recover an overpayment. Patient 24, S.K. Patient S.K. was an 86-year-old female, admitted to hospice with a terminal diagnosis of end-stage cerebral degeneration. The claim period at issue is just over seven months, from 05/10/12 to 12/31/12. Patient S.K. had two recent hospitalizations to Northwest Medical Center for lower extremity cellulitis on 02/20/12 and on 05/04/12, just prior to admission. The patient had functional decline. In the hospital, her PPS was noted to be 20 percent. She became bedbound within the previous nine months. Before that, she was ambulatory. She had upper and lower contractures. She was described as lethargic with a FAST at that time of 7d. She was dependent in 6 of 6 ADLs, with a weight of 78 pounds and a BMI of 14.2. She had muscle wasting, along with anorexia, incontinence, cachexia, and poor appetite. S.K. also had dysphagia, was on a pureed diet, and was at risk for aspiration. The patient had Stage II pressure wounds to the right hip, right toe, and knee. Patient S.K.'s past medical history included dementia, hypertension, DVT of the right lower extremity, and a pressure ulcer of the right hip. Dr. Shega testified that Patient S.K. met the criteria for Medicaid hospice because she had two recent hospitalizations for infections; progression of her disease; functional decline with wounds; impaired nutritional status; with BMI markedly low at 14.2; a PPS at admission of 20 percent likely related to lethargy; and documentation that nine months prior, the patient essentially became bedbound. All of that documentation together indicated that she went from a chronic illness to end-of-life. Patient S.K.'s non-Vitas attending physician signed the oral certification that concurred the patient had a terminal illness with a life expectancy of six months or less if the illness ran its normal course and authorized Vitas to evaluate and admit the patient to the program. After S.K. was admitted to Vitas hospice, she experienced lethargy and low-grade fevers consistent with likely aspiration that slightly improved, and then she developed thrush in the first benefit period, which impacted her ability to swallow and eat. The thrush was appropriately treated. Thrush only happens in usually severely immunocompromised patients. She would cough when she ate, indicating her high risk of aspiration. In July 2012, S.K. was dependent in all ADLs. Her PPS was 30 percent, her FAST level was 7f, she had a Stage III wound, was nonverbal, was eating 50 to 60 percent of small meals, and had visible weight loss. She was in pain when being moved. She developed a wound on the right foot that had bloody drainage, so she had a hip wound and a foot wound. Her caregiver reported she slept most of the day, stared at the ceiling, and continued to document end-stage cerebral degeneration. S.K.'s hip wound resolved in August 2012. In October 2012, the patient developed another episode of thrush, again documenting her poor status. S.K. had dysphagia and coughed when getting liquids, which meant that when the patient was drinking, she was coughing, which dramatically increased her risk of aspiration because she was having a hard time controlling the texture; and at any time, it could get into her lungs and cause pneumonia or asphyxiation. S.K. was recertified as Medicaid hospice eligible on 10/27/2012. S.K.'s MMA had decreased, she remained bedbound with cachexia and muscle wasting, she was eating about 50 percent, she continued to need to be fed, she was given Percocet for pain as needed, had shortness of breath with oxygen as needed, her wounds had resolved, and she was at very high risk for infection given her bedbound status, severe malnutrition, and inability to care for herself. S.K.'s PPS remained at 30 percent, and she was dependent in 6 of 6 ADLs. Her home health aide visits had to be increased to seven times a week to help support the patient and family. Dr. Talakkottur acknowledged that Patient S.K. remained at a FAST level above 7, a PPS score of 30 percent or below, was incontinent of bladder and bowel, had dysphagia and was bedbound, and was 6 of 6 ADLs during the entirety of the dates at issue. S.K. met the disease specific criteria from the LCD for dementia and related disorders. As noted above, she had a FAST score above 7c, which indicates she was speaking six words or fewer, was 6 of 6 ADLs, and was incontinent. AHCA has not met its burden by the greater weight of the evidence that S.K. was not eligible for Medicaid hospice services, and it is not entitled to recover an overpayment. Patient 26, E.E. Patient E.E. was a 59-year-old male, admitted to hospice with a terminal diagnosis of end-stage liver disease. The claim period at issue is 09/01/09 to 04/30/10. E.E. had two hospitalizations for ascites and paracentesis prior to his stay in Vitas hospice. Upon admission, E.E. had a distended abdomen with 8 of 10 pain. E.E.'s skin was slightly jaundiced, he had a very poor appetite, and reportedly had not eaten in three days. The family and patient also reported issues with bloody noses and periodic bloody stool. At that time, the patient had a reported weight loss from 180 to 160 pounds or 11 percent of his body weight. E.E. was dependent in 5 of 6 ADLs, a PPS of 40 percent, dyspnea with rest and exertion, and confusion On 09/02/09, E.E. had two plus edema noted in his feet. As of 09/17/09, Patient E.E. had shortness of breath with activity and at rest. From a cognitive perspective, E.E. was confused at times and forgetful. He had bilateral edema in the extremities, was incontinent, under fall precautions, needed help setting up his food, and had very poor skin turgor with easy bruising indicating challenges with coagulation. Patient E.E. was extremely anxious, needed to be placed on an antibiotic for cellulitis, and was started on Aldactone for worsening edema. As of 11/30/09, while E.E.'s weight from admission in June increased from 160 to 180, his PPS remained at 40 percent, and he was having more pain in the abdomen related to ascites. The abdomen was described as distended. He continued to have confusion, forgetfulness, and agitation at times. E.E. also had lower extremity edema and now shortness of breath. E.E. was now on Lasix in addition to the Aldactone to try to control his edema. He continued to have a poor appetite. He was on lactulose to help manage his encephalopathy, which would not be expected in a 59-year-old without a dementia diagnosis, and he had confusion and forgetfulness; consequently, Dr. Shega concluded that was related to the end-stage liver disease. Dr. Shega testified that Patient E.E. was Medicaid hospice eligible at that time because he had ongoing manifestations of end-stage liver disease with worsening ascites, weight gain from the edema, a poor appetite, and required medication for encephalopathy. In February 2010, E.E.'s long-acting morphine was increased from 30 to 45 every 12 hours, he had pain, confusion and cognitive loss, was incontinent, had difficulty with ADLs, was eating about 25 percent of meals with anorexia, and had additional skin tears on his arms. E.E. had confusion, needed reorientation, and required a bed alarm on the bed because he might get up and fall. E.E. was prescribed an antipsychotic, Risperdal, at one milligram twice a day in March 2010 and had episodes of dyspnea requiring oxygen treatment. His PPS was 40 percent, pulse was 102, and had ongoing pain 8 of 10. He remained agitated with confusion and had aggression for which the antipsychotic was started. His Lasix dose was twice a day to try to manage the edema, and he continued to have intermittent dyspnea, ADL dependency, decreased appetite, easy bruising, and skin tears on both arms. In April 2010, E.E. continued to decline with increased confusion and weakness. He had new skin tears on both arms indicative of poor nutritional status. He had ascites along with his liver being able to be palpated. His weight was 165 pounds. He was lethargic, lying in bed with altered mental status; he remained on the lactulose and diuretics. His skin was jaundiced. Patient E.E. was Medicaid hospice eligible during all of the dates at issue. Dr. Talakkottur acknowledged that in March 2010, Patient E.E. became a fall risk, was dependent in 6 of 6 ADLs, and had periods of aggression and was very confused, which was possibly caused by encephalopathy. Dr. Talakkottur further acknowledged in final hearing that in April 2010, Patient E.E. had severe low back and abdominal pain, was on two liters of oxygen, required assistance with 5 of 6 ADLs, had skin tears, signs of ascites, and jaundiced skin. AHCA has not met its burden by the greater weight of the evidence that E.E. was not eligible for Medicaid hospice services, and it is not entitled to recover an overpayment. Patient 28, D.M. Patient D.M. was a 59-year-old male, admitted to hospice with a terminal diagnosis of malignant neoplasm of the prostate. The claim period at issue is just over seven months, from 05/26/12 to 12/31/2012. D.M. was admitted to Vitas on 05/26/12 with a terminal diagnosis of malignant neoplasm of the prostate (cancer). He died on service on 5/07/13. The "Scope" of the audit, as included in the FARs, states, "In addition, HI excluded recipients who had at least one malignancy (cancer) primary diagnosis and had a date of death less than one year from the first date of service with this provider." The undisputed evidence shows that D.M. had a terminal diagnosis of cancer and died less than one year after first receiving hospice care from Vitas. AHCA has the burden to prove compliance with the audit scope. It has not in this case. According to the scope of the audit, this claim must be excluded. Even if the scope of the audit did not preclude disputing this patient's benefits, AHCA failed to show this patient was not eligible. Just prior to admission in May 2012, Patient D.M. sustained a fall for which he had imaging that demonstrated diffuse metastatic blastic lesions and an elevated PSA to 302 nanograms per milliliter. D.M. also had left hydronephrosis, an enlarged bladder secondary to the prostate cancer that required Foley catheter placement. A CT scan demonstrated widespread blastic bony metastasis diagnosed as prostate cancer. The patient had substantial physical disability with a noted PPS of 40 percent, a reported weight loss from 150 to 140 pounds, and a BMI of 20. The patient had 6 of 10 groin pain and bilateral lower extremity edema. D.M.'s non-Vitas physician, Dr. Richard Mastrole, signed the certification attesting that the patient had a prognosis of six months or less if the illness ran its normal course and authorized Vitas to evaluate the patient for hospice services and admit him to the Vitas hospice program (signed and dated on 06/07/2012). D.M. also had a hematology consultation by Dr. David Drew. Dr. Drew noted D.M. developed weight loss of more than 20 pounds, close to 15 percent of his body weight, in the previous four to five months. He also noted that D.M.'s pain was so severe it interfered with his sleeping and eating. Dr. Shega testified that D.M.'s imaging demonstrated the blastic disease (prostate cancer) growing and invading into the bone. Dr. Shega further testified that the patient's alkaline phosphatase was markedly elevated to 600, which demonstrated the cancer was eating into the bone. The blastic lesions suggested that the tumor was actively growing and metabolizing the bone, destroying the bone, which is what was contributing to the pain. Within the bone, there are nerve fibers, and those nerve fibers were being stimulated by the cancer, which was destroying the environment. Dr. Shega testified that patients who have bony metastatic disease are at marked increase risk of subsequent fracture. D.M. was Medicaid hospice eligible at the time of initial certification because he had a terminal diagnosis of metastatic prostate cancer with known bony metastatic lesions that were blastic in nature, and a prognosis of six months or less if the disease ran its normal course. There were serial physician assessments of a hospitalization with all the physicians, including the patient's primary care doctor, documenting the patient had a prognosis of six months or less. D.M. had impaired nutritional status as documented in the appropriateness evaluation and in the medical record in the hospital. He had functional decline demonstrated by a PPS of 40 percent, which is markedly impaired. On 05/25/12, the day prior to admission, Patient D.M. met with the Vitas admission nurse and discussed that he had Stage IV prostate cancer and the Vitas hospice philosophy. The patient stated that he would be seeking aggressive care and would be seeing an oncologist in one to two weeks for chemotherapy and that he might also have an orchiectomy in two to three weeks per the urologist. However, D.M. did not follow through with aggressive care. In June 2012, Patient D.M. suffered a fall. X-rays did not document a fracture, but the fall indicated his overall weakness. In July 2012, Patient D.M. had a Stage I ulcer on the left leg that subsequently healed, but demonstrated that his nutritional status had not improved despite the weight gain. As of 08/10/12, D.M. was distressed and not getting adequate pain relief. He had pain in his pelvis, hips, and back relating to bone metastasis. On exam, palpation of different areas of his body exacerbated the pain; he had edema; and his appetite was declining, although he did not appear to be losing weight (due to the steroid treatment). He was also lethargic. Patient D.M. continued to have worsening pain during his stay in Vitas hospice, requiring more aggressive pain management. He was started on methadone, which is one of the most potent opioid analgesics, which was increased as the patient was on Vitas service. The increased pain and titration of opioids supported that the cancer was progressing and worsening. D.M. met the disease specific criteria from the LCD for cancer. As noted above, he had both metastases and a PPS below 70 percent. AHCA has not met its burden by the greater weight of the evidence that D.M. was not eligible for Medicaid hospice services, and it is not entitled to recover an overpayment. Patient 29, R.S. Patient R.S. was a 59-year-old male, admitted to hospice with a terminal diagnosis of debility. The claim periods at issue are 04/20/11 to 05/23/11 and 06/03/11 to 10/16/12. Prior to admission, R.S. was hospitalized for almost three weeks beginning on 03/02/11 for joint pain. At that time, the patient had severe electrolyte abnormalities, hyponatremia, along with a hemoglobin of 7.7. He was a known alcohol abuser and had an EGD that found gastritis in the stomach, along with a duodenal ulcer. He also had a UTI during that hospital stay and pneumonia. The patient was not safe to live independently and was placed in an ALF. Patient R.S. had a recent significant decline in functional status and became totally dependent in ADLs resulting in a PPS of 30 percent. R.S. had a poor appetite and an extremely low albumin level of 2.1. The patient became more confused, forgetful and developed extremity edema. He had a wound on his right foot. R.S. had peripheral vascular disease contributing to his diagnosis of debility, with severe functional disability. His prognosis in part was related to severe functional disability. This patient's comorbidities included dementia, atrial fibrillation, alcohol abuse for over 30 years, and a history of delirium tremens ("DTs"), gout, high blood pressure, COPD, anemia, and depression. R.S.'s primary care, non-Vitas physician, certified the patient for hospice and that the patient's prognosis was six months or less. After admission, R.S. developed a lesion on the outer aspect of the right foot that became necrotic due to poor circulation. Ultimately, R.S. had to be transferred to the IPU for management. Patient R.S. decided that due to the pain, he wanted an amputation and revoked hospice services to receive that amputation. R.S. was readmitted to Vitas hospice on 06/03/11 after his above-the-knee amputation at Columbia Hospital and was quickly thereafter admitted to Vitas' IPU for pain control. At that time, the patient's PPS was 40 percent. R.S. had ongoing 9 of 10 stump pain, which is common after an amputation, but he developed necrosis of the left heel, and he was admitted to the IPU for pain management. R.S. was Medicaid hospice eligible at readmission because he had the same terminal diagnosis of debility with the same clinical manifestations, but now had a left heel ulcer; the patient had just come out of the hospital after a life-defining condition and was referred to hospice services from that hospitalization; and, functionally, the patient had a PPS of 30 percent. Those indicators together demonstrated that Patient R.S. continued to have a prognosis of six months or less if the illness ran its usual and normal course. As of 06/11/11, Patient R.S. continued to have pain and had a new necrotic area on the left heel, cachexia and muscle wasting, a poor appetite, and was increasingly confused at times with increasing dementia. As of 08/20/11, R.S. had ongoing cachexia, muscle wasting, continued pain, progressive dementia, and continued to have the wound on the left heel, which was necrotic, and was having regular wound care and needed to be debrided, which was a systemic manifestation of the peripheral vascular disease. In December 2011, R.S. was noted to have poor skin turgor, was at high risk of developing additional skin breakdown, and his skin temperature was cold due to the peripheral vascular disease. The patient had an open coccyx wound, along with a wound to the left outer knee. The ongoing wounds suggested that the patient's nutritional status had not improved and that he continued to be hospice appropriate. The wound tissue was dead and not healing very well and Santyl, a chemical debrider, was administered to remove the dead tissue, indicating a severe wound. R.S. was steadily declining as evidenced by increased weakness and skin breakdown. In May 2012, R.S. had urinary symptoms along with increased lethargy and forgetfulness. He was started on an antibiotic for UTI. His condition was steadily declining, requiring frequent repositioning in bed and had poor balance. R.S. had an active infection. In his debilitated stated, it was considered a life-defining infection making R.S. hospice appropriate with a prognosis of six months or less if the illness ran its usual and normal course. In July 2012, R.S. needed increased pain medication to help manage his symptoms and was transitioned from morphine to methadone for the neuropathic pain he was experiencing. He remained bedbound, incontinent, and dependent in all ADLs. He had persistent sleepiness throughout the morning and difficulty staying awake, a sign of end-stage disease. He had shortness of breath along with anorexia, anxiety and depression, and a PPS of 30 percent. R.S. continued to have poor blood flow to the leg with decreasing sensation and decreased pulses in the left leg, putting it at very high risk for subsequent skin breakdown and the risk of an additional ulcer was very high. He had decreased breath sounds and scattered rhonchi. R.S. was also complaining of urinary symptoms and was started on another antibiotic for a UTI. As of 08/27/12, R.S. continued to demonstrate severe physical disability, with a fair appetite, poor skin turgor, and a right shoulder wound that was open and draining, consistent with an infection. His right shoulder had a raised area with redness, hard, moderate drainage, and he was started on an antibiotic to treat the infection. Patient R.S. was discharged from Vitas hospice in October 2012. The patient was presented to the Vitas medical director review for a possible extended prognosis. The patient's pain was much better controlled with titration of medications. The patient's weight had increased and his appetite had improved. The patient currently did not have any wounds, and previous wounds had healed. The infection in August 2012 had resolved. Patient R.S. did not need a higher level of care. At that time, the medical director believed that the patient had a prognosis greater than six months if the illness ran its usual course. At final hearing, Dr. Talakkottur acknowledged that R.S., at initial certification, had a history of dementia, was incontinent, required full assistance with ADLs, had a necrotic toe, was bedbound and wheelchair-bound. He revoked hospice on 05/23/11, and shortly thereafter had his necrotic and gangrenous foot amputated above the knee. Dr. Talakkottur further acknowledged that during R.S.'s stay in hospice, he did not have a PPS score above 40 percent, his condition was slowly declining, evidenced by delayed wound healing and increased weakness. R.S. had muscle wasting, severe low back pain, became anorexic, continued to be incontinent of bowel and bladder, was too weak to get out of bed, developed a Stage III decubitus ulcer, and had a UTI and cellulitis. AHCA has not met its burden by the greater weight of the evidence that R.S. was not eligible for Medicaid hospice services, and it is not entitled to recover an overpayment for the two periods at issue. DADE RECIPIENTS Patient 1, A.B. Patient A.B. was a 34-year-old female admitted to hospice with a terminal diagnosis of end-stage AIDS. The claim periods at issue are 02/12/11 to 07/18/11 and 10/18/11 to 12/30/11. A.B. was hospitalized just prior to hospice admission on 02/04/11 for shortness of breath, cough, weakness, and pneumonia. On admission to hospice, A.B.'s weight had decreased from 189 pounds to 160 pounds in the previous five to six months. She also had a CD4 count of less than four. She was having difficulty chewing and was on a mechanically soft diet. A.B. had a history of several pneumocystis pneumonias, which Dr. Vermette stated is one of the sentinel opportunistic infections that define a patient as having AIDS, instead of HIV, and is a very serious type of pneumonia that is difficult to treat and eradicate. She had a PPS of 40 percent. A.B. had numerous admissions to Vitas continuous care and IPU. She was admitted to continuous care at the time of admission. On 02/17/11, she was admitted to the IPU. She was again placed on continuous care on 02/19/11. She was admitted back to the IPU on 03/23/11 for difficulty breathing and a respiratory infection. A.B. was re-admitted to the IPU on 04/11/11 for pain, and admitted again on 04/21/11 due to vomiting and pain. She was admitted to the IPU on 05/12/11 for abdominal pain and diarrhea. She was again admitted to the IPU for chest pain on 05/19/11. She was placed on continuous care for pain management on 06/10/11. A.B. was again transferred to the IPU on 07/04/11 for vomiting and abdominal cramping. On 05/10/11, A.B.'s weight had decreased to 157 pounds, she was cachectic, had shortness of breath managed with oxygen and bronchodilators, had a PPS of 40 percent, had increased episodes of confusion, agitation and forgetfulness, and was recently treated for oral candiasis. A.B. was discharged on 07/18/11 when arrested. On 10/18/11, A.B. was readmitted to Vitas hospice. Between the two hospice admissions, A.B. was again seen at the Magic Johnson Healthcare Center. In August 2011, her CD4 count was less than six. On 09/19/11, her weight was 151 pounds. She was taking her AIDS and heart medications without improvement and with periods of noncompliance, which are both indicators of worsening prognosis. At admission, A.B. had a PPS of 40 percent, a weight of 150 pounds, was having significant pain, shortness of breath at exertion and rest, ulcers and lesions on both legs, a history of recurrent infections, and had been discontinued for antiretroviral medications. On 10/19/11, A.B.'s attending physician certified her as having a life expectancy of six months or less if her terminal illness ran its normal course. On 11/12/11, A.B. was admitted to the IPU for pain management, at which point her PPS had decreased to 30 percent. On 11/20/11, A.B. was again admitted to the IPU for shortness of breath and chest pain. Her respiratory rate was extremely high at 28 and her pain medications had been changed from Percocet to morphine. On 12/01/11, A.B. had a CD4 count of 20, which was still in the terminal stage. She also had decreased appetite, increased weakness, and a PPS of 40 percent. On 12/30/11, A.B. revoked hospice care to seek surgery for recurrent diarrhea and gastrointestinal issues. Dr. Talakkottur stated as his rationale for denying eligibility that there was a lack of CD4 labs during the first admission, that her PPS remained at 40 percent, that she had no frequent hospitalizations, and that she had no recurrent infections. These statements are all contrary to the evidence. Dr. Talakkottur admitted A.B. had multiple hospitalizations leading up to hospice, serial assessments and lab work in the two years leading up to hospice, ten higher levels of care during her first admission, a CD4 count of less than 4 at admission, a PPS that dropped to 30 percent, and documented recurrent infections (pneumocystis pneumonia and thrush, which are opportunistic infections). At hearing, Dr. Talakkottur relied on the study "Mortality and Well Controlled HIV and the Continuous Antiretroviral Therapy Arms of the SMART and ESPRIT Trials Compared with the General Population" dated 03/27/13, by A.J. Rodger. The study, published after the end of the audit period, was not available to Vitas in 2011 when physicians were making real time prognoses regarding patient A.B. In addition, the patients examined in the study were only those with a CD4 count of greater than or equal to 350. With CD4 counts always at or below 20, A.B.'s condition would exclude her from the parameters of this study. Dr. Talakkottur acknowledged that the lower the CD4 count, the more susceptible a person is to infections and that these infections can increase the risk of morbidity and mortality. He also acknowledged that not taking AIDS medication increases the patient's chances of getting opportunistic infections. Patient A.B. was not compliant with medication. AHCA has not met its burden by the greater weight of the evidence that A.B. was not eligible for Medicaid hospice services, and it is not entitled to recover an overpayment for the two periods at issue. Patient 4, E.M. Patient E.M. was a 70-year-old male, admitted to hospice with a terminal diagnosis of end-stage COPD. The claim periods at issue are 12/21/11 to 05/13/12 and 05/15/12 to 12/31/12. Patient E.M. was hospitalized on 11/30/11 through to his initial admission to Vitas. He had shortness of breath and a pulse oxygen reading of 88. He responded poorly to treatment with bronchodilators and had a wound on his sacrum. He had a carbon dioxide pressure of 67, which was very high and implied the patient was not able to flush the carbon dioxide out of his lungs because of his disease. He had acidosis in his bloodstream of 7.32. Acidosis in the bloodstream can be extremely life- threatening it if drops below 7.25 or 7.2. An acidosis level of 7.32 shows that despite E.M.'s body's best effort to compensate for the retained carbon dioxide that his lung disease was causing, he was not able to maintain homeostasis. During the 11/30/11 hospital stay, Patient E.M. was placed on BiPAP, which at the time was the most aggressive nonintubation treatment available. He remained on BiPAP for about 22 days, despite efforts to ween him off before being referred to hospice. At the time of discharge from the hospital, E.M. was informed that he did not have many options to improve his condition. E.M. was certified hospice appropriate by his non- Vitas attending physician. He was admitted with evidence of extensive disease as identified above and a BMI of less than 19. At admission, E.M. was placed on continuous care while on eight medications to treat his respiratory symptoms. In January 2012, E.M. lost consciousness and was sent to the ER. On 03/09/12, E.M. had cough, congestion, and secretions, and had to be started on another antibiotic. On 03/15/12, E.M. had a PPS of 40 percent, was short of breath and on oxygen 24 hours a day. He could stand with assistance but could not walk freely. He had a poor appetite and slept day and night, which was evidence of progression as end-stage COPD patients require increased sleep and rest. E.M. had crackles in his lungs which were consistent with end-stage lung disease. He also had apnea during the first benefit period, which is more significant in COPD patients, because there is a chance they never start breathing again. Most COPD patients, who do not die of some other cause, die of acute respiratory arrest. Apnea in an end-stage COPD patient is a significant indicator of a poor prognosis. E.M. revoked hospice care on 05/13/12 and was treated at Baptist Hospital of Miami for intractable shortness of breath. He was discharged from the hospital on 05/15/12 and re-admitted to hospice that same day. At the second admission to hospice on 05/15/12, E.M. had shortness of breath, was coming off the recent hospitalization, had decreased weight from 121 pounds to 109.5 pounds, was chair-bound, had chronic kidney disease, bronchial asthma, and a PPS of 40 percent. He was placed on continuous care on admission. Upon readmission on 05/15/12, E.M. had muscle wasting, was unable to be weighed, had shortness of breath with continuous oxygen usage, and had decreased tolerance to activity and increased weakness. Dr. Talakkottur relied on the Global Initiative for Obstructive Lung Disease ("GOLD") Criteria for COPD for denying eligibility during the periods at issue. However, the GOLD criteria were developed to standardize what treatments are started when in a step-by-step organized fashion for COPD patients. GOLD is designed to treat patients to keep them out of the hospital. Dr. Vermette stated that the GOLD criterion has no relevance to a patient in E.M.'s condition who is already on eight medications, which is far beyond the GOLD criteria. Dr. Talakkottur's reliance on a spirometry test for prognosis is similarly misguided. A spirometry test is helpful to determine treatment and medication. Dr. Vermette stated that once a patient's COPD has progressed to the severity of E.M.'s, spirometry is inconsequential. The six-minute walk test is also irrelevant for a patient who has an illness as advanced as E.M. That test is to determine how many breathing treatments a patient needs and has no impact on prognosticating life expectancy. Dr. Talakkottur believed E.M. should have performed a six-minute walk test to determine the severity of his COPD, despite being unable to walk for six minutes (mainly bed and chair-bound). On 08/13/13, E.M. was forced to sit in a tripod position, trying to actually push air in and out of his lungs, not just with his diaphragm. He also exhibited global muscle atrophy, which meant all the muscles in his body were shriveling. This was evidence of both functional and nutritional impairment. COPD, by definition, is a chronic disease from the time of diagnosis. It does, however, enter an end-stage as evidenced by symptoms such as having shortness of breath at rest, being in and out of the hospital with intractable shortness of breath, being oxygen-dependent, and being on eight medications. E.M. exhibited specific indicators of "progression of end stage pulmonary disease" for the LCD for pulmonary disease. As noted above, he had hospitalizations due to his COPD both immediately prior to admission and during his stay in hospice. AHCA has not met its burden by the greater weight of the evidence that E.M. was not eligible for Medicaid hospice services, and it is not entitled to recover an overpayment for the two periods at issue. Patient 6, G.O. Patient G.O. was a 90-year-old male admitted to hospice with a terminal diagnosis of end-stage heart disease. The claim period at issue is under three months, from 05/21/12 to 08/18/12. Just prior to being admitted to hospice, G.O. had been hospitalized for multiple complex problems, including sepsis, left lower lobe pneumonia, severe anemia, and had a heart attack while in the hospital. He was referred to and certified for hospice by his attending physician. Dr. Vermette opined that G.O. was terminally ill with a prognosis of six months or less to live and his condition and symptoms were indicative of a NYHA Class IV because he suffered from shortness of breath at rest. NYHA Class III and Class IV patients will present with shortness of breath, chest pain, fatigue or palpations at rest; any of those symptoms occurring at rest would stage a person at Class IV and be considered an indicator of a poor prognosis. However, Vitas's file for G.O. seems to belie a finding that he met the standards for NYHA Class IV or Class III. The Plan of Care Review documents during the disputed timeframe fail to indicate that G.O. ever suffered from shortness of breath at rest--the hallmark for NYHA Class IV. One plan in the disputed timeframe remarks upon the recipient's respiratory system, but all other plans have no comment for the recipient's respiratory status. The plan dated 08/30/12, indicated the recipient had shortness of breath and received oxygen. Not all plans are indicative of the recipient having dyspnea. Those that are checked to indicate the recipient had dyspnea do not all suggest it was with exertion. Not one indicated dyspnea at rest. In the initial nursing note following G.O.'s hospice admission, a nurse assessed the recipient and checked that no problems were identified with the patient's neurosensory, cardiovascular, or respiratory systems. The patient was in no pain. G.O.'s vital signs in the cardiovascular section were reported within normal limits. Subsequent nursing notes reported G.O. having no shortness of breath, having no level of concern with his respiratory status, reporting oxygen was used "as needed" or "PRN" and that G.O. reported no level of concern with his respiratory system. In the cardiovascular system of the same notes, G.O. was reported to have no dyspnea at rest. Many notes were not checked for dyspnea and most reported the recipient had a "0" level of concern with his cardiovascular system. Further, the Appropriateness Evaluation form failed to support the patient being NYHA Class IV. The form notes that the recipient had shortness of breath with minimal exertion and not at rest. The respiratory system section of the evaluation is marked not applicable and the cardiovascular section does not indicate that the patient had dyspnea at rest, but instead noted only that the patient had dyspnea on exertion. Based upon the greater weight of evidence in this case, it is determined that this patient was not eligible for Medicaid hospice services and that AHCA is entitled to recover an overpayment of $38,253.17. Patient 9, L.B. Patient L.B. was a 70-year-old female, admitted to hospice with a terminal diagnosis of end-stage vascular dementia. The claim period at issue is 11/12/10 to 03/05/12. L.B. had been hospitalized for a stroke just prior to hospice admission. Dr. Talakkottur acknowledged the stroke was severe. At admission, L.B. was on a PEG tube, had quadriparesis, breast cancer, hypertension, and contractures in her lower extremities caused by brain damage. She was total care, 6 of 6 ADLs, and incontinent, with a FAST of 7f. She had a PPS of 30 percent. L.B. also had renal insufficiency, dysphagia, malnutrition, and required oxygen supplementation. Patient L.B.'s FAST score of 7f demonstrated functional impairment, along with quadriparesis and constrictors, which indicated that her disease process was advanced. On 11/15/10, L.B.'s non-Vitas attending physician certified that the patient was appropriate for hospice and had a terminal diagnosis. Dr. Vermette testified that once a dementia patient reaches the equivalent debility of a FAST 7a, has functional decline, and has other significant comorbidities, then the patient is considered to have a terminally ill prognosis. L.B. had those conditions at admission. On 12/29/10, L.B. had an albumin on the lower end of normal at 3.6, had an abnormal lung exam with decreased breath sounds and rhonchi, and had dysphagia. Dr. Vermette testified that abnormal breath sounds and rhonchi in a patient with a PEG tube was a sign the tube feeding was not tolerated and placed the patient at a higher risk of aspiration. On 01/24/11, L.B. had a fever of 100 degrees. Her blood pressure medication was also increased. Dr. Vermette testified that stroke patients have an increased risk of stroke when their blood pressure is high. L.B. remained incontinent during the first certification period. On 02/10/11, L.B. had a PPS of 30 percent, was dependent in 6 of 6 ADLs, had a FAST score between 7d and 7e, had contractures, weakness, high blood pressure, a lesion on her lower lip, and incontinence. Dr. Talakkottur opined that he saw no progression of the terminal illness. He opined the recipient's clinical state was static. Dr. Vermette explained that with these indicators, L.B. would not be able to decline significantly until her actual death, and so it would be expected for her PPS, ADLs, and FAST scores to remain static. Most patients in this condition die of an aspiration or respiratory event at some point in the course of their care. On 04/01/2011, L.B.'s PPS dropped to 20 percent before returning to 30 percent later that month. L.B. also developed a Stage II wound on her right buttock and sacrum, which persisted into May. On 05/09/11, L.B. had mild shortness of breath, had some congestion and excess secretions and was placed on atropine drops, an anticholinergic medicine used to dry up the oral/nasal secretions. Dr. Vermette testified that with dysphagia, the secretions would end up in the patient's lungs and she would have significant respiratory distress. On 06/24/11, L.B. was placed on Pro-Stat because her wounds were not healing with conventional treatment. Her PPS remained 30 percent, her FAST was 7d to 7e, and she still had decreased breath sounds and rhonchi. In August 2011, L.B. had wounds on her great toe and coccyx. On 09/08/11, L.B. was moaning and groaning at times and medicated with morphine for pain and still required ongoing wound care. On 09/24/11, L.B. still had a PPS of 30 percent, was 6 of 6 ADLs, had wounds, and increased secretions. The increased secretions increased L.B.'s risk of aspiration. On 10/27/11, L.B. had a FAST of 7f, was total care, and her PPS was 30 percent. L.B. had increased pain and increased secretions. She also had decreased tolerance to activity and decreased tolerance to being placed in a chair with a Hoyer lift. On 12/20/11, L.B.'s breast mass was increasing, her FAST was 7f and her PPS was 30 percent. She had contractures and chest congestion. Dr. Talakkottur stated a patient like L.B. could live for ten or 20 years. Dr. Vermette opined that L.B. was displaying the signs of the last six months of life if the disease progresses normally--advanced dementia with a FAST in the 7s, a PPS level in the 30s, recurrent problems with secretions, contractures, and wounds. In fact, L.B. did not live ten years but instead died on service at Vitas on 04/24/12. AHCA has not met its burden by the greater weight of the evidence that L.B. was not eligible for Medicaid hospice services, and it is not entitled to recover an overpayment. Patient 10, G.S. Patient G.S. was a 74-year-old female admitted to hospice with a terminal diagnosis of end-stage dementia. The claim period at issue is just under seven months, 09/01/09 to 03/26/10. Prior to admission to hospice, G.S. had aspiration pneumonia, a PEG tube, and ongoing dysphagia. In September 2009, G.S. had a PPS of 30 percent, a FAST of 7d, was incontinent, and weighed 107 pounds. She had gastroesophageal reflux disease as a comorbidity. G.S. was dependent in 12 of 12 ADLs, which is the same as 6 of 6, but on a different scale. She had episodes of congestion and cough related to dysphagia, which gave her a higher risk of aspiration, and she also had a recent UTI that required an antibiotic. Patients with dysphagia and gastroesophageal reflux disease who cannot swallow normally and are having liquid food pumped into their stomach have an increased risk for aspiration, making it a significant comorbidity. In October 2009, G.S. developed wounds on her left foot and left elbow. She was bedbound with contractures. Her wounds evidenced poor nutritional and functional status, as well as an increased risk of infection. In November 2009, G.S. remained total care, FAST 7d, and bedbound. She had impaired bed mobility--she could not reposition herself in bed by herself and her wounds had not healed. In January 2010, her left elbow wound was open, her FAST was 7d, she was total care, and she had an episode of vomiting. Dr. Vermette stated that G.S. was at an especially high risk of aspiration because when she vomited she could not lean over the bed or sit up to reposition herself but was forced to lie there and hope someone assisted her before she choked. G.S. began having shortness of breath at rest during January and February 2010. In March 2010, G.S. began tolerating placement in a chair better and her PPS increased to 40 percent. Vitas discharged her for extended prognosis on 03/25/10. Dr. Vermette stated that the patient's PPS and ADLs remained the same throughout the dates at issue, but she also had infections, wounds, and a risk of aspiration that evidenced a terminal prognosis of six months or less. He testified that G.S. was what a terminal dementia patient looks like. Dr. Talakkottur stated that G.S.'s wounds and UTI ultimately healed with appropriate treatment. He did not mention that it took nearly four months for the wounds to heal. Moreover, he could not have known in real time that those wounds would ultimately heal four months after they began. L.B. met the disease specific criteria from the LCD for dementia and related disorders. As noted above, she had a FAST score above 7c, which indicates she was speaking six words or fewer, was total care, and was incontinent. AHCA has not met its burden by the greater weight of the evidence that G.S. was not eligible for Medicaid hospice services, and it is not entitled to recover an overpayment. Patient 11, J.A. Patient J.A. was a 64-year-old male, admitted to hospice with a terminal diagnosis of end-stage heart disease. The claim period at issue is under three months, from 06/12/11 to 09/09/11. Prior to admission, J.A. had two significant hospitalizations. He was hospitalized from 05/10/11, to 06/02/11. During that hospitalization, he suffered a heart attack, respiratory failure, aspiration pneumonia, and encephalopathy. He had cardiomyopathy with an EF of ten percent and had congestive heart failure. He had several other comorbidities, including respiratory insufficiency, atrial fibrillation, diabetes, hypomagnesemia, which means low magnesium in the blood, and hypertension. J.A. was readmitted to the hospital on 06/04/11. He was in the hospital from 06/04/11 to 06/12/11, for altered mental status and was admitted directly to hospice from the hospital. At the time of his admission, J.A. was confused, had reduced ambulation, needed assistance with self-care, and had a PPS of 40 percent. He had a heart attack, which required intubation. He had an EF of 15 percent. He was jaundiced and was found to have cirrhosis with end-stage liver disease as a comorbidity. He had a JVD of three centimeters and diminished breath sounds. Dr. Vermette testified that J.A. had a prognosis of six months or less if the disease progressed at its expected rate because he had significant evidence of severe heart disease, multiple hospital admissions, and radiologic evidence of end- stage disease. He had a declining functional status, a PPS of 40 percent, and had just been intubated after a heart attack; consequently, it was very reasonable to assume that he had entered the terminal stage of the disease. Dr. Vermette testified that the prognosis is very limited for patients that have to be intubated and on a ventilator for five days after an acute heart attack, together with the other conditions affecting J.A., including the aspiration pneumonia. During June 2011, J.A. was admitted to the IPU. He continued to have significant symptoms of heart disease and more symptoms related to the liver disease, including encephalopathy. In July 2011, J.A.'s blood pressure became so low that he could not tolerate his medications; and, by August, his blood pressure medications had to be discontinued due his body's lack of tolerance. When Dr. Vermette was asked about plan of care reviews in the records for J.A. and whether those documents were inconsistent with a terminal prognosis of six months or less, Dr. Vermette testified that he focused his attention on the physician notes and nurse notes because those are notes that are being done, for the most part, at the bedside, in the presence of the patient, and the notes were a peer reviewers opinion of the patient at that point in time. In contrast, the plan of care reviews were produced as a result of discussing the case at an IDG meeting, with someone making notes of the comments that various people around the room were saying about the patient, and hoping to capture the discussion. Dr. Vermette pointed out that the plan of care reviews he was asked about contained a lot of information that corroborate J.A.'s terminal prognosis and condition, including shortness of breath on exertion, the extensive heart medications he was on, and dependent in 4 of 6 ADLs, which later worsened to 5 of 6 ADLs. Dr. Vermette testified that the plan of care reviews do not contradict the patient's eligibility for hospice. Dr. Eisner's testimony corroborated Dr. Vermette's that just prior to admission to hospice, J.A. suffered a cardiac event where his heart had stopped beating and he had an EF of 15 percent. Dr. Eisner further acknowledged that during J.A.'s stay in hospice, he lost 30 pounds of body weight, his dependency increased to 5 of 6 ADLs, his PPS score remained 40 percent, he had a decreased appetite and ambulation, had decreased tolerance to activity, had increased weakness, and was incontinent of bowel and bladder. AHCA has not met its burden by the greater weight of the evidence that J.A. was not eligible for Medicaid hospice services, and it is not entitled to recover an overpayment. Patient 12, N.D. Patient N.D. was an 87-year-old female, admitted to hospice with a terminal diagnosis of end-stage cerebrovascular disease. The claim period at issue is 11/07/09 to 02/24/12. At the time of admission, N.D. had had a history of strokes and her attending non-Vitas physician referred and certified her as hospice appropriate. N.D. had a history of cerebral vascular disease and extensive dementia as a result. At admission, she had a PPS of 30 percent, was completely bedbound, had a FAST score of 7d, was total care, and incontinent. The Appropriateness Evaluation notes show that N.D. was referred to hospice for weight loss and severe agitation. However, a psychosocial/spiritual note reflects that N.D. had previously been on services and was discharged for extended prognosis, and she was reported to be more confused and depressed according to her family. The Appropriateness Evaluation reported N.D.'s weight as 150 pounds, with a BMI of 25 according to chart and family, and no pressure ulcers or skin lesions. It reported the patient having recurrent infections over the last six months but no further information regarding the infections was included in the space provided on the form. The Appropriateness Evaluation finally indicated that N.D. was hypertensive with no other cardiovascular symptoms and indicated that she had no issues with the following systems: respiratory, genitourinary, gastrointestinal, neurological, HIV disease, debility, or adult failure to thrive. Vitas reported N.D. as having a history of CVA, but failed to reflect the number or dates of such occurrences. Dr. Talakkottur noted that there was no indication as to when the CVA occurred in the Appropriateness Evaluation, and there was nothing marked under the neurological section to reflect how that system had been impaired or to what degree. Under the section entitled stroke/coma, Dr. Talakkottur also noted that none of the pertinent assessments were checked for certifying that diagnosis. A physician, in his addendum to the initial certification, stated N.D. suffered a CVA, was hypertensive, diabetic and had been left weak with a poor caloric intake. However, there is no indication of the severity of her condition or notice as to when the CVA occurred in the physician's addendum. If anything, the file records demonstrate that the condition could have been ongoing for some time. Four years prior to the hospice stay at issue, N.D. was noted to be nonambulatory and bed and wheelchair bound. Dr. Talakkottur shed light on this issue and testified that the N.D.'s CVA or diagnosis of a CVA was recorded back in 2006. These facts and findings are further evidence in support of Dr. Talakkottur's testimony that patients who have strokes oftentimes have a chronic condition and can live for years. This patient's condition essentially remained stagnant. The medical file reflects that N.D. lived three years following her CVA before being admitted to hospice care during the disputed period. In N.D.'s 59 Plan of Care Review documents, her level of impairment was listed as one and two--mild to moderate except for seven occurrences where her gastrointestinal system was reported as a three (severe concern) for constipation (typically not a life-threatening condition). Her level of care and medication were not reported to have changed. While N.D. was reported at times to have dyspnea, the Plan of Care Reviews never reported dyspnea at rest. N.D. did not suffer from non-healing wounds or recurrent infection. The file did not show any recurrent infections, any aspirations, or any instances where the recipient was oriented times zero. Based upon the greater weight of evidence in this case, it is determined that this patient was not eligible for Medicaid hospice services and that AHCA is entitled to recover an overpayment of $126,209.70. Patient 14, M.G. Patient M.G. was an 83-year-old male, admitted to hospice with a terminal diagnosis of end-stage cerebrovascular disease. The claim period at issue is 09/01/09 to 07/14/10. At the beginning of the dates at issue, M.G. had comorbidities of vascular dementia, hypertension, and a history of aspiration pneumonia. He had a FAST of 7c, was dependent in 5 of 6 ADLs and had a PPS of 40 percent. During the first few weeks, the patient had significant pain, was having some shortness of breath with activity, was using oxygen, continued to have a 40 percent PPS, was bed to chair-bound and totally dependent on ADLs. Just getting from the bed to the chair required assistance. Dr. Vermette testified that the differences between 30 percent and 40 percent PPS in the patient at this point was moot because both of those scores describe a patient who is in a terminal phase of the disease process. The patient had increased weakness and worsening dysphagia. In October and November 2009, Patient M.G. had an episode of respiratory symptoms, a low-grade fever, a high respiratory rate, shortness of breath, rales, and was on oxygen. The patient was having excess secretions, cough and congestion, and began an inpatient level stay to manage those symptoms. According to Dr. Vermette, in a patient with dysphagia, secretions, cough, fever and congestion make up an aspiration event. Anytime food or secretion goes down the trachea and into the lungs, it causes congestion, causes a cough, can cause fever, and can become full-blown pneumonia. It can lead to airway compromise and death; there is no way of predicting when that event is going to happen. Through January 2010, M.G. had a PPS of 40 percent, a low FAST, and required assistance with 6 of 6 ADLs. He had an episode of chest pain, went to the hospital and was evaluated. He was recommended to have a cardiac catheterization, which he/his family refused to do. He did not appear to have had a heart attack, but the hospital believed he was at risk of a heart attack. Although it would have been M.G.'s right to have the catheterization and get that done outside the hospice benefit, he/his family refused, which demonstrated that he/his family recognized that he was not in any condition for an invasive procedure and they just wanted to keep him comfortable rather than pursue aggressive treatment. Through March of 2010, patient M.G. was bedbound, had dysphagia, aphasia, hemiplegia, and was at high risk for aspiration pneumonia and sudden death due to an aspiration attack. He had a FAST of 7d, a PPS of 40 percent, increased weakness, and decreased tolerance to activities. M.G. was not improving. He was, at best, staying the same and, at worst, declining. In May of 2010, M.G. had a PPS of 30 to 40 percent, dependent in 6 of 6 ADLs, incontinence, muscle wasting, and shortness of breath with minimal activity and at rest with chest pain off and on. M.G. qualified as a NYHA Class IV based upon the shortness of breath at rest and chest pain. M.G. had an albumin test in early June that came back in the normal range, at 4.5, which was high for the patient at that point. The patient was discharged in July 2010 for extended prognosis, before the patient was due for the next recertification. During the dates at issue, M.G.'s FAST level never improved to better than 7c, his PPS score never improved to greater than 40 percent and declined in March and June of 2010 to 30 percent, he was dependent for least 5 of 6 ADLs, and he had dysphagia. Dr. Talakkottur testified specifically that a patient with dysphagia is always at risk for aspiration. M.G. met the disease specific criteria from the LCD for dementia and related disorders. AHCA has not met its burden by the greater weight of the evidence that M.G. was not eligible for Medicaid hospice services, and it is not entitled to recover an overpayment. Patient 16, T.P. Patient T.P. was a 50-year-old female, admitted to hospice with a terminal diagnosis of advanced AIDS. The claim period at issue is 10/17/11 to 06/12/12. Just prior to her admission to Vitas, T.P. was hospitalized with an admitting diagnosis of advanced AIDS, an altered mental status, noncompliance and polysubstance abuse, and she was cachectic. The non-Vitas attending physician referred and certified the patient to hospice for end-stage AIDS. At initial certification, T.P. was mainly bedbound, had reduced oral intake, was total care, and her PPS was 40 percent. She only weighed 88 pounds, she had a significant amount of pain, rated as 7 of 10 pain after receiving pain medicine. She had comorbidities of cocaine use, kidney infections, latent syphilis, muscle wasting, shortness of breath with minimal exertion, and a UTI in the last six months. Dr. Eisner testified that between the dates of 10/17/11, and 06/12/12, T.P. had a continuous PPS of 40 percent, she was gaining weight, she was performing some of her ADLs and, as such, she was not an appropriate candidate for hospice. The Appropriateness Evaluation simply reported her date of diagnosis in the HIV Disease section but failed to give any other clinical evidence, such as the CD4 count, persistent elevated viral load, opportunistic infections or organ damage that would be related to HIV. The date of diagnosis was reported to be 2010 and the terminal diagnosis was reported to be AIDS. Dr. Eisner opined that T.P.'s condition while hospitalized--bedbound, requiring 100 percent dependence with ADLs, a PPS of 40 percent, dyspnea, lethargic, oriented to one, and incontinence of bowel and bladder--were conditions not related to her underlying HIV disease but instead were related to her drug abuse. Dr. Eisner testified that had it been her underlying end-stage HIV disease, T.P.'s condition would not have gotten better during her hospitalization. Dr. Eisner noted that the hospital did not find infection or organ damage that one would associate with someone who had end-stage AIDS. Laboratory data from while T.P. was in the hospital came back "essentially normal." Upon discharge from the hospital, the recipient was taken to Gramercy Park nursing home. Multiple face-to-face encounters were made between Vitas' physician(s) and T.P. at Gramercy Park nursing home. During many of those visits, she was reported to be alert, oriented, in no acute distress, denying pain except for one occasion, yet she could not rate or describe the pain. T.P. was also reported to ambulate mostly with a wheelchair, to have an adequate appetite, and to require some assistance with ADLs. During face-to-face encounters with Vitas' physician on 03/14/12, and 05/03/12, signs of weakness were noted but otherwise her condition was essentially the same as prior visits. Dr. Vermette agreed that Vitas' file lacked any CD4 count or viral load for this patient. Dr. Vermette nonetheless believed T.P. to be end-stage based upon a very low albumin level of 1.8 taken 10/09/11. T.P.'s albumin, however, was measured again on 04/17/12, and was 3.3, which is within the normal range. Dr. Vermette's opinion that T.P. was end-stage AIDS was also based upon a reported shortness of breath. Plan of Care Reviews, however, failed to report T.P. having dyspnea during the time in dispute. Quite the contrary, the plans often reported she had oxygen available to her on an as needed basis without reporting respiratory distress or shortness of breath. The lack of terminality is also supported by Vitas' signed recertification charts, all of which failed to report a single instance of non-healing wounds, recurrent infections, titrations in pain medications, or dyspnea during the dispute period. Based upon the greater weight of evidence in this case, it is determined that this recipient was not eligible for Medicaid hospice services and that AHCA is entitled to recover an overpayment of $40,711.85. Patient 17, Z.H. Patient Z.H. was a 63-year-old female admitted to hospice with a terminal diagnosis of end-stage heart disease. The claim period at issue is just over one month, from 09/01/09 to 10/06/09. Dr. Talakkottur testified that in a Plan of Care Review dated 09/12/09, covering the period 08/26/09 to 09/02/09, Z.H.'s PPS was reported as 60 percent, her weight was 85 pounds, and the recipient required assistance with 5 of 6 ADLs. No shortness of breath was indicated. Nursing notes prepared in the months of September (September 3, 10, 15, 22, 25 and 29) all reveal that a nurse assessed and reported no issues or concerns with Z.H.'s bodily systems and observed little to no pain. Little to no issues were reported again for the recipient's neurosensory system. Z.H. was reported oriented times two or three following 09/03/09, and there was but one occurrence on 09/25/09, where the nurse indicated some confusion and agitation but noted the recipient was oriented times two. There was never any indication of a problem or issue with this patient's cardiovascular system. With regard to Z.H.'s need for assistance with ADLs, a nurse reported in all but one note that the recipient required assistance in 3 of 6 (grooming and bathing) ADLs. On 09/10/09, the recipient was reported to require assistance in all ADLs without providing comment or evidence of change in the recipient's organ systems or pain level. Throughout the month of September 2009, oxygen was reported to be available as needed and there was no higher level of care administered to the recipient. Throughout the month of October, nurses similarly reported Z.H.'s condition as they did in September. She was oriented times two, no concerns, issues, or comments regarding the recipient's bodily systems or pain, and required assistance in 3 of 6 ADLs. Dr. Talakkottur testified that the patient did not have a terminal condition. Further, while physicians reported Z.H. to have cardiovascular problems in the recertification documents, there is no chest pain, no edema, no JVD, no dyspnea, no palpations, no arrhythmia, and no syncope reported. As such, Dr. Talakkottur testified he could not classify this patient as having a terminal condition related to heart disease. In support of the patient's eligibility for hospice, Dr. Vermette relied upon Z.H. having a comorbidity of ovarian cancer. Vitas initially admitted Z.H. to hospice with a terminal diagnosis of ovarian cancer. However, shortly after admission, a physician consult reported there was no evidence of metastatic ovarian cancer. Vitas changed Z.H.'s terminal diagnosis to heart disease, but continued to reflect upon the patient having a comorbidity of ovarian cancer in support of her hospice eligibility. On cross, Dr. Vermette testified that he did not review the entire file to determine Z.H.'s clinical status and relied upon the recertification note during the period in dispute. The medical records contained in this file do not support a finding that the Medicaid hospice eligibility standard was met during the disputed period. Based upon the greater weight of evidence in this case, it is determined that Z.H. was not eligible for Medicaid hospice services and that AHCA is entitled to recover an overpayment of $31,409.54. Patient 18, R.W. Patient R.W. was a 58-year-old male admitted to hospice with a terminal diagnosis of end-stage liver disease caused by alcoholic cirrhosis. The claim period at issue is 11/26/11 to 12/09/12. In the two months preceding the disputed period, R.W. had multiple open wounds on his legs, had evidence of persistent ascites, and had symptoms of hepatic encephalopathy. He also required two episodes of continuous care, one for change in mental status and the other for shortness of breath and anasarca. He suffered a fall the day before recertification for the dates at issue. In November 2011, R.W. was very lethargic, had a poor appetite, a decrease in verbal skills, respiratory distress with a rate of 24, and rhonchi with labored breathing. His ADLs varied between 5 of 6 and 6 of 6 due to his fluctuating encephalopathy. R.W. had comorbidities of cardiac disease, encephalopathy, and COPD. In early December 2011, R.W. had recurrent episodes of shortness of breath at rest and with exertion, which made him a NYHA Class IV. R.W. developed a respiratory infection with a moist productive cough and labored respirations. He was coughing up large amounts of yellow sputum and was placed on nebulizer treatments. He also began having tremors in his hands, known as asterixis, which Dr. Vermette stated was evidence of neurologic dysfunction caused by the ammonia and other toxins built up in the blood because of R.W.'s liver failure. R.W. also had episodes of apnea in December 2011. R.W. had anasarca, facial swelling, and tremors into January 2012, and he developed foul- smelling wounds on his legs. At the end of January 2012 and into February 2012, R.W. was on continuous care for a change in level of consciousness. He was dependent in 6 of 6 ADLs, PPS of 40 percent, and his abdomen was large. He had edema in all extremities and was weak and very lethargic. R.W. was placed on prednisone to help with breathing. In March 2012, R.W. had anasarca and significant lethargy. He spent most of his days slumped over in a wheelchair, and he was on oxygen most of the time. By May 2012, R.W. was on oxygen at three to four liters and exhibited shortness of breath. He developed edema with a swollen scrotal region, which Dr. Vermette stated occurs typically only in significant heart failure and liver failure patients. The time he spent in bed as opposed to a wheelchair had increased, as had his periods of lethargy and his ascites. He remained on lactulose for hepatic encephalopathy. He also had facial edema. In July 2012, R.W. was placed on methadone around the clock and Percocet as needed, especially before dressing changes. He also was no longer able to wheel himself in his wheelchair, which evidenced further functional decline. In September 2012, R.W. was having shortness of breath at rest and with activity, again demonstrating NYHA Class IV, which was evidence of end-stage liver disease according to Dr. Vermette. At the end of September and into early October 2012, R.W. was on continuous care for difficulty breathing, as well as a low-grade fever and change in level of consciousness. He developed respiratory distress, was having periods of apnea and was hypotensive. In the end of November 2012, R.W. was again on continuous care. He was lethargic and confused. His pain medications had increased again and he had diminished consciousness, hepatic encephalopathy, arrhythmia and respiratory distress with a high respiratory rate. He also had muscle wasting. R.W. was again on continuous care on 12/05/12. This was his third hospitalization-equivalent within the last 60 days. He was admitted for respiratory distress and he died on hospice service on 12/09/12. Dr. Talakkottur's rationale for his opinion that Patient R.W. was not Medicaid hospice was that lab work had not been done. However, lab work is rarely done in a hospice setting. Lab work is only done to adjust the patient's plan of care to better address his symptoms and keep him comfortable. Hospices do not take labs just to document a disease. Dr. Talakkottur used a visual aid that contained a list of symptoms that he believed should be present in an end-stage liver patient. Dr. Vermette opined that a patient with terminal cirrhosis of the liver would not have all of those symptoms. Dr. Vermette stated that the list appeared to simply be a list from a textbook of all symptoms that could possibly relate to liver disease of any sort. Most were not useful for prognostication whatsoever. Dr. Talakkottur reasoned that Patient R.W. was not hospice eligible because he did not have refractory ascites. Dr. Vermette stated this patient had ascites recurrently and frequently. Dr. Vermette also testified that in his experience working in and treating hospice patients, that the clear majority of end-stage liver patients on hospice do not receive repeated paracentesis because they do not tolerate them well. R.W. was on medication throughout his stay in hospice for his ascites. As part of Dr. Talakkottur's rationale for denying eligibility, he stated R.W. "did not show any signs of end-stage of his chronic disease." However, the LCD for liver disease specifically states that refractory ascites, alone, is evidence of the disease being end-stage. Dr. Talakkottur also reasoned that this patient was not hospice eligible because he did not have anasarca. Dr. Vermette noted that R.W. had severe edema, including edema of his face and scrotum, which was anasarca. Dr. Talakkottur also reasoned that R.W. was not hospice eligible because he did not have asterixis, which was directly refuted by the record. AHCA has not met its burden by the greater weight of the evidence that R.W. was not eligible for Medicaid hospice services, and it is not entitled to recover an overpayment. Patient 19, M.M. Patient M.M. was a 48-year-old male admitted to hospice with a terminal diagnosis of end-stage AIDS. The claim period at issue is just under eight months, 03/30/10 to 11/24/10. M.M. was admitted to an acute care hospital on 03/26/10 just prior to entering hospice with a history of fever, shaking, chills, and sweats, and he had a bacterial infection in his bloodstream of Enterobacter cloacae. He also had an infection in the wounds on his left leg of methicillin-resistant staph aureus ("MRSA"). He was anemic and was positive for cocaine and benzodiazepine. His CD4 count from the prior year was 70. M.M. was admitted directly from the hospital to hospice. At admission to hospice, M.M. was weak, bedbound, had dysphagia, was malnourished, severely immunocompromised, had failed treatment with antiretrovirals, had a PPS of 30 percent, and weighed 145 pounds, which indicated a five-pound loss from prior to admission. He had an ulcer on his left leg. M.M. was homeless, which according to Dr. Vermette impacted the patient's prognosis because he was not receiving adequate meals, shelter, and prior medical care. Dr. Vermette testified that the fact that the patient was homeless did not preclude him from being eligible for Medicaid hospice services, but made delivery of the services more challenging. In April 2010, M.M. was unable to ambulate and fell out of his wheelchair, further damaging the skin on his legs. M.M. did have improvement in his ADLs over the course of his stay in hospice, but he had a respiratory infection in July 2010 which required antibiotics and, by August 2010, had declined and was placed in a nursing home. His ADLs returned to 6 of 6 while in the nursing home. In September 2010, M.M. only had to be in the wheelchair for short intervals; however, he had muscle wasting at that time. On 09/14/10, M.M. was having generalized pain and shortness of breath with activity that required oxygen and occasional bronchodilators. He also had a respiratory infection and was incontinent. In November 2010, M.M. had a CD4 count of 29 from a prior level of 70. Dr. Talakkottur agreed that this lower CD4 count put the patient at higher risk for opportunistic infections. During the dates at issue, M.M.'s PPS increased to 40 percent, but decreased back to 30 by the fall of 2010. Dr. Vermette testified that M.M. had terminal AIDS because he was noted to have advanced HIV illness with wasting by the physician taking care of him in the hospital just prior to hospice admission. M.M. was also seen by an infectious disease expert who stated M.M. had advanced AIDS. M.M. was discharged from the hospital and referred to hospice by his doctors who stated that he had a poor prognosis and was hospice appropriate. Those doctors were not affiliated with Vitas. Dr. Vermette noted that although MRSA is not an opportunistic infection, it is a seriously harmful bacterium that is hard to eradicate even in a healthy patient with a normal immune system. Dr. Talakkottur believed, in part, that M.M. was not hospice appropriate because he did not have opportunistic infections. Dr. Vermette stated that Dr. Talakkottur did not properly take into account that an AIDS patient is usually not going to die from an opportunistic infection, and that most AIDS patients who die from an infection die from a regular infection that is more likely to kill an AIDS patient. M.M had two respiratory infections, a staph infection, and an infection in his blood. Any of those could be life-threatening to a healthy person, much less a person with AIDS. AHCA has not met its burden by the greater weight of the evidence that M.M. was not eligible for Medicaid hospice services, and it is not entitled to recover an overpayment. Patient 22, E.D. Patient E.D. was a 64-year-old male admitted to hospice with a terminal diagnosis of adult failure to thrive. The claim period at issue is eight months from 02/23/10 to 11/25/10. E.D. was hospitalized in February of 2010 prior to hospice admission with respiratory failure. He was intubated. He also had renal failure during the hospitalization and was diagnosed with a brain tumor. He was admitted directly from the hospital to Vitas. At admission to hospice, E.D. had a PPS of 20 percent, was 6 of 6 ADLs, had a BMI of 17.7, a Stage III ulcer on his hand, pulmonary edema, hypertension, a brain tumor, a PEG tube, and coronary artery disease. He was taking only minimal sips of fluid and had confusion. E.D.'s brain tumor was measured to be 4.9 by 4.9 centimeters, or about two inches in diameter. Shortly after admission to hospice, E.D. was placed in the IPU due to severe agitation. In March 2010, E.D. had an infection of his central line. He developed blood in his stool and had significant anemia and significant gastrointestinal bleeding with a hemoglobin of 9.6 and hematocrit of 29.6, which would have required a transfusion if E.D. was not in hospice. In May 2010, E.D. was transferred to the IPU unit because of aggressive behavior, including hitting caretakers. He continued to have wounds and significant functional and nutritional decline, as evidenced by a PPS that remained at 40 percent or less and a BMI that remained significantly below 20. In June 2010, E.D. had a low albumin of 2.93. He still had non-healing wounds and required another IPU stay for agitation and combativeness in late July 2010. All nonessential medications were stopped because of side effects, including agitation. He also had a UTI in the end of July. In August 2010, E.D. was having dark discoloration to his right foot, which was evidence of diabetic peripheral vascular disease. Dr. Vermette testified that this was a significant finding of progression of E.D.'s comorbidity of diabetes. In September 2010, E.D. had another UTI requiring antibiotics. In October 2010, E.D. had a respiratory infection with rhonchi, congestion, cough, and he was on respiratory nebulizer treatments. He still had a PEG tube for nutritional supplements. His ambulation was restricted from bed to wheelchair with assistance. He was on dexamethasone for intracranial swelling from the brain tumor and on seizure prophylaxes. In November 2010, E.D. developed respiratory distress with a respiratory rate of 38. He was placed on continuous care, became nonresponsive despite being on continuous care, and ultimately died on hospice care. Dr. Eisner opined that E.D. did not die because of his terminal illness; therefore, Dr. Eisner found E.D. ineligible for Medicaid hospice. Dr. Vermette testified that adult failure to thrive is a diagnosis that was, at the time of E.D.'s admission, one of the four most common diagnoses used in hospice nationwide. It was used for patients who had significant functional impairment, significant nutritional impairment, and was used for a patient who had multiple conditions that could result in his death. It is now called multiple morbidity. Dr. Vermette testified that typically a patient who has concurrent different illnesses is admitted for adult failure to thrive when they meet the criteria. All of E.D.'s comorbidities were part and parcel of the diagnosis of adult failure to thrive. The pneumonia or respiratory failure that he developed right before he died was extremely similar to the event that led to him being admitted to hospice. Dr. Eisner stated that E.D. did not have adult failure to thrive because he gained 12 pounds and, therefore, could not have nutritional impairment. Dr. Vermette testified that E.D.'s weight gain was not inconsistent with the terminal diagnosis and that factors, such as nutritional supplements, beginning to eat a soft diet, and use of the steroid dexamethasone, would cause a weight gain. Dr. Vermette noted that there was no indication that the weight gain coincided with increased muscle mass or strength. More importantly, the fact that the patient gained weight over the course of his stay in hospice could only be known at the end of the hospice stay and during a retrospective review. It could not be known when the initial certification was made on the date the patient was admitted with a BMI of 17. E.D. met the disease specific criteria from the LCD for failure to thrive. As noted above, he had a PPS of 40 percent or less, a BMI less than 22, and was not responding to nutritional support by way of his PEG tube at admission. AHCA has not met its burden by the greater weight of the evidence that M.M. was not eligible for Medicaid hospice services, and it is not entitled to recover an overpayment. Patient 23, J.L. Patient J.L. was a 59-year-old female admitted to hospice with a terminal diagnosis of end-stage COPD. The claim period at issue is just over four months, 03/14/11 to 07/27/11. J.L. was admitted to the hospital with an exacerbation of COPD on 03/09/11. She was found to have severe anemia during this stay and was treated by IV with hydration, antibiotics, and blood transfusions. At the time of admission to Vitas, J.L. had shortness of breath at exertion and at rest, was an aspiration risk, and had recurrent infections. Her PPS was 40 percent. She also had AIDS, acute renal failure, and a history of hepatitis. Her BMI was 19.9 and she had a glomerular filtration rate of 25 and an albumin of 2.5. She was immediately admitted to the IPU with shortness of breath, agitation, and altered mental status. In April 2011, J.L. was drinking heavily and was found vomiting after drinking, which put her at a risk of aspiration and affected her longevity. She had bitemporal wasting, which showed significant nutritional decline for a patient this young. Between admission and the end of June, J.L. had multiple hospitalizations for a viral illness, a UTI, and a psychiatric admission--she was hospitalized on 03/25/11, 05/16/11, and 06/17/11. In late June 2011, J.L. showed signs of improvement. She was dependent in 5 of 6 ADLs, but her PPS increased to 60 percent. She was still having shortness of breath, but it was intermittent as opposed to constant. She was still having agitation and gastrointestinal issues. Over the course of the next month, she stabilized enough to be discharged for extended prognosis. Dr. Vermette testified that J.L. followed the sawtooth pattern of decline. J.L. had a serious decline at admission and subsequently improved, but at the time of admission there was no way to know whether that decline was going to be the one that resulted in death or she would have a rebound in condition. When she rebounded enough to no longer support a prognosis of less than six months, she was appropriately discharged. Dr. Eisner noted in his review that J.L. was not hospice eligible because "she improved during her hospice admission." However, her improvement from her severe status exhibited at admission could not be realized until she was appropriately discharged at the end of the dates in dispute. AHCA has not met its burden by the greater weight of the evidence that J.L. was not eligible for Medicaid hospice services, and it is not entitled to recover an overpayment. Patient 24, F.F. Patient F.F. was an 84-year-old female, admitted to hospice with a terminal diagnosis of end-stage renal failure. The claim period at issue is just over four months, from 09/01/09 to 01/18/10. F.F. was referred to hospice for progressive decline in function. On her admission date, she was reported awake, alert, and oriented times two to three. In January 2009, a CT scan revealed that F.F. had a large renal cyst suggestive of Myeloma (a cancer of plasma cells in the bone marrow). Vitas admitted F.F. with a terminal diagnosis of end-stage chronic renal disease that had been diagnosed approximately four years earlier (2005). Evidence of F.F.'s renal disease was reported within the Appropriateness Evaluation's genitourinary section. One would therefore assume that Vitas would continue to track the status and/or progression of the disease under that system. Dr. Vermette, however, testified at the final hearing that end- stage renal disease did not produce genitourinary symptoms. End- stage renal disease caused symptoms systematically in other parts of the body because of the fact that the kidney's main function is to eliminate toxic metabolites from the body. When those toxins build up, they produce symptoms elsewhere in the body unrelated to genitourinary review of symptoms. A review of F.F.'s other systems reported in the Plan of Care Reviews suggest no terminal illness or progression of her renal disease. The Plan of Care Reviews reported no respiratory issues at all over the course of the disputed period. F.F. was reported to itch under the integumentary system. F.F. was neurologically sound. At best, she was reported to be forgetful at times, and her symptoms were reported mild from August through mid-October. Afterwards, Vitas failed to make further comment or score an impairment level for F.F.'s neurological system. The same was true for F.F's cardiovascular system except her impairment levels, when recorded between August and mid-October, fluctuated between mild and moderate. The plans reported no edema under cardiovascular. The plans reported F.F.'s musculoskeletal system to have a mild impairment level until 11/03/09, and thereafter, it went to moderate. As for her genitourinary system, there was no impairment level noted throughout the disputed period. Vitas also failed to report any concerns with F.F.'s genitourinary system in any nursing note, including the initial note prepared following admission (March 2009). Most nursing notes were checked that the genitourinary system had been "Assessed, no GU problems identified." The Plan of Care Reviews also fail to report F.F. enduring any pain above a mild impairment level. The only pain medication referred to in the plans is Tylenol 3 and it was used on an as needed basis. When marked in the Plan of Care Reviews, F.F.'s PPS was consistently 50 percent. F.F.'s weight was not always reported, despite the fact that she was ambulatory. However, when it was reported, the Plan of Care Reviews showed a steady increase. At admission she weighed 98 pounds, the first recorded weight in the Plan of Care Reviews was 100 and that was in October, and she was consistently reported to weigh 100 pounds until the latter part of December when her weight increased to 102 pounds and remained as such until the last Plan of Care Review in the disputed period. There were no labs to report F.F.'s albumin in the disputed period; however, labs were taken in October 2011, and it was reported at that time the recipient's albumin was 3.8 and 3.9 on 10/25/11 and 10/26/11. The medical records contained in this patient's file do not support a finding that the Medicaid hospice eligibility standard was met during the disputed period. Based upon the greater weight of evidence in this case, it is determined that F.F. was not eligible for Medicaid hospice services and that AHCA is entitled to recover an overpayment of $20,545.60. Patient 25, S.C. Patient S.C. was a 43-year-old female, admitted to hospice with a terminal diagnosis of end-stage SLE. The claim periods at issue are 02/02/12 to 02/24/12 and 05/14/12 to 12/31/12. SLE is an autoimmune disease where the body develops antibodies and attacks its own cells, damaging organ tissue all over the body. SLE can cause damage to the heart, to the lungs, to the liver, to the kidneys, and to the brain by damaging the blood vessels, leading to vasculitis. Most patients with SLE die from organ failure. In the time period leading up to the dates at issue, Patient S.C. was hospitalized with a stroke resulting from lupus. At the time of admission, she had a PPS of 30 percent, was drowsy, and required total care. Her family reported she had recently lost nine percent of her body weight. S.C. had significant comorbidities, including tuberculosis meningitis, four previous strokes, atrial fibrillation, and cardiac disease. She was an aspiration risk due to dementia and dysphagia. Her family sought hospice services. Patient S.C. met the criteria in the Florida Handbook at the beginning of the dates at issue because of her recent hospitalization with a stroke; the progression of her disease with multiple organs affected, including the brain, the heart, and immune system; nutritional decline; and significant functional impairment. During the first admission, Patient S.C. was on continuous care for numerous symptoms, including pain and respiratory symptoms. She came off continuous care but then was started on it again on 02/23/12, for agitation. Shortly thereafter, 911 was called, the patient was taken to the hospital, and hospice was revoked for aggressive treatment. At the time of her next admission beginning on 05/14/12, Patient S.C. had just been hospitalized again for altered mental status and possibly another stroke. The physician certification noted the patient was lethargic, had extensive evidence of disease, was bedbound, had reduced intake, required total care, had lost all intelligible vocabulary, was unable to sit independently, unable to smile, and unable to even hold her head up. Dr. Vermette testified that tuberculosis meningitis is a very rare condition. S.C. was exposed to tuberculosis while doing earthquake relief in Haiti about six months prior to her initial admission to hospice, which meant that, based on her status at admission to hospice, she had rapidly declined during those previous six months. With tuberculosis meningitis, instead of lodging in the lungs, it makes its way to the brain and affects the meninges. It is extremely difficult to treat. As of the initial certification on 05/14/12, Patient S.C. had a PPS of 30 percent, had a FAST of 7f, and had shortness of breath with minimal exertion. S.C. had contractures locking her limbs in a flexed position, as well as agitation and dysphagia. Her weight was 105 pounds, an additional 15-pound weight loss from the previous hospice admission three months earlier. S.C. showed evidence of progression of the terminal illness with worsening of the various organs that had been involved with lupus, further nutritional decline, and significant functional impairment. Over the next few months, S.C. continued to decline. She became aggressive and screamed when someone tried to bathe her, she tried to attack and claw nurse's aides, she began to develop skin breakdown on her ankle, and was only eating 30 percent of her pureed diet that had to be fed to her. S.C. was Medicaid hospice appropriate as of the recertification in August 2012. She had a fair appetite, was cachectic, had signs of muscle atrophy, needed total care, and had a PPS of 30 percent. In late August going into September, S.C. had fever and cough, and she was at increased risk of developing aspiration pneumonia. At the next recertification on 10/06/12, S.C. had to be fed, had an increasing appetite, and was eating 50 to 70 percent of her meals, but despite this, she was still very thin and cachectic. S.C. had atrophy of her leg muscles, so she was not able to stand on a scale. She was no longer able to tolerate being in a chair, even with a lift, so she was completely bedbound all the time. S.C. was recertified a final time during the period in dispute on 11/26/12. At that point, S.C. demonstrated functional decline, anorexia and weight loss, dysphagia, cardiac involvement of lupus, and had oral thrush, which further indicated the decline of her immune system and susceptibility to an infection. Following that recertification, S.C. continued to show evidence of significant decline. She developed a lung infection that required bronchodilators in the form of nebulizer treatments and antibiotics and had a fever of 102, which continued until 12/20/12. Whether S.C.'s PPS score was less than 30 percent, or whether it was 20 or 40 percent, did not change her eligibility for Medicaid hospice. Any number of 50 percent or less would have shown functional impairment to meet the expected functional decline. A PPS of 50 percent is generally considered compatible with a prognosis of six months or less in non-cancer hospice diagnoses. Even when a nurse note did not calculate a PPS number, they indicated the patient required total care, was bedbound, or was able to get in a wheelchair only with a Hoyer lift. Consequently, the description of the patient in the notes described the criteria that a physician would use to infer a PPS of 30 or 40 percent at any given time. There was no description of S.C. in the medical records that would lead to a PPS of 50 percent or greater. Dr. Vermette testified that once S.C. began developing cachexia and had a level of terminality to her disease process, she reached a tipping point at which even with good nutrition, she could not gain weight because her body was no longer capable of reversing the process. Where the records showed S.C. did eat 100 percent of her meal, she did not feed it to herself. She needed assistance with eating at those times. She was total care at those points and she was bedbound. Dr. Talakkottur testified that at the second admission, 05/14/12, Patient S.C. had been hospitalized for agitation and nasal bleeding, she had a PPS score of less than 30 percent, she was bedbound and had a FAST level of 7f, and she continued to be dependent in 6 of 6 ADLs. Dr. Talakkottur further testified that patient S.C.'s PPS score never rose above 40 percent, her FAST level never improved to better than 7c, and she was nonambulatory and incontinent during her entire length of stay. AHCA has not met its burden by the greater weight of the evidence that S.C. was not eligible for Medicaid hospice services, and it is not entitled to recover an overpayment. Patient 26, D.A. Patient D.A. was a 61-year-old female, admitted to hospice with a terminal diagnosis of end-stage cerebral degeneration. The claim period at issue is 10/17/11 to 12/31/12. At the time of admission, Patient D.A. had end-stage dementia. In addition, she had recurrent UTIs and had been hospitalized a little over a month prior to hospice admission with a serious UTI. D.A. also had hyperglycemia and had a malignant melanoma Stage IV on her leg. A Stage IV melanoma, by definition, means that it is in the bloodstream waiting to settle. D.A.'s secondary conditions due to her dementia included severe cognitive impairment, functional impairment, incontinent of bowel and bladder, FAST of 7d, PPS of 30 percent, bedbound, reduced intake, dysphagia, and dependent in 6 of 6 ADLs. Patient D.A. met the criteria for Medicaid hospice eligibility in the Florida Handbook at the beginning of the dates at issue because of her status at admission and terminal diagnosis, clear evidence that she had reached the terminal stage of her illness, a recent hospitalization, significant functional decline, and significant evidence of nutritional impairment. Dr. Vermette testified that the indicators of end-stage cerebral degeneration include a FAST of 7a or above and secondary or comorbid conditions which are significant and contribute to prognosis. D.A. portrayed these indicators by having a FAST of 7c or above throughout the dates at issue, a known malignancy that has a poor prognosis in general, significant dysphagia which puts the patient at high risk of aspiration--the most common cause of death in dementia patients. She continued to be severely declined, she remained bedbound during the entire period, and she had signs of decline throughout her course of her care. At the beginning of the dates at issue, D.A. had a pressure ulcer to her left foot that eventually resolved. However, she quickly developed another wound on her upper thigh. D.A. developed dyspnea on exertion, such as while trying to roll over in bed and trying to eat, even though she was bedbound. There were very few actions D.A. could perform at that point. Shortness of breath while rolling over or eating was significant and showed an aspect of respiratory involvement in her disease. In December 2011, D.A. developed tremors in her hands, which was a sign of further disease progression of D.A.'s end-stage cerebral degeneration. D.A. also had hydrocephalus, which means that the areas in her brain that are normally filled with fluid had expanded. This was evidence that she lost brain tissue. In May of 2012, D.A. required an IPU stay because of shortness of breath and vomiting, which was life-threatening because of D.A.'s dysphagia and aspiration risk. While she was in the IPU, she weighed 165 pounds, which was a five-pound weight loss. In July 2012, she was coughing more frequently while trying to eat, which was evidence of worsening dysphagia and increased risk of aspiration. In September 2012, she developed another wound on her elbow. In October of 2012, she had developed contractures, so her fingers were curling up on themselves and the pressure of one finger pushing against the skin of another finger caused wounds. This was a sign of further progression of her terminal disease of cerebral degeneration. At the end of the dates at issue, D.A. was in the IPU again for shortness of breath and fever, which could lead to an aspiration pneumonia. She was started on antibiotics during the last few days of December 2012. Dr. Vermette testified that the only improvement in D.A.'s condition during the dates at issue was that, except for the elbow wound that began in October 2012, her numerous wounds did eventually heal, albeit at a delayed pace. However, whether or when a wound resolves cannot be known at the time it occurs. In December 2012, D.A. developed decorticate posturing, which means that D.A.'s brain had declined to the point where her arms were stiffly held out at the sides with the palms up and were immobile. Decorticate posturing is incompatible with having tremors and is a worse decline than tremors. Patient D.A. had aspiration events when she was having shortness of breath, and coughing and choking while eating, even though such events did not end up leading to pneumonia. When asked whether a patient was hospice appropriate that had a PPS score of 30 percent, was bedbound, required assistance with 6 of 6 ADLs, was confused, had reduced intake, was unable to sit up on her own, was not ambulatory, was incontinent of bowel and bladder, and had a history of melanoma, hydrocephalus, diabetes, obesity and arterial hypertension, Dr. Talakkottur would not answer yes or no and was unpersuasive. D.A. met the disease specific criteria from the LCD for dementia and related disorders. As noted above, she had a FAST score of at least 7c, which indicates she was speaking six words or fewer, was dependent in 6 of 6 ADLs, and was incontinent. AHCA has not met its burden by the greater weight of the evidence that D.A. was not eligible for Medicaid hospice services, and it is not entitled to recover an overpayment. Patient 28, N.M. Patient N.M. was a 57-year-old female, admitted to hospice with a terminal diagnosis of end-stage heart disease. The claim period at issue is less than one year, from 05/25/11 to 04/06/12. N.M. had a long history of heart disease, as well as stroke. She was admitted to the hospital approximately six months prior to her hospice admission in November 2010 and was diagnosed with cardiogenic shock, as well as coronary artery disease and carotid stenosis. Cardiogenic shock means the heart has such an insult that it becomes stunned for a period of time and the blood pressure rapidly drops. The patient usually ends up on multiple medications in an attempt to keep the blood pressure high enough to stay alive. N.M. was hospitalized again on 05/20/11, approximately five days prior to her hospice admission, for an acute decompensation of congestive heart failure. N.M. was having orthopnea (shortness of breath lying down) and had progressive shortness of breath, but was not a candidate for bypass surgery or other modalities that would have corrected her issues because of her multiple comorbidities. N.M.'s comorbidities included a previous stroke, obesity, diabetes, hypertension, and carotid stenosis. During the 05/20/11, hospitalization, Patient N.M. was found to have an EF of 45 percent, which was between normal and abnormal. She also had a pulmonary artery pressure of 57 with moderate to severe mitral regurgitation. Normal is only 8 to 25, making this finding more significant to her prognosis than the EF. N.M. was referred to and admitted directly to hospice from the hospital. She was unable to do any work, she was mainly sitting and lying, she needed assistance with care, and her weight was 183 with a BMI of 36, which was in the obese range. She had shortness of breath, or dyspnea, at rest and with exertion, NYHA Class IV. She had residual issues from her prior stroke, including muscle weakness on the left side. She was immediately admitted to a higher level of hospice care. Patient N.M. met the criteria for Medicaid hospice eligibility at the beginning of the dates at issue because she had evidence of terminal diagnosis with a life expectancy of six months or less, she had multiple hospitalizations, and she had multiple physician assessments and radiologic assessments. N.M. further had progression of the disease, declining functional status with a PPS of 40 percent. She had gone from chronic heart disease to end-stage heart disease. In August 2011, N.M. had signs of muscle atrophy and wasting, she remained bedbound, and she had a skin abscess in her axilla, or armpit, in the previous month. She remained a NYHA Class IV, and she was on six medications to try to control her cardiac symptoms. N.M. was also on oxygen 24 hours a day and had nitroglycerin tablets for when she had chest pains. Between August and November of 2011, N.M. had another abscess under her arm and she continued to have shortness of breath at rest and was NYHA Class IV. In November 2011, N.M. continued to have an abscess, needed extensive care, and had a PPS of 40 percent. In January 2012, N.M. had yet another skin infection. She required multiple doses of sublingual nitroglycerin and she required oxygen continuously. Her PPS was down to 30 percent. She needed extensive assistance and she had another UTI in addition to the abscess. N.M. had shortness of breath at rest and she became incontinent and was wearing diapers. In February 2012, N.M. was having continuous episodes of chest pain and shortness of breath at rest. In March 2012, she had more episodes of abscesses in her sweat glands and axilla which had become a recurrent infection. She had increased episodes of pain, which required more doses of pain medication. She was having more psychosocial symptoms, anxiety and depression, because of her symptoms related to her end-stage heart disease and medication was started for those symptoms. She continued to be a NYHA Class IV and continued to need oxygen 24 hours a day. N.M. was appropriately recertified for Medicaid hospice at each point in time and had evidence of a prognosis of six months or less at each point in time. On 04/06/12, N.M. had a worsening of her symptoms, and her family called 911. She went to the hospital and revoked hospice and was admitted to the hospital with decompensating symptoms. N.M. did not have any significant improvement during the dates at issue. Even though the EF found on the echocardiogram at the time N.M. revoked hospice showed some improvement, other issues on the echocardiogram showed the patient remained Medicaid hospice eligible, such as pericardial effusion more related to her intrinsic heart disease than to heart failure per se. She also had evidence of valve disease and inoperable multivessel coronary artery disease. Although there were a few nursing notes in N.M.'s records where the orthopnea box was not checked, the nurses frequently noted the patient had dyspnea, and that the patient was bedbound or lying in bed, which is the definition of orthopnea. AHCA has not met its burden by the greater weight of the evidence that N.M. was not eligible for Medicaid hospice services, and it is not entitled to recover an overpayment. Patient 29, V.R. Patient V.R. was a 56-year-old female, admitted to hospice with a terminal diagnosis of end-stage cirrhosis of the liver. The claim period at issue is just over seven months, from 04/05/12 to 11/20/12. Rather than being referred to hospice from a hospital admission, V.R. was referred to hospice by her primary care physician. Dr. Eisner testified that V.R.'s liver disease was related to her chronic Hepatitis C. V.R. had suffered from liver disease since 1998. During the disputed period, Dr. Eisner opined that V.R. had a life expectancy of greater than six months because the file did not contain evidence to show her cirrhosis was progressing and her functional status did not change. Although she suffered from ascites, it did not worsen to the point of requiring a paracentesis. Dr. Vermette noted V.R. had a "declining functional status, including a PPS of 40 percent." However, her PPS score was 40 percent on admission and remained static at 40 percent until 09/20/12, when it rose to 50 percent. Dr. Vermette admitted that the most common markers for liver functionality are albumin scores and INR scores, which are assessed through a blood test. Vitas' training document, created by Dr. Shega, states that a patient must have an INR of greater than 1.5 and an albumin score of less than 2.5 AND other evidence of end-stage liver disease, such as ascites or encephalopathy. Dr. Vermette admitted that no blood tests were performed for V.R. during the disputed period. Therefore, V.R. did not have lab values which would lead a physician to conclude she had a life expectancy of less than six months. The medical records contained in this patient's file do not support a finding that the Medicaid hospice eligibility standard was met during the disputed period. Based upon the greater weight of evidence in this case, it is determined that V.R. was not eligible for Medicaid hospice services and that AHCA is entitled to recover an overpayment of $35,999.98. Patient 30, J.A. Patient J.A. was an 86-year-old male admitted to hospice with a terminal diagnosis of debility unspecified. The claim period at issue is less than one year, from 10/29/09 to 09/29/10. Patient J.A. was transferred to Vitas from a different hospice at the beginning of the dates at issue. The medical director from the prior hospice believed J.A. was still hospice eligible at the time of transfer and noted that J.A. had an increase in healthcare utilization as well as a fall causing a head injury. At admission to Vitas, J.A. had underlying organ systems insufficiency with significant cognitive and nutritional impairment, was dependent in 6 of 6 ADLs, and required maximum assistance in going from bed to chair. He had dysphagia with micro aspirations, end-stage dementia with a FAST greater than 7, lung disease which required nebulizers frequently, coronary artery disease, and his PPS was 40 percent. On 11/02/09, Patient J.A. was on a pureed diet and was using oxygen and bronchodilators for cough, congestion, and agitation. He had a recent respiratory infection requiring antibiotics. His FAST score was 7c, he was dependent in 6 of 6 ADLs, and he had a PPS of 40 percent. He required a Velcro support to keep him from falling out of his wheelchair. By December 2009, J.A. had lost a pound and a half more weight. He had another fall later that month, hit his head, and required a skull X-ray. In January 2010, J.A.'s PPS decreased to 30 percent while his FAST remained in the terminal stage. In April 2010, J.A.'s weight decreased to 123 pounds. He had chest congestion requiring nebulizer treatment, increased weakness, dysphagia, and needed to be fed. In June 2010, J.A. was incoherent in speech and his FAST score was 7c to 7d. His weight was between 122 and 123 pounds, he had decreased tolerance to activity and sitting in a wheelchair, he had increased weakness and confusion, and he remained on a pureed diet due to the risk of aspiration. In August 2010, J.A. had shortness of breath and chest congestion intermittently, increased weakness and agitation, and restlessness. He was dependent in 6 of 6 ADLs, had further decreased tolerance to sitting in a chair and increased mental confusion. On 09/27/10, Patient J.A. developed a sudden change in level of consciousness and respiratory distress. He was placed on continuous care and over the next two days, he had very rapid breathing and respiratory distress with a respiratory rate as high as 42. His skin became mottled as he was getting less oxygen to the tissues. He had apnea spells and ultimately died of respiratory distress on 09/29/10. Dr. Eisner testified that J.A. did not exhibit functional decline over the dates at issue. Dr. Vermette explained that this patient was dependent in 6 of 6 ADLs at admission requiring maximum assistance so there was no way to decline in functional status, although he did exhibit decline in his inability to tolerate just sitting in a chair. Dr. Eisner also stated that J.A.'s weight had been stable at admission at 128 pounds. However, J.A.'s weight declined by ten pounds in the months leading up to admission. AHCA has not met its burden by the greater weight of the evidence that J.A. was not eligible for Medicaid hospice services, and it is not entitled to recover an overpayment. Patient 31, A.J.M. Patient A.J.M. was a 77-year-old female admitted to hospice with a terminal diagnosis of end-stage heart disease. The three claim periods at issue total about six months: 03/13/12 to 03/15/12; 03/20/12 to 03/24/12; and 03/30/12 to 09/28/12. A.J.M. had a history of heart disease which required a defibrillator be placed three years prior to admission at Vitas. She was hospitalized in the days leading up to the first claim period with significant heart failure, diastolic dysfunction, and an EF of only 10 percent. She also had severe global hypokinesis of the left ventricle, which means heart tissue had died so the heart beat in an abnormal pattern with less strength than normal. A.J.M. was admitted directly from the hospital to Vitas. On admission on 03/13/12, A.J.M. had a PPS of 30 percent, was bedbound, had reduced intake, was NYHA Class IV, and had leg edema. She also had comorbidities of recurrent pneumonias and dementia. She was dependent in 6 of 6 ADLs. A.J.M. revoked hospice care less than three days after admission on 03/15/12. A.J.M. returned to the hospital on 03/16/12. She presented to the ER with a hypertensive emergency and pulmonary edema. Her EF was 10 percent. She was intubated during this hospitalization and her blood gas was monitored. A.J.M. was immediately readmitted to Vitas hospice from this hospitalization on 03/20/12. At this admission, she had a PPS of 30 percent, was total care, still had reduced intake, had edema in both legs, was short of breath at rest, and had a wound on her sacrum. More history was noted including that the patient had pneumonia and UTIs in the last six months. Given the hospitalization with respiratory failure requiring intubation between the first and second period, this patient's terminal prognosis had worsened since the initial admission to hospice. During the second admission, A.J.M. had chest pains which required nitroglycerin. Vitas was arranging to transfer A.J.M. to the IPU for pain management when her family instead elected to seek aggressive treatment in the hospital and revoked hospice care again on 03/24/12. Patient A.J.M. was again admitted to Vitas directly from a hospitalization on 03/30/12. On admission, A.J.M. had a PPS of 30 percent, shortness of breath, an EF of 10 percent, a FAST score of worse than 7, diabetes, anemia, and dysphagia. A.J.M.'s weight had decreased to 130 pounds and she was experiencing chest pains. In April 2012, A.J.M. required an IPU stay for shortness of breath and had chest pain which was treated with nitroglycerin. A.J.M. received four bursts of defibrillation because she had three episodes of ventricular tachycardia and one episode of ventricular fibrillation, requiring the automatic device to shock her. On 05/06/12, Patient A.J.M. required a stay in the IPU for chest pains. Her respiratory rate was high and she was tachycardic. A.J.M. was in significant distress at this time. On 05/21/12, A.J.M. again required care in the IPU, this time for a change in level of consciousness. She was hypotensive, and as a result, some of her blood pressure medications were withheld. On 06/22/12, A.J.M. again required IPU care due to pain and respiratory distress. Her weight decreased to 122 pounds. On 09/14/12, Patient A.J.M. had significant respiratory and cardiac symptoms, increased weakness, and muscle wasting. On 09/24/12, she again was transferred to the IPU for change in level consciousness and agitation. She was in respiratory distress with a respiratory rate of 26, was becoming more delirious, and experienced more shortness of breath. A.J.M. died on hospice care on 09/28/12. Dr. Vermette opined that each of the IPU stays would have resulted in another hospitalization if A.J.M. had not been on hospice at the time. Dr. Vermette also opined that this patient died of end-stage heart disease or end-stage congestive heart failure with respiratory arrest. Dr. Talakkottur stated A.J.M. was not hospice eligible because she did not have significant respiratory or cardiac symptoms, had no frequent hospitalizations, and had no recurrent infections. These statements are directly contrary to the evidence. A.J.M. was noted to have recurrent UTIs and pneumonia within the six months prior to hospice admission. She had three hospitalizations in March 2012 due to her cardiac and respiratory distress along with five other IPU stays. Dr. Talakkottur also stated that A.J.M.'s nutritional status was not compromised despite a decrease in weight from 175 pounds to 122 pounds from the time of initial admission until the patient's death. AHCA has not met its burden by the greater weight of the evidence that A.J.M. was not eligible for Medicaid hospice services, and it is not entitled to recover an overpayment. Patient 33, M.V. Patient M.V. was an 89-year-old female admitted to hospice with a terminal diagnosis of end-stage cardiovascular disease and also exhibited symptoms of end-stage cerebral degeneration. The claim period at issue is 12/14/10 to 03/25/12. On recertification for the period beginning 12/14/10, M.V. had shortness of breath, a PPS of 30 percent, was dependent in 6 of 6 ADLs, a comorbidity of end-stage dementia with a FAST of 7d, and had dysphagia which required a pureed diet, as well as the Thick-It compound added to her fluids. M.V. remained 6 of 6 ADLs during the dates in dispute with a PPS of 30 percent. In April 2011, M.V. suffered a respiratory infection requiring antibiotics. In June 2011, she had visible signs of cachexia and muscle wasting. On 08/12/11, M.V. had a significant infection. Similarly, on 08/25/11, M.V. had congestion, shortness of breath, cough, and secretions, which was consistent with an aspiration event in a patient such as this with severe dementia and dysphagia. On 08/31/11, M.V. required a suction machine to help with the secretions. In October 2011, Patient M.V. became hypotensive and had another upper respiratory infection. M.V. continued to experience brachycardia and hypotension in December 2011. Her FAST score also worsened to 7e. Dr. Talakkottur agreed that this progression of M.V.'s FAST score would be consistent with her comorbidity of Alzheimer's disease. On 03/23/12, Patient M.V. developed acute respiratory distress with a respiratory rate of 24. She had cyanosis and was placed on continuous care for respiratory distress. M.V. died on hospice services on 03/25/12. Dr. Vermette testified that each of M.V.'s episodes of infection where she developed respiratory distress and developed cough, congestion, and required antibiotics were likely aspiration events. As noted from the Mitchell study, an episode of pneumonia in the presence of advanced dementia results in a grave prognosis. Patient M.V. had three episodes of significant respiratory distress, the last one of which ended up killing her, and either of the other two could have done so. Dr. Talakkottur stated this patient was not hospice eligible because she did not have recurrent infections. However, the record shows that M.V. had three respiratory infections within a year. Dr. Talakkottur stated that this patient had a hip fracture but that such an injury would have no impact on her prognosis. This is directly refuted by the credible testimony of Dr. Shega in prior claims. Dr. Talakkottur admitted that the medical record on 03/25/12 immediately preceding M.V.'s death evidenced that M.V.'s life expectancy at that point was less than six months. According to the audit instructions, if any day during a certification period was approved by a peer reviewer, then the entire certification period was to be approved. Dr. Talakkottur agreed that M.V. was hospice appropriate on 03/25/12; accordingly, that entire period must be approved for reason of the instruction alone. AHCA has not met its burden by the greater weight of the evidence that M.V. was not eligible for Medicaid hospice services, and it is not entitled to recover an overpayment. Patient 34, L.S.L. Patient L.S.L. was an 85-year-old male admitted to hospice with a terminal diagnosis of end-stage cerebral vascular disease. The claim period at issue is 12/03/10 to 09/28/11. In 2008, L.S.L. suffered a significant stroke. Over time, he became increasingly debilitated. He was hospitalized prior to admission to repair and replace his PEG tube, but was noted by his daughter to have declined since that hospitalization, including that he required a Foley catheter. At the time of admission, he required a PEG tube for his feedings, had developed vascular dementia and was nonverbal. He had problems swallowing and had dysphagia. He had a seizure disorder and was on seizure medications. The medical records indicate that this patient was admitted to hospice for "agitation." Dr. Vermette testified that he thought it was "very likely" that the agitation experienced by L.S.L. was associated with the PEG tube reinsertion and Foley catheter insertion. Dr. Eisner opined that although L.S.L. was sick on presentation, it was the result of his stroke in 2008. He showed no change in his cerebral vascular disease and no progressive decline in his functional or nutritional status. Besides one brief inpatient overnight stay in June of 2011 to service his PEG tube, L.S.L. lived at home with his daughter. His daughter was a nurse who described herself as having experience working around patients like her father. In July 2011, a social worker noted the daughter stated her father was doing well, and he seemed like a chronic patient and had not declined since admission. The medical records show that discharge planning was discussed with L.S.L.'s daughter as early as 06/29/11; however, he was not discharged until 09/28/11, for extended prognosis. The medical records contained in this patient's file do not support a finding that the Medicaid hospice eligibility standard was met during the disputed period. Based upon the greater weight of evidence in this case, it is determined that L.S.L. was not eligible for Medicaid hospice services and that AHCA is entitled to recover an overpayment of $46,830.90. Patient 35, R.B. Patient R.B. was a 52-year-old male admitted to hospice with a terminal diagnosis of end-stage AIDS. The claim period at issue is just two weeks, from 01/14/11 to 01/28/11. R.B. was admitted to the hospital with pneumonia just prior to his hospice admission. The chest x-ray from that admission was consistent with pneumocystis carinii pneumonia ("PCP"), which is one of the defining opportunistic infections in AIDS patients. Patient R.B. was admitted to hospice directly from that hospitalization. He had a combined CD3 CD4 count of 88. At admission, R.B. had a PPS of 30 percent, was drowsy, was dependent in 6 of 6 ADLs, had weight loss from 125 to 110 pounds in the prior three months, and had a BMI of 18. In addition to AIDS, R.B. had thrush, a history of AIDS wasting, systemic lymphoma, non-small cell lung cancer, and COPD. He was placed in IPU for shortness of breath upon admission to hospice. He was also agitated and restless during that time. R.B. was going to be placed in a nursing home because he was homeless, but when the transfer to the nursing home was scheduled to occur, he became angry and belligerent and revoked hospice care. On the date R.B. revoked, his ADLs had improved to needing assistance with 1 of 6. However, Dr. Vermette stated it is not uncommon for a patient to show improvement in the first weeks after admission to hospice from an acute hospitalization. Dr. Vermette also stated that a combined CD3 CD4 count is very similar to a CD4 count. He stated a combined CD3 CD4 count below 200 would be AIDS-defining. During the dates at issue, R.B. required antipsychotic medications. He was also treated with oxygen and nebulizer treatments every four hours. He required two different narcotics for pain. Dr. Eisner found no evidence of decline during the two weeks R.B. was in hospice. However, this again shows the problematic nature of the retrospective review and does not take into account that at admission, this patient was hospice eligible. AHCA has not met its burden by the greater weight of the evidence that R.B. was not eligible for Medicaid hospice services, and it is not entitled to recover an overpayment. Patient 36, J.D. Patient J.D. was a 79-year-old male, admitted to hospice with a terminal diagnosis of end-stage heart disease. The claim period at issue is just under six months, from 10/21/10 to 04/18/11. Leading up to and at the beginning of the dates at issue, Patient J.D. had been hospitalized because of gangrene in one of his legs, requiring amputation. He was referred to hospice from that hospitalization. In addition to his obvious peripheral vascular disease and anemia, J.D. had a history of stroke and dementia and a comorbidity of hypertension. He had a PPS of 30 percent, was bedbound, disoriented at times and required total care, had shortness of breath at rest and required frequent oxygen. J.D. was also having episodes of chest pain and having episodes of edema in his lower extremity. J.D. had experienced a MI (heart attack) ten years prior to admission to hospice. At admission the recipient's EF was 45 percent. Notably, J.D. was not suffering from shortness of breath or requiring oxygen after admission to hospice care. Moreover, starting with the nursing assessment on 11/16/10, Dr. Talakkottur noted that the nurses' notes fail to evidence anything of significance for either the cardiovascular or respiratory systems of J.D. which would lead him to believe J.D. had a prognosis of six months or less to live. Dr. Vermette opined that J.D. was hospice eligible because of his recent hospitalization and the progression of his terminal illness, specifically that he was a NYHA Class IV. However, in addition to the nurses' notes discussed during Dr. Talakkottur's testimony, the Plan of Care Reviews failed to report this recipient suffered from dyspnea at any time from admission until 04/12/11. Moreover, Dr. Vermette admitted that Respondent conceded a portion of J.D.'s hospice stay based upon concerns that certain Plan of Care Reviews had been merely photocopied with dates changed. Based upon the greater weight of evidence in this case, it is determined that this recipient was not eligible for Medicaid hospice services and that AHCA is entitled to recover an overpayment of $148,606.85. Patient 38, L.F.P. Patient L.F.P. was an 83-year-old female, admitted to hospice with a terminal diagnosis of end-stage Alzheimer's disease. The claim period at issue is just over four months, from 08/09/12 to 12/31/12. In July 2012, L.F.P. was a FAST of 7c to 7d, dependent in 6 of 6 ADLs, PPS of 30 percent, had muscle wasting, decreased oral intake, was having episodes of agitation, and had a recent UTI. Following that recertification, a week prior to the beginning of the denied period, L.F.P. was placed on continuous care because of a change of mental status with significant lethargy and she was also dehydrated and having shortness of breath. On the first day of the denied period, L.F.P. developed a tremor possibly due to medications. L.F.P. then had improvement since the continuous care began and was more awake and alert. Her altered mental status appeared to be improving. Patient L.F.P. displayed the indicators for end-stage Alzheimer's, such as high FAST score, functional impairment, nutritional impairment, and other comorbidities or secondary symptom burden. Dr. Vermette testified that L.F.P. was appropriate for Medicaid hospice at the beginning of the dates at issue because the factors that were present when the patient was appropriately recertified on 07/08/12 were still present one month later, and indeed the patient had shown a need for significantly more care during those two weeks just prior to the beginning of the denied period. Because the first month of the recertification period was approved, the second month, including the beginning of the denied period, must be approved in accordance with the audit instructions. In August 2012, L.F.P. developed blood in her urine and a UTI, requiring an antibiotic. In September 2012, L.F.P. developed a wound in the sacral region and it was a Stage II, over an inch in diameter in all directions. While a patient does not die specifically from a skin wound of this size, he/she can develop an infection which then can debilitate a patient such as this and lead to sepsis and ultimately death from the infection. More commonly, this type of a wound is a marker of nutritional impairment and a general functional decline. In October 2012, L.F.P. remained FAST 7d and remained bedbound, total care. The prior wound healed in October; however, later in the month and early November, she developed a new wound in that area. L.F.P. developed contractures, her muscles tightened up because of disuse and caused her joints to flex and be locked in that position. L.F.P. began receiving baclofen to help with her contractures. L.F.P. was also at risk for aspiration and was on aspiration precautions, requiring a pureed diet and thickened liquids. In December 2012, Patient L.F.P. had a FAST score of 7d, a PPS of 30 percent, dysphagia requiring a pureed diet with thickened liquids, still had contractures, and she had a sacral wound. Additionally, she had shortness of breath at rest, which was an additional symptom burden and additional organ system involvement in her symptom burden. L.F.P. displayed the indicators of end-stage Alzheimer's disease throughout the dates at issue. Dr. Talakkottur confirmed that throughout the dates at issue, L.F.P. was incontinent of bowel and bladder, her PPS score never ranged above 30 percent, her FAST level was never better than 7d, and she was dependent in 6 of 6 ADLs. AHCA has not met its burden by the greater weight of the evidence that L.F.P. was not eligible for Medicaid hospice services, and it is not entitled to recover an overpayment.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency for Health Care Administration enter a final order directing VITAS Healthcare Corporation of Florida to repay an overpayment to AHCA the sum of $954,488.60, plus the overpayments to be recalculated for Melbourne Patients 11 and 21, and Boynton Beach Patient 5. The undersigned reserves jurisdiction to the extent AHCA provides the revised sanctions, fines, and costs it is entitled to recover against VITAS and that amount is determined in a later proceeding. DONE AND ENTERED this 28th day of September, 2018, in Tallahassee, Leon County, Florida. S MARY LI CREASY Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 28th day of September, 2018.
Findings Of Fact The Department rules on the Proposed Findings of Facts and Exceptions, submitted by the parties as follows: APPLICANT'S PROPOSED FINDINGS AND CONCLUSIONS Applicant's Proposed Findings numbers 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 23, 24, 27, 28, and 29 are accepted to the extent that they are not inconsistent with the Findings of Fact rendered by the Hearing Officer. Applicant's Proposed Finding number 22 is accepted to the extent that factual matters are discussed. However, to the extent that it suggests that "public convenience and advantage" will be promoted by establishment of the trust company, the Department rejects this conclusionary statement as inconsistent with the Department's conclusion as to this criterion based on the reasons as discussed in paragraph three (3) contained in the Conclusions of Law of the Final Order. Applicant's Proposed Finding number 25 concerning the telephone survey has been dealt with in the Hearing Officer's Finding number 13, as adopted by the Department. Applicant's Proposed Finding number 26 concerns several counter- arguments addressing contentions proposed by the Protestants. As to (1) "Concentration", (2) "Dual Banking", and (3) "Siphoning of Capital". To the extent that no significant findings of fact, if any, were premised on these contentions, there is no necessity to respond. A portion of the Hearing Officer's Finding of Fact number 10, was excepted to, concerning the "concentration" argument, and will be treated below in paragraph 9. Number 4 concerning injury to existing institutions has been dealt with in the Final Order in paragraph 4 of the Conclusions of Law, as to the "reasonable promise". The Applicant's Conclusions of Law numbers 1, 4, 5, 6, 7 are accepted. Numbers 2, 3, and 8 are rejected as contrary to the Conclusions of the Final Order. PROTESTANT'S (FLORIDA BANKERS ASSOCIATION) PROPOSED FINDINGS Protestant's Proposed Findings numbers 1, 2, 3, 4, 5, 13, 18, 19, 20, 21, 23, 29, 30, 34, and 35 are accepted to the extent that they are generally consistent with the Hearing Officer's Findings or with the Final Order. Protestant's Proposed Findings numbers 6, 7, 8, 9, 10, 12, 14, 15, 16, 17, 22, 24, 25, 26, 27, 28, 31, 32, 33, 36, 37, 38, 39, 40, 41, 42, 43, 44, 45, 46, and 47 are rejected to the extent that they are inconsistent with the Hearing Officer's Findings or with this Final Order, or are otherwise irrelevant or immaterial. APPLICANT'S EXCEPTIONS The Applicant's Exceptions numbers 1, 2, 3, 4, 5, 6, and 10 concern Proposed Findings that were not specifically referenced in the Hearing Officer's Report. However, they are generally consistent with the Hearing Officer's Findings and have been accepted by the Department to the extent that they are consistent with the Final Order. Exception 7, concerning Proposed Finding number 18, has been discussed above in paragraph 1. Exception 8, concerning Proposed Finding number 22, has been discussed above in paragraph 2. Exception number 9, concerning objection to portions of Finding of Fact number 10, is rejected. The first sentence of the Finding may speak in terms of "national trust business", but is viewed in terms of trust business throughout the nation. In no wise does it imply that there is a national market for personal trust business. The language should be viewed in the context of the overall finding. Exception number 10 is duly noted and reflected in the Final Order. Exception number 11 has been addressed in the Final Order in paragraph 4 of the Conclusions of Law as to "resonable promise." CERTIFICATE OF SERVICE I HEREBY CERTIFY that the original of the foregoing was filed with the Clerk of the Department of Banking and Finance and that a true and correct copy of the foregoing was sent by Certified U.S. Mail, Return Receipt Requested, to: Thomas J. Cardwell, Esquire, Post Office Box 231, Orlando, Florida 32802; Robert A. White, Esquire, Aubrey Kendall, Esquire, and Paul Brenner, Esquire of the firm Mershon, Sawyer, Johnston, Dunwoody and Cole, 1600 Southeast First National Bank Building, Miami, Florida 33131; Howard A. Setlin, Esquire, 1111 Lincoln Road Mall, Suite 600, Miami Beach, Florida 33139; Bruce Culpepper, Esquire, 350 East College Avenue, Tallahassee, Florida 32301; Robert Asti, Esquire, 2400 First Federal Building, Miami, Florida 33131; Richard R. Paige, Esquire, Alfred I. DuPont Building, Miami, Florida 33131; Charles Cane, Esquire, 801 Hallandale Beach Boulevard, Hallandale, Florida 33009; and G. Kenneth Kemper, Esquire, 9999 N.E. 2nd Avenue, Suite 200, Miami Shores, Florida 33138, on this 24 day of January, 1980. FRANKLYN J. WOLLETT Assistant General Counsel Office of the Comptroller The Capitol, Suite 1302 Tallahassee, Florida 32301 (904) 488-9886
The Issue Whether the numeric need for hospice programs in health planning subdistrict 6A for the March 2000, batching cycle should be one, as originally published by the Agency for Health Care Administration, or zero, as published in a revision of the original publication?
Findings Of Fact The Parties Petitioner, Hernando-Pasco Hospice, Inc., was formed in 1982 and commenced service in 1984. It is licensed to provide hospice services in Service Areas 3D and 5A, Hernando and Pasco Counties, respectively. On average, it serves 500 patients per day. Hernando-Pasco has three offices for the delivery of care in its service areas. It operates three hospice residential houses with a total of 23 beds. The houses are in Hudson, Dade City, and Spring Hill. Hernando-Pasco also operates an inpatient unit at a nursing home in Brooksville serving Hernando County. LifePath Hospice is a not-for-profit community organization founded in 1983. It is licensed to provide hospice services in two service areas, 6A and 6B. Service Area 6A is Hillsborough County. Service Area 6B is comprised of three counties: Polk, Highlands, and Hardee. LifePath serves 820 patients on an average daily basis. In calendar year 2000, it served 4,002 patients. LifePath provides hospice service without regard to the patient's ability to pay. The services are provided, moreover, regardless of the circumstances in which the patient is found so long as the patient is in Service Area 6A or 6B. For example, services are provided to the patient whether at home, in another residential setting, in an inpatient facility such as a hospital or even if homeless. In other words, LifePath provides hospice service to patients wherever the patient might be within LifePath's two service areas. Similarly, Hernando-Pasco Hospice provides its hospice services to hospice patients at home, in residential settings, and in in-patient settings. It does not matter in what setting the hospice patient is found at the time of the request for hospice services as long as the patient is located within the service areas where Hernando-Pasco Hospice is authorized to provide its services. Hernando-Pasco delivers services within its authorized service areas "wherever the patient may be." (Tr. 64). Hospice services are also delivered by Hernando-Pasco Hospice to the homeless, although requests by the homeless for hospice services tend to be few. As Mr. Taylor, CEO of Hernando- Pasco Hospice explained at hearing: Fortunately, the few of them [the "homeless"] are able to go to an adequate facility, but some of them prefer to live in cardboard boxes . . . things of that nature. We go where they are. * * * [I]f they want to be living in a cardboard box, we will take service to that cardboard box for them. (Tr. 248, 249). The Agency for Health Care Administration is the single state agency responsible for the administration of certificate of need laws in Florida. In conjunction with these duties, it determines semi-annually the net numeric need for new hospice programs pursuant to Rule 59C-1.0355, Florida Administrative Code ("the Rule.") Numeric Need Under The Rule Rule 59C-1.0355, Florida Administrative Code, entitled "Hospice Programs" was adopted on April 17, 1995. Its purpose is to ensure "the availability of hospice programs as defined in this rule to all persons requesting and eligible for hospice services, regardless of ability to pay." Rule 59C-1.033(1), Hernando-Pasco Ex. 9. The Rule establishes criteria and standards for assessing the need for new hospice programs. For determining whether a new hospice is needed in a service area, the Rule includes a numeric need formula. The numeric need formula contains two terms: "HPH" and "HP." "HPH" is defined as "the projected number of patients electing a hospice program in the service area during the 12- month period beginning at the planning horizon." (Hernando Ex. 9). "HP" is defined as "the number of patients admitted to hospice programs serving a service area during the most recent 12-month period ending on June 30 or December 31. (Id.) If the number of patients denoted as HPH exceeds the number denoted by HP by 350 or more, then a numeric need is indicated for the service area. The formula is expressed as: HPH - HP > 350 [Rule 59C-1.0355(4)(a), Hernando-Pasco Ex. 9]. The "350" figure in the Rule's numeric need formula "is a threshold value to determine whether any difference that may exist between HPH and HP rises to a significant level. It represents a minimum volume that would be associated with a hospice that would be large enough to be financially viable and still offer comprehensive services to the patients who request hospice care." (Tr. 782). AHCA's Calculation and First Fixed Need Pool Publication On July 12, 1999, LifePath submitted the first of two "Semi-annual Reports of Hospice Utilization" for calendar year 1999 to the Agency. The report showed a total of 1,406 new patients admitted by LifePath for the period January 1, 1999, through June 30, 1999. The first half of the year total was broken down for LifePath's two service areas; the number of admissions in Service Area 6A totaled 1,282, and the number of admissions in Service Area 6B totaled 124. The report is signed in a space for the administrator of LifePath to show that it had been reviewed and approved. On January 7, 2000, LifePath filed its second utilization report for calendar year 1999. The second semi- annual report, covering the period from July 1, 1999, through December 31, 1999, showed a total of 1,368 patients admitted for the second half of 1999. Also broken down into admissions by service area, the report indicated that 1,228 of the admissions were in Service Area 6A and 140 of the admissions were in Service Area 6B for the second half of 1999. This report also shows review and approval by a LifePath Administrator, in this second case, by Kathy L. Fernandez, LifePath's CEO. With the two utilization reports in hand, AHCA calculated numeric need for the two service areas served by LifePath pursuant to the Rule's formula. With regard to Service Area 6A, Hillsborough County, AHCA determined HPH to be 2,871. (The HPH figure for Hillsborough County is not in dispute in this proceeding.) Based on LifePath's utilization reports, AHCA determined HP for Service Area 6A, Hillsborough County, to be 2,510. Inserting these two figures into the appropriate places in the formula yielded a resulting difference of 360. Since the result was a positive difference of 350 or more, the result indicated a numeric need for one more hospice in Service Area 6A. Different Information The Agency prepared to publish a hospice fixed need pool of "one" for Service Area 6A on January 28, 2000. While preparation was underway, LifePath's CEO Ms. Fernandez was informed of what the publication would show. Surprised, she asked her staff to investigate the utilization data LifePath had submitted to AHCA. The investigation conducted, the results were reported to Ms. Fernandez. In Ms. Fernandez' words, she realized: there was an error. When [staff] ran a simple computer report for the admissions that were admitted in 6A and 6B, they came back and told me the numbers that they had run on the computer were different than the numbers that we turned into AHCA. (Tr. 609) According to the new computer-run numbers, LifePath had admitted 32 more patients during Calendar Year 1999 in Service Area 6A than it had reported. The difference in the new numbers and the ones reported to AHCA concerned hospice patients who had been admitted to LifePath while patients of hospitals located in Hillsborough County but whose permanent residences were outside Hillsborough County and, conversely, patients who had been reflected as 6A admissions but had been admitted while outside Hillsborough County. The new numbers reflected where patients were located at the time of admission as opposed to where the patients permanently resided. Forty patients were involved. Thirty-six of them had been admitted to LifePath while physically present in Service Area 6A, that is, at the time of admission, they were patients in Hillsborough County hospitals. Another four patients had been reported to have been admitted in Service Area 6A, but had actually been admitted while physically present in Service Area 6B. In consideration of location at time of admission rather than permanent residence or home as the patient's place of admission, the new numbers, therefore, showed a net change of 32 patients that in LifePath's view should have been regarded as Service Area 6A admissions above the reported number of Service Area 6A admissions. The utilization reports submitted to the Agency, unlike the new numbers, did not show admissions by location of the patient at the time of admission because the reports had determined admissions by which LifePath team had cared for the patients. The 36 patients admitted while in Hillsborough County hospitals but omitted from the utilization reports as 6A admissions had been cared for by LifePath's Rose Team, a team "geographically placed in 6B." (Tr. 610). They were counted in the reports, therefore, as 6B admissions without regard to the fact that the admissions had occurred at a moment when the patients were actually located in Service Area 6A as Hillsborough County hospital patients. The same was true of the four patients reported to have been 6A admissions. They were all physically located in Service Area 6B at the time of their admission. In each of these cases, the teams were assigned on the basis of the patient's home address at the time of admission rather than the patient's actual location at the time of admission. In light of the new numbers that reflected a different approach and an understanding of the difference between those numbers and the ones LifePath had submitted by way of the reports, LifePath concluded that its utilization reports had underreported 6A admissions for calendar year 1999 by 32 patients. Armed with this new information and what it viewed as a sounder approach to the reporting of admissions, LifePath set out to correct what it hoped AHCA would see as an error. On January 26, 2000, two days in advance of the scheduled publication of the fixed need pool for hospice programs in the State, LifePath caused to be hand-delivered to the Agency, a letter from its attorney. In pertinent part, the letter reads as follows: Enclosed . . . is correspondence and a packet of information . . . which notifies the Agency of mistakes . . . made in LifePath's last two [reports]. This information included Patient Data Sheets from LifePath's information system for 36 patients who were admitted and cared for in Service Area 6A (Hillsborough County), but who were mistakenly counted as Service Area 6B patients. Also, enclosed are Data Sheets for 4 patients who were admitted and cared for in Service Area 6B (Polk County), but who were mistakenly counted as Service Area 6A patients . . . . The error occurred when patients were mistakenly counted by nursing team (e.g., the Rose and Yellow teams), rather than strictly by geographic location of where the patient received his/her care. The net result will be an addition of 32 patients to Service Area 6A and a reduction of 32 patients from Service Area 6B. It is respectfully requested that, based upon this new information, your office correct the upcoming fixed need pool projection for Hospice Service Area 6A, scheduled to be published on January 28, 2000 and, instead of publishing a need for one (1) new hospice program in Service Area 6A, publish a need for zero (0) new hospice programs in Service Area 6A for the upcoming CON batching cycle. (Hernando-Pasco Ex. No. 15). The forty Patient Data Sheets attached to the letter bear the title "Patient Referral Data." Below the title is the time that the data was generated by the computer. All forty sheets were generated between 10 a.m. and 11 a.m., the morning of January 26, 2000. As current location, 36 of the sheets list one of a number of hospitals in Hillsborough County. The majority of the sheets show the Moffitt Cancer Center as the patient's current location. Some data sheets of these 36 list other hospitals in Hillsborough County as the patient's current location: Tampa General Hospital, St. Joseph's Hospital, Brandon Regional Hospital, and South Florida Baptist Hospital. The other four data sheets list as "current location" either Lakeland Regional Medical Center in Polk County or Winter Haven Hospital in Polk County. The forty referral data sheets generated by LifePath's information system on January 26, 2000, were not produced in the customary format used by LifePath. They were reformatted to show the patient's location at the time of admission (termed "current location") and to omit the patient's permanent residence or home address. At hearing, LifePath's CEO candidly stated that the "Patient Referral Data" sheets were "altered . . . to show the [patient's] location at the time of admission." (Tr. 612). Some of the information remained the same on the sheets produced on January 26 as was customary. Just as Ms. Fernandez testified, for example, the 36 sheets that show a hospital in Hillsborough County as the current location list under "Team Code" the Rose Team, LifePath's team that serves Service Area 6B. The four that show Polk County as "current location" list the Yellow Team, the LifePath team that serves Hillsborough County or Service Area 6A, under "Team Code." The January 26 data sheets' use of the word "current" to describe the patient's location is a misnomer if applied to the date the information was generated. The 36 patients with Hillsborough County locations had passed away by January 26, 2000. On the other hand, the use of the word "current" is accurate if understood to mean the location at the time of the referral and admission, a use consistent with the title of the document as reflecting "referral" data. Response by the Agency The January 28, 2000, publication proceeded as planned without change. But, after receiving the information submitted by LifePath, AHCA published a second "Notice of Hospice Program Fixed Need Pool." This second publication appeared in Volume 26, Number 6 of the Florida Administrative Weekly on February 11, 2000. It indicated a revised net need for zero (0) hospice programs for Service Area 6A. As reflected by the revised publication, AHCA believed that the second publication correctly determined the net need for the service area to be zero. The determination is based upon the Agency's interpretation of Rule 59C-1.0355. As Mr. Gregg, Chief of the Bureau of Health Facility Regulation, for the Agency explained at hearing: [T]he rule . . . directs us to consider the place where the patient was prior to admission. * * * For people who have been . . . nursing home residents, or ALF residents, or in and out of hospitals prior to being admitted to a hospice, their actual residence may not be quite so clear. And so the interpretation is that it is the place from which they are referred. (Tr. 932, 933). With regard to the 36 patients originally reported as Service Area 6B admissions but who had been admitted while in a hospital in 6A, LifePath continued to provide hospice services to the patients after they returned to a location in Service Area 6B. LifePath's ability to admit in one service area and provide treatment later in a different service area makes this case somewhat unusual. There are few hospices in Florida that provide service in more than one service area. For that reason, the issues presented in this case have not surfaced in the past. The more common situation for when a patient is admitted in a hospital in one service area and provided hospice services there and then returns to a permanent residence in another service area would call for the patient to be admitted to two different hospices at two different times. In such a case, for the sake of consistency, the Agency "would want to see . . . an admission to the program in [the service area in which the hospital was located]" (Tr. 934) and then a second admission to the hospice in the service area in which the patient had permanent residence when the patient moved back home or to a location in the second service area. This expectation of the Agency, however, is not required by rule. It is one that apparently has emerged in the context of this case. LifePath's Transmission of Data to Hernando-Pasco On February 18, 2000, LifePath transmitted to Mr. Rodney Taylor, the Administrator of Hernando-Pasco Hospice, referral records for the same forty patients whose referral data sheets generated on the previous January 26 had been submitted to the Agency. In its cover letter to Mr. Taylor, Ms. Fernandez wrote on behalf of LifePath: I'm enclosing the referral records for the patients who were inadvertently mis- classified as to county of admission by LifePath in 1999. We found a few original referral records were not filed appropriately in the medical record, or in error, reflected the home address versus the hospital in which they were admitted. In those instances, I am attaching a portion of the Admission Assessment or Patient Information Sheet to which show the actual point of admission. As you know, if I run a current referral record, HPMS will show the patient's current address rather than the point of admission. (Hernando-Pasco Ex. 16). Unlike the Patient Referral Data generated January 26, the Patient Referral Data sheets sent to Mr. Taylor show that they were generated earlier, on various dates in 1999. Also dissimilar from the sheets produced on January 26 that had omitted "home address" and had shown only the location at the time of admission, moreover, the sheets provided Mr. Taylor show not only a "current location" or a location at the time of admission but also the patient's home address. No attempt was made by LifePath to hide the fact that the Patient Referral Data Sheets submitted to AHCA on January 26, 2000, had been generated on that same date rather than any earlier date as in the case of the information transmitted later to Mr. Taylor and Hernando-Pasco Hospice. The other main difference between the two sets of data submitted to the Agency and to Mr. Taylor, that is, the omission from the data submitted to AHCA of the patient's home address, was explained by Ms. Fernandez as an act done for the State's benefit, "so as not to confuse them." (Tr. 622.) Other Provisions of the Rule Rule 59C-1.0355 is an extensive rule. The Rule consists of ten subsections that cover an array of topics related to hospice programs. In addition to the provisions setting forth criteria for determination of numeric need, the rule contains a "definition" section, general provisions related to quality of care and conformance with statutory criteria, consistency with plans, required description of the program, construction and changes in licensed capacities of freestanding hospice facilities, and grandfathering provisions. Also included in the Rule is a statement of intent and pertinent to this proceeding, Subsection (9), which governs semi-annual utilization reports. Subsection (9) of the Rule states: Each hospice program shall report utilization information to the agency or its designee on or before July 20 of each year and January 20 of the following year. The July report shall indicate the number of new patients admitted during the 6-month period composed of the first and second quarters of the current year, the census on the first day of each month included in the report, and the number of patient days of care provided during the reported period. The January report shall indicate the number of new patients admitted during the 6-month period composed of the third and fourth quarters of the prior year, the census on the first day of each month included in the report, and the number of patient days of care provided during the reporting period. The following detail shall also be provided: For the number of new patients admitted: The 6-month total of admissions under age 65 and age 65 and over by type of diagnosis (e.g., cancer; AIDS). The number of admissions during each of the 6 months covered by the report, by service area of residence. For the patient census on April 1 or October 1, as applicable, the number of patients receiving hospice care in: A private home. An adult congregate living facility. A hospice residential unit. A nursing home. A hospital. (Hernando-Pasco Ex. 9, emphasis supplied). There is no definition of "service area of residence." The term "service area resident" is used extensively in the descriptions of the factors that make up HPH, "the projected number of patients electing a hospice program in the service area during the 12 month period beginning at the planning horizon." See Subsection (4)(a) of the Rule. HPH, however, is not in dispute in this proceeding. It is the other term in the formula that is in dispute: "HP." The Rule's definition of "HP" does not use the term "service area of residence." But the definition cross-references to Subsection reporting requirements: "(HP) is the number of patients admitted to hospice programs serving an area during the most recent 12-month period ending on June 30 or December 31. The number is derived from reports submitted under subsection (9) of the rule." Section (4)(a) of the Rule. The Agency interprets "service area of residence" not to mean the service area where the patient has a "permanent residence," but the service area which is the patient's "location at the time of admission." There are good reasons in support of the AHCA's interpretation. Hospitalized hospice patients come from a population that has been mobile. Some have permanent residences in foreign countries, other states (so-called "snowbirds") or in other counties in the state or different health planning service areas than the one in which they are hospitalized. Some hospice patients may have no permanent residence at all, as in the case of the homeless. To report as admissions only those who reside permanently in a service area in Florida by that service area and to not report the patient as an admission when admitted in the service area in which the patient is hospitalized or located at the time of admission would omit many admissions. As Mr. Gregg testified on behalf of the Agency, the numeric need formula produces the "most accurate projection of need by having the best data and the most complete data; therefore you would want every possible admission to be reported." (Tr. 958). An Additional Contention In addition to contending that the numbers originally reported by LifePath were correct for calculation of HP and that the later reported numbers may not be used for calculation of HP, Hernando-Pasco raises a second, fundamental issue. Hernando- Pasco contends that the 36 patients did not achieve the status of admission while in the hospital. According to Hernando-Pasco's line of thinking, if the patients were ever admitted to LifePath, it was not until after their return to Service Area 6B. To address these contentions, it is necessary to examine the admissions process used by LifePath, whether that process was applied to the 36 patients, and, ultimately, whether that process meets the legal requirements for hospice admission. LifePath's Admissions Process for the Hospitalized Patient Whether hospitalized or not, admission of a patient to LifePath commences with a physician order or a request from the patient or family of the patient. A pre-admission visit is conducted to determine if the patient is eligible for hospice services. During the visit, a representative of LifePath speaks with the patient and family to ensure that services have been requested. In the case of a hospitalized patient, death is often imminent and occurs in the hospital. LifePath, therefore, does not wait for the patient to return home or to a residential setting to commence admission. The formal admission process is initiated at the hospital by the admissions nurse, a professional who has received training on how to conduct initial psychosocial, spiritual and financial assessments to be undertaken during the admissions process together with the physical assessment. The admitting nurse goes to the location of the patient where the admissions process takes between two and one-half and three hours. Because of the length of time required, LifePath's "admission nurses do [only] two admissions a day." (Tr. 641). If the patient's location is a hospital, the nurse does a physical assessment and an initial psychosocial, financial, and spiritual assessment of the patient. Forms for consent of care, medical exchange of information, and authorization of payment forms as well as a patient information sheet are completed. Advance directives are discussed. Prognostic indicators, criteria set by the state, are reviewed to determine whether the patient meets admission criteria. Emergency planning is discussed. A teaching record is prepared. A physician's referral and plan of treatment are completed and confirmed with the physician. An interdisciplinary plan of care is initiated. Referrals of patients, if necessary, are facilitated. For the hospitalized patient for whom end of life is not imminent and who will have the opportunity to return home, LifePath's objective is to facilitate that return. Planning for the discharge of a patient from a hospital is an important hospice service. Often it involves the ordering of medications and equipment in anticipation of the patient's return home, two functions that require admission to the hospice. In such cases, physician's orders are necessary and a physician will not give a hospice orders to care for a patient unless the patient is admitted to the hospice program. For the hospitalized patient for whom death is imminent, one of the important reasons for admission to hospice is to qualify the patient's family for the 13 months of bereavement services hospices are required to provide survivors under the Medicare hospice benefit. Hospices also admit patients near death so that they may be provided care as quickly as possible. A hospitalized patient is considered by LifePath to be admitted when the physical assessment and at least the initial psychosocial, spiritual, and financial assessments are conducted by the admitting nurse, all consent forms are complete and the hospice takes over the care of the patient in coordination with the hospital. LifePath's Administrative/Operational Manual with regard to the subject of "Admission Process" (see Hernando-Pasco Exhibit 25) requires more in the way of procedure for an admission than is done for the typical hospitalized patient. The manual describes procedure for the admissions process as consisting of 35 categories of items (Procedures A - Z, and AA through II), some of which have numerous sub-parts. The process leads to a Plan of Care. The procedure includes: W. In conjunction with one additional IDT member develop the "Plan of Care". Identify foci and document on the IDT Plan of Care. Complete a "Hospice Interdisciplinary Plan of Care Evaluation/Summary" form. (Id., emphasis supplied.) Normally, it is the social worker member of LifePath's interdisciplinary care team, together with the admissions nurse, who develops the plan of care. According to the "Position Description" of LifePath's "Hospital Team Patient/Family Counselor", it is the social worker also who "[w]orks closely with the LH Hospital Team RN to assure timely admissions." (Hernando-Pasco Exhibit 26, Li-He 974). In the case of a hospitalized patient for whom admission is requested, however, the social worker may not participate in LifePath's admission process at all. To complete a full psychosocial assessment and history takes up to three hours. To do so on the day of admission following the two and one-half hour to three-hour admissions process conducted by the nurse frequently "would be cumbersome and overburdening to a patient and family." (Tr. 644). This is especially true in the case of the patient for whom death is imminent. In the case of the patient who will have the chance to return home, the full follow-up psychosocial and spiritual assessments conducted by social workers and chaplains are often deferred by patient and family request. Understandably, conducting the full assessment can be too much for the hospitalized patient who has just received a prognosis of terminal illness and the patient's family in the midst of arrangements for transfer of the patient home and initiation of the care to be delivered. The family frequently chooses to defer "to a time when they can sit down and comfortably speak about what they need to, at a different time, when things are calmer." (Tr. 647). There may be other complications with a hospitalized patient, as opposed to a patient admitted at home or in another setting. Sometimes hospitals do not permit patients to elect the Medicare hospice benefit while they are inpatients. Nonetheless, they can still be admitted to the hospice and be provided hospice services. If the hospital allows the patient to elect hospital benefits, LifePath is eligible for reimbursement for services provided on the day of a patient's admission. Once LifePath admits a hospitalized patient, the LifePath hospital team is notified. The team consists of hospice nurses, social workers, and a chaplain. The team continues to see the patient while in the hospital and helps coordinate the care and, frequently, the discharge of the patient. The 36 Patients Hospitalized in 6A The 36 patients originally reported by LifePath as admissions in Service Area 6B were all eligible for admission to hospice at the time LifePath undertook to admit them to hospice care. All 36 were admitted while physically located in Service Area 6A. The admission process for the 36 patients included a professional initial assessment by the admitting nurse of the social, psychological, spiritual and financial needs of the patient as well as a physical assessment. LifePath was not reimbursed by Medicare for 34 of the patients in question for hospice care in the hospital. Nor did LifePath seek compensation from Medicare for the care in the hospital provided these patients. As to those patients who returned home or were transferred to another residential setting in Service Area 6B, LifePath received Medicare reimbursement for the hospice care provided in the residential setting. LifePath explained that it did not receive Medicare reimbursement for the care provided during the time the 34 spent in the hospital because the hospitals would not allow the patients to elect hospice Medicare benefits while in the hospital. Hospitalized patients, moreover, LifePath explained, can be admitted as patients who pay privately without the involvement of a third party payer.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by the Agency for Health Care Administration determining the fixed need pool for health planning subdistrict 6A for the March 2000 batching cycle to be zero. DONE AND ENTERED this 18th day of May, 2001, in Tallahassee, Leon County, Florida. DAVID M. MALONEY Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 18th day of May, 2001. COPIES FURNISHED: Sam Power, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive Fort Knox Building Three, Suite 3431 Tallahassee, Florida 32308-5403 Julie Gallagher, General Counsel Agency for Health Care Administration 2727 Mahan Drive Fort Knox Building Three, Suite 3431 Tallahassee, Florida 32308-5403 Richard A. Patterson, Esquire Agency for Health Care Administration 2727 Mahan Drive Fort Knox Building Three, Suite 3431 Tallahassee, Florida 32308-5403 Gerald B. Sternstein, Esquire Frank P. Rainer, Esquire Sternstein, Rainer & Clarke, P.A. 101 North Gadsden Street Tallahassee, Florida 32301 H. Darrell White, Esquire McFarlain, Wiley, Cassedy & Jones, P.A. 215 South Monroe Street, Suite 600 Post Office Box 2174 Tallahassee, Florida 32316-2174
The Issue [Case No. 79-2407] Whether the Department is entitled to reimbursement of certain Medicaid funds previously paid to a nursing home owner in the amount of $118,061.00, based upon a recommendation by the Department and subsequent determination by the U.S. Department of Health, Education and Welfare, under Section 1122, Social Security Act, that Federal reimbursement of expenses attributable to the purchase of the nursing home should be withheld due to the Owner's lack of timely notice of intent to acquire the nursing home; [Case No. 80-467] Whether, based on the Section 1122 determination, the Department wrongfully disallowed and withheld payment to the nursing home owner, certain medicaid reimbursement funds in the amount of $101,348.00. Conclusions and Recommendation: Conclusions: Here, each party has the burden of presenting a preponderance of evidence in support of its affirmative claim. Each claim rests on the propriety or impropriety of imposition of Section 1122 penalties against the nursing home. Since the Department failed to present sufficient evidence justifying the imposition of Section 1122 penalties and the nursing home failed to establish the Section 1122 penalties were erroneously imposed, neither party sustained its burden of establishing entitlement to the relief requested. Recommendation: That the Department's Medicaid overpayment claim against the nursing home owner, in the amount of $118,061.00 be DENIED, and the nursing home owner's claim against the Department for $101.348.00 in Medicaid underpayments be DENIED. Background: On April 26, 1979, and May 2, 1979, Petitioner/Respondent, Department of Health and Rehabilitative Services ("Department") notified Respondent/Petitioners, Lakeview Nursing Home, Robert Becht and R. B. Care, Inc., d/b/a Lakeview Manor and d/b/a Intercoastal Nursing Manor ("Owner") that a desk review of the annual cost report for the Lakeview Nursing Home (a/k/a Lakeview Manor) indicated that the nursing home had been overpaid $18,900.00 by the Department's Medicaid Program during the eight months, ending June 30, 1978, and that such overpayment should be returned to the Department. On October 8, 1979, the Department notified the nursing home Owner that, pursuant to a "Notice of Determination Under Section 1122" issued by the U.S. Department of Health, Education and Welfare ("HEW") the Department had recalculated the nursing home's historic per diem rates and determined that the Owner had been overpaid $61,155.00 in Medicaid funds during the period ending June 30, 1978. On November 19, 1979, the nursing home Owner requested a formal hearing, under Section 120.57(1), Florida Statutes, to challenge the validity of the Department's overpayment claim. On November 30, 1979, the Department forwarded the Owner's request for a hearing to the Division of Administrative Hearings. [DOAH Case No. 79-2407] On January 10, 1980, the Department notified the nursing home Owner that an additional $56,906.00 should be repaid to the State of Florida--based upon alleged overpayment to the nursing home during the period ending June 30, 1979. On February 14, 1980, the nursing home Owner filed a Petition with the Department alleging numerous wrongful and negligent Department actions resulting in the withholding and underpayment of Medicaid funds to which the nursing home was entitled, demanding full payment, and requesting a formal Section 120.57 hearing. On March 12, 1980, the Department forwarded the nursing home Owner's Petition to the Division of Administrative Hearings for assignment of a Hearing Officer. [DOAH Case No. 80-467] By Notice of Hearing, dated April 11, 1980, Case No. 80-467 was set for final hearing on May 29, 1980. By agreement of the parties, the two cases were subsequently consolidated for final hearing. At final hearing, the Department called John T. Donaldson, and offered Respondent's Exhibit Nos. 1 through 9, into evidence, each of which was received. The nursing home Owner called as its witnesses, William McCaulley, Leonard Cordes, and Linda Zarecki, and offered Petitioner's Exhibit Nos. 5, (Composite) and 6, each of which was received. At the request of the nursing home, and without objection by the Department, official recognition was taken of Rule 10C-7.48(6)(c), Florida Administrative Code. The nursing home further stipulated that the only allegations which it would pursue in the administrative hearing concerned whether the Department wrongfully withheld from the nursing home certain Medicaid funds to which its was entitled. Neither party submitted post-hearing proposed Findings of Fact or Conclusions of Law.
Findings Of Fact Pursuant to an agreement with HEW, the Department administers the Medicaid Program within Florida which includes allocation and payment of Medicaid funds to nursing homes which provide health care to patients qualifying for Medicaid benefits. (Testimony of Donaldson, Petitioners Exhibit 5; Respondent's Exhibit 9) On November 1, 1977, Robert Becht, on behalf of R. B. Care, Inc. ("Owner") purchased a nursing care facility located at 208 Lakeview Avenue, West Palm Beach, Florida, known as Intercoastal Nursing Manor. No evidence was presented to establish the purchase price paid for the facility. Subsequent to its purchase, the name of the nursing home was changed to Lakeview Manor, although Department correspondence frequently refers to it as Lakeview Nursing Home. (Testimony of Donaldson, McCaulley, Respondent's Exhibits 1, 2, 5, 9 [Composite]) On January 9, 1978, a representative of the Regional Health Care Planning Agency--Health Planning Council, Inc.--advised the Department's Bureau of Community Medical Facilities of an apparent change in ownership of the Intercoastal Nursing Home, noted that the new owner had not "sought, applied for, or received the necessary Certificate of Need for this change of ownership transaction," and asked for Department assistance in determining the present status of the nursing facility. (Testimony of Donaldson, Respondent's Exhibit 1) In response to the Health Planning Council's letter, the Department's Office of Medical Facilities sent a letter to the Nursing Home Owner, dated January 26, 1978. That letter enclosed Department rules which provided that, when certain expenditures have been incurred by a health care facility without prior notice of such expenditure being given to the designated planning agency (Office of Medical Facilities), that agency should notify the health care facility that such obligation was subject to review, that timely notice of the proposed expenditure was not given, and that the Agency proposed to recommend to the Secretary of HEW that the expenditure be disapproved. The nursing home was given 30 days to reply, or file the necessary application for approval of the expenditure (acquisition of the nursing home). The letter closed with the following: "You should understand that we must report the purchase of Intercoastal Nursing Manor to the Department of Health, Education and Welfare on a no timely notice and that it may affect depreciation, interest, and fair returns on the project and reimbursement on the project." (Respondent's Exhibit 2) By letter dated March 22, 1978 (with copy to the nursing home Owner), the Department's Office of Community Medical Facilities subsequently informed the regional office of HEW that notice had been given the nursing home Owner concerning the need to file an application for review of the November 1, 1977, acquisition of and change in ownership of the nursing home, but that it had failed to respond. The recommendation of the Office of Community Medical Facilities was attached to the transmittal letter; however, that recommendation was not offered into evidence by the Department. The letter of transmittal concluded that, because no application for approval was submitted by the nursing home Owner, there was "no indication on the HRA-45 of the amount of capital expended for the acquisition." (Respondent's Exhibit 3) During April, 1978, the Regional Health Administrator of HEW issued a "Notice of Determination under Section 1122--Reimbursement to be Excluded." The Notice was addressed to the nursing home Owner and concluded that reimbursement for expenses related to the capital expenditure (acquisition of the nursing home facility) would be excluded from payment for services provided under the Social Security Act based upon the finding that (1) the expenditure was subject to Section 1122, and (2) Notice of Intent to make the expenditure had not timely been given. By way of explanation, the regional administrator added that reimbursement would be "withheld for an indefinite period" because the State had been unable to make a finding that the expenditure conformed to applicable plans, standards, and criteria due to the failure to submit an application. (Respondent's Exhibit 4) By separate agreements entered into by the Department and the nursing home Owner on November 2, 1977, October 30, 1978, and September 5, 1979 (which enabled the nursing home to participate in Florida's Medicaid Program) the nursing home Owner expressly agreed to comply with state and federal laws and rules applicable to the Medicaid Program. The Owner also agreed that Medicaid cost reporting would be governed by the procedures and methods contained in the Medicare Provider Reimbursement Manual (HIM-15). The agreements relieve the nursing home from responsibility in "those instances of overpayment due to Agency [Department] errors in eligibility investigation and determination. . ." (Respondent's Exhibit 9 [Composite]) Section 2422 of HIM-15 describes the requirements concerning approval of capital expenditures imposed by Section 1122 of the Social Security Act. The Manual cautions providers desiring to make or having made expenditures subject to Section 1122 to familiarize themselves with the regulations and direct questions concerning its implementation to the designated planning agency. (Respondent's Exhibit 8) Notwithstanding having been sent repeated notices by the Department and HEW concerning the requirements of Section 1122, the nursing home Owner has not filed an application for approval of the capital expenditure associated with acquisition of the nursing home; neither has it contended that such capital expenditure does not fall within the ambit of Section 1122 and implementing HEW and Department rules. (Testimony of McCaulley, Donaldson) Despite the Department's withholding and disallowal of payment to the nursing home of expenses relating to the acquisition of the facility (due to the federal Section 1122 determination), the nursing home continued to qualify for and participate in the Medicaid Program. The nursing home provided efficient and satisfactory medical care to Medicaid patients during 1978, and 1979, and the Department does not assert otherwise. The three Medicaid participation agreements entered into during 1977, 1978, and 1979, do not directly address or purport to relieve health care facilities from compliance with Department rules and Section 1122. (Testimony of Donaldson, McCaulley, Respondent's Exhibit 9 [Composite]) It is probable that the nursing home received actual notice of the requirement that certain capital expenditures by health care facilities must receive Section 1122 approval. Although the nursing home Owner's secretary since June, 1978, does not recall receiving the HEW Section 1122 Notice, she was not employed by the nursing home during the time the notice was issued, and she admitted that she could not testify that the owner had not received the HEW Notice. Moreover, her testimony did not address the earlier Department correspondence to the Owner concerning the need to obtain State and Federal Section 1122 approval, including the Department's Section 1122 recommendation to HEW. (Testimony of Zarecki, Donaldson, Respondent's Exhibits 2, 3, 4, 5, 6) Between 1977 and 1979, the Department overpaid the nursing home $118,061.00 (which includes the $18,900.00 claimed by the Department in its May 2, 1979, letter) in per diem patient reimbursements which the nursing home was not entitled to under the Section 1122 Notice and Penalty. This overpayment was caused by the Department's failure to exclude that portion of per diem patient reimbursements attributable to the Owner's acquisition of the nursing home property. (Testimony of Donaldson, Respondent's Exhibits 5 and 7) If the Section 1122 penalty was incorrectly recommended by the Department, and imposed by the HEW, the Department has withheld between November 1, 1977, and December 31, 1979, $101,348.00 which is now due and owing to the nursing home Owner. (Testimony of McCaulley, Petitioner's Exhibit 6) Since January 2, 1979, the Owner has no longer owned or operated the nursing home in question. (Testimony of McCaulley, Cordes)
