The Issue Whether HRS should grant Upjohn's application for certificate of need to establish a home health agency in Escambia County? Whether, in light of the recommended disposition of Upjohn's application, HRS should grant Baptist's application for a certificate of need to establish a home health agency to serve Escambia and Santa Rosa Counties? Whether an applicant for certificate of need and HRS can by stipulation divest the Division of Administrative Hearings of jurisdiction over the application and defeat the right of an existing provider to proceedings pursuant to Section 120.57(1), Florida Statutes (1984 Supp.)?
Findings Of Fact Since June 4, 1978, Upjohn has operated a home health service from its Pensacola office, one of 22 such offices in Florida, 16 of which are licensed as home health agencies. For more than three years, Upjohn has performed various services under contract to HRS from its Pensacola office. In Escambia, Santa Rosa, Okaloosa, Walton and Bay Counties, Upjohn now provides home nursing care, homemaking services, live-in companions and nurses' aides. Medicaid and medicare would pay for some, but not all, of the services Upjohn already provides in Escambia County, if Upjohn's Pensacola office were licensed as a home health agency. The certificate of need Upjohn seeks here is a prerequisite to such licensure. Upjohn provides services which are not offered by either of the home health agencies now licensed to serve Escambia County. Some people receiving these services must turn elsewhere for related services in order to obtain reimbursement from medicaid or medicare for the related services. This can create coordination problems such as the one mentioned at hearing: If employees from both agencies arrived at the same time, one might have to wait while the other "performed services", e.g., administered an injection. Like Upjohn, Baptist is already in the home health care business and provides services not offered by either of the licensed home health agencies serving Escambia County (one of which also serves Santa Rosa County.) Since October 2, 1983, Baptist has operated in Escambia and Santa Rosa Counties, albeit without the benefits of licensure as a home health agency. In 1984, to the time of final hearing, Baptist had seen 163 patients, ten to twelve of whom it had referred to NWFHHA because they were eligible for medicare benefits, but only if they received services from a licensed provider. Like Upjohn, Baptist provides various technical nursing services, such as hyperalimentation and intraveneous administration of antibiotics. Baptist also provides oxygen therapy and chemotherapy, once a physician has administered an initial dose. In addition, Baptist deals in durable medical equipment including bedside commodes, walkers, and the like. Baptist intends to offer physical, occupational and speech therapy if it receives a certificate of need, although it does not now offer these services. Durable medical equipment expenses and physical therapy fees are reimbursable by medicare Part B without regard to the provider's licensure. All of the services which the applicants provide and for which they are now reimbursed by medicare are available in Escambia and Santa Rosa Counties from providers who are licensed and eligible for reimbursement. COMPETITORS LICENSED Already licensed to provide services in Escambia and Santa Rosa Counties as a home health agency is Northwest Florida Home Health Agency, a nonprofit corporation that opened for business in 1975. The number of visits NWFHHA makes monthly has risen from 629 in 1980 to 1709 in 1984. Of the 902 patients NWFHHA served in the fiscal year ending March 31, 1984, only twelve were not eligible for medicare benefits. NWFHHA has headquarters in Gulf Breeze and is the only licensed home health agency serving Santa Rosa County. Nothing prevents NWFHHA staff from providing nursing services gratis on their own time, but there was no evidence that this occurs. NWFHHA offers only services that medicare reimburses, viz., skilled nursing, physical, occupational and speech therapy, and medical social worker and home health aide visits. NWFHHA's office hours are from eight o'clock in the morning until four o'clock in the afternoon Monday through Friday. After hours, nights and weekends a telephone answering service, "the doctors and nurses registry," answers calls placed to NWFHHA's office telephone, and relays messages to a nurse. A nurse is always on call, and registry personnel either telephone the FWFHHA nurse on call or contact her with a beeper pager system. The only other licensed home health agency serving Escambia County is the oldest, the Visiting Nurses' Association (VNA) which has been "absorbed" into the Escambia County Health Department. In the fiscal year ending June 30, 1983, the VNA served 465 medicare patients and 303 others, including patients unable to pay, those who could and did, and those whose insurance companies paid for services. The VNA does not sell or rent durable medical equipment but enjoys good relationships with suppliers and has never been unable to obtain equipment needed by its clients. The VNA provides skilled nursing services, including enteral therapy, post-colostomy and other stomal care, nutritional counseling, home health aides and, through another branch of HRS, social services. The VNA has never turned away a medicare or a medicaid patient in need of its services. VNA's office hours are from eight o'clock in the morning till half past four o'clock in the afternoon Monday through Friday. Between same hours on Saturdays, Sundays and holidays, VNA has "a weekend nurse" who can be reached through the doctors and nurses registry. (T.369) VNA's services are generally unavailable before eight o'clock mornings and after four-thirty evenings, and VNA cannot be reached by telephone during those hours, unless, like Judy Gygi, the director of the social work department at West Florida Hospital, a person has the VNA "call-back number." NEED In comparison to hospitals, home health agencies can open shop relatively quickly, once the decision to do so is made. A "planning horizon" of one year for home health agencies is more appropriate than the five-year horizon used for hospitals. This is particularly true here where both applicants are already engaged in offering the services for which certificates of need are sought. The need for home health services may be seen as a function of the age and size of a population. In 1985, Escambia County is projected to have a population of 254,100 persons of whom 23.04 percent would be younger than 15 and 10.1 percent would be 65 or older. The 1985 population of Santa Rosa County is projected at 62,600 of whom 24.63 percent would be under 15 and 7.9 percent would be 65 or over. For District 1 as a whole, comprising Escambia, Santa Rosa, Okaloosa and Walton Counties, the 1985 population is projected at 464,300, including 23.39 percent under 15 and 9.35 percent 65 or over. An expert retained by Upjohn predicted a need in 1985 for up to 27 home health agencies in District I, and for at least two and up to 18 home health agencies in Escambia County alone. Upjohn's expert invoked four methodologies. Common to each was the assumption that the average patient can be expected to receive 31.5 home visits, a number HRS generated to reflect statewide experience. Changes in medicare reimbursement for hospital care seem to have decreased the average length of stay in Escambia County hospitals by nearly a full day over the last two years or so. This is thought to have created additional home health clients who need significantly fewer visits than historical averages might suggest. VNA's recent experience has been on the order of 14 visits per patient as compared to NWFHHA'S recent average of approximately 36 visits per patient. At least two of the four methodologies generated predictions for 1985 of home health care visits in Escambia and Santa Rosa Counties, without regard to whether their cost was reimbursable by medicare. Nationally about 18 percent of Upjohn's services are reimbursed by medicare. A rough rule of thumb is that the "medicare need" is one fifth of the total need. Using a method he denominated "U.S. DHHS", Upjohn's expert predicted that there would be 5,836 home health referrals in Escambia County in 1985 as compared to 8,692 for the whole of District I, in 1985, so that the number for Escambia County would exceed two-thirds of the district total. Even assuming the "U.S. DHHS" methodology is a good one, something is amiss with the calculations, because the 1985 population of Escambia County is projected to amount to only 54.73 percent of the district total; and Escambia County is not projected to have as much as two thirds of any age cohort in District I in 1985. According to Upjohn's Exhibit No. 3, the "U.S. DHHS" method projects only medicare referrals, but this is an apparent error. According to the same exhibit, the "U.S. DHHS" predicts more than four times the number of medicare referrals for 1985 in Escambia and Santa Rosa counties than the only other medicare method, "DHRS Option 2," predicts. On the 20 percent medicare assumption, the "U.S. DHHS" calculations predict a level of home health care referrals in Escambia County ten times higher than the "District I Draft HSP" method predicts. The two "total referral" methods predicted 2,881 and 3,637 home health referrals for Escambia County and 696 and 878 for Santa Rosa County for 1985. Neither of these methodologies has been validated because, as Upjohn's Dr. Dacus explained, "there is just no reliable, verifiable data base, which reflects the total volume of home health care services." (T. 136). The final method, "DHRS Option 2", predicts 1,359 home health medicare referrals for Escambia County in 1985 and 267 such referrals for Santa Rosa County in 1985, a two-county total of 1626. Annualizing from Intervenors' Exhibits 2 and 5, the VNA can expect to make 5102 visits [2976 (12 divided by 7] in 1984 for which medicare Part A will reimburse; and NWFHHA can expect to make 20,388 visits (April, May and June home health aide, nurse, and paramedic visits quadrupled), for almost all of which it will seek reimbursement from medicare, if past experience is an indication. Dividing 5102 by 14 and 20388 by 36 yields a total of 931 medicare referrals for Escambia and Santa Rosa Counties for 1984, which suggests that the 1626 prediction for 1985 is a substantial overprediction. Area specific utilization rates suggest, on the generous assumption of a five percent increase in 1985 over 1984, and on the twenty percent medicare assumption, 4888 home health referrals for Escambia and Santa Rosa Counties in 1985. Assuming medicare visits increase in Escambia and Santa Rosa Counties by ten percent in 1985 over 1984 levels, 28,0389 visits can be expected. Upjohn's own policy is to form a subunit only "once you get up to around 15 or 20 thousand visits." (T.119) The national average is on the order of 7,000 visits per year per agency. NO NEED SHOWN TO BE UNMET But no net need was shown on this record because of the incomplete evidence as to what existing home health services already provide. The evidence did not show the total number of home health care visits now being made in Escambia and Santa Rosa Counties or either of them. Nor was it clear from the evidence whether the applicants and the licensed agencies are the only providers of home health services in the area. There has never been a waiting list for home health services in Escambia County and neither of the two Escambia county medicare providers had added staff in the twelve months preceding the final hearing. Specifically, there was no showing that medicare reimbursed services would be in any way lacking in 1985. The evidence affirmatively established that they would be readily available, unless the existing providers cease offering these services. The most interesting effort to show that there might be a problem was proof that a judgment for $105,000 against NWFHHA had not been paid. This amount exceeded the amount of NWFHHA's assets and no doubt presents serious legal problems for this nonprofit corporation. But this evidence 1/ falls short of establishing by a preponderance that NWFHHA will cease to provide home health services in 1985. Upjohn's expert witness testified that the only capital costs for home health agencies was "so low...just the cost of the office, having the office there. (T.114) Even if NWFHHA is stripped of its assets in order to satisfy the outstanding judgment or to obtain discharge in bankruptcy, its viability as an ongoing enterprise would persist. Office rent would be its chief working capital requirement and revenues would readily cover that. Both the VNA and NWFHHA can provide significantly more home health services without adding additional staff. To the extent Upjohn and Baptist serve non-medicare patients that VNA would otherwise have served, VNA's ability to deliver home health services to medicare-eligible patients is enhanced. Nothing in the evidence established that any medicare-eligible patient in Escambia or Santa Rosa Counties has encountered difficulty in obtaining home health services in the past or will in the foreseeable future. FINANCES Home health agencies differ from hospitals and other similar health care providers in that their fixed costs only amount to one or two percent of total costs. In order to serve more patients, they need only add staff. Patients' homes are the principal workplace, and capital expenditures entailed in expanding are minimal. The record is replete with theories about economies and diseconomies of scale, but these offer little practical guidance. "If you try [to] plot a curve of home health care average charge per visit [versus the number of visits] you cannot get a defined line. You get a very steady [flat] line with a lot of random variances across it." (T.115) The mix of services offered is more significant than the volume of services, although there is some correlation between volume and mix. (T.117, 118) "[G]oing further and further away...[to see] patients...increase(s) travel costs...[s]o you get an expanding component of travel expense" (T.119) if the geographical area being served expands. The medicare program reimburses costs of home health services up to a cap, which is $50.26 per visit for the current fiscal year. The rate of reimbursement for services to medicaid patients is much lower ($16 per visit). The average cost per NWFHHA medicare visit during the 1983-1984 fiscal year was $23.26, and the average cost per VNA medicare visit was $29.62 during the 1982- 1983 fiscal year. Because of differences in the mix of services, the applicants' average cost figures are not strictly comparable, but there was no proof that the cost of providing medicare services would go down if these applications are granted. 2/ Neither applicant showed projected costs at less than what the existing providers are experiencing. NWFHHA's costs are the lowest in Florida and there is nothing in the evidence to suggest that Baptist or Upjohn will be able to provide medicare services for as little as the existing providers. As a result, the medicare program and so the tax payers would be paying more for the same services, as far as the evidence shows, if either application is granted.
Findings Of Fact Background Respondent published a fixed need pool for Medicare- certified home health agencies for the certificate-of-need (CON) review cycle commencing in March, 1992, and determined that Service District XI did not need any additional home health agencies. On February 17, 1992, Petitioner timely notified Respondent that the fixed need pool calculation was in error. On March 6, 1992, Petitioner timely filed a petition challenging the fixed need pool determination, thereby commencing DOAH Case No. 92-2289. On February 24, 1992, Petitioner filed a letter of intent to submit a CON application for the development of a Medicare-certified home health agency in District XI. On March 24, 1992, Petitioner timely submitted an application for CON 6951 to establish a home health agency in Service District XI. On July 17, 1992, Respondent notified Petitioner of the intent to deny the application. Petitioner timely filed a petition challenging the intent to deny, thereby commencing DOAH Case No. 92-4795. Petitioner is adversely and substantially affected by Respondent's decisions concerning the fixed need pool and intent to deny Petitioner's CON application. Need for Proposed Health Care Facilities and Services in Relation to Applicable District Plan and State Health Plan Fixed Need Bed Pool Respondent calculated the fixed need bed pool based on Rule 59C-1.031, which is set forth in the Conclusions of Law. The purpose of the rule is to determine the required number of home health agencies by finding the cost efficient agency size (CEAS) "in number of visits at which economy of scale is achieved." Once the optimal number of visits is thereby determined, Respondent can calculate how many home health agencies are required in a specific service district. Pursuant to the rule, Respondent divided 181 nonexcluded home health agencies into four equal groups of equal numbers of agencies. These groups were divided by median numbers of visits and arrayed, as required by the rule, into groups from the lowest to the highest number of visits. Respondent then calculated for each group the median number of visits and mean cost per agency. The results of these calculations are as follows: Group Median # of Visits Average Cost Per Visit 1 5,000 $42.14 2 15,000 $45.88 3 31,000 $46.93 4 64,000 $45.95 Pursuant to Rule 59C-1.031, Respondent determined the percentage reductions, comparing "each grouping to the previous grouping." Respondent next checked for a cost reduction of at least 5 percentage points between two groups, as required by the rule. Between groups 1 and 2, there was no reduction of cost, but rather an increase of 8.88 percent. Between groups 2 and 3, there was no reduction, but an increase of 2.29 percent. Between groups 3 and 4, there was a reduction, but only of 2.09 percent. Under the rule, the only role of the first group, and its average cost per visit, is to serve as a standard against which the second group can be measured. Thus, Respondent did not calculate the percentage reduction between the average cost of the first group, which has the lowest average cost, and the average cost of any other group. Petitioner contends that the rule requires or permits a rolling comparison of group 4 with group 1. If so, the reduction between groups 4 and 1 would be 8.29 percent. There are no mean visit cost reductions of at least 5 percent between groups 1 and 2, 2 and 3, or 3 and 4. Under the rule, Respondent is required to choose the median number of visits of the grouping for which the average cost per visit was at least 5 percent less than the average cost per visit of the "previous grouping." If two or all three of the comparisons yield at least 5 percent reductions, then, rather than take the grouping corresponding to the greatest reduction or the lowest average cost per visit, the rule identifies the last of the qualifying reductions as the CEAS. As noted above, the CEAS is used to calculate the fixed need pool. In the absence of any 5 percent reduction between groups 1 and 2, 2 and 3, or 3 and 4, Respondent identified two alternatives. First, it could find that there was no fixed need pool. As Respondent's Health Services and Facilities Consultant Supervisor testified, Respondent could have declined to publish a fixed need pool because it could not apply the rule. "And at that point, the certificate of need reviewer would have to rely on other criteria other than fixed need-pool in determining whether there was a need." Tr., p. 87. In the second alternative identified by Respondent, it could select group 4 as the CEAS because the comparison between it and group 3 resulted in the only positive reduction in average costs per visit, unless group 1 was compared with some other group. An unfortunate concomitant of this alternative is that group 4 represents the second highest cost per visit. Despite this fact, Respondent chose the second alternative and proceeded to calculate the fixed need pool for home health agencies accordingly. The effect of Respondent's selection of group 4 was to calculate the fixed need bed pool based upon a relatively high number of visits per facility. The CEAS in this case was 64,000 visits. Thus, roughly 1/13th of the agencies would be needed under Respondent's fixed need pool than would have been needed if the CEAS had been set at 5000 visits, which corresponds to the least expensive group--group 1. The practical effect of Respondent's selection of group 4 was that the fixed need pool for Service District XI was zero. If group 1 had been selected, the fixed need pool would have been 14. The interpretation given the rule by Respondent lacks reason, as does the interpretation for which Petitioner contends. The correct interpretation requires the adoption of the first alternative in which Respondent acknowledges the inapplicability of the rule and leaves parties free to litigate the issue of need without regard to any published fixed need pool. Both rejected interpretations ignore the plain language of the rule. Respondent's argument falters by setting up group 1 as a "previous group" to group 4. The rule leaves no doubt that the groups are to be arrayed in ascending order of size. Given the rule's obvious reliance upon the principle of economies of scale, there is no reasonable basis for inferring the authority for a final comparison of group 4 to group 1. On the other hand, Petitioner's interpretation disregards the requirement that a substantial reduction of 5 percent triggers the identification of the CEAS group. Petitioner's argument that this interpretation most closely follows the intent of the rule is erroneous. In fact, two contradictory intentions emerge from close study of the rule. The more evident is that the rule intends to restrict market access without substantial regard to the principle of cost containment. In the absence of a rule challenge, the rule must be applied without regard to this feature. But Respondent's unchallenged disregard of the critical principle of cost- containment does not militate strongly in favor of allowing Respondent to extend the reach of this dubious aspect of the rule by engrafting upon it layers of nonrule policy to cover contingencies, which, incidentally, Respondent should have easily foreseen. The rule reflects a bias toward restricting market entry by home health agencies without regard to cost efficiency. As noted above, the rule precludes the possibility that the group with the lowest number of visits (and thus generating the largest fixed need pool) could ever be selected as the CEAS. Also as noted above, the rule's preference for later reductions of at least 5 percent, without regard to comparing average costs or even percentage reductions, again encourages the selection as the CEAS of the group with the larger number of visits (thus generating the smallest fixed need pool). Third, as Respondent contends, in no way can Rule 59C-1.031 be interpreted to require Respondent to select the CEAS based on the group with the lowest average cost per visit. As Respondent's Health Services and Facilities Consultant Supervisor testified, "the only reason why we regulate home health agencies under the certificate of need program and why we restrict market entry is based on the argument that larger size agencies are more cost-effective." The Supervisor added: "If that assumption were no longer true generally, then there would be actually no reason for us to control market entry for home health agencies." Tr., p. 81. In fact, Respondent has detected a decreasing correspondence between the size of a home health agency in number of visits and its average cost per visit, as agencies' costs migrate toward applicable cost ceilings. This was easily predictable and means that many more cases can be anticipated in which no CEAS will emerge from the rule's formula because no later group represents a 5 percent reduction in cost from a previous group. Implicitly acknowledging this practical problem with the rule, as well as hopefully the counterproductive effect of the rule upon the attainment of cost-containment, Respondent has also proposed the deregulation of home health agencies in terms of the issuance of CON's. The other source of the intent of the rule is derived from the definition of the CEAS, which is the objective of the rule's calculations. The CEAS is the "cost efficient agency size . . . at which economy of scale is achieved." "Economy of scale" is defined in the following statement: The behavior pattern of costs recognizes that gains in operating efficiencies act to reduce costs per unit to a certain point (economies of scale) and that[,] as the level of production continues to increase[,] operating inefficiencies take effect (diminishing returns). Respondent's interpretation of the rule, which stresses the intention to restrict market access without substantial regard for the principle of cost containment, fails to account adequately for the fact that diminishing returns or diseconomies of scale may actually have already begun before the second group is considered. The intent of the rule is to find the cost efficient agency size at which economies of scale are achieved. If, as here, the economies of scale are only encountered within the first group (i.e., the group with the agencies with the smallest number of visits), then it is impossible to justify Respondent's interpretive nonrule policy that exacerbates the tendency of the rule to restrict market access without substantial regard to the principle of cost containment. Thus, Respondent's claim that its interpretation of the rule is most consistent with the intent of the rule is flawed. In fact, the rule contains contradictory intentions, and Respondent, at best, has adopted the interpretation most consistent with the more dubious intent inferable from the rule. Petitioner's interpretation is most consistent with the better intent inferable from the rule--i.e., the CEAS is the "cost efficient agency size . . . at which economy of scale is achieved." However, Petitioner's interpretation fails to take into account the intent of the rule favoring larger providers. Petitioner's deemphasis of this aspect of the rule commendably pursues the critical principle of cost containment. But Petitioner's contrivance of the rolling comparison in which group 4 is compared to group 1 suffers from a disregard of the language of the rule regarding the arraying of the groups in ascending order and the comparison of each of the three largest groups with its previous group. There is no other reasonable conclusion than that the rule could not produce a fixed need pool, Respondent's determination of a fixed need pool of zero is incorrect, and the parties should have been allowed to litigate the question of need without regard to Respondent's incorrect determination of a fixed need pool of zero and without a showing of not-normal circumstances. Need in General The absence of the fixed need pool does not mean that the inputs to the formula are without value. To the contrary, the above-described calculations under the rule clearly justify determining need on the basis of the finding that the most cost efficient agency size is the agency in which the median number of visits is 5000. To achieve this most cost-efficient agency size, the number of home health agencies in District XI could be expanded by 14. Thus, Petitioner has proved the need for another home health agency. The applicable district and state health plans fail to identify any groups with a quantifiable lack of services or special need for home health care services. Plan language regarding preferences implies a comparative evaluation process, which is, at most, not readily applicable to the present situation involving a single applicant. In any event, it appears that Petitioner would serve a variety of subgroups of District XI that are specified in the district plan as medically underserved, even though the plan does not indicate that any of these groups currently has unmet needs in terms of home health agency services. It also appears that Petitioner would serve a greater percentage of Medicaid-eligible and medically indigent patients that is typical for existing home health agencies in District XI. Based on the findings of the preceding paragraph, Petitioner was entitled to full compliance with the corresponding preferences of the district plan, rather than the noncompliance and partial compliance that it was given for these preferences in the State Agency Action Report (SAAR). Respondent should have given Petitioner full compliance on the remaining preferences under the district plan, although several of them appear to have little to do with need. Petitioner has a working arrangement with the prime referral source, physicians. Also, by virtue of its acquisition of an existing home health agency, Petitioner will also have working arrangements with various health care providers in the area. The deficiency with the district plan cited in the SAAR concerning working arrangement with AIDS referral networks is of little importance as the AIDS referral networks, which have their own home health agencies, will be competitors of Petitioner. The SAAR likewise incorrectly gives Petitioner partial or no compliance with preferences in the State plan with respect to AIDS patients, which Petitioner clearly proposes to serve; counties underserved by existing home health agencies, which includes Dade County based on the above-described calculations concerning the most cost efficient agency size; and the proposal of a comprehensive quality assurance program and the seeking of accreditation by the Joint Commission on Accreditation of Healthcare Organizations, both of which Petitioner proposes to do. Based on the foregoing, Petitioner has clearly demonstrated a need for the proposed project without regard to not-normal circumstances and despite the absence of a valid fixed need pool for home health agencies in the subject batching cycle. Availability, Quality of Care, Efficiency, Appropriateness, Accessibility, Extent of Utilization, and Adequacy of Like and Existing Health Care Services According to the SAAR, there are sufficient home health agencies in District XI. However, Petitioner has proved that the proposed project will increase the availability or access of home health agency services based on the above-described calculations concerning the most cost efficient agency size. Ability of Applicant to Provide Quality of Care The parties have stipulated that this criterion is either not applicable to Petitioner's application or that the application has adequately addressed the criterion. Availability and Adequacy of Other Health Care Facilities and Services According to the SAAR, there are sufficient home health agencies in District XI. However, Petitioner has proved that existing home health agencies are not adequate or sufficiently available based on the above-described calculations concerning the most cost efficient agency size. Probable Economies and Improvements in Service that May Be Derived from Operation of Joint, Cooperative, or Shared Health Care Resources The parties have stipulated that this criterion is either not applicable to Petitioner's application or that the application has adequately addressed the criterion. Need for Special Equipment and Services Not Reasonably and Economically Accessible in Adjoining Areas The parties have stipulated that this criterion is either not applicable to Petitioner's application or that the application has adequately addressed the criterion. Need for Research and Educational Facilities The parties have stipulated that this criterion is either not applicable to Petitioner's application or that the application has adequately addressed the criterion. Availability of Resources for Project Accomplishment and Operation, Effects of Project on Clinical Needs of Health Professional Training Programs, Extent to which Services Will Be Accessible to Schools for Health Professions, Availability of Alternative Uses of Such Resources for the Provision of Other Health Services, and Extent to which the Proposed Services Will Be Accessible to All Residents of the Service District The parties have stipulated that these criteria are either not applicable to Petitioner's application or that the application has adequately addressed the criteria. The sole exception concerns the extent to which the proposed services will be accessible to all residents of the service district. Petitioner has proved that the proposed services would be accessible to all residents of the service district. Immediate and Long-Term Financial Feasibility of Project The parties have stipulated that these criteria are either not applicable to Petitioner's application or that the application has adequately addressed the criteria. The sole exception concerns the extent to which the long-term financial feasibility of the project is a function of Petitioner's utilization assumptions. The SAAR predicates its assignment of only partial compliance with this criterion upon Petitioner's failure to demonstrate access problems and justify the projected patient volume. However, to the extent that these criticisms reflect an incorrect need determination, Petitioner has proved that the proposed project satisfies the criterion of long-term financial feasibility based on the above-described calculations concerning the most cost efficient agency size. Special Needs and Circumstances of Health Maintenance Organizations The parties have stipulated that this criterion is either not applicable to Petitioner's application or that the application has adequately addressed the criterion. Needs and Circumstances of Entities Providing a Substantial Portion of Their Services or Resources to Individuals Not Residing in the Service District in which the Entities Are Located or in Adjacent Service Districts The parties have stipulated that this criterion is either not applicable to Petitioner's application or that the application has adequately addressed the criterion. Probable Impact of Proposed Project on Costs of Providing Health Services Proposed by Applicant Based on Effects of Competition on Supply of Health Services Being Proposed and Improvement or Innovations in the Financing and Delivery of Health Services which Foster Competition and Service to Promote Quality Assurance and Cost-Effectiveness The parties have stipulated that this criterion is either not applicable to Petitioner's application or that the application has adequately addressed the criterion. Costs and Methods of Proposed Construction The parties have stipulated that this criterion is either not applicable to Petitioner's application or that the application has adequately addressed the criterion. Applicant's Past and Proposed Provision of Health Care Services to Medicaid Patients and the Medically Indigent The parties have stipulated that this criterion is either not applicable to Petitioner's application or that the application has adequately addressed the criterion.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that the Agency for Health Care Administration issue a final order approving the application for CON 6951. ENTERED on September 8, 1993, in Tallahassee, Florida. ROBERT E. MEALE Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 8th day of September, 1993.
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found: The letter of intent and authorizing board resolution to establish a new Medicare certified home health agency filed by ABC for District Four for the September, 1989 batching cycle was timely filed with HRS and the Health Planning Council for Northeast Florida, Inc., and met all statutory and rule requirements for filing. The CON application to establish a new Medicare certified home health agency filed by ABC for District Four for the September, 1989 batching cycle was timely filed with HRS and the Health Planning Council for Northeast Florida, Inc. The CON application to establish a new Medicare certified home health agency for District Four for the September, 1989 batching cycle was deemed complete and accepted for review by HRS, effective November 13, 1989. There is a numeric need for one additional Medicare certified home health agency in District Four as determined by HRS and published pursuant to Rule 10-5.011(1)(d), Florida Administrative Code. Local Health Plan The 1989-90 CON Allocation Factors Report for HRS District Four (Health Plan) is the applicable health plan with regards to this proceeding. In its application ABC addressed the recommendations found in the Health Plan. The Health Plan recognizes that under the new methodology for determining numeric need, a licensed home health agency within an HRS district could serve any and all counties within the district. However, the Health Plan contains recommendations for allocating home health agencies. The Health Plan makes the following recommendations: Geographic Preference Home health agencies should be allocated to counties on the following basis: Preference should go to applicants who will establish their program in a county which does not have any CON approved agencies or subunits based in the county. Consideration should be given to counties with a low number of Medicare visits per 1,000 persons 65 years and older. Competing Applications In the case of competing applications for the same or similar geographic area, preference should be given to those applicants which demonstrate: They will meet identified needs in the most cost-effective manner. They are addressing a current or potential geographic access problem in the district. They will serve the widest spectrum of the population, including the medically indigent. They have written agreements with a broad spectrum of local hospitals, nursing homes, mental health resources and/or other service providers in order to help ensure continuity of care. They demonstrate in their CON application how they will comply with any conditions placed on the CONs. They will serve AIDS patients. ABC proposes to locate its agency office in Duval County because it contains medical centers, hospitals with discharge planners and physician staff for referrals, and because of enhanced recruiting and retaining of appropriate staff. However, it proposes to serve all patients referred to it in all counties located throughout District Four, including Baker County. Baker County has no CON approved home health agency based within the county. However, it is presently being served by home health agencies based in Duval County. Because of its small population, with a relatively low percentage of the population being 65 years old or older, its distance from hospitals and the recruiting and staffing problems it would engender, it is doubtful that Baker County could support a main office for a home health care agency. In fact, the 1988 Local Health Plan indicated that Baker County should probably not have a home health agency physically located within the county. Baker County has the lowest number of citizens 65 years of age or older and the lowest usage rate for home health agencies. There is no data or documentation to show why the usage of home health services in Baker County is low. However, HRS makes the assumption from the usage rate only that Baker County is underserved. Duval County is not considered as being underserved in terms of Medicare units. By locating in Duval County, ABC does not specifically comply with preference 1A or 1B. However, ABC has proposed to serve all patients within District Four referred to it regardless of where the patient is located, and regardless of the patient's payor class. (Medicare, Medicaid, private pay or indigent) While 1A and 1B of the Health Plan's recommendation is concerned with geographic preferences, 2A through 2F of the Health Plan's recommendations are preferences that relate mainly to situations involving competing applications in the same batch. ABC meets a majority of those preferences, including: 1A. ABC will be among the lowest in cost of the existing providers in District Four. 1B. ABC goes to the patient and has stated it will serve all of the patients within District Four referred to it. 1C. ABC proposed to serve all patients referred to it, including the medically indigent and medicaid. Because of the situation with Medicaid patients, ABC did not project any Medicaid patients. However, ABC proposed to serve all patients on which it has referrals including Medicaid patients. 1D. ABC did not have written referrals with hospital, nursing homes and other resources for patient referrals. However, ABC stated that this was its standard operating procedure and if granted a CON they would establish written referrals. 1E. ABC does not specifically address how they would comply with any condition placed on the CON. 1F. Again, ABC proposed to serve all patients within District Four referred to it, including AIDS and HIV patients. Since ABC has no control over which patients are referred to it, then its payor mix is just a projection. Whether an AIDS or HIV patient is on Medicare, Medicaid, private pay or medically indigent ABC has proposed to served them. In fact, it has a corporate policy to train and educate its employees in this area of service. ABC has shown that it intends to serve AIDS and HIV patients on which it has referrals. State Health Plan The 1989 Florida State Health Plan is the applicable health plan in this proceeding. The State Health Plan is a comprehensive three-volume document which describes Florida's health system and the services available to Florida residents. Specifically, the State Health Plan addresses certain preferences which HRS uses in reviewing home health CON applicants. They are as follows: Preference shall be given to an applicant proposing to serve AIDS patients. Preference shall be given to an applicant proposing to provide a full range of services, including high technology services, unless these services are sufficiently available and accessible in the same service area. Preference shall be given to an applicant with a history of serving a disproportionate share of Medicaid and indigent patients in comparison with other providers within the same HRS service district and proposing to serve such patients within its market area. Preference shall be given to an applicant proposing to serve counties which are underserved by existing home health agencies. Preference shall be given to an applicant who makes a commitment to provide the department with consumer survey data measuring patient satisfaction. Preference shall be given to an applicant proposing a comprehensive quality assurance program and proposing to be accredited by the Joint Commission on Accreditation of Healthcare Organizations. As to 16A, ABC has proposed to serve all patients in District Four that are referred to it by referring agencies, including AIDS and HIV patients regardless of their of payor class. ABC has a stated commitment to serving AIDS and HIV patients. The evidence establishes that of all AIDS cases reported in District Four, Duval County has approximately 69 percent. District-wide 52 percent of all reported AIDS cases have ended in death whereas in Duval County the percentage is 56. Very few AIDS patients are medicare eligible. A higher percentage of AIDS patients in Duval County are served as indigents or under Medicaid, notwithstanding HRS' Medicaid Project AIDS Care. As to 16B, ABC proposes to provide the full range of services, including high technology services. ABC included in it application excerpts from its high tech policy manual. There was no data available from local health council on what high tech services are available from existing providers. As to 16C, while ABC's payor mix does not indicate that they would be serving a disproportionate share of Medicaid and indigent patients there is no data indicating what access problem, if any, exists for Medicaid and indigent case patients needing home health care services. ABC proposes service to all patients within District Four that are referred to it be referring agencies. As to 16D, while there is no data available that any county within District Four is in fact underserved, ABC has stated that it will serve all counties in District Four and there is no evidence to show that ABC will not serve all counties in District Four. As to 16E, ABC has indicated it will comply with this requirement and there is no evidence to show that ABC will not furnish the data in terms of consumer survey response. As to 16F, ABC has a quality assurance program in place and HRS agreed that ABC could provide quality of care to its patients. Statutory Criteria Section 381.705(1)(a), Florida Statutes - Availability and Access to Services District Four has 20 Medicare certified home health agencies, with five located in Duval County and, one approved but not yet established Medicare certified home health agency. However, as stated in the State Agency Action Report (SAAR) there is a market for another home health agency in District Four as determined by the fixed need pool. ABC's stated commitment to serve all counties in District Four and to serve all patients in those counties referred to it by referring agencies regardless of whether the patient's payor class should enhance the convenience and accessibility to patients. Section 381.705(1)(b), Florida Statutes - Quality of Care, Efficiency and Adequacy of Existing Area Providers There is no specific data available from HRS concerning the quality of care, efficiency and adequacy of services being provided by existing care providers in District Four. ABC did not conduct a survey to assess the existence of quality care problems in District Four. However, the existence of quality care problems in District Four would be difficult to gauge since the in- home provision of services makes them largely beyond public or professional scrutiny. In fact, generally, with few exceptions, application for home health agencies do not address this criterion. The parties stipulated that the provisions of Section 381.705(1)(c) through (g), Florida Statutes were deemed to have been met or otherwise not applicable. Section 381.705(1)(h), Florida Statutes - Availability of Resources and Funds and Accessibility of Service to all Residents of Service District The evidence establishes that ABC has sufficient resources and funds to accomplish what it proposes. HRS has no data suggesting significant access problems for Medicaid patients to home health care nor was there sufficient evidence that AIDS or HIV patients suffer an access problem for home health care. However, due to improvements in terms of Medicaid reimbursement any access problem that may exist should be reduced. ABC has a stated commitment to serving all patients in District Four regardless of the patient's payor class. This commitment should improve the accessibility of home health care to underserved patients if, in fact, there is an access problem for the Medicaid, AIDS, HIV or indigent patients. Section 389.705(1)(i), Florida Statutes - Financial Feasibility ABC projects it will do 12,000 home visits in year one and 14,000 home visits in year two. These projections are based on ABC's experiences in other districts, particularly District Three. These projections also represent approximately 25 and 29 percent of the new visit pool market for each year, respectively. However, ABC clients would not necessarily all come from the new visit pool. ABC's projected home care visits are reasonable based on its experience in other Florida districts and its experience in other states, notwithstanding its lack of an established referral network in District Four and being a new entrant into the District Four market. ABC's financials displayed in its application are reasonable and consistent with its Florida experience. ABC's payor mix and visit each correlate to its actual Florida experience. ABC's pro forma expenses for year one and year two are reasonable. ABC projects a first year profit of $3,914 and a second year profit of $5,010 and after the second year, ABC should continue to show a profit. ABC's proposed project will benefit ABC by allowing it to meet its long term goals. ABC's existing Florida agencies are operating in financially sound manner and there is no reason to believe that ABC's proposed agency will not operate in the same manner. ABC's liquidity ratio is 0.7 to one which means that ABC has excess current liabilities over current assets and is one factor used for determining the general health of a company. ABC has an accumulated deficit of $651,836. From all of the above, ABC's proposed agency is feasible in both the short term and the long term. It was stipulated that Section 381.705(1)(j) and (k), Florida Statutes were deemed to have been met or otherwise inapplicable. Section 381.705(1)(l), Florida Statute - Impact on Competition Since ABC has a stated commitment to serve all patients in all counties in District Four referred to it regardless of the payor class and is offering a full range of services, including high tech, its proposal should only serve to enhance competition within District Four, notwithstanding that the proposal is primarily a Medicare home health care provider which would not provide any financial competition. The parties stipulated that Section 381.705(1)(m), Florida Statutes was deemed to have been met or otherwise inapplicable. Section 381.705(1)(n), Florida Statutes - Medicaid and Indigent Care Very few medicaid and indigent patients are served by the existing agencies in District Four. Most of these patients are served by the Visiting Nurses Association (VNA) which is subsidized by United Way, local governments and other sources. There is no data or documentation that Medicaid patients do not in fact have a significant access problem. Medicare is the predominant payor source in Florida and is ABC's primary payor source even though ABC has a stated commitment to serve all patients regardless of payor class. A high percentage of Florida's Medicaid budget for home health services is used for co-insurance for medicare. Therefore, Medicaid patients that are "dually eligible" are receiving home health care under Medicare. Florida's Medicaid program does not reimburse for physical therapy, speech therapy or occupational therapy for adults. In a Medicare certificate home health agency there is only a certain pool of profit available to serve Medicaid and indigent patients. Therefore, if the percentages of Medicaid service goes up then indigent or charity cases must suffer or the agency cannot operate in the "black". While HRS usually places a condition on the CON concerning Medicaid services, a majority of the recently issued CONs for home health care had no such condition placed on them. The parties stipulated that Section 381.705(2) and (3), Florida Statutes were deemed to have been met or otherwise inapplicable. State Agency Action Report (SAAR) HRS up to and including, the home health care agency batching cycle immediately preceding the instant September 1989 batch, used not applicable (N/A) on those criteria that were not typically addressed by applicants or were not considered to be applicable to an applicant. HRS now enters a "no" in those situations but a "no" in this situation has no adverse or negative impact on HRS' decision. Typically, approved applicants do not meet all the statutory criteria. Some of the criteria may be only partially met and some may not be met at all.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED: That a final order be entered granting ABC's application for a certificate of need (CON No. 6015). DONE and ENTERED this 26th day of October, 1990, in Tallahassee, Florida. WILLIAM R. CAVE Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 26th day of October, 1990. APPENDIX TO THE RECOMMENDED ORDER The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on the proposed findings of fact submitted by the parties in this case. Specific Rulings on Proposed Findings of Fact Submitted by Petitioner, ABC 1. Each of the following proposed findings of fact are adopted in substance as modified in the Recommended Order. The number in parentheses is the finding of fact which so adopts the proposed finding of fact: 6(2,3); 7(8); 8(7,8,11); 9(8,10); 11(7,14); 15(4); 16(16,17,18,19); 17(16,18); 18(16,21); 19(16,22); 20- 21(23,24); 23(25); 25(4,25); 28-29(25-27); 31-38(29); 40-42(29); 45(32); 48- 52(33,34,35,36); 54-58(32,37,38,41); 61-64(43); 68-70(45,46,47); 72- 77(47,48,49); 79-81(47,49,50); 83(51); 85-87(53); 89(53); 90(54). 2. Proposed findings of fact 1-5, 10, 12-14, 22, 24, 26, 27, 30, 39, 43, 44, 46, 47, 53, 59, 60, 65-67, 71, 78, 82, 84, 88, 91 and 92 are unnecessary. Specific Rulings of Proposed Findings of Fact Submitted by Respondent, HRS Each of the following proposed findings of fact are adopted in substance as modified in the Recommended Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact: 3-9(5,6,7,9,12,13,14); 12- 26(14,18,19); 28-29(15,16); 44-46(32) 48-51(39,40). Findings of fact 1 and 2 are covered in the preliminary statement. Proposed findings of fact 10, 11 as to the last 2 sentences, 27, 30, 31, 32 other than last sentence, 33, 35, 36 other than last sentence, 37, 38, 39, 41, 42, 47 and 52 are not supported by substantial competent evidence in the record. The last two sentences of finding of fact 34 are adopted in finding of fact 25, otherwise not supported by substantial competent evidence in the record. Proposed finding of fact 43 is unnecessary. The first two sentences of proposed finding of fact 53 are adopted in finding of fact 36, otherwise not supported by substantial competent evidence in the record. Copies furnished to: R. Terry Rigsby, Esq. F. Philip Bank, P.A. 204-B South Monroe Street Tallahassee, FL 32301 Edward Labrador, Esq. Assistant General Counsel 2727 Mahan Drive, Suite 103 Tallahassee, FL 32308 Sam Power, Agency Clerk Department of Health and Rehabilitative Services 1323 Winewood Blvd. Tallahassee, FL 32399-0700 Linda Harris, General Counsel Department of Health and Rehabilitative Services 1323 Winewood Blvd. Tallahassee, FL 32399-0700
The Issue Whether the applications for certificate of need numbers 8380, 8381, 8382 and 8383, filed by Petitioners RHA/Florida Operations, Inc., Care First, Inc., Home Health Integrated Health Services of Florida, Inc., ("IHS of Florida,") and Putnam Home Health Services, Inc., meet, on balance, the statutory and rule criteria required for approval?
Findings Of Fact Care First The Proposal Care First, the holder of a non-Medicare-certified home health agency license, was established in March of 1996. Owned by Mr. Freddie L. Franklin, Care First is the successor to another non-Medicare-certified home health agency also owned by Mr. Franklin: D. G. Anthony Home Health Agency ("D. G. Anthony"). Established in May of 1995, D. G. Anthony provided over 10,000 visits in its first 10 months of operation mostly in Leon and Wakulla Counties, pursuant to a contract with Calhoun-Liberty Hospital Association, Inc. Very few of the 10,000 patients were referred to D. G. Anthony by Calhoun-Liberty; they became D. G. Anthony's patients through community-based networks, including physicians, created through the efforts of Mr. Franklin and D. G. Anthony itself. D. G. Anthony was dissolved in 1996. Both its patient census and its staff of 45 were absorbed by Care First. D. G. Anthony's contract with Calhoun-Liberty was substantially assumed by Care First so that it provided service to Medicare patients as Calhoun-Liberty's subcontractor. From the point of view of the federal government, the Medicare patients served by Care First were Calhoun-Liberty's patients, even those who had not been referred to Care First by Calhoun Liberty and who had been referred from other community sources. Care First, therefore, was simply a sub- contractor providing the services on Calhoun-Liberty's behalf. The contract was terminated effective December 1, 1996. Calhoun-Liberty was free to terminate Care First with 30 days notice, a peril that motivated Mr. Franklin to seek the CON applied for in this proceeding. With the termination of the contract, Care First ceased serving Medicare patients, "because Mr. Franklin did not want to enter into another subcontractor arrangement because of all the issues and problems," (Tr. 934,) associated with such an arrangement. Mr. Franklin is involved with nursing homes as the administrator at Miracle Hill Nursing Home in Tallahassee. He is an owner of Wakulla Manor Nursing Home in Wakulla County, and he owns a 24 bed CLF, Greenlin Villa, also in Wakulla County. Miracle Hill has the highest Medicaid utilization of any nursing home in District 2. Both Miracle Hill and Wakulla Manor are superior rated facilities. On the strength of Mr. Franklin's extensive experience with community-based organizations and health care services, as well as Care First's succession to D. G. Anthony and other historical information and data. Care First decided to proceed with its application. In the application, Care First proposes to establish a home health agency that, at first, will serve primarily Franklin, Gadsden, Jefferson, Leon, Liberty and Wakulla Counties. It plans to expand into Madison and Taylor Counties in its second year of operation. Five of these eight counties have high levels of poverty; six of the eight are very rural, with the population spread widely throughout the county. Ninety-six percent of Care First's patients are over age Minority owned, approximately 65% of the patients are members of minorities. Many of the patients live in rural areas and are Medicaid recipients or are uninsured low income persons who do not qualify for Medicaid but cannot afford home health care. Since it will be serving the same patient base as a Medicare-certified agency, Care First has committed to the provision of 7% of its visits to Medicaid patients and 1% of its visits to patients requiring charity/uncompensated care. Care First projects 18,080 visits in its first year and 29,070 in its second year. Care First will promote efficiency through the use of a case management approach. Each patient will be assigned a case manager who will act as the patient advocate to provide care required and to identify and assist the patient with access to other "quality of life" enhancing services. Care First proposes an appropriate mix of services, including skilled nursing, physical therapy, speech and language therapy, occupational therapy, home health aide services and social services. Care First estimates its total project cost at $25,808. Of this amount, $2,000 is indicated as "start-up cost", with nothing allocated to salaries. Care First indicates no "capital projects" other than its proposal for the home health agency in District 2. Care First's proposal would be funded from a $60,000 bank line of credit. Projected Utilization Potential patients will be able to gain access to Care First through several avenues, including physician referral, hospital referral, nursing home discharge, assisted living referrals from community agencies and organizations such as Big Bend Hospice and through private referral. In addition, there are several natural linkages to the community for Care First. Wakulla Manor and Miracle nursing facilities offer Care First's services to discharged residents in need. Very often, residents and families choose Mr. Franklin's agency because they are familiar with him, staff or the quality of care provided. Residents of Greenlin Villa, owned by Mr. Franklin, frequently chose Care First when in need of home health agency services. Mr. Franklin's civic, church, and community involvement is impressive. He is president of the Florida Health Care Association, chairman of the board of the Tallahassee Urban League, superintendent of the Wakulla County Union Church Group, and serves on the advisory board for the Allied Health Department for Florida A&M University. In the past, he has served on the Board of Trustees of Tallahassee Community College. He was accepted as an expert in long-term care administration in this proceeding based in part on his service on the Governor's Long Term Care Commission. Miracle Hill has held a "Superior" licensure rating for the last ten consecutive years. It is the highest rating awarded by the AHCA licensure office and is intended to blazon the high quality of care provided by the facility. Although reported through Calhoun-Liberty, very few of D. Anthony's and Care First's past referrals have been generated through that affiliation. Rather, they have come through community contacts and getting the referrals from "talking with physicians," (Tr. 922), in Tallahassee and the surrounding areas, many of whom Mr. Franklin has gotten to know through his post as Administrator of Miracle Hill Nursing Home. By far, it is through physician referrals that Care First receives most of its patients. Care First's physician referral list includes 47 doctors who referred patients to D. G. Anthony since May, 1995. These doctors practice in urban areas and some have rural clinic offices which they staff on certain days of the week. Physicians are willing to refer patients to Care First because of the quality of care which has been provided by Care First, as well as the reputation of its owners. The Care First application included letters of support from eight physicians who have referred patients to Care First in the past and state that they will continue to support Care First with referrals in the future. Among the letters included are those from Dr. Earl Britt, a practitioner of internal medicine and cardiology in Tallahassee, and Dr. Joseph Webster, who practices internal medicine and gastroenterolgy in Tallahassee. Many of the patients of these two physicians are elderly. Dr. Britt's patients often have chronic hypertension or heart disease, are diabetic or suffer strokes. These two physicians provided over half the total number of patient referrals to D.B. Anthony and Care First. Dr. Britt and Dr. Webster established through testimony that Freddie Franklin and Care First have an excellent reputation for provision of quality of care and enjoy significant support among physicians within the service area. Moreover, Dr. Britt, although based in Tallahassee, stressed the importance of Care First's proven ability to provide home health services in the rural setting both from the standpoint of understanding the needs of the rural patient and from being able to travel over rural terrain in order to deliver services. (Tr. 1151, 1152, 1154). Approximately 11,500 visits were performed by D. G. Anthony staff from the period of May 1995, through April 1996, before they became the staff of Care First. Since the agency has established a presence in the district and has physician and other referral mechanisms in place, it is reasonable to project that Care First will continue to grow and will experience between 18,000 and 20,000 visits in its first year and 28,000 to 31,000 visits in year two as a Medicare-certified home health agency. These projections stem from the historical and very recent monthly growth of D. G. Anthony, as well as demand it is experiencing from Franklin and Jefferson Counties, two counties it does not serve regularly at present but plans to serve regularly in the future. The reasonableness of Care First's projections is bolstered by the conservative number of visits per patient the projections assume, 35, when typically Medicare-certified agencies average at least 35 visits and as many as 60 visits per patient. Care First's utilization projections are reasonable. It enjoys an excellent reputation for quality of care and ability to deliver services. Together with its predecessor, D. G. Anthony, it has a proven track record and has benefited from a referral network that remains in place. These factors, together with the conservative assumptions upon which its projected utilization is based demonstrate that its projected utilization is reasonable. Financial Feasibility of Care First The total project cost for the Care First agency is projected to be $25,808. The majority of the costs are reasonable for this type of health care project. The majority of the project development costs, the application fee and much of the cost of the consultant and legal fees, have already been paid by Care First. Care First's Schedule 2 was prepared in conformance with the requirements of the agency and accurately lists all anticipated capital projects of Care First. The necessary funding for the Care First project will come from Care First's existing $60,000 line of credit with Premier Bank, in Tallahassee. This method of funding the project is reasonable, appropriate, and adequate. Care First has demonstrated the short term financial feasibility of its project. Care First's schedule 6 presents the anticipated staffing requirements for its home health agency. The staffing projections are based upon the historical experience of D. G. Anthony and Care First, taking into consideration the projected start-up and utilization of the agency. The projected salaries are based upon current wages being paid to Care First employees, adjusted for future inflation. Care First's schedule 6 assumptions and projections are reasonable, and adequate for the provision of high quality care. The staffing proposed by Care First is sufficient to provide an RN or an LPN and an aide in each of the eight counties Care First proposes to serve in District 2. Care First's schedule 7 includes the payor mix assumptions and projected revenue for the first two years of operation. Medicare reimburses for home health agency services based upon the allowable cost for providing services, with certain caps. The Care First revenues by payor type were based upon the historical experience of D. G. Anthony and Care First, as well as the preparation of an actual Medicare cost report. The Care First payor mix assumptions and revenue assumptions are reasonable. Care First's projection of operating expenses in Schedule 8A is also based on the historical experience of D. G. Anthony and Care First, as modified for the mix of services to be offered and the projected staffing requirements. The use of historical data to project future expenses adds credibility to the projections. Care First's projected expenses for the project are reasonable. The Care First application presents a reasonable projection of the revenues and expenses likely to be experienced by the project. Care First has reasonably projected a profit of $8,315 for the first two year of operation. Care First's proposal is financially feasible in the long term. As the result of its community contacts, Care First has been offered the use of donated office space in Franklin, Jefferson, Wakulla, and Gadsden counties. The use of donated office space will decrease the cost of establishing a physical presence and providing services in those counties since Care First will not have a lease cost for a business office and a place to keep supplies. Quality of Care Through the experience of D. G. Anthony, Care First has identified the particular needs of the community it served. This experience has been carried over into Care First's provision of services. In the 9 months of Care First's existence at the time of hearing, it provided quality of care. Its predecessor, D. G. Anthony, also provided quality of care. While Care First's experience is relatively limited, there is no reason to expect, based on the experience of both Care First and its predecessor D. G. Anthony, that quality of care will not continue should its application be granted. IHS of Florida The Application IHS of Florida is a wholly-owned subsidiary of Integrated Health Services, Inc. ("IHS") formed for the specific purpose of filing CON applications. IHS operates other home health agencies under other subsidiary names. Pernille Ostberg is a senior vice president of the Eastern Home Care Division of Symphony Home Care Services, Integrated Health Services. In that capacity she oversees nearly 195 operations in six states, including Florida. Her operations include home health agencies, durable and medical equipment distributions, and infusion therapy offered by pharmacists. Under Ms. Ostberg's guidance, IHS has grown to its current roster of 195 agencies in only three years, from a beginning of only five agencies. IHS first acquired Central Park Lodges, primarily a nursing home company which also owned five home health agencies. Once these agencies became Medicare certified, IHS made a corporate decision to acquire additional Medicare certified home health agencies. Beginning approximately three years ago, IHS undertook a series of acquisitions which included Central Health Services, Care Team, ProCare/ProMed, and Partners Home Health. More recently, IHS has acquired the Signature Home Health and Century Home Health Companies. And, immediately prior to the final hearing in this matter, IHS acquired First American Home Health Care, making IHS the fourth largest provider of home health services in America. Of all the home health agencies overseen by IHS, 95% are Medicare certified, and 62-63 are located in Florida. IHS now has a presence in all districts except District 1 and 2. IHS personnel also have extensive experience in starting up new home health agencies. IHS personnel have opened over 40 locations across the United States. IHS employees have extensive experience bringing new home health agencies through successful surveys by the Joint Commission on the Accreditation of Hospital Organizations ("JCAHO") recommendations. Of 18 branches personally taken through initial survey by IHS's Pernille Ostberg, none were recommended to change their operations and none were cited for a deficiency. IHS has recently opened, licensed, and certified new home health agencies in AHCA Service District 5, 6, and 10. They have also received licensure in District 7, 8, and 11. Based on the extensive expensive of IHS personnel, a start up home health agency typically experiences 8,000 - 15,000 visits per first year. Opening a new program requires two months for licensure. It will require a registered nurse for three months to make certain all manuals are in place and that quality personnel are recruited. After achieving licensure, one must wait for a certification survey, which may take as long as six months. The three IHS home health agencies that became certified recently have experienced 200 visits in the first month, a good sign of growth. IHS' umbrella organization for home health organizations is Symphony. Most of their home health companies retained their original names. Other IHS home health companies include ProCare, Central Health Services, Partners Home Health, Nurse Registry, and First American. IHS of Florida has applied for applications in other districts. This applicant filed applications in District 7, 8 and 10 and each were approved. IHS of Florida's CON application number 8382 was prepared by Patti Greenberg with the significant input of IHS and IHS of Florida's operational experts. Ms. Greenberg has prepared 75-100 CON applications, 20-25 of which sought approval for Medicare Certified Home Health Agencies. Each of these prior applications had been approved or otherwise reached settlement before litigation. The Proposed Project Once the needs analysis was complete, IHS examined geographic issues within the 14 county district. IHS examined where the populations required home health agencies and what niche of the market IHS could expect to achieve. Projected visits were determined by examining month by month, how this agency would grow. This projected utilization was subdivided among sub-visit types. Existing IHS home health agencies visit mix (skilled nursing as opposed to home health aide or therapy visits) was used to estimate skill type of the projected total volume. The projected utilization was also subdivided by payor class. This payor class projection was derived specifically for District 2, its poverty levels and its managed care penetration. In the aggregate, IHS projects 7,650 visits in year one and 17,100 visits in year two. This projection is reasonable and achievable. Witnesses for the Agency agreed that IHS of Florida's projected number of visits was "definitely attainable". Past and Proposed Service to Medicaid Patients and for Medically Indigent The payor class analysis allowed IHS to conclude it should condition its approval of its application under the performance of 5% Medicaid and 1% charity care. The balance of the population served by an IHS Medicare Certified Home Health agency would be covered by Medicare. The condition is important as it is a requirement which, if not achieved, will subject IHS of Florida to fines and penalties by the agency. Improved Accessibility The applicant will improve the efficacy, appropriateness, accessibility, effectiveness and efficiency of home health services in District 2 if approved. IHS of Florida will provide good quality of care, should its application be granted. Quality of Care Through competitive forces, the applicant's approval will also improve the quality of care offered by home health agencies in District 2. The approval of IHS of Florida's application will also comply with the need evidenced by the extent of utilization of like and existing services in District 2. Economies from Joint Operations Certain economies derived from the operation of joint projects are achieved by IHS of Florida's proposal. IHS has a home office and corporate umbrella which oversees all of its operations for home health services. This master office offers economies of sale by sharing resources across a wide array of home health agencies in Florida and other states. Thus, the incremental expense for corporate overhead is reduced as compared to a free-standing home health agency. Additionally, this national oversight provides better economies to provide the most recent policies and procedures, billing systems, and other systems of business operation. Financial Feasibility IHS of Florida has the resources to accomplish the proposed project. As demonstrated on schedule 1, and schedule 3 of IHS exhibit 1, the budget for the project is only $144,000. This budget includes all appropriate equipment for both the initial and satellite offices. Budgeted amounts include all required lease expenses, equipment costs and even start-up costs such as salaries for the recruitment of training and staff prior to opening. In total, $52,000 of pre-opening expenses are projected, which is reasonable. IHS of Florida filed applications for other home health agency start-ups in three different districts. The applicant had more than $180,000 in cash on hand and an additional $226,000 assured from a commitment letter from IHS which was also contained in the application. A letter of commitment from Mark Levine, a director and executive vice president of IHS, indicated IHS will provide $250,000 in capital for this specific project. Additionally, IHS will provide up to $1 million in working capital loan to assure no cash flow problems ever arise. A similar letter of commitment appears in each of the CON applications which IHS of Florida has filed. IHS has committed to fund each of the CON applications applied for by IHS of Florida. Each of these letters of commitment for the various CON applications sought by this applicant are on file with the AHCA. In total, the applicant projects $600,000 in capital commitments assured. IHS' balance sheet, reveals access to $60 million in cash and cash equivalent. The record clearly demonstrates an ability of IHS to fund all capital contributions required by the applicant. The current assets of IHS approximate $240 million. In addition to having cash in the bank, IHS is a growing concern and is, in fact, a Fortune 500 company that is publicly traded on the New York Stock Exchange. IHS generates revenues which exceed its annual expenses. In the last year, IHS derived $30 million more than it experienced in expenses. The application is financially feasible in the short- term. IHS' application is also feasible in the long-term. IHS of Florida's utilization projections are reasonable. Budgeted staffing and salaries are reasonable. The cost limit calculation and reimbursement calculation by payor source, which is provided in great detail in Schedule 5 of IHS of Florida's application, is reasonable. Projected expenses associated with this project were reasonably calculated based on the actual experience of other IHS Home Health operations. The reasonableness of these costs are also demonstrated when compared with the cost per visit by existing agencies in District 2. In fact, IHS of Florida predicted it would be a lower cost provider than the expected cost of existing agencies at the time IHS of Florida's operations would begin. IHS of Florida's proposal will have a healthy, competitive effect on the cost of providing services by other providers. Putnam The Proposal Putnam proposes to establish a Medicare-certified home health agency with its primary office located in Bay County. Bay County was selected as the primary office based upon the locations of existing and approved agencies in District 2, the aggregate utilization of each, and the number of individuals aged 65 and over distributed among the existing District 2 counties and agencies. Mr. Alan Anderson is Putnam's sole stockholder, Director, and President. Under the ownership and administration of Alan Anderson, Putnam has provided Medicare-certified home health services in AHCA District 3 continuously since 1986. Mr. Anderson is also the sole owner, director, and president of Anderson Home Health, Inc., a Medicare-certified home health agency serving AHCA District 4 since 1992. Anderson Home Health's CON was obtained by Putnam through the same process undertaken by the prospective applicants in this proceeding. Putnam's District 3 agency has successfully served District 3 residents since 1986 at first through its Palatka office, then growing to its current size of four offices. In District 4, Anderson Home Health, Inc. has also experienced successful operations having grown from its principal office in Duval County to a total of four offices. Putnam's District 3 home health agency began with the original office located in Palatka, followed by offices opened in Gainesville, Ocala and Crystal River. Anderson Home Health, Inc.'s District 4 operation began with the original office located in Jacksonville; the second office was opened in Daytona Beach, followed by the opening of the third office in Orange Park; and the fourth office was opened in Macclenny. Putnam's District 3 agency is JCAHO accredited "with commendation." As part of CON application No. 8383, Putnam has agreed to certain conditions upon award. First, the proposed project will locate its primary office in Bay County. Putnam also conditions its approval with the provision that 0.25% of its admissions will be persons infected with the HIV virus. Four percent of its patients will be Medicaid or indigent patients. Finally, Putnam has conditioned its approval upon the provision of various special programs such as high tech home health services, a volunteer program, and the establishment of a rural health care clinic. History or Commitment to Provide Services to Medicaid and Indigent Patients For Medicare reimbursement purposes, Putnam proposes to maintain a Medicare-only agency and private sister agency which provides services to non-Medicare patients. The private sister agency will provide service to the Medicaid and indigent patients. The costs of providing services to these non-paying or partial paying patients will be absorbed by the agency as a contribution to the community. The establishment of a private sister agency to handle the non-Medicare patients is common in the home health industry. As a condition in the application, Putnam will accept up to 3.0% Medicaid patients. Although it stated in its application that it would accept between .5%-1.0% indigent patients, its conditioning of the application on 4.0% Medicaid and indigent patients would necessitate that it accept at least 1.0% indigent (if not more, should the Medicaid patients fall below 3%) in order to meet the 4.0% Medicaid and indigent care condition. The percentages proposed by Putnam are consistent with the statewide average (approximately 95% Medicare) and the District average (approximately 92.1% Medicare). Bay County's average of Medicare patients is approximately 96.4% Medicare. To meet the 4.0% Medicaid and indigent condition, Putnam's average of Medicare patients might have to be less than the Bay County average but not by much. Certainly, meeting the condition is achievable. The agency's position is that Putnam's Medicaid/indigent commitment is not a ground for denial of the application. Quality of Care Putnam has continuously owned and operated a licensed Medicare-certified home health agency in District 3 since 1986 and has been JCAHO accredited with commendation status since 1994. In an effort to continuously provide quality care, Putnam has developed a comprehensive set of policies and procedures to guide its staff, its physicians, volunteers, patients, as well as patients families. No evidence was presented to suggest that Putnam does not have a history or ability to provide quality care. Availability of Resources, Including Health Manpower, Management Personnel and Funds for Capital and Operating Expenditures Putnam has provided Medicare-certified home health service to the residents of District 3 for ten years. Putnam will be able to share its existing personnel and operations expertise with the proposed District 2 agency. Administrative, Managerial, and Operational Personnel Putnam intends to utilize existing administrative personnel in the start up and overall operation of the proposed agency. These management personnel include the Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, Data Processing Director, Director of Volunteers, Personnel Director. These experienced personnel will be available to provide valuable management support to the proposed agency. The proposed agency will be operated by an administrator who will report directly to Putnam's CEO, Alan Anderson. The agency's administrator will be actively involved in budget preparation, physician relations, community education, and preparation for regulatory agency surveys. The proposed agency will rely upon the demonstrated experience of key personnel in its initiation. Ms. Nora Rowsey, experienced in the start-up phases of home health agencies, will personally supervise and implement the start up phase of the proposed District 2 agency. Putnam intends to hire individuals to work within the proposed agency who already have experience in the provision of the necessary services. Current employees of Putnam's as well as contract personnel of the District 3 agency have indicated a willingness to provide services in Bay County once the application is approve. Funding and Capital Resources Putnam projects the total costs of initiating the proposed agency to be approximately $70,000. Putnam has simultaneously applied for two other Medicare-certified home health agencies, in Districts 6 and 7. Each of these projects area also projected to cost approximately $70,000. Putnam, therefore, has projected costs associated with all three projects of approximately $210,000. Additionally, there is a $10,000 contingency cost related to the District 3 offices bringing the total expenditure for all capital projects of $220,000. Putnam's application includes two letters from First Union National Bank of Florida which substantiate that there are funds on hand to finance all of Putnam's capital expenditures, including the District 2 proposed agency. As of April 18, 1996, Putnam's bank account had a twelve month average balance of $245,949.02. As of April 18, 1996 the accounts of both Putnam and Anderson Home Care Inc., had a combined twelve month average balance of $676,656.93. The evidence established that these funds exist and are available for all proposed capital projects. In the two years prior to hearing, Putnam showed sound management, significant growth, and a strong financial position. It continues to do so. In an interoffice memorandum dated May 28, 1996, from Roger L. Bell to Richard Kelly, Health Services and Facilities Consultant, Putnams' financial position was described as follows: The current ratio of .62 indicates the current assets are not adequate to cover short term liabilities. The long term debt to equity and equity to assets ratios are very weak. This, along with the negative equity make a weak financial position. The profit margin at .1% is also very weak, and raises some concern with the applicant's ability to cover operating expenses . Putnam Ex. No. 4. This criticism was answered by Putnam. The agency may not have considered certain factors applicable to a predominantly Medicare-reimbursed home health agency. Putnam's current liabilities are payable in a longer term than the receivables are collectible. Furthermore, with provision of 98% Medicare services, which is solely cost reimbursed, there remains only two percent of the operation left to make a profit. A .1% profit from the small amount of insurance and private pay patients indicated financial health. Putnam, moreover, is a viable operation because of its historical success, its knowledge of the industry, its expansion to six locations, its growth in staff, and its growth in patient visits. Putnam has the resources available to provide the necessary administrative, managerial, and operational manpower needed by the proposed home health agency. AHCA's financial criticisms are unfounded; Putnam has on hand the capital necessary for the accomplishment of the proposed project. Putnam has the experience and know-how to make the proposed project work in District 2's rural areas. Financial Feasibility Putnam has the resources to implement this project if approved. Putnam has the same capability that existed when three offices were opened during the period from April 1992 through February 1993, and the same resources when four offices were opened in 1995. In every instance, the new offices were started up with cash on hand from operation. Mr. Anderson, Putnam's President and sole shareholder and director, testified that he spends much time in the financial area of the operations. As of November 29, 1996, after deducting all accounts payable, Putnam has a cash balance of approximately $390,000. Anderson Home Health, Inc. had a balance of approximately $425,000. Mr. Anderson testified that the First Union letters in the application at pages 231 and 232 were correct and that Putnam is in even better shape now than when the letters were written. Putnam is financially feasible in the short term. AHCA contends Putnam's project is not financially feasible in the long term because the projected visits stay the same in the second year and because it does not project a profit in year two of operation. This fails to take into account Putnam's performance over the past ten years which, as the agency conceded at hearing, is an important consideration . Mr. Anderson purchased Putnam in 1986. At that time the agency had a single office in Palatka doing 4,000 visits. Following Mr. Anderson's purchase of the agency it had grown to over 55,000 visits and close to a hundred employees. After the success experienced by Mr. Anderson in Palatka, Putnam filed a CON application for District 4, with a proposed principle site in Jacksonville. The District 4 CON was approved by the agency--without any concerns for financial feasibility nor with any concerns for Putnam's cash flows. Without having any experience or referral sources in Jacksonville, Putnam began doing approximately 7,000 visits. The number of visits jumped to 45,000 in the second fiscal year, 123,000 in the third fiscal year, and as of September 30, 1996 the Jacksonville office performed 158,000 visits. Aside from the extraordinary growth experienced in the Palatka and Jacksonville offices, already discussed, Putnam has opened rural offices also doing very well. The Macclenny office in rural Baker County had over 15,000 visits in the first twelve months and is currently averaging over 1800 visits. The Crystal River office in rural Citrus County made over 12,000 visits in its first year and is currently doing approximately 1400 visits a month. Every new office opened by Putnam or Anderson Home Health since 1991 has been break even or better. Putnam has a proven track record for the successful and profitable operation of new Medicare-certified home health agencies. Putnam's project is financially feasible in the long term. Utilization Projections The application sets forth reasonable utilization projections. Based on Putnam's utilization in the past, there is no reason to believe the projections set forth in the application are or unreasonable or will not be achieved. Impact on Costs Putnam is a high tech provider of home health services and will provide some services not currently available or available only in a limited number of agencies. The impact of approval of Putnam's application on costs in the District will be minimal due to the reimbursement issues associated with Medicare which is cost based. RHA A Not-for-Profit Corporation in District II RHA is not-for-profit corporation whose purpose is to provide a continuum of care to the community. All profits are returned to its nursing homes or agencies as a way of continuing to build the programs. RHA owns two nursing homes in AHCA District II; Riverchase Care Center in Gadsden County and Brynwood Center in Jefferson County. If approved, RHA is proposing to locate its Medicare certified home health agency in existing space within the Riverchase and Brynwood nursing facilities. Both of these facilities are managed and operated by HealthPrime, Inc., a company which operates approximately 40 facilities in 13 states. While RHA is technically the owner and therefore applicant for this CON, HealthPrime would operate the proposed Medicare certified home health agency within the nursing homes. RHA's home health agency would have two offices. The office located in the Riverchase facility would serve Gadsden, Liberty, Franklin, Gulf, Wakulla, Jackson, Calhoun, Washington, Holmes and Bay Counties. The office located in the Brynwood facility would serve Leon, Jefferson, Madison and Taylor Counties. Financial Feasibility The only questions raised by AHCA concerning RHA's financial feasibility went to the ability of RHA to fund this project in conjunction with other CON projects listed on Schedule 2 of its CON application. The largest project on Schedule 2 of RHA's application was a CON application for a 20 bed addition to Riverchase Care Center. At hearing it was determined that since the filing of the instant home health CON application, the 20 bed application had been withdrawn, was no longer viable, and was not being pursued by RHA. Once AHCA's financial expert learned that the 20 bed addition to the Riverchase Care Center had been administratively withdrawn and that its costs should therefore no longer appear on Schedule 2, questions about the financial feasibility of the project were resolved. RHA's project was shown to be financially feasible in the short term based upon the financing commitment of HealthPrime. RHA proved that its assumptions and projections made in its financial analysis are reasonable. These assumptions were based on actual experience in the operation of similar skilled nursing facility based home health agencies, as well as prior experience of other home health agencies in their first two years of operation. RHA's proposed project shows a net income in years one and two and is financially feasible in both the short and long term. Availability and Access of Services To the extent that the number of people needing home health care will increase in the future, there is need for new providers of home health services to provide such availability and access. RHA's willingness to condition its application on service to AIDS, indigent and Medicaid patients can only improve the availability and access to services in the district. In addition, RHA's approval to provide nursing home based home health services is unique to the provision of home health services in District II. Efficiency RHA's proposal, which would place its home health agency within its nursing homes, is unique among the applicants in this proceeding. Such an arrangement provides not only an efficient continuum of care to the patients, it also provides efficiencies and cost savings in the sharing of resources. RHA's proposed project is cost effective because it utilizes existing space and equipment in its nursing homes. Skilled nursing home based Medicare certified home health agencies are specifically recognized by the Federal Medicare program in their cost reports. Home health reports are filed as a part of the nursing home cost report and there is an allocation of the nursing home's cost to the home health agency. This benefits both the provider and the Medicare program through cost savings. RHA's cost per visit to the Medicare program of $48 will be substantially less than the District II average of $66 per visit projected for the time RHA will be operational under the applied- for CON. RHA's proposed project will have no impact on its costs of providing other health care services. Appropriateness and Adequacy RHA proposes to provide the entire range of home health services throughout the district. Given the project need in the planning horizon, RHA's proposal is more than adequate to meet the demand for such services. Quality of Care An applicant's ability to provide quality care is another important factor in statutory and rule criteria. RHA and HealthPrime have shown, through operation of their nursing homes in Florida, all of which have superior ratings, that they have the ability to provide quality health care. In addition, HealthPrime, which will actually operate the home health agency, has experience operating four other nursing home based home health agencies. HealthPrime will utilize its quality assurance programs already in place in its other home health agencies and will seek JCAHO accreditation of this proposed agency. By combining a home health agency with its existing nursing homes, RHA will improve the case management of its patients by providing vertical integration of its services in a continuum of care. Such continuum of care provides a stability in personnel and providers that are working with the patient. Economies and Improvements from Joint or Shared Services As previously discussed, RHA's unique proposal to operate a nursing home based home health agency not only offers a continuum of care for the patient, it also provides fiscal economies to the agency as well as the Medicare program. Resource Availability Based on RHA's experience of hiring personnel for its existing nursing homes in the district, there will be no problem in hiring sufficient personnel for RHA's agency. Fostering Competition The addition of other Medicare certified home health agencies in a district consisting of 10 counties and only 23 providers will promote increased competition and more options for patients. Findings Applicable to All Four Applicants No Fixed Need Pool The agency has no rule methodology to determine the need for Medicare-certified home health agencies. The agency's most recent home health need methodology was invalidated in Principal Nursing vs. Agency for Health Care Administration, DOAH Case No. 93-5711RX, reversed in part, 650 So.2d 1113 (Fla. 1st DCA 1995). There is, therefore, no numeric need determination, or "fixed need pool", established by the agency applicable in this proceeding. District 2 AHCA District 2 is composed of 14 counties. The applicants propose to concentrate their service in various, different parts of the district. Local and State Health Plan Preferences District 2 Health Plan Services to Medicaid and Medically Indigent The first preference under the District 2 Health Plan provides a preference to applicants with a history of providing services to Medicaid or medically indigent patients or commitment to provide such services in the future. Mr. Franklin of Care First has such a history. He is an owner of Wakulla Manor, which had a Medicaid occupancy rate of 88.09% for the period of July-December, and the administrator of Miracle Hill Nursing Home which had a Medicaid occupancy rate of 95.74% for the same period. In the face of such a record, Care First’s commitment of 7% Medicaid and 1% uncompensated/charity patients might seem to pale. But it is a significant commitment, given the nature of the home health agency business, and one upon which Care First agrees its application should be conditioned. IHS conditioned its application on 5% Medicaid and 1% charity care. Putnam conditioned its application on an “Indigent and Medicaid participation equal[ling] 4.0%.” Putnam Ex. No. 1, pg. 51. Putnam, moreover, proposes a Medicare-only agency. Establishment of a private sister agency, a practice common in the home health care industry, will allow Putnam to provide service to the Medicaid and indigent patients separate from its Medicare-only agency. RHA has provided a high percentage of Medicaid/charity days at its Riverchase facility (92.10%) and at its Brynwood facility (90.24%). In addition, RHA is willing to condition its CON on the provision of a minimum of 1% of annual visits to indigent care and 5% to Medicaid. Service to Unserved Counties. Preference 2 states that “[p]reference should be given to any home health services CON applicant seeking to provide home health care services in any county within the District which is not presently served by a home health agency.” There are no counties within District 2 that are not presently served by a home health agency. Service Through a County Public Health Unit Preference 3 states that “[p]reference should be given to a home health services CON applicant seeking to develop home health care services to be provided through a county public health unit in the district in order to more adequately serve the elderly and medically indigent patients who are isolated or unable to travel to permanent health care sites." Of the four applicants, only IHS of Florida’s application is conditioned on working with public health units. IHS has experience working with public health units, working with them currently in Martin County, Manatee County and Broward County. Nonetheless, IHS of Florida will not be providing its services “through” a public health unit. Public Marketing Program Preference 4 states, “[p]reference should be given to a home health services applicant who has a history of providing, or will commit to provide, a public marketing program for services which included pamphlets, public service announcements, and various other community awareness activities. These commitments should be included on the granted CON as a condition of that CON.” Care First currently markets its services to the community and commits to a public marketing program in the future as a condition of its CON. IHS of Florida committed to performing at least one community awareness activity per calendar quarter as a condition of its application. It also indicated, moreover, that it would work to develop public service announcements and marketing programs with the help of public health units or any other appropriate vehicle. The latter indication, however, was not made a condition of the application. Putnam provides educational services to the community, its employees, patients and patients’ families, including the provision of pamphlets, and presenting audio and video tapes as appropriate to the patient and their families. Putnam, however, did not condition its application on a commitment to a public marketing program or commit to such a program in any other way in its application. RHA stated it would accept a condition on its CON to provide a public marketing program for services, including pamphlets, public service announcements and other community awareness activities. It did not reflect such a condition on the “Conditions” page of the application, but, given its statement that it would accept such a condition, there is nothing to prevent the agency from imposing such a condition should it grant RHA’s application. Access Requirements Preference 5 is, “[p]reference should be given to a home health services CON applicant who agrees, as a condition of the CON, to meet the following access requirements for each county in which services are provided: 1) 24 hour local telephone call (or toll-free) contact. 2) 24 hour call/response capability. 3) Maximum on one (1) hour response time following call. Care First currently meets the requirements of Preference 5 in the counties in which it now provides services, and has committed to continue to meet these requirements as a Medicare certified home health agency in all counties in which it will provide services. Care First has made as conditions of its CON, provision for 24-hour accessibility by answering service and installation of a toll-free access line and maintenance of a log of calls during the hours the agency is closed, including documenting of response time to each call. IHS of Florida conditioned grant of its CON on a 30 minute response time, and 24-hour phone availability on a toll-free hot line. Putnam presently provides the services in this preference in its District 3 Medicare certified home health agency and agrees to meet this preference within 90 days of initiating services. It did not, however, make a commitment to meet this preference on the “conditions,” page of its application. There is nothing to prevent the agency from making Putnam’s CON, if granted, conditional upon compliance with this preference. RHA has agreed to have its CON conditioned to meet the access requirements of Preference 5. 2. State Health Plan Service to Patients with AIDS The first preference under the State Health Plan is that “[p]reference shall be given to an applicant proposing to serve AIDS patients.” All four applicants are committed to serving AIDS patients. Full Range of Services. Preference 2 of the State Health Plan is “[p]reference shall be given to an applicant proposing to provide a full range of services, including high technology services, unless these services are sufficiently available and accessible in the same service area." There are currently 11 hospital-based Medicare certified home health agencies in District 2. Several of them provide the high tech services which are sometimes needed by discharged hospital patients. Very few referrals for high tech care have been received by D. G. Anthony or Care First since May, 1995, and there is no indication such services are not available in District 2. Care First has identified, however, an unmet need for the pediatric and pre-hospice home health agency services and has conditioned its application on the provision of those services to the community. IHS of Florida proposes, among other high tech services, infusion therapies, pain management therapies and chemotherapy. There is no evidence, however, that these therapies are not available in District 2. The same is true of Putnam as to the high tech therapies it proposes to provide. There is no evidence that they are not available in District 2. Although RHA indicated in its application that it intended to provide the entire range of services that a home health agency can provide, again, there is not evidence that they are not available in District 2. Disproportionate Share Provider History Preference 3 is “[p]reference shall be given to an applicant with a history of serving a disproportionate share of Medicaid and indigent patients in comparison with other providers within the same AHCA service district and proposing to serve such patients within its market area." Care First, having been formed in March, 1996, did not have a history of providing Medicaid and indigent patients. Care First has committed to 7% of its visits to Medicaid patients, well above the average of existing District 2 agencies of 2-3% Medicaid. Care First has committed to 1% of its visits to charity/uncompensated care. IHS of Florida has committed to 5% Medicaid and 1% charity care. Like Care First, IHS of Florida, as a newly formed corporation, does not have a history of serving a disproportionate share of Medicaid/indigent care patients. Putnam’s commitment is 3% to Medicaid and 1% to charity care. This commitment will be met through its sister home health agency and not the Medicare-certified home health agency for which the CON is sought. RHA has committed to set aside 5% total annual visits to Medicaid patients and 1% of annual visits to indigent care. It has a history of providing a disproportionate share of services to Medicaid patients at its two skilled nursing facilities in District 2, Riverchase Care Center in Quincy and Brynwood Center in Monticello. Underserved Counties Preference 4 is [p]reference shall be given to an applicant proposing to serve counties which are underserved by existing home health agencies. The rural areas of District 2 are traditionally underserved. Putnam will serve Bay County, an underserved county; the three other applicants will serve rural areas of more than one county in District 2. Consumer Survey Data Preference 5 is "[p]reference shall be given to an applicant who makes a commitment to provide the department with consumer survey data measuring patient satisfaction." Care First has committed to providing such data to the agency. IHS of Florida will maintain a data base of results of patient satisfaction surveys and make them available to the agency, just as it already does. Putnam will make available to the agency the results of surveys similar to surveys measuring patient satisfaction Putnam has already developed. Putnam has conditioned its application on providing these surveys to the agencies as well as surveys measuring physician satisfaction. RHA has cited on its “Conditions” page, “. . . (it) will provide the Agency for Health Care Administration with consumer survey data.” Quality Assurance Program and Accreditation The State Health Plan’s Sixth Preference is “[p]reference shall be given to an applicant proposing a comprehensive quality-assurance program and proposing to be accredited by either the National League for Nursing or the Joint Commission on Accreditation of Healthcare Organizations." Care First included in its application a copy of its Quality Assurance Program which has been in use since May, 1995. The program meets the state and federal licensure and certification requirement and the stringent requirements of JCAHO. Moreover, Care First has conditioned its application upon JCAHO accreditation. IHS of Florida submitted documentation regarding its Quality Assurance Program through initiatives such as Total Quality Management and Continuous Quality Improvement. It will seek accreditation from JCAHO within one year of receiving its CON. Putnam, an existing home health agency in District 3 since 1986, has over the years developed and refined a comprehensive quality assurance program which is above the industry standard. The District 3 agency, using its quality assurance program, has attained its JCAHO accreditation “with commendation,” a distinction received by less than 4% of all applicants. Putnam will seek accreditation from JCAHO for its District 2 operation within one year of receiving its CON. RHA is willing to condition its CON on the provision of a comprehensive quality assurance program and accreditation by the JCAHO. Need 1. Numeric Need Since there is no published fixed need pool applicable to this proceeding, the parties, other than the agency, developed their own methodologies for determining numeric need. Each of the methodologies employed by the parties was reasonable. After taking note of the statistics for actual patient visit growth in District 2 from 1991 to 1994, Michael Schwartz began with a conservative number of 60,000 new patient visits per year, a number half of the growth for the lowest growth year of that time period. Multiplying that number times the three horizon years of 1994-97 equals 180,000 new patient visits from 1994 which yields a need for 5.2 agencies. The reasonableness of numeric need in excess of four is supported by other factors. After the filing of the four applications at issue in this proceeding, there are two fewer Medicare-certified home health agencies with certificates of need in District 2. At the same time, home health care visits have been on the increase not only in the district as discussed, above, but in the state as well. Statewide, home health care visits grew from 18 million to 22 million between 1991 and 1994. The utilization of home health care agencies is increasing because of population growth and an increase in the number of visits per patient. The amount of time spent by patients in the hospital is decreasing. The decrease translates into increased need by patients for visits from home health agencies. The need for home health is going to continue to increase because it is a cost-effective alternative to nursing home placement and hospital care. From 1991 to 1994, the number of home health visits more than doubled: from 369,396 to 869,893. This trend continued in 1995. The recent significant growth in the utilization of home health agencies in District 2 is expected to continue. The growth is attributable not only to a population increase in the district but to increase in the use rate for home health agency services as well. The growth in use rates can be explained, in part, by the increase in the senior population (65 and older) and the pressure exerted by managed care for earlier hospital discharges and home health agency services as a viable alternative in some cases to inpatient treatment. The senior population in District 2 is reasonably expected to grow approximately 8% in the five years after 1996, with 15% growth expected reasonably in the 75 to 84 year old population and even higher growth, 25%, in the population over 84 years old. 2. Other Indications of Need Local physicians have experienced difficulty arranging for the existing home health agencies to provide services to patients located in remote areas of District 2. Specialized groups, such as AIDS patients, would, in all likelihood, benefit from additional home health agencies in District 2. Furthermore, a study conducted by IHS of Florida showed that the district has an unusually high rate of diabetes and in four counties has a diabetes death rate 100% greater than the statewide average. Well Springs home health agency is one of the two Medicare-certified home health agencies to cease providing Medicare-certified home health services after the four applicants in this proceeding filed the applications at issue here. Well Springs was licensed in all 14 counties of District 2 and had physical locations in Franklin, Gadsden, Bay, Leon, Liberty, Taylor and Madison Counties. It had a significant share of the District 2 Medicare certified home health agency market with 13.1% of the 1994 visits, the second highest in the District. With Well Springs discontinuing Medicare-certified home health agency services, a void was left for such services in District 2, particularly in those counties in which Well Springs had a physical presence.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED: That the Agency for Health Care Administration enter its final order granting CON Nos. 8380, 8381, 8382 and 8384 to RHA/Florida Operations, Inc., Care First, Inc., Home Health Integrated Health Services of Florida, Inc., and Putnam Home Health Services, Inc., respectively. DONE AND ENTERED this 9th day of June, 1997, in Tallahassee, Florida. DAVID M. MALONEY Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 9th day of June, 1997. COPIES FURNISHED: Sam Power, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive, Suite 3431 Fort Knox Building III Tallahassee, Florida 32308-5408 Jerome W. Hoffman, General Counsel Agency for Health Care Administration 2727 Mahan Drive, Suite 3431 Fort Knox Building III Tallahassee, Florida 32308-5403 Richard Ellis, Esquire Agency for Health Care Administration 2727 Mahan Drive, Suite 3431 Fort Knox Building III Tallahassee, Florida 32308-5408 W. David Watkins, Esquire Watkins, Tomasello & Caleen, P.A. 1315 East Lafayette Street, Suite B Tallahassee, Florida 32301 Mark Emanuel, Esquire Panza, Maurer, Maynard & Neel NationsBank Building, Third Floor 3600 North Federal Highway Fort Lauderdale, Florida 33308 Paul Amundsen, Esquire Amundsen & Moore 502 East Park Avenue Tallahassee, Florida 32301 Theodore E. Mack, Esquire Cobb Cole & Bell 131 North Gadsden Street Tallahassee, Florida 32301
The Issue The issues are whether Petitioner has overpaid Respondent $9713.34 in reimbursed claims for home health visit services. If so, additional issues are whether Petitioner is entitled to impose a fine of $1942.67 and assess costs of $254.70.
Findings Of Fact Respondent has been a Medicaid provider since 2005, and the record discloses no prior violations of Medicaid law. Respondent provides home health visit services to Medicaid recipients in their homes, which may be group homes or private homes. The five recipients at issue in this case reside in private homes. As identified in the FAR, the recipients are M. O., who is Recipient 1; A. del. P., who is Recipient 2; J. R., who is Recipient 3; N. M. de O., who is Recipient 4; and B. C. C., who is Recipient 5. (The Preliminary Audit Report dated November 8, 2011 (PAR), identifies these recipients by the numbers, respectively, of 1, 4, 7, 9, and 10, but this recommended order will refer to the recipients by the numbers assigned to them in the FAR.) Respondent stipulates that the Florida Medicaid Home Health Services Coverage and Limitations Handbooks applicable to the years in question authorize a full reimbursement for home health visit services provided to a single recipient at a specific address and a reduced reimbursement of one-half for home health visit services provided on the same date to subsequent recipients at the same address. This provision, which has been in Medicaid handbooks for about ten years, occurs on page 3-2 in Petitioner Exhibit 5. As for the dates of service at issue in this case, Respondent concedes that, at the time of receiving home health visit services, Recipients 1-4 each resided with another recipient, who also received home health visit services from Respondent on the same dates. Respondent concedes that it has received full reimbursements for the services that it provided to these coresident recipients. Respondent contends that it is entitled to full reimbursements for the services that it provided to Recipients 1-4 because Petitioner's Medicaid billing program did not allow Respondent to enter the necessary information to halve these reimbursements. Respondent contends that Recipient 5 did not reside with another recipient receiving home health visit services from Respondent for any date of service occurring from May 6, 2009, through September 1, 2009. Alternatively, Respondent would contend that, if this contention failed to prevail, it is entitled to a full reimbursement for Recipient 5 on the same ground as it is for Recipients 1-4. There is no merit to Respondent's contention as to Recipients 1-4. First, reimbursement rates are set by the home health services coverage and limitations handbooks, not a Medicaid billing program maintained by Petitioner for use by providers. Second, Petitioner has proved that Respondent could have entered on its submitted claims halved reimbursement amounts for Recipients 1-4. Third, Petitioner gave Respondent a chance to correct its claims for Recipients 1-4 without any penalty. The Amended Preliminary Audit Report dated October 31, 2012 (APAR), which reduced the claimed overpayment to $9713.34, provides: "If the identified overpayment is paid within 15 days of receipt of this letter, amnesty will be granted in regard to the application of sanctions and the assessment of costs for this audit." As one of Petitioner's witnesses testified, all Respondent had to do within 15 days was to contact Petitioner and arrange for a repayment schedule. But Respondent did not avail itself of this opportunity, clinging instead to its argument that some flaw in the online billing program entitles Respondent to full reimbursements for all coresidents to whom it provided home health visit services. Assuming, strictly for the sake of discussion, that something was wrong with the online billing program, the amnesty offer constitutes the repair of the program and the restoration of Respondent to the point of submission (or resubmission) of the subject reimbursement claims. By not accepting the offer, Respondent essentially refuses to use the repaired program and unreasonably repeats its demand that it be relieved from a longstanding limitation on Medicaid reimbursement of home health visit services. As for Recipient 5, the dispute is whether this recipient coresided with another recipient receiving home health visit services from Respondent. The PAR found a problem with four recipients, including Recipient 5, but, after examining documentation provided by Respondent, Petitioner dropped the overpayment claims arising out of the other three recipients, but not Recipient 5. Relying on information contained in the Florida Medicaid database, which is known as FLMMIS, Petitioner determined that Recipient 5 coresided with another recipient. Although each recipient is required to provide updated residential information when appropriate, it is possible that Recipient 5 may not have timely done so. For its part, though, Respondent did not have documentation showing where the home health visit services were provided. Respondent instead relied on Recipient 5's Plan of Care, which is typically completed by the physician and presumably focuses more on the treatment plan than the recipient's place of residence. The record does not reveal the date of the Plan of Care on which Respondent relied, nor how often these plans are updated. Petitioner's staff tried to verify the address in Recipient 5's Plan of Care, but were unable to do so. On these facts, the addresses on FLMMIS control. It is unclear what role a recipient's address plays in a plan of care, but a recipient's address in FLMMIS is crucial because it is used to establish and maintain the recipient's Medicaid eligibility. A service log contemporaneously documenting the location that a provider visited to provide home health visit services probably would have sufficed to overcome the evidentiary force of the FLMMIS and FAR, which, as noted below, is evidence of the overpayment, but a mere plan of care cannot overcome this evidence. Having determined that Petitioner has proved that Recipient 5 coresided with another recipient of home health visit services from Respondent on the dates in question, Respondent's alternative argument, which is the billing argument that it used for Recipients 1-4, is rejected on the same grounds. Lastly, Petitioner has proved all factual grounds for imposing a fine of $1942.67 and assessing investigative costs of $254.70.
Recommendation It is RECOMMENDED that the Agency for Health Care Administration enter a final order finding a total overpayment of $9713.34, imposing a fine of $1942.67, and assessing costs of $254.70. DONE AND ENTERED this 27th day of September, 2013, in Tallahassee, Leon County, Florida. S ROBERT E. MEALE 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 27th day of September, 2013. COPIES FURNISHED: Enrique F. Vazquezbello Amer-Cu Home Care, Inc. Suite 210 3271 Northwest 7th Street Miami, Florida 33125 Jeffries H. Duvall, Esquire Agency for Health Care Administration Fort Knox Building 3, Mail Stop 3 2727 Mahan Drive Tallahassee, Florida 32308 Richard J. Shoop, Agency Clerk Agency for Health Care Administration Mail Stop 3 2727 Mahan Drive Tallahassee, Florida 32308 Stuart Williams, General Counsel Agency for Health Care Administration Mail Stop 3 2727 Mahan Drive Tallahassee, Florida 32308 Elizabeth Dudek, Secretary Agency for Health Care Administration Mail Stop 1 2727 Mahan Drive Tallahassee, Florida 32308
Findings Of Fact 1. The initial action of HRS in regard to the application of Home Health Care of Bay's application for a CON, as set forth in the State Agency Action Report (SAAR), was to deny the application. 2. The SAAR, dated April 29, 1987, together with a cover letter dated April 30, 1987, advised Home Health Care of Bay that its application has been denied because "[t]here was no need demonstrated by Home Health Care of Bay for an additional home health agency in Bay County." These two documents further advised Home Health Care of Bay of its point of entry into Chapter 120, Florida Statutes. 3. Home Health Care of Bay availed itself of this point of entry by filing a reguest for a formal hearing pursuant to Section 120.57(1) on the initial decision to deny its application. 4. Home Health Care of Bay is a for-profit corporation under the laws of Florida, having been incorporated on December 10, 1986, prior to the SAAR and the initial denial letter. 5. Home Health Care of Bay has had its principal office in the State of Florida since its incorporation. 6. Home Health Care of Bay does not have and has never had more than 25 full-time employees. 7. At the time of its CON application and of the initial denial by HRS, Home Health Care of Bay had assets of $1,000, which was received from issuance of 1,000 shares of stock at $1.00 per share, and a note receivable of $21,600. The total net worth of Home Health Care of Bay at the time this action was initiated was $22,600. 8. By its response to Request for Admission 1 and its stipulation at hearing, HRS has stipulated that Home Health Care of Bay incurred attorneys' fees and associated costs in DOAH Case No. 87-2151 equal to $15,000 and that said fees and costs are reasonable. It is so found. 9. Following a formal hearing in DOAH Case No. 87- 2151, a Recommended Order was entered on December 17, 1987, recommending granting of the CON. A Final Order was entered by HRS on February 15, 1988. HRS adopted all of the Findings of Fact in the Recommended Order. HRS granted certain exceptions to the Conclusions of Law. Specifically, HRS granted exceptions as to the conclusions that its reliance on the statutory criteria is "nebulous," that its failure to establish a need methodology is arbitrary and capricious, that it was requiring applicants to prove "unmet need," and that the Hearing Officer relied in part on a need methodology abandoned by HRS. 10. HRS granted the requested CON to Home Health Care of Bay by this Final Order. 11. Findings of Fact in that Recommended Order, which were adopted by HRS, included findings that: A. HRS abandoned its "interim policy" regarding use of a need methodology in home health agency applications in late 1986. (Finding of Fact 56). B. HRS informed applicants that it had abandoned the interim policy only after applications were filed in the second batching cycle of 1986. (Finding of Fact 57). C. Applicants in this December, 1986, batching cycle, including Home Health Care of Bay, were asked for an unlimited extension of time within which HRS could render a decision. (Finding of Fact 58). D. Applicants who refuse to agree to an extension were evaluated on the basis of the "statutory need criteria." Applicants who did not agree to an extension were denied. (Finding of Fact 59). E. The new "policy" used by HRS to evaluate these applications (the ones who refused to grant extensions) put the burden of proof on the applicant to demonstrate an unmet need. Such a demonstration would be difficult to make. (Finding of Fact 62). F. HRS reviewed Home Health Care of Bay's application using the new "policy" based on the "thirteen statutory criteria." Such a review required Home Health Care of Bay to prove need by demonstrating an unmet need. (Finding of Fact 63). G. As evidenced by HRS' review of Home Health Care of Bay's application, a policy requiring an applicant to meet a negative burden of proof is unreasonable. It imposes a standard which is e for an applicant to meet. (Finding of Fact). 12. Fig in the Recommended Order set forth extensive the standard used by HRS to review the application Health Care of Bay and the reasons why the review was deficient and the determination to deny the application was flawed. 13. One Conclusion of Law which HRS did not reverse is that found on page 35 of the Recommended Order in the second full paragraph: Further, DHRS' preliminary decision had no reasonable basis in law or fact at the time it was made. It is this same preliminary decision which was set forth in the SAAR and which constituted the initial decision from which Home Health Care of Bay had a point of entry into Chapter 120 proceedings. 14. In attempting to justify its actions, HRS presented the testimony of Sharon Gordon-Girvin. Ms. Gordon-Girvin had no part in or knowledge of the initial decision of HRS to deny this application. Instead, shortly before and in preparation for the formal hearing in DOAH Case No. 87-2151, Ms. Gordon- Girvin reviewed the SAAR and the initial decision and agreed with HRS' counsel not to enter into a settlement with Home Health Care of Bay. Her testimony regarding the basis for and correctness of the initial denial is rejected as being irrelevant to the question of whether HRS had a reasonable basis in law and in fact at the time it initially denied the application. Additional, such after-the-fact rationalization and justification for HRS' actions is so self- serving as to merit little weight. 15. HRS failed to prove that its initial denial was reasonable in DOAH Case No. 87-2151 and it failed to prove in this case that there was any reasonable basis for its initial denial. 16. HRS did present evidence that Home Health Care of Bay may be able to recover some of its fees and costs through Medicare reimbursements amortized over at least five (5) years. However, the evidence was speculative and uncertain, and HRS did not offer evidence that Home Health Care of Bay will recover any or all of its fees and costs through Medicare reimbursements.
The Issue Whether Nursing Quality Services, Inc. (Respondent), a Medicaid provider, was overpaid by the Florida Medicaid Program in the amount of $8,154.02, and, if so, whether Respondent must pay to the Agency for Health Care Administration (Petitioner) the amount of the alleged overpayment, a penalty in the amount of $1,630.80, costs in the amount of $43.94, and any applicable interest.
Findings Of Fact At all times relevant to this proceeding, Respondent has been a provider with the Florida Medicaid Program and has had a valid Medicaid Provider Agreement with Petitioner. Relevant to this proceeding, Respondent is a home health services provider, providing nursing services to residents of assisted living facilities (ALFs). Petitioner is the agency of the State of Florida charged with the responsibility of administering the Florida Medicaid Program. At all times relevant to this proceeding, Respondent was subject to all applicable federal and state laws, regulations, rules, and Medicaid Handbooks. Respondent is required to comply with the Florida Medicaid Provider General Handbook. Respondent is also required to comply with the Home Health Services Coverage and Limitations Handbook (Coverage Handbook). Home health services are billed in units of service. Each unit of service has a billing code that generates a specified Medicare payment to the provider. The two billing codes at issue in this proceeding are T1030 and T1031. A billable unit of service is generated under these codes when either a registered nurse or a licensed practical nurse goes to an ALF and provides a qualified service to a resident of the ALF. Tab 6 in Petitioner's exhibit book contains relevant excerpts of the Coverage Handbook, which was last revised in July 2008. Relevant to this proceeding, the Coverage Handbook reflects the following reimbursement information under the bulletin heading "Home Health Visits for Multiple Recipients at One Location" with emphasis added by the undersigned: Home health visit services provided to two or more recipients with individual residences at a single location are reimbursed as one visit for each individual receiving a home health service at that location (for example, visits at an assisted living facility). Home health visit services provided to two or more recipients sharing a residence at a single location (for example, visits at a group home) are reimbursed as follows: For the first recipient, Medicaid reimburses the service at the established Medicaid visit rate; For the second recipient, Medicaid reimburses the service at 50 percent of the established Medicaid visit rate; and For any additional recipients, Medicaid reimburses the services at 50 percent of the established Medicaid visit rate. The Bureau of Medicaid Program Integrity (MPI) has generated a memorandum that reflects its understanding of the coverage and limitations set forth in the Coverage Handbook. Key to this proceeding, the memorandum states the following as to services provided to a resident of an ALF with emphasis added by the undersigned: MPI further understands that residence in an assisted living facility would not justify an automatic authorization for a 100 percent reimbursement of the established Medicaid reimbursement rated for home health services. Providers will be given the opportunity to submit documentation demonstrating individual residence at a single location for MPI review and subsequent decision-making as to applicable reimbursement policy. Should the documentation substantiate an individual residence at a single location for the recipient(s) in question, the reimbursement for home health services would be allowed at 100 percent of the established Medicaid reimbursement rate appropriate for the date of service. As part of a larger audit of Medicaid providers, Petitioner audited Respondent based on billings submitted by Respondent and paid by Petitioner. Taking information reflected by Respondent's billings, Petitioner prepared a PAR, which was dated January 23, 2012, and signed by Ms. Fante. The PAR cited the Coverage Handbook, statues, and rules Petitioner relied upon and attached a detailed audit report reflecting that Respondent was overpaid $8,154.02. All of the services at issue in this proceeding were billed and paid at 100 percent of the established Medicaid visit rate for identical units of service (either T1030 or T1031) generated at the same facility location on the same date whether or not it was the first recipient (the so-called anchor recipient), a second recipient, or an additional recipient. Respondent's billings provided the respective address for each of the three ALFs at which these recipients resided, but the billings do not document that each recipient maintained an individual residence in that ALF. Consequently, after payment for the anchor recipient at 100 percent of the Medicaid reimbursement rate, Respondent should have been paid at 50 percent of the reimbursement rate for identical units of service to the other recipients at the same address on the same day. The payments at 100 percent of the billing rate for units of service that should have been reduced to 50 percent of the billing rate constituted overpayments. Petitioner established that the amount of the overpayment totaled $8,154.02. The PAR was not final agency action. Respondent was advised of the following options: Pay the identified overpayment in this notice within 15 days of the receipt of this letter. Under this option, amnesty will be granted, sanctions will not be applied and costs will not be assessed. If you wish to submit further documentation in support of the claims identified as overpayments, you must do so within 15 days of receipt of this letter. Any additional documentation received will be taken under consideration and you will be notified of the results of the audit in a final audit report. Under this option, a final audit report will be issued and will include application of sanctions, the assessment of costs, and hearing rights. If you chose not to respond, wait for the issuance of the final audit report. Under this option, a final audit report will include the application of sanctions, the assessment of costs, and inform you of any hearing rights that you may wish to exercise. The PAR was sent to Respondent via Federal Express using the following address: 8300 SW 8 Street, Suite 107, Miami, FL 33144. Ms. Creel testified, credibly, that the foregoing was the address of record for Respondent at the time the PAR was sent to Respondent. The Federal Express receipt reflects that the PAR was delivered on January 25, 2012 at 9:41 a.m., and signed for by someone named "M. Mejia." The receipt reflects that the PAR had been delivered to "Receptionist/Front Desk." Mr. Fernandez testified, credibly, that he never received the PAR because Respondent had moved its offices from Suite 107 to Suite 103 in the same building. While that evidence is accepted, Ms. Creel established that Respondent's office of record with Petitioner had not been updated at the time the PAR was sent to Respondent. Respondent did not respond to the PAR. Petitioner prepared a "Final Audit Report" (FAR), which was dated March 2, 2012, and signed by Ms. Fante. The FAR asserted that Respondent owed $8,154.02 as the overpayment, a fine in the amount of $1,630.80, and costs in the amount of $43.94, for a total of $9,828.76, plus applicable interest. The FAR was sent to Respondent by Federal Express at the same addressed that had been used for the PAR. The Federal Express receipt reflects that the FAR was delivered on March 8 at 9:28 a.m. and signed for by "M. Mejia." The receipt reflects that the PAR had been delivered to "Receptionist/Front Desk." The FAR advised as follows: Pursuant to section 409.913(25)(d), F.S., the Agency may collect money owed by all means allowable by law, including, but not limited to, exercising the option to collect money from Medicare that is payable to the provider. Pursuant to section 409.913(27), F.S., if within 30 days following this notice you have not either repaid the alleged overpayment amount or entered into a satisfactory repayment agreement with the Agency, your Medicaid reimbursements will be withheld; they will continue to be withheld, even during the pendency of an administrative hearing, until such time as the overpayment amount is satisfied. Pursuant to section 409.913(30), F.S., the Agency shall terminate your participation in the Medicaid program if you fail to repay an overpayment or enter into a satisfactory repayment agreement with the Agency, within 35 days after the date of a final order which is no longer subject to further appeal. Pursuant to sections 409.913(15)(q) and 409.913(25)(c), F.S., a provider that does not adhere to the terms of a repayment agreement is subject to termination from the Medicaid program. Finally, failure to comply with all sanctions applied or due dates may result in additional sanctions being imposed. The FAR provided Respondent an explanation of its right to request an administrative hearing pursuant to the provisions of chapter 120. Mr. Fernandez received the FAR. Promptly thereafter, Mr. Fernandez called Ms. Creel to discuss the assessed overpayment, fine, and costs. Mr. Fernandez told her that he had not receive the PAR, and asserted that there was no overpayment because each recipient of the payments at issue lived in an ALF. Ms. Creel answered his questions as to the type documentation Respondent could submit to document there was no overpayment, but she explained to him that she had no authority to extend any of the deadlines set forth in the FAR. Respondent thereafter requested a formal administrative hearing, the matter was referred to DOAH, and this proceeding followed. As noted above in the Preliminary Section, Respondent offered no exhibits at the formal hearing. While Mr. Fernandez had visited each of the three ALFs at issue in this proceeding, he knew nothing about the living quarters of any of the recipients. The term "individual residence" is not defined in the Coverage Handbook, by rule, or by statute. Consequently, the plain meaning of the phrase is used in finding that there was no evidence that any of the recipients maintained an individual residence at the location of his or her ALF.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Agency for Health Care Administration enter a final order finding that Nursing Quality Services, Inc., was overpaid by the Florida Medicaid Program in the principal amount of $8,154.02. It is further recommended that the final order require Nursing Quality Services, Inc., to repay the Florida Medicaid the amount of $8,154.02, together with applicable interest and cost in the amount of $43.94. It is further recommended that no administrative fine be imposed. S DONE AND ENTERED this 13th day of September 2012, in Tallahassee, Leon County, Florida. CLAUDE B. ARRINGTON 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 13th day of September, 2012.
Findings Of Fact Background At all times material to this proceeding, Redi-Care was a corporation doing business as a home health care agency in Florida and was duly licensed in that capacity by the Department. Prior to May 4, 1989, Redi-Care was not certified to receive payment for services provided to Medicaid recipients under the Florida Medicaid Program. At times, however, Redi-Care did provide services to Medicaid recipients under a waiver program involving "Home and Community Based Services." This program receives funding from a separate appropriation than the one administered by the Department for the Florida Medicaid Program. Since the sale of some of the corporate assets on July 31, 1990, Ms. Ingeborg G. Mausch, Ph.D., has been authorized by the corporation to proceed with the collection of the accounts receivable that remained with the corporation. This proceeding involves Redi-Care's request for payment from the Department for medical services provided to two Medicaid eligible recipients, Richard Mow and Claire Jester. The Florida Medicaid Program is jointly funded by the federal and state governments. The Department is the state agency responsible for the administration of Medicaid funds from both funding sources. To the extent monies are appropriated, the Department is authorized to provide payment for medical services given to Medicaid eligible recipients through certified home health care agencies. Consultec was awarded the contract to replace EDS as the provider of fiscal agent services and the Medicaid agent for the Florida Medicaid Program in 1988. Pursuant to the agreement, Consultec was to become responsible for the enrollment of new providers and the processing of claims on December 15, 1988. Prior to the assumption of the fiscal agent duties, Consultec was responsible for the re-enrollment of all existing Florida Medicaid Providers into the Florida Medicaid Management System as it had been redesigned by Consultec. Current enrollees were given new provider numbers to be used on all submissions made on or after the December 15, 1988 date. Any claims submitted prior to December 15, 1988 would be processed by Electronic Data Systems Corporation (EDS) under the provider numbers previously issued by that entity. As part of the re-enrollment program, Consultec also created vendor numbers for those home health care agencies involved in the waiver program. These vendor numbers are used within the Department's Developmental Services and Aging Adult Services operations. In the past, home health care providers have not had access to these numbers. Consultec sent Vendor Information Sheets to all providers within the HRS Developmental Services and Aging Adult Services Waiver Program for "Home and Community Based Services" on October 7, 1988. Redi-Care was listed as a provider with the waiver program at the time the vendor re-enrollment occurred. Upon receipt of the Vendor Information Sheet, Redi-Care certified that the information on the sheet prepared by Consultec was correct. The document was returned to Consultec, as requested on the form, on October 19, 1988. Unbeknownst to those providers who completed the form, Consultec was planning on issuing them vendor numbers. Although each of the providers had such vendor numbers in the past, these numbers were never specifically issued to them because the Department undertook the responsibility to complete that portion of the waiver program's documentation. Application Process Originally, Redi-Care applied for enrollment as a "Medicaid Provider" in 1987. This original application was abandoned by Redi-Care when it learned that a provider had to be Medicare eligible as well. Instead, Redi-Care became a provider of "Medicaid Home and Community Based Services" in the waiver program. In July of 1988, "Medicaid Providers" were no longer required to be Medicare eligible. Based upon this policy change, Redi-Care reapplied to the Department for enrollment as a "Medicaid Provider" who provides medical services to recipients of the Florida Medicaid Program. The enrollment application, known as a "Request for Certification," was completed by Redi-Care on September 7, 1988. Assurance of Compliance with Title VI of the Civil Rights Act of 1964 was attached to the application. The Ownership and Control of Interest Statement was completed by Redi-Care, but the evidence presented reveals that it may not have been included in the application documents sent to the Department's Office of Licensure and Certification on September 7, 1988, or shortly thereafter. Pursuant to the agreement still in effect between the Department and EDS on the date of the submission of the application, EDS was the Medicaid Agent responsible for the review and processing of Redi-Care's application to become a Florida "Medicaid Provider" once it was received by EDS from the Department's Office of Licensure and Certification. Because Redi-Care was already licensed as a home health agency, the Department's Office of Licensure and Certification was not required to grant a license prior to the transfer of this enrollment application to EDS. All that was required was a certification survey from this branch of the Department and a copy of Redi-Care's active license. When the Office of Licensure and Certification went to complete the survey, the representative of the Department confused this Redi-Care entity with an entity next door known as Redi-Care, Inc. Consequently, the Redi-Care corporation seeking certification as a "Medicaid Provider" was not surveyed as it had requested via all of the proper channels. As the Office of Licensure and Certification was unaware of its mistake regarding the Redi-Care entities, this Redi-Care application package was sent on to EDS for review and processing of the application without the documentation required from the Department. After a few weeks, because Redi-Care was generally familiar with the application process from its prior experience, the Department was contacted and the follow-up package was requested. Redi-Care was sent a copy of the Medicaid Provider Agreement, which was signed and returned to the Office of Licensure and Certification on or about November 18, 1988. Within a day or two after Redi-Care mailed the Medicaid Provider Agreement, a letter was received from Consultec which referred to Redi-Care as a "Medicaid Provider." Redi-Care was thanked for re-enrolling in the program and was issued a Florida Medicaid Provider number for Home and Community Based Services. In actuality, the letter from Consultec was providing Redi-Care with the vendor number described previously in these Findings of Fact for use in the waiver program. Redi-Care was unaware that such a number was to be issued because it had not received such a number in the past, nor was it advised that one was forthcoming. When Ms. Mausch read the letter on behalf of Redi-Care, she assumed it related to the recent reapplication for Medicaid certification submitted in September 1988. The first sentence of the letter thanking Redi- Care for "re-enrollment" was interpreted as an acknowledgement of the first application for enrollment which had been abandoned, and an appreciation of the facility's current decision to assist in the provision of home health care to Medicaid recipients. Because the body of the letter appeared to be tailor made to Redi-Care's recent decision to participate as a "Medicaid Provider", Redi- Care believed its pending application for enrollment had been approved. When the letter was read and interpreted by Ms. Mausch, she failed to notice that the letter was issued four days prior to Redi-Care's submission of the Medicaid Provider Agreement, and specifically referred to "Home and Community Based Services." This mistake does not dissuade the Hearing Officer from finding Redi-Care's interpretation of the document was reasonable in light of all of the surrounding circumstances under which it was read. The references to Redi-Care as a "Medicaid Provider" in this letter issued by Consultec was ambiguous. The technical term "Medicaid Provider" was misused in a generic sense. Although the more casual use of the term might not have been misleading to most providers in the waiver program, it was very misleading to Redi-Care, who was awaiting the issuance of a "Medicaid Provider" number from the Medicaid Program. At the time the Consultec letter of November 14, 1988 was issued, EDS was the Department's Medicaid agent responsible for the review and processing of Florida's "Medicaid Provider" applications. On December 5, 1988, EDS acknowledged its receipt of Redi-Care's application to become a Florida "Medicaid Provider." The application packet was returned to Redi-Care, who was advised that additional items needed to be available with the application for processing to occur. Redi-Care was required to submit a copy of the Ownership and Control of Interest Statement. The Office of Licensure and Certification was required to complete its certification survey and submit this, along with a copy of Redi-Care's active license. The requests made by EDS were questioned by Redi-Care for the following reasons: Consultec's letter of November 11, 1988, appeared to have already approved the Medicaid enrollment, and the Office of Licensure and Certification had already been notified by Redi-Care two months earlier, and should have sent a copy of the license and survey to EDS. Instead of calling EDS, Ms. Mausch contacted Consultec, who had recently issued the "Medicaid Provider" number. During the conversation with "Deborah" of Consultec, who represented she was able to speak to Ms. Mausch's concerns, Redi-Care was advised that it need not complete the directions issued by EDS because a "Medicaid Provider" number had already been assigned by Consultec. It is unknown what exactly was said by Ms. Mausch to "Deborah" which resulted in this reply. However, the advice from "Deborah" was accepted and relied upon by Redi-Care because it was very compatible with what Redi-Care was willing to do under the known circumstances and what it reasonably believed the facts to be. Neither Redi-Care nor EDS were advised of the Department's failure to conduct the certification survey. It is also unknown whether the Department was aware of its confusion of the two Redi-Care entities at this point in time. Shortly after the re-application was returned to Redi-Care by EDS, this Department agent was relieved of its responsibility to review and process Florida "Medicaid Provider" applications. This responsibility was transferred to Consultec, the new Medicaid agent. At the time of the transfer, Consultec interpreted the return of Redi-Care's application for further attachments as a rejection of the application by EDS. Therefore, no further action was taken by Consultec on the application because it was considered to be a resolved matter. It should be noted however, that Redi-Care had not been advised that its application had been rejected, nor was any completion deadline given before rejection would occur. Redi-Care heard nothing more about the application after the discussion with "Deborah", so it continued to rely upon the representation that the new Florida "Medicaid Provider" number had been properly issued by the new Medicaid agent, and that nothing more was currently required of Redi-Care prior to its acceptance of Medicaid eligible recipients. The Acceptance and Care of Medicaid Eligible Recipients Once Redi-Care began to hold itself out as a home health agency who could accept Medicaid eligible recipients under the Medicaid Program, Richard Mow and Claire Jester were referred by their physicians and accepted as clients. There is no dispute in these proceedings about the Medicaid eligibility of either Richard Mow or Claire Jester. Further, there is no dispute regarding the quality of medical care, the dates of services, the necessity for the services and the reasonableness of the amount of the bills submitted for claims review and processing under the Medicaid Program. Richard Mow and Claire Jester were accepted as clients and services were performed based upon Redi-Care's reliance upon the representation that Redi-Care had a valid "Medicaid Provider" number that would allow it to receive payment from Medicaid appropriations for the medical care of these two clients. The Department was aware of the acceptance of these two Medicaid eligible recipients as clients by Redi-Care. The Department was also aware that they were being provided medical services for which Redi-Care expected to be reimbursed by the Medicaid Program. The two clients also relied upon this method of payment for the medical services provided by Redi-Care as third-party beneficiaries to the purported agreement between Redi-Care and the Medicaid Program. The amount of the claim submitted for services provided to Richard Mow from February 8, 1989 through April 16, 1989 was $7,411.45. The amount of the claim submitted for services provided to Claire Jester from February 12, 1989 through April 30, 1989 was $753.83. The Submission of Claims and Claims Denial Redi-Care first submitted billings and notes for the claims involving Richard Mow and Claire Jester to Consultec on March 29, 1989. On April 11, 1989, Redi-Care contacted Elizabeth Campbell, a Human Services Program Specialist with the HRS Medicaid Program Office in Fort Myers, Florida. At the time Ms. Campbell was contacted, her job duties included claims resolution for providers in the home health and nursing home areas. The purpose of the phone call from Redi-Care was to ask Ms. Campbell to find out why it had not received word on its claim submission to Consultec for Richard Mow and Claire Jester. After Ms. Campbell researched the issue, she discovered that Redi-Care was not listed as a "Medicaid Provider" on the rolls maintained by Consultec. Redi-Care was ineligible for payment through Medicaid. Payment could be received only as a provider of "Home and Community Based Services" under the waiver program. When Redi-Care was advised that it did not have a "Medicaid Provider" number on April 11, 1989, the Department was told about the information given to Ms. Mausch by Consultec's letter and her follow-up conversation with "Deborah". Ms. Campbell, as a representative of the Department, assured Redi-Care that the matter would be pursued further. In the meantime, through its employees, the Department allowed Redi-Care to continue to rely on the representation that it would be paid at the Medicaid rates for the continuing care provided to Richard Mow and Claire Jester. On April 12, 1989, Ms. Campbell recorded in her field notes that she did not make any assurances to Redi-Care that it would be paid for providing services for the two clients. However, there is no evidence to show that she affirmatively advised Redi-Care that they might not get paid for past or continuing services. Redi-Care was allowed to continue to care for the clients under the the assumption that Medicaid would provide payment. On April 18, 1989, it was clear to Department employees involved in this factual scenario that the Office of Licensure and Certification had confused this Redi-Care entity with Redi-Care, Inc. when the survey and certification was scheduled to occur in November 1988. This mistake had never been corrected. On April 26, 1989, Consultec completed its review of the claims submitted by Redi-Care and denied the claims because Redi-Care did not have a "Medicaid Provider" number. Attempts to Cure Certification Issue The Office of Licensure and Certification completed its survey on May 4, 1989. Redi-Care's enrollment application was complete, and contained all of the required information on this date. Although no deficiencies were noted during the survey, the Department did not send a copy of the letter stating Redi-Care met its requirements until June 27, 1989. On that date, the letter was sent to Redi-Care, who was required to forward it to Consultec, along with the application Redi-Care had previously submitted with the attachments requested in December 1988 by EDS. Once Redi-Care received the letter in early July 1989, the information was immediately forwarded to Consultec. Consultec reviewed the application and issued Redi-Care a "Medicaid Provider" number on August 6, 1989. When Redi-Care received its "Medicaid Provider" number, it was advised by Consultec that it could use this number to submit billings to the Medicaid Program for eligible services provided since September 1988. Apparently, Consultect relied on the date EDS acknowledged receipt of the application and related the eligibility date to the 90 day period prior to the application receipt. On September 19, 1989, the Department issued a letter through the Program Administrator, Medicaid Program Office, advising Redi-Care that the Medicaid billings for Richard Mow and Claire Jester would not be paid by the Medicaid Program, even though these services were provided after the effective date of eligibility given to Redi-Care by Consultec in its letter of August 6, 1989. The Department's letter advising Redi-Care of the Medicaid Program's decision to deny payment for the services provided to the two Medicaid eligible recipients also told Redi-Care that its "Medicaid Provider" number could be used only for services rendered on or after May 4, 1989.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is recommended: Redi-Care's application for enrollment as a "Medicaid Provider" be deemed complete on May 4, 1989. Redi-Care's eligibility period to submit claims as a "Medicaid Provider" should be listed as February 4, 1989, based upon the eligibility period set forth in the "Medicaid Provider Handbook, Home Health Care Services" in effect on the date the application was completed. The Department waive time limits for claims received beyond the usual 12 month period, as allowed in Rule 10C-7.030(6), Florida Administrative Code, based upon the unusual circumstances of this case because the circumstances pose an undue hardship on the provider or recipients. That the claims for services provided to Richard Mow and Claire Jester be re-submitted to Consultec for claims processing once the 12-month deadline is waived by the Department. That the amount of the reimbursement allowed to Redi-Care should be provided at the rates in effect at the time the services were rendered. RECOMMENDED this 11th day of June, 1991, in Tallahassee, Leon County, Florida. VERONICA E. DONNELLY Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 11th day of June, 1991. APPENDIX TO RECOMMENDED ORDER, CASE NO. 89-6923 Redi-Care's proposed findings of fact are addressed as follows: Accepted. See HO number 4. Accepted. See HO number 5. Accepted. Accepted. Accepted. Accepted. See HO number 15. Accepted. Accepted. Accepted. Accepted. Accepted. See HO number 40. Accepted. Accepted. See HO number 42. Accepted. See HO number 14 - number 27. Accepted. Accepted. Accepted. Accepted. Accepted. See HO number 45. Accepted. See HO number 29. Accepted. See HO number 38. Accepted. See HO number 35. Rejected. Contrary to fact. See HO number 5 - number 7 and number 16. Rejected. Contrary to fact and Redi-Care Exh. number 9. Rejected. See HO number 35 - number 38. Accepted. See HO number 39. Accepted. Rejected. Contrary to fact. Accepted. Rejected. Improper conclusion of law. Accepted. See HO number 32. Accepted. See HO number 33. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. See HO number 8. Accepted. Accepted. See HO number 8. Accepted. See HO number 9. Reject due to use of technical term "Medicaid Provider." See HO number 18. Otherwise, accepted. See HO number 15. Accepted. Accepted. See HO number 28. Accepted. See HO number 30 - number 31. Accepted. See HO number 34. Accepted. Accepted. Accepted. Accepted. Accepted. See HO number 5. Accepted. Accepted. Accepted. Accepted. See HO number 2. Accepted. See HO number 2. The Department's proposed findings of fact are addressed as follows: Accepted. See HO number 2. Accepted. See HO number 3. Rejected. Contrary to fact. See HO number 5. Accepted. See HO number 1. Accepted. See HO number 1. Accepted. See HO number 5, number 15 and number 16. Accepted. See HO number 6 and number 7. Accepted. See HO number 7. Accepted. Accepted. See HO number 15 and number 16. Accepted. See HO number 45. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Rejected. Irrelevant. Rejected. Conclusion of Law, not fact. Accepted. Accepted. Rejected. Contrary to fact. Accepted. See HO number 5. Accepted. Accepted. Accepted. Accepted. Accepted. See HO number 9. Accepted. See HO number 40. Accepted. Accepted. See HO number 43 - number 45. Rejected. Improper conclusion. Accepted. Accepted. See HO number 20. Accepted. See HO number 22 - number 24. Rejected. Contrary to fact. See HO number 27. Rejected. Irrelevant to this proceeding. Consultec's proposed findings of fact are addressed as follows: Accepted. See HO number 1 - number 2. Accepted. See HO number 3. Accepted. See HO number 3. Generally accepted, except for the dates of enrollment and claims processing. See HO number 4 and number 5. Accepted. See HO number 5 - number 7. Rejected. Conclusionary and contrary to fact. See HO number 15 - number 17. Accepted. See HO number 15 - number 17. Accepted. Rejected. Contrary to fact. See HO number 20. Accepted, except for the conclusion that this was a rejection letter. See HO number 20 and number 26. Reject the classification as rejection letter. Improper conclusion. See HO number 20. The rest of the paragraph is factually correct. See HO number 22 - number 24. Rejected. Irrelevant. Rejected. Improper definition of hearsay. Accepted. Accepted. See HO number 45. Accepted. See HO number 40. Accepted. See HO number 40. Rejected. Contrary to fact. See HO number 16, number 17 and number 27. COPIES FURNISHED: Karel Baarslag, Esquire Senior Attorney Department of Health and Rehabilitative Services 1317 Winewood Boulevard Building Six, Room 233 Tallahassee, Florida 32399-0700 Barry Roth, Esquire COHEN AND ROTH, P.A. 1375 Jackson Street, Number 201 Post Office Drawer 2650 Fort Myers, Florida 33902-2650 Ken Syler CONSULTEC, INC. 2002 A1 Old St. Augustine Road Post Office Box 5497 Tallahassee, Florida 32314-5497 R. S. Power, Agency Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 Linda K. Harris, Esquire General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700
Conclusions THIS CAUSE comes before the AGENCY FOR HEALTH CARE ADMINISTRATION (the "Agency") concerning the Agency’s denial of the Home Health application of the Petitioner, Florida Home Health Association, Inc., (“Petitioner”), Subsequently, Petitioner filed a Petition For Formal Administrative Hearing, which was forwarded by the Agency Clerk to the Division of Administrative Hearings (“DOAH”). On April 9, 2010 , Petitioner filed its voluntary dismissal of the DOAH case. (Exhibit “A”) On April 12", 2010, an Order Closing File was issued by DOAH as a result of the voluntary dismissal. (Exhibit “B”) ' The correct Fraes No is 2010000781. The pleading filed by Petitioner in the above referenced matter, theNotice of Voluntary Dismissal, reflects an incorrect Fraes No of 2010000782. Filed April 15, 2010 8:00 AM Division of Administrative Hearings. It is therefore ORDERED and ADJUDGED: 1. The voluntary dismissal filed by Petitioner and the DOAH Order Closing File are hereby acknowledged and accepted. 2. Petitioner’s application is hereby denied. 3. The above-styled case is hereby closed. DONE and ORDERED this A eos of Copuk , 2010 in Tallahassee, Florida. AGENCY FOR HEALTH CARE sonmasreanion
