The Issue The issue for determination in this case is whether Respondent's license to practice nursing home administration should be revoked or otherwise disciplined for violations of Chapter 468, Part 11, Florida Statutes, as alleged in the Administrative Complaint.
Findings Of Fact Respondent, MARY ALICE DESSASAU, is a licensed nursing home administrator in the State of Florida, having been issued license number NH0002826. From 1993 to 1995, Respondent was employed as the nursing home administrator of The Ambrosia Home in Tampa, Florida. Respondent, MARY ALICE DESSASAU, is also a licensed registered nurse in the State of Florida, having been issued nursing license number 003029. From 1989 to 1993, Respondent served as a nurse and also as director of nursing for The Ambrosia Home. Petitioner, AGENCY FOR HEALTH CARE ADMINISTRATION, BOARD OF NURSING HOME ADMINISTRATORS, is the agency of the State of Florida vested with statutory authority to administer the provisions of Chapter 468, Part II, Florida Statutes, governing nursing home administration and conducting disciplinary proceedings pursuant to Section 468.1755, Florida Statutes. Alleged Insufficiencies of the Administrative Complaint Respondent contends that the Administrative Complaint improperly referenced the wrong license number. Paragraph 2 of the Administrative Complaint alleges: Respondent is, and has been at all times material hereto, a licensed Nursing Home Administrator in the State of Florida, having been issued license number 003029. In this respect, Paragraph 2 mistakenly references Respondent's license as a registered nurse instead of her nursing home administrator license. The style of the case, however, clearly identified the prosecuting agency as the Board of Nursing Home Administrators, and the remaining allegations of the Administrative Complaint clearly relate to Respondent's practice of nursing home administration. Moreover, on April 2, 1996, Respondent executed her election of rights, and in her election referenced her nursing home administration license number, which is 0002826. Respondent clearly was on notice that this proceeding sought to discipline her license to practice nursing home administration. Respondent also contends that there are insufficiencies in Paragraph 10 of that the Administrative Complaint which alleges: The violations and deficiencies include but are not limited to the following: Residents were placed in the facility's 23 bed locked unit based upon inappropriate criteria. Frail elderly residents were placed on this unit with violent, mentally ill patients. The nursing home did not appropriately re-evaluate the patients being placed in the locked unit. At least one resident was denied his freedom from reprisal when, after the resident had pulled the facility's fire alarm on July 26, staff members were instructed to shave his beard without the resident's assent. Residents were denied privacy when staff and other individuals rendered personal care to them. A resident was observed in the shower with the shower curtain and door open. Other residents were present in the outer- room and could have observed the resident in the shower. The therapy room where residents received treatment was open to public view and residents were observed receiving treatment. Male residents were observed wearing unzipped pants or no underwear, and exposed themselves to other residents. Female residents complained that male residents would wander into their rooms at night and get into bed with them. Residents were observed with dirty clothing and other unsanitary conditions. One resident was inappropriately restrained. As recited in Paragraphs 4, 5, 6, 7, 8 and 9 of the Administrative Complaint, the allegations of Paragraph 10 are based upon two inspections by an agency survey team of The Ambrosia Home on July 17, 1995, and again on August 9, 1995. Paragraph 7 specifically alleges that on July 28, 1995, Respondent signed the Statement of Deficiencies and Plan of Correction which set forth the basis for the specific allegations of Paragraph 10. In this request, the Administrative Complaint is sufficient in its allegations of specifying those acts and omissions for which Petitioner seeks to discipline Respondent's license to practice nursing home administration. Conditions at The Ambrosia Home At all material times hereto, The Ambrosia Home was a long-term nursing home facility generally serving residents of modest means, many of whom suffered mental infirmities. Residents with serious mental infirmities were often housed in a locked unit (also known as the 300 wing) within the facility. Prior to July 1995, Petitioner received several complaints regarding deficiencies of the conditions at The Ambrosia Home. These complaints related to resident abuse, staff abuse, quality of care and quality of life for the residents. In response to these complaints, the agency on July 11- 12, 1996, assembled a team of surveyors to investigate conditions at The Ambrosia Home. The team of surveyors included health care practitioners and nursing home professional. Barbara Doyle, a registered nurse, social worker, registered dietitian, and life safety specialist served as the survey team leader. Sandra C. Carey, a registered nurse who also holds a master's degree in business administration served as a survey team member. Ms. Carey has extensive experience working in long- term care facilities, as well as in sub-acute and acute care facilities. The team conducted an extended survey of The Ambrosia Home from July 13-17, 1995. Respondent was the nursing home administrator at The Ambrosia Home at this time. The survey team interviewed Respondent during the course of the team's investigation of the complaints relating to The Ambrosia Home. The survey team conducted an intensive review of patient records, interviewed staff and residents, and extensively inspected the facility. Because of the complaint regarding residents in the locked unit, the survey team was particularly concerned with conditions in the 300 wing. The survey team observed and recorded several deficiencies in the locked unit. Supervision in the locked unit was inadequate. One nurse was responsible not only for the locked unit, but also a second unit of the facility, which resulted in mentally infirm residents being unattended. The facility, and especially the locked unit, was not properly cleaned. The smell of urine permeated the facility. Restrooms had dried fecal matter on the toilets, and were without soap, toilet tissue, or towels. One resident of the unit, M. K., was inappropriately restrained. Keys to the locked unit were not readily available to staff in case of fire or other emergency. Resident Abuse Allegations In addition to the deficiencies of the locked unit, the survey team investigated and confirmed that on May 26, 1996, P. C., a resident of The Ambrosia Home had been inappropriately and severely restrained by a Certified Nursing Assistant (CNA) when attempting to leave the grounds of the facility. As a result of this incident, P. C. suffered scrapes and bruises. Respondent did not become aware of this incident or the injuries sustained by the resident until five days afterwards. Respondent then reported the CNA involved in the incident for abuse. The CNA, however, remained employed at The Ambrosia Home until June 28, 1995. Records of The Ambrosia Home reflected that CNAs were employed at the facility prior to the completion of background checks by the agency's abuse hotline. In a separate incident, by order of the owner of The Ambrosia Home, another resident W. D., was forcibly given a haircut and shaved for pulling a fire alarm. Respondent took no steps to address this incident, and doubted that the incident occurred. Agency Actions As a result of the severity of the findings verified by the survey team, the agency placed The Ambrosia Home on a 23-day termination track. Respondent, as the administrator of the facility, was notified of the deficiencies, and on July 28, 1995, signed the Statement of Deficiencies and Plan of Correction for The Ambrosia Home. On August 9, 1995, the survey team returned to The Ambrosia Home for a second follow-up inspection. The deficiencies first verified by the survey team in July 1995 were not corrected. After the second inspection, Respondent was terminated from her position as administrator and the locked unit within The Ambrosia Home was closed. The residents were placed in other facilities. Standards of Nursing Home Administrators Respondent, as nursing home administrator of The Ambrosia Home, was responsible for operation of the facility in accordance with state and federal statutes, rules and regulations. As indicated above, The Ambrosia Home served residents with significant medical infirmities and of limited financial resources. Respondent was aware of the deficiencies of the facility and attempted at times to bring these problems to the attention of the owner. During her tenure as administrator, Respondent attempted to work in good faith with the owner of The Ambrosia Home to address the deficiencies of the facility; however, due, in part, to the medical circumstances of the residents and the financial constraints of the facility the deficiencies of The Ambrosia Home were not corrected. Respondent did not adequately supervise the staff of The Ambrosia Home. The deficiencies of The Ambrosia Home developed over several years during Respondent's tenure as administrator of the facility. Respondent was, however, responsible for being aware of the incidents of mistreatment of residents, as referenced above, and for taking the appropriate measures to address such incidents to protect the welfare of the residents of the facility. Respondent did not take appropriate measures to become aware of these incidents of mistreatment in a timely manner, and did not take appropriate measures to address the incidents.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a final order suspending Respondent from the practice of nursing home administration for a period not to exceed one year, and to reinstate Respondent’s license upon completion of additional educational courses as determined by Petitioner.DONE AND ENTERED this 29th day of April, 1997, in Tallahassee, Leon County, Florida. RICHARD HIXSON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32301-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 29th day of April, 1997. COPIES FURNISHED: Natalie Duguid, Esquire Agency for Health Care Administration Post Office Box 14229 Tallahassee, Florida 32317-4229 Howard J. Shifke, Esquire 701 North Franklin Street, Suite 200 Tampa, Florida 33602 John Taylor, Executive Director Board of Nursing Home Administrators Agency for Health Care Administration 1940 North Monroe Street Tallahassee, Florida 32399-0792 Sam Power, Agency Clerk Agency for Health Care Administration Fort Knox Building 3, Suite 3431 2727 Mahan Drive Tallahassee, Florida 32317-5403 Jerome W. Hoffman, General Counsel Agency for Health Care Administration Fort Knox Building 3, Suite 3431 2727 Mahan Drive Tallahassee, Florida 32317-5403
The Issue The basic issue in this case is whether the Petitioner, Laurence Arthur Baird, is entitled to be licensed by endorsement as a Nursing Home Administrator.
Findings Of Fact On March 3, 1993, the Petitioner, Laurence Arthur Baird, filed his application for licensure by endorsement to sit for the Nursing Home Administrators examination and subsequently to be licensed as a Nursing Home Administrator by the Board of Nursing Home Administrators. The application was complete and was timely filed. The appropriate fee was paid. Mr. Baird holds current active licenses to practice as a Nursing Home Administrator in Georgia and Illinois. Mr. Baird has a high school diploma. In addition, Mr. Baird completed over four semesters at Milliken University. He has also secured additional hours at Jacksonville University, has received CLEP credit in five course areas, and has secured a number of continuing education hours in areas relative to nursing home administration. He has spent over 600 hours in continuing education since his initial licensure. He also passed the GMAT examination which is a prerequisite to admission to many M.B.A. programs. The University of Alabama considered Mr. Baird's undergraduate career, his CLEP scores, his GMAT score, and his life experiences and concluded that Mr. Baird was qualified for graduate studies in its M.B.A. program. Mr. Baird completed 42 hours toward an M.B.A. degree. Mr. Baird has formal education in the following areas: Nursing Home Administration; including planning, organization, operations and services, resource development, supervision of staff, and control and evaluation of facility performance. Personnel Management; including managing people for the specific needs of the long-term care facility, recruitment and selection, orientation, training and development of employees, development of employee appraisal programs, communications, wage and salary administration, union procedures and employee-management relations, discipline and morale. Accounting and Financial Management; including basic accounting, adjustment of accounts, preparation of financial statements, financial management planning, effective use of resources, financial performance evaluation, cost analysis, reimbursement from the United States Department of Health and Human Services under Medicare and Medicaid, and budgeting. Social Gerontology; including biology of aging, psychology of aging, changing social roles of aging, personal adjustment to aging, programs for health improvement and rehabilitation, financial aspects of aging, retirement, independency and dependency of aging persons, societal disengagement, impact of living arrangements and interaction between the needs of the institution and the needs of the patients. Mr. Baird has practiced as a Nursing Home Administrator since 1970. Mr. Baird has attained many years of experience in all of the areas mentioned immediately above. A review of Mr. Baird's work experience includes the following details: In 1970 Mr. Baird participated in and fully completed an AIT program. He then became assistant administrator at a facility in Decatur, Georgia. From 1970 to 1972 he was administrator of a 102-bed facility in Champaign, Illinois. From 1972 to 1977 Mr. Baird was administrator of a 165-bed facility. During that time the company built a second 65-bed facility and Mr. Baird oversaw both. From 1977 to 1988 Mr. Baird was administrator of a 209-bed facility. In 1979 Mr. Baird purchased a 65-bed facility and, until its sale in 1987, oversaw both of them. In 1988, Mr. Baird took the position of Director of Operations at Pruitt Corporation. Initially, he was responsible for the operation of 17 nursing home facilities. He was promoted to Vice President of Operations and, later, to Senior Vice President of Operations. At the time he left Pruitt, he was responsible for 30 facilities. He resigned from Pruitt to move his family to Florida to take a position at Beacon Pointe in Sunrise. During the last five years he was with Pruitt, he acted in the capacity of administrator for at least two years. Mr. Baird has distinguished himself as a Nursing Home Administrator by being nominated for Nursing Home Administrator of the year in 1976 in Georgia and by winning the equivalent award in Alabama in 1984. For five years Mr. Baird served on a board in the State of Alabama which advised the state on nursing home licensure matters. He chaired that board for one year. He also served three years on a Georgia advisory board on Medicaid. Mr. Baird is a member of the American Academy of Nursing Home Administrators. He has been certified as an administrator by that body, after passing a rigorous two-day examination. He served as the regional governor of the American Academy of Nursing Home Administrators. Mr. Baird has successfully completed a national examination which is substantially equivalent to the examination given by the department. Mr. Baird has worked as a fully licensed Nursing Home Administrator for two years within the five year period immediately preceding the application by endorsement. The Board's Order of Denial filed on July 9, 1993, included the following pertinent language: The Board of Nursing Home Administrators reviewed and considered your application for licensure by endorsement on May 14, 1993, in Miami, Florida and has determined that said licensure be denied, stating as grounds therefore: Your application and supporting documentation do not evidence that the licensure requirements for Georgia or Illinois are substantially equivalent to those in Florida. In the State of Georgia the rules and regulations governing qualifications for licensure as a Nursing Home Administrator include the following: 393-3-.01 Pre-Examination Requirements. Amended. A person who seeks licensure by examination as a nursing home administrator must show the following: be at least 21 years of age; be of reputable and responsible character; and meet one of the following education and experience requirements: Have earned a master's degree in Nursing Home Administration, in Health Care Administration or in a related health care administration field from an accredited institution of higher learning. If the master's degree did not include an Administrator-In-Training (AIT) program as provided in Rule 393-4-.04, the applicant must either have completed an AIT program as provided in Chapter 393-4 or the applicant must have attained two years of employment working in a nursing facility. Have earned a baccalaureate degree from an accredited institution of higher learning and have completed AIT program as provided in Chapter 393-4; or earned a baccalaureate degree from an accredited institution of higher learning and have attained two years of employment working in a nursing facility. With less than a baccalaureate degree, the applicant must have either: 3 years of college plus 2 years of full time work experience; 2 years of college plus 4 years of full time work experience; 1 year of college plus 6 years of full time work experience; or a High School Diploma or GED certificate plus 8 years of full time work experience; provided that: One year of college means 45 quarter hours or 24 semester hours of course work at an accredited institution of higher learning; and Full time work experience means a minimum of 35 hours per week in a licensed nursing facility. In the State of Illinois the statutory provisions governing qualifications for licensure as a Nursing Home Administrator include the following: 70/8. Qualifications Sec. 8. A person is qualified to receive a license as a nursing home administrator: (a) who is at least 21 years of age, (b) who has not engaged in conduct or behavior determined to be grounds for discipline under this Act, (c) who is in sound physical and mental health, (d) who is a citizen of the United States or lawfully admitted alien, (e) who is a graduate of a college or university deemed reputable and in good standing by the Department, or who has satisfactorily completed a course of instruction approved by the Department containing subjects embracing the laws governing the operation of nursing homes, the protection of the health and safety of patients in nursing homes and the elements of sound nursing home administration, or who presents evidence to the Department of education, training and experience deemed by the Department to be equivalent of either of the above, (f) who passes a written examination conducted by the Department to determine his fitness to receive a license as a nursing home administrator and (g) who pays the required fee. The Illinois Administrative Code includes the following requirements at Section 1310.30(a)(2) regarding the contents of applications for licensure as a Nursing Home Administrator: (a) An applicant for a license as a nursing home administrator shall file an application on forms supplied by the Department . . . together with: (1) *** Certified records of any one of the following: Graduation from an accredited college or university with the minimum of a Baccalaureate Degree; Satisfactory completion of an approved course of instruction in nursing home administration as outlined in Section 1310.40; or Graduation from an accredited college or university with the minimum of an Associate Degree and an Employer's Affidavit certifying to the applicant's qualifying experience as described in Section 1310.50. The types of courses that may be approved for satisfaction of the requirements of Section 1310.30(a)(2)(B), above, are described as follows at Section 1310.40 of the Illinois Administrative Code: The Department, upon the recommendation of the Nursing Home Administrators Licensing Board, shall approve courses of instruction in nursing home administration which include instruction in the following areas: Nursing Home Administration; including planning, organization, operations and services, resource development, supervision of staff, and control and evaluation of facility performance. Personnel Management; including managing people for the specific needs of the long- term care facility, recruitment and selection, orientation, training and development of employees, development of employee appraisal programs, communications, wage and salary administration, union procedures and employee-management relations, discipline and morale. Accounting and Financial Management; including basic accounting, adjustment of accounts, preparation of financial statements, financial management planning, effective use of resources, financial performance evaluation, cost analysis, reimbursement from the United States Department of Health and Human Services under Medicare and Medicaid, and budgeting. Social Gerontology; including biology of aging, psychology of aging, changing social roles of aging, personal adjustment to aging, programs for health improvement and rehabilitation, financial aspects of aging, retirement, independency and dependency of aging persons, societal disengagement, impact of living arrangements and interaction between the needs of the institution of [sic] the needs of the patients. The types of qualifying experience that will satisfy the experience requirements of Section 1310.30(a)(2)(C) are described as follows in Section 1310.50 of the Illinois Administrative Code: Qualifying experience for applicants . . . shall include: One year of full time employment as a nursing home administrator in a licensed nursing home or two years of full time employment as an assistant nursing home administrator in a licensed nursing home with 50 or more beds. Experience as a nursing home administrator or as the assistant nursing home administrator must have been completed within the 36 months immediately preceding date of application. Full time employment as an administrator of a related facility for two years or more. Related facilities include hospitals with long term care beds or other licensed long-term care facilities not having nursing care beds licensed by the Illinois Department of Public Health. Experience as an assistant administrator in such a facility shall not qualify.
Recommendation Based on all of the foregoing, it is RECOMMENDED that the Board of Nursing Home Administrators issue a Final Order in this case concluded that the Petitioner is not entitled to licensure by endorsement as a Nursing Home Administrator. DONE AND ENTERED this 8th day of November 1993 in Tallahassee, Leon County, Florida. MICHAEL M. PARRISH 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 8th day of November 1993. APPENDIX TO RECOMMENDED ORDER, CASE NO. 93-4844 The following are the Hearing Officer's specific rulings on all proposed findings of fact submitted by all parties. Proposed findings submitted by Petitioner: Paragraph 1: Accepted. Paragraph 2: Rejected as consisting primarily of subordinate and unnecessary background and procedural details. Paragraph 3: Accepted. Paragraph 4: Accepted in substance with the exception of the portion reading "which gave him more than the requisite number of hours necessary to secure an A.A. Degree." The quoted portion is rejected as irrelevant in the absence of evidence that the Petitioner's courses at Milliken satisfied the subject matter requirements for an Associate of Arts degree. Paragraphs 5 through 12: Accepted in substance with the exception of a few repetitious observations. Proposed findings submitted by Respondent: All of the proposed findings of fact submitted by the Respondent have been accepted in whole or in substantial part. COPIES FURNISHED: Karen L. Goldsmith, Esquire Goldsmith & Grout, P.A. 2709 West Fairbanks Avenue Post Office Box 2011 Winter Park, Florida 32790-2011 Arthur R. Wiedinger, Esquire Assistant Attorney General Office of the Attorney General The Capitol, Plaza Level 01 Tallahassee, Florida 32399-1050 Anna Polk, Executive Director Board of Nursing Home Administrators Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0777 Jack McRay, Acting General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792
The Issue Whether the Department of Health and Rehabilitative Services should approve the application for certificate of need (CON) of any one or more of five applicants for community nursing home beds in Lee County for the July 1989 planning horizon.
Findings Of Fact The Applicants Applications for certificates of need (CON) for nursing homes are accepted by the Department of Health and Rehabilitative Services (Department) in batching cycles and are subject to competitive review. The Department comparatively reviewed and analyzed 13 individual applications for proposed nursing services for District VIII, Lee County, in the July, 1986 nursing home batching cycle. Five of those applications are at issue for purposes of this proceeding. Pertinent to this proceeding, petitioner, Maple Leaf of Lee County Health Care, Inc., a wholly owned subsidiary of Health Care and Retirement Corporation of America (HCR filed an application for a 120-bed nursing home (CON 4746), petitioner Forum Group, Inc. (Forum), filed an application for a 60-bed nursing home (CON 4755), petitioner, Health Quest Corporation (Health Quest), filed an application for a 60-bed nursing home (CON 4747), petitioner, Hillhaven, Inc., d/b/a Hillhaven Health Care Center Lee County (Hillhaven) filed an application for a 120-bed nursing home (CON 4756), and respondent, Gene Lynn d/b/a Careage Southwest Healthcare Center (Careage) filed an application for a 120-bed nursing home (CON 4748). Each of these applications was timely filed. The Department's "preliminary" action The Department is the state agency charged with implementing and regulating the CON program for medical facilities and services in Florida. Within the Department, the Office of Community Medical Facilities is responsible for the review of CON applications and provides a recommendation for approval or disapproval after its analysis is concluded. The Department assigned the subject District VIII applications for the July, 1986 hatching cycle to Medical Facilities Consultant Robert May for review. Mr. May was supervised in his work by Elizabeth Dudek, an experienced Medical Facilities Consultant Supervisor, who has reviewed or supervised the review of approximately 1200 CON applications. Robert Nay and Elizabeth Dudek concurred in their evaluations of the applications and recommended that Hillhaven's application be approved for 60 beds in Lee County. This recommendation was forwarded to the Administrator of the Office of Community Medical Facilities, Robert E. Naryanski, who also occurred with the recommendation on or about December 20, 1986, and forwarded the recommendation to Marta Hardy, Deputy Assistant Secretary for Health Planning and Development, for final approval. An unusual set of circumstances evolved from that approximate point in time with respect to the applications at issue. Sometime in late November 1986 Marta Hardy talked to Robert Sharpe, Administrator of the Office of Comprehensive Health Planning, concerning the applications in this batching cycle and stated that she intended to involve him in the review procedure. In late December, she asked Mr. Sharpe to review the applications for four of the counties in the cycle, including Lee County. Mr. Sharpe is in a separate and distinct part of the Department, which reports to the Deputy Assistant Secretary but does not, in the ordinary course of operations, review certificate of need applications. Mr. Sharpe's involvement with reviewing nursing home applications had never occurred before and has not occurred since. However, Mr. Sharpe has been involved on limited occasions with reviewing hospital CON applications in preparation for administrative hearings. Careage had a CON application in each of the four districts that Mr. Sharpe was asked to review. Mr. Sharpe was not asked to review any other districts other than the four districts in which Careage had applications pending. In Mr. Sharpe's conversation with Ms. Hardy, Ms. Hardy specifically mentioned Careage while expressing her concern about the Department's ability to discriminate the best applicants on the basis of quality of care. Ms. Hardy mentioned no other applicant by name. Mr. Sharpe, in all circumstances, recommended Careage for approval. Mr. Sharpe did not attempt to do a complete re-review the applications, and did not redo any part of the review that had been performed by the Office of Community Medical Facilities specifically the need calculations and comparing the applications to the statutory review criteria. Mr. Sharpe did not apply statutory review criteria in his review of the applications because it had been determined that all the applicants were minimally qualified and met the statutory review criteria. Mr. Sharpe felt that the responsibility of his office was simply to do a comparative review to determine the best applicant. Mr. Sharpe placed information in the applications into what has been termed a "matrix." The purpose of the matrix was to present the information in the applications in a format which would facilitate a comparative analysis based on a greater number of factors than had previously been considered. Traditionally, the predominant factors utilized by the Department in reviewing applications were construction costs, Medicaid participation percentages, proposed sites, and charges. The matrix developed by Mr. Sharpe included additional factors which he felt would better address the quality of care to be provided, such as the size of facility, the size of the patient rooms, the amenities available to the patients and their families, the type and level of staffing, availability of special programs, and operating costs. By including a greater number of factors in the matrix, more information was considered in selecting the best applicant. As a result, the factors that traditionally had been considered by the Department were given relatively less weight. There was no notice to the applicants of this change in practice. Further, although all the information considered by Mr. Sharpe was taken from the applications and generally required to be in the application, the applicants reported the information differently, making a direct "apples-to-apples" comparison difficult. Mr. Sharpe's review of the applications spanned approximately five to eight days. Mr. Sharpe's staff in the information on the matrix from the applications, and, although Mr. Sharpe had personally reviewed all the applications, Mr. Sharpe did not personally check the information placed on matrix for accuracy. The Office of Community Medical Facilities' initial review covered a period of approximately six months. There was no evidence that the duties and responsibilities of the Office of Community Medical Facilities were not carried out in a thorough and appropriate manner. Ms. Dudek has more experience in reviewing CON applications than Mr. Sharpe, and she took into account, among other review criteria requirements, the type programs offered by the applicant and the quality of care the applicant had demonstrated and was capable of providing. Mr. Sharpe never talked to Ms. Dudek to find out the basis for her recommendation because he felt his responsibility was to do an independent review. Robert Sharpe reported his findings with regard to Lee County to Marta Hardy who apparently accepted Mr. Sharpe's recommendation on or about January 7, 1987, approving Careage's application for 60 beds and denying all others. On or about January 23, 1987, in the Florida Administrative Weekly, it was published that Careage was approved fob a 120-bed facility in Lee County. Actually HRS approved Careage for a 60-bed facility; the 120-bed figure in the Florida Administrative Weekly was erroneous. As a result of a new administration and Bob Griffin succeeding Ms. Hardy as Deputy Secretary in the Office of Health Planning, and due to his concerns about the unique manner in which these applications were reviewed and a decision made, another review of the applications for Lee County was conducted. The Office of Community Medical Facilities, the office originally responsible for reviewing the applications, was asked to do this review. This third review was conducted during the summer of 1987 by Bob May while this case was pending before the Division of Administrative Hearings. In this third review, a matrix was also used, but not the identical matrix previously used by Mr. Sharpe. Indeed, the Office of Community Medical Facilities was instructed not to look at what Mr. Sharpe's office had done. The review resulted in a decision that HRS would maintain its position of supporting partial approval of the Careage application for 60 beds. By letter dated September 4, 1987, the parties were formally notified of the HRS decision and a Correction Notice was published in the Florida Administrative Weekly indicating that the notice published in January, 1987, stating that Careage had received a CON for 120 beds, should have shown a partial approval of 60 beds, and a denial of 60 beds. HCR, Forum, Health Quest and Hillhaven timely contested initial approval of the Careage application and their own respective denials. Careage and HRS are the respondents. Hillhaven, prior to final hearing, dismissed its case contesting the Careage approval for 60 beds, and in this proceeding contends that Hillhaven should be awarded a certificate of need because there is a bed need in excess of 60 beds in Lee County. Careage did not timely contest the denial of the 120 beds requested in its original application. Health Care and Retirement Corporation of America HCR, through its wholly owned subsidiary, Maple Leaf of Lee County Health Care, Inc., proposes to construct a 120-bed community nursing home in Lee County, Florida. At the time its application was submitted, HCR had not selected a site on the proposed facility, but at hearing proposed to locate it in the Ft. Myers area. Currently, HCR owns and operates 92 nursing homes in 19 different states, including seven within the State of Florida. Its existing Florida facilities are Pasadena Manor Nursing Home (South Pasadena, Florida), Community Convalescent Center (Plant City Florida), Kensington Manor (Sarasota, Florida), Jacaranda Manor (St. Petersburg, Florida) Wakulla Manor (Crawfordville, Florida, Heartland of St. Petersburg (St. Petersburg, Florida, and Rosedale Manor (St. Petersburg, Florida). Each of these facilities received superior ratings on their latest licensure and certification survey with the exception of Heartland and Rosedale, which received a standard and conditional rating respectively. Significantly, the conditional rating assigned to the Rosedale facility occurred less than six months after that facility was acquired by HCR, and all deficiencies were corrected within 19 days of the survey. HCR's current proposal for a 120-bed facility will be a one-story structure containing 40,000 gross square feet, including 2,000 square feet for an ancillary adult day care center. It will have 58 semi-private rooms with half-bath (toilet and sink) and four private rooms with full bath (toilet, sink and shower) located within four patient wings, two nursing stations, two dining rooms, central bathing facilities, beauty- barber shop, quite lounge, physical therapy room, occupational therapy room, multi-purpose rooms, outdoor patio areas and the other standard functional elements required to meet licensure standards. In all, the proposed facility meets or exceeds state requirements for the construction of nursing homes. HCR proposes to dedicate one wing (14 semi-private and 1 private room) of its facility to the care of patients suffering from Alzheimer's Disease and related disorders. Alzheimer's Disease is a brain disorder that results in gradual memory loss and, as such loss progresses, a need for increased personal care. Historically, Alzheimer's patients have been mixed with other patients in nursing homes, often disrupting other patients and presenting problems of control for staff separate Alzheimer's care unit enables the nursing home to utilize special techniques to manage the patient without restraint or sedation, and provides the patient with a smaller, safer and specially designed area with specially trained staff to address the needs of such patients. However, absent fill-up, HCR does not propose to limit admission to its Alzheimer's unit solely to patients suffering from Alzheimer's disease and related disorders. HCR's Alzheimer's unit is reasonably designed, equipped and minimally staffed for its intended purpose. HCR also proposes to provide, as needed, subacute care at its facility. Due to the impacts of the federal DRG (diagnostically related group) system which encourages hospitals to discharge patients earlier, there has been an increased demand for subacute services in nursing homes. Included within the subacute services HCR proposes to offer are ventilator care, IV therapy, pulmonary aids, tube feeding, hyperalimentation, and percentage and long term rehabilitation. HCR currently provides a wide variety of such subacute services at its existing facilities, and it may reasonably be expected to continue such practice at the proposed facility. As an adjunct to the proposed nursing home, HCR proposes to operate an adult day care unit for 12 Alzheimer's Disease patients. Additionally, HCR will offer respite care within the nursing home when beds available. Adult care and respite care provide alternatives to institutional long-term care in nursing homes, aid in preventing premature rising home admissions, and promote cost containment. As initially reviewed by the Department, HCR's activity would be a single story building containing 40,000 gross square feet, including the day care area, with an estimated total project cost of $3,894,000. As proposed, the total project cost equates to $32,450 per bed, and as designed provides 127 net square feet of living space for private rooms and 166 square feet for semi- private rooms. Construction equipment costs were as follows: Construction costs $2,200,000; costs per square foot $55.00; construct cost per bed 17,417; equipment costs $420,000; and equipment cost per bed $3,500. HCR's estimate of project costs is reasonable. At hearing HCR updated its project costs to account for changes that arose during the delay between initial review and de novo hearing. As updated, the total project cost was $4,375,500, or $36,462 per bed. Construction equipment costs, as updated were as follows: construction costs $2,400,000; cost per square foot $60.00; construction cost per bed $19,000, equipment costs $420,000; and equipment cost per bed $3,500. HCR's updated estimate of cost is reasonable. Staffing at the proposed 120-bed facility is designed to accommodate the needs of the skilled and intermediate care patients, as well as the special needs of the Alzheimer's and subacute patients. HCR will provide 24-hour registered nurse coverage for subacute patients and a higher staffing level in the Alzheimer's unit. The nursing home will provide 3.59 hours per patient in the Alzheimer's unit and 2.73 nursing hours overall, based on the assumption that 50 percent of the Alzheimer's patients will wanderers and that 50 percent of all patients will require skilled care. Precise staffing for subacute patients will be determined by the nature of the subacute services needed. HCR's staffing levels, as originally proposed and as updated, meet or exceed state standards. The salary and benefit estimates provided by HCR in its original application reflect salary and benefit levels current at the time of application, and the salary and benefit projections provided by HCR at bearing reflect current (1987) salaries and benefits inflated to the date of opening. Both estimates are reasonable. HCR's projection of utilization by class of pay as initially proposed was as follows: Private pay 51 percent, Medicaid 46 percent, and Medicare 3 percent. Due to its experience over the intervening 17 months since submittal of its application, HCR updated its assessment of utilization as follows: Private pay 50 percent, Medicaid 46 percent, and Medicare 4 percent. The current Lee County Medicaid experience level is 46 percent, and HCR provides an average 71 percent Medicaid occupancy in its Florida facilities. HCR's projections for payor mix are reasonable. HCR's initial application contained estimates of expenses and revenues current as of the date of application (July 1986) but failed to include an inflation factor to accommodate anticipated increases in expenses and revenues. Initially, T. projected its per diem room charges to be $60 to $85. At hearing, HCR projected its per diem room charges in the year opening (1990) to be $90 for a private room, $75 for a semiprivate room, $76.00 for Medicare patients, and $72 for Medicaid patients. The private, semi-private and Medicare charges were determined by inflating current (1987) Lee County charges forward to the year of opening. The Medicaid charges were based on a calculation of the Medicaid reimbursement formula. These charges, when multiplied by patient days, are a reasonable estimate of the projected revenues of the facility. HCR's estimate of expenses in its initial application was based on its current experience. Intervening events have lent new insight to its evaluation of expenses, as have intervening inflationary factors. While HCR's estimate of expenses and revenues was reasonable in its initial application, its current estimates comport with the reality of a 1990 opening and are reasonable. HCR has the available resources, including management personnel and funds for capital and operating expenditures, for project accomplishment and operation, and will be able to recruit any other personnel necessary to staff its facility. Since HCR does not propose to initially limit admission to its Alzheimer's unit solely to patients suffering from Alzheimer's disease and related disorders, its pro formas are premised on reasonable assumptions, and it has demonstrated the financial feasibility project in both the short term and long term. The proof demonstrates that HCR provides and Bill continue to provide quality care. HCR's corporate standards and guidelines regulate such areas as patient rights, staff development and orientation, physician and nurse services, pharmacy services and medication administration, social services, and infection control. HCR's manager of quality assurance, house professional services consultants, and quality assurance consultants regularly visit each HCR nursing home to implement the quality assurance standards and guidelines. Each HRC nursing home provides a staff development director who is responsible for the orientation of new employees, training new employees, and continuing training for all employees. Forum Group Inc. Forum is a publicly held health services company which owns, develops and operates retirement living centers and nursing homes on a national basis. Currently Forum operates 22 Lang facilities and an additional 11 retirement living centers with attached nursing facilities, including one nursing facility in Florida. Its Florida facility holds a standard rating. Other facilities owned by Forum in Texas, Kentucky and Illinois do, however, hold superior ratings. Pertinent to this case, Forum proposes to develop a retirement living center in Lee County that would consist of its proposed 60-bed skilled and intermediate care nursing home, an adult congregate living facility, and apartments or Independent living. Each of the three components which comprise Forum's retirement living center are physically connected and share some operational functions, such as a central kitchen, laundry, administrative area and heating plant. Such design provides for an efficient operation, as well as an economical distribution costs facility wide. The nursing facility proposed by Forum will be a single story building of wood frame and brick veneer construction containing 27,000 gross square feet. It will include 20 semi- private rooms with half bath, 16 private rooms with half bath, 3 private rooms with full bath, and one isolation room with full bath. Also included are a beauty-barber shop, quite lounge, physical therapy room, occupational therapy room, and exam-treatment room. But for the length of the corridors in the patient wings, discussed infra, the proposed facility meets or exceeds state requirements for the construction of nursing homes. Forum's proposal, as initially reviewed by the Department, would have a total project cost of $2,314,800. This equates to $38,580 per bed, and as designed provides 150 net square feet of living space for private rooms and 228 net square feet for semi-private rooms. Construction equipment costs were as follows: Construction costs $1,377,000; cost per square foot $51.00; construction cost per bed $22,950; equipment costs $200,000; and equipment costs per bed $3,333. Forum's estimate of project cost is reasonable. Forum provided a single-line drawing indicating the general arrangement of spaces for its proposed facility. As proposed, the facility would consist of two patient wings, and a central nurse's station. The corridor lengths in the patient wings exceed state standards by 40 feet. They could, however, be modified to conform to State standards without significantly affecting the cost of construction. The project would have energy conservation features such as heavy duty roof and side insulation, double-glazed windows, and high efficiency heating and air conditioning equipment. The forum facility will offer skilled and intermediate care, and subacute care, including IV therapy, ventilator care, hyperalimentation, pulmonary aids, and short and long term rehabilitation. Forum would contract out for physical therapy, speech therapy, pharmacy consultation and a registered dietician. If needed, Forum would offer respite care when beds are available. The proposed staffing levels and salaries proposed by Forum in its application are reasonable and meet or exceed state standards. Forum has a staff training program, with pre-service and in-service training, and utilizes a prescreening procedure to assure it hires competent staff. Twenty-four hour coverage by registered nurses will be provided, and a staffing ratio of 2.9 will be maintained. The staffing level at the proposed facility is consistent with that experienced at Forum's existing Florida Facility. Forum provides, and will continue to provide, quality care. Forum's application projected its utilization by class of pay as follows: private pay 58.47 percent, Medicaid 37.16 percent, and Medicare 4.37 percent. Currently, Forum experiences a 48 percent Medicaid occupancy rate system-wide, although it only has 2 of 35 beds dedicated to Medicaid care in its present Florida facility. Forum estimated its revenues based on patient charges ranging from $50.64 per day for Medicaid/semi-private room to $75.00 per day for SNF/private pay/private room. Based on such revenues, its pro forma, utilizing a conservative 86.25 percent occupancy rate at the end of the second year of operation, demonstrated the short term and long term financial feasibility of the project as initially reviewed by the Department notwithstanding the fact that it had underestimated its Medicaid and Medicare reimbursement rates. At hearing, Forum sought to demonstrate that its project was currently feasible by offering proof that intervening events had not significantly impacted the financial feasibility of its project. To this end, Forum offered proof that the contingencies and inflation factors it had built into the construction of its initial proposal would substantially offset any increased costs or expenses of construction. Additionally, Forum sought to update its proposal at hearing by offering testimony that included an increase in the administrator's salary from $27,000 to $39,000, a decrease in interest in year one to $187,803, an increase in interest in year two to $250,790, and an increase in revenues based on patient charges ranging from $69.19 per day for Medicaid/semi private room to $90.00 per day for SNF/private pay/private room. Some of the applicants objected to Forum's proof directed at the current financial feasibility of its project because it had not previously provided them with a written update of its application as ordered by the Hearing Officer. The applicants' objection was well founded. Further, the proof was not persuasive that any contingencies and inflation factors it had built into its initial proposal would substantially offset any increased costs or expenses of construction, nor that salaries, benefits and other expenses that would be currently experienced were appropriately considered in addressing the present financial feasibility of Forum's project. While Forum has the available resources, including management personnel and funds for initial capital and operating expenditures, for project accomplishments and operation, and will be able to recruit any other personnel necessary to staff its facility, it has failed to demonstrate that its proposal, as updated, is financially feasible in the long term. Health Quest Corporation Health Quest is a privately held corporation which owns, develops and operates health care facilities and retirement centers on a national basis. Health Quest has been in business for approximately 20 years, and currently operates 11 long-term care facilities and three retirement centers in Indiana, Illinois, and Florida. Its existing Florida facilities are located in Jacksonville, Boca Raton, and Sarasota. It also has facilities under construction in Winter Park and Sunrise, Florida. Health Quest also held a number of other certificates of need to construct nursing facilities in Florida. Recently, however, it decided to transfer or sell 3-4 of those certificates because its initial decision to develop nine new projects simultaneously would have, in its opinion, strained its management staff and commitment to high quality standards. HCR is, however, currently proceeding with several projects in Florida, and anticipates that the proposed Lee County facility will be brought on line thereafter. Pertinent to this case, Health Quest proposes to develop a retirement center in Lee County that would consist of a 60-bed skilled and intermediate care nursing home, and 124 assisted living studio apartments (an ACLF). 4/ The two components which comprise Health Quest's retirement center are physically connected and share some operational functions such as a common kitchen, laundry, therapy areas, maintenance areas, and administrative areas. Such design provides for an efficient operation, as well as an economical distribution of costs facility wide. In addition to providing an economical distribution of costs, the two components of the retirement center are mutually supportive. The nursing care unit supports the ACLF by making sure that health care services are available to the assisted living people. The ACLF supports the nursing unit as a source of referral and as an alternative to nursing home placement. The nursing facility proposed by Health Quest will be a single story building of masonry and concrete construction. It will include 6 private rooms and 27 semi-private rooms with half-bath attached, central nurse's station, central bathing facilities, beauty-barber shop, quite lounge, central dining area, physical and occupational therapy room and outdoor patio The center, itself, will provide patios, walkways and other outdoor features to render the facility pleasant and attractive, and will provide multi-purpose areas to be used for religious services and other activities, an ice cream parlor and gift shop. As proposed, the nursing home meets or exceeds state standards. As initially reviewed by the Department, Health Quest's proposed facility contained 25,269 gross square feet, with an estimated total project cost of $2,244,505. As proposed, the total project cost equates to $37,408 per bed, and as designed provides 240 net square feet of living space for both private and semi-private rooms. Construction equipment costs were as follows: Construction costs $1,470,333; cost per square foot $58.19; construction cost per bed $24,506; equipment costs $298,200; and equipment cost per bed $4,970. While the majority of Health Quest's costs are reasonable, its equipment costs are not. These costs are substantially the same as those projected in its original application for a 120-bed facility, which at an equipment cost of $300,000 derived an equipment cost per bed of $2,500. Why the same cost should prevail at this 60-bed facility was not explained by Health Quest, and its equipment cost per bed of $4,970 was not shown to be reasonable. As with most applicants, Health Quest updated its project costs at hearing to account for the changes which were occasioned by the delay between initial review and de novo hearing. As updated, the estimated project cost is $2,290.331, $38,172 per bed. Construction equipment costs were as follows: Construction costs $1,507,043; cost per square foot $59.64; construction cost per bed $25,117; equipment costs $302,700; and equipment costs per bed $5,045. Again, while the majority of Health Quest's costs are reasonable its equipment costs are, for the reasons heretofore expressed, not shown to be reasonable. The Health Quest facility will offer skilled and intermediate nursing care, and subacute care, including IV therapy, chemotherapy, TPN therapy and tracheostomy care. Also to be offered are respite care as beds are available and, within the complex, adult day care. Health Quest will maintain a nursing staffing ratio of approximately 3.25 hours per patient day for skilled care and 2.5 for intermediate care. As originally reviewed by the Department, Health Quest's staffing levels and expenses were reasonable. At hearing, Health Quest increased its staffing levels to account for an increased demand in labor intensive care, and increased its staffing expenses to account for the intervening changes in the market place. As updated, Health Quest's staffing levels and expenses are reasonable. Health Quest's projection of utilization by class of pay in the application reviewed by the Department was as follows: private pay 51.6 percent, Medicaid 45 percent, and Medicare 3.4 percent. Health Quest's utilization projection, as updated at hearing, was as follows: private pay 50.9 percent, Medicaid 45 percent, and Medicare 4.1 percent. TAB Health Quest currently serves 30 percent Medicaid patients at its Jacksonville facility, 10 percent Medicaid patients at its Boca Raton facility, and no Medicaid patients at its Sarasota facility. It has, however, committed to serve 40 percent and 48 percent Medicaid patients at its Sunrise and Winter Park facilities, respectively. Health Quest's projections of payor are reasonable. Initially, Health Quest projected its per diem room charges to range from $52 for skilled and intermediate care Medicare patients to $57.25 for skilled care-private and Medicare patients. It did not, however, draw any distinction between private and semi-private rooms. At hearing, Health Quest projected its per diem room charges as follows: $90 for SNF/single/private pay; $73 for SNF/double/private pay; $73 for SNF/double/Medicare; $68 for SF/double Medicaid; $68 for ICF/single/private pay; $70.75 for ICF/double/private pay; and $68 for ICF/double/Medicaid. Health Quest's fill-up and occupancy projections, as well as its projections of revenue and expenses, are reasonable. They were reasonable when initially reviewed by the Department, and as updated. During the course of these proceedings, a serious question was raised as to whether Health Quest had demonstrated that it had the available resources, including management personnel and funds for capital and operating expenditures, for project accomplishment and operation, or that it was committed to the subject project. Within the past three years, Health Quest has sold three of its approved CONS and is considering the sale a fourth due to its inability to handle that number of projects, and the adverse impact it would have on its ability to deliver quality care. Notwithstanding its inability to proceed with approved projects, Health Quest proceeded to hearing in October 1987 and December 1987 for nursing home CONs in Hillsborough County and Lee County (the subject application), and also had nine such applications pending in the January 1987 batching cycle and eight such applications in the October 1987 batching cycle. Health Quest's actions are not logical, nor supportive of the conclusion that it is committed to this project or that it possesses available resources for project accomplishment. Under the circumstances, Health Quest has failed to demonstrate that it has the available resources, including management personnel and funds for capital and operating expenditures, for project accomplishment and operation. Health Quest's facilities in Jacksonville and Boca Raton currently hold superior ratings from the Department. A superior rating includes consideration of staffing ratios, staff training, the physical environment, physical and restorative therapies, social services, and other professional services. Those facilities are monitored, as would the subject facility, by Health Quest for quality care through a system of quarterly peer review, and provide extensive staff education programs that include orientation training for new staff and on-going education for regular staff. Health Quest has demonstrated that it has provided quality care. However, in light of the strain its current activities have placed on its resources, it is found that Health Quest has failed to demonstrate that it could provide quality care at the proposed facility were its application approved. Hillhaven, Inc. Hillhaven is a wholly owned subsidiary of the Hillhaven Corporation, which is a subsidiary of National Medical Enterprises. The Hillhaven Corporation has been business for almost 30 years, and is currently responsible for the operation of approximately 437 nursing homes and retirement centers nationally, including 15 nursing homes which it owns or operates in the State of Florida. Hillhaven proposes to develop a new 120-bed skilled and intermediate care community nursing home in Fort Myers, Lee County, consisting of 38,323 square feet. It will include 14 private rooms and 53 semi-private rooms, a full bath attached to each room (shower, toilet and sink), central tub rooms, beauty- barber shop, quite lounge, chapel, physical therapy room, occupational therapy room, and outdoor patio areas. In all, Hillhaven's proposed facility meets or exceeds state requirements for the construction of nursing homes. As initially reviewed by the Department, Health Quest's proposed facility would be a single-story building containing 38,323 gross square feet, with an estimated total project cost of $3,544,444. As proposed, the total project cost equates to $29,537 per bed, and as designed provides 217 net square feet of living space for both private and semi-private rooms. Construction equipment costs were as follows; construction costs $2,146,000; cost per square foot $56.00; construction cost per bed $17,884; equipment costs $442,005; and equipment cost per bed $3,683.38. Hillhaven's project costs are reasonable. As with the other applicants, Hillhaven update its project costs at hearing to account for the changes which were occasioned by the delay between initial review and de novo hearing, certain oversights in its initial submission, and its decision to proceed with type 4 construction as opposed to type 5 construction as originally proposed. As updated, the estimated project cost is $4,089,639, or $34,155.33 per bed. Construction equipment costs, as updated, were as follows: construction costs $2,446,088; cost per square foot $63.82; construction cost per bed $20,384; equipment costs $521,200; and equipment costs per bed $4,343.33. By far, the biggest factor in the increased construction costs was Hillhaven's decision to proceed with type 4 construction as opposed to type 5 construction. Either type of construction would, however, meet or exceed state standards, and Hillhaven's estimates of construction and equipment costs are reasonable. The Hillhaven facility will offer skilled and intermediate care, occupational therapy, speech therapy, physical therapy, recreational services, restorative nursing services, and social services. Hillhaven does not discriminate on admission, and would admit Alzheimer's and subacute patients as presented. Were sufficient demand experienced, Hillhaven has the ability to provide and would develop a full Alzheimer's unit, and provide day care and respite care. Currently, Hillhaven operates 36 Alzheimer's units at its facilities nation wide, but has experienced no demand for such a special unit or other special care at its existent Lee County facility. As originally reviewed by the Department, Hillhaven's staffing levels an expenses were reasonable. At hearing, Hillhaven increased its staffing levels to account for staff inadvertently omitted from its initial application, and increased its staffing expenses to account or intervening changes in the market place. As updated, Hillhaven's staffing level is 2.5, and its staffing levels and expenses are reasonable. Hillhaven's projected utilization by class of pay as originally reviewed by the Department was as follows: private pay 30 percent, Medicaid 60 percent, and Medicare 10 percent. As updated at hearing, Hillhaven's utilization projection was as follows: private pay 44 percent, Medicaid 53 percent, and Medicare 3 percent. Currently, Hillhaven provides, on average, 53 percent Medicaid care at its facilities in Florida. Hillhaven's estimate of payor mix was reasonable and, in light of intervening changes in circumstance, was reasonable as updated. Hillhaven's patient charges for its second year of operation as originally reviewed by the Department ranged from $58.60 to $62.00 per day. As updated, Hillhaven's patient charges ranged from $52.13 to $73.50 per day. Hillhaven's estimated charges were achievable when initially proposed and as updated, and are reasonable. Hillhaven's fill-up and occupancy projections, as well as its projections of revenues and expenses, are reasonable. They were reasonable when initially reviewed by the Department, and comport, as updated, with the current experience in Lee County. Hillhaven has the available resources, including management personnel and funds for capital and operating expenditures, for project accomplishment and operation, and will be able to recruit any other necessary personnel to staff its facility. Its pro forma estimates are premised on reasonable assumptions, and Hillhaven has demonstrated the short term and long term financial feasibility of its project. Currently, Hillhaven owns or operates 15 facilities in the State of Florida. Of these 15 facilities, two have opened within the past year and are not eligible for ratings. Nine of the 13 eligible facilities are operating with superior licenses. Of the remaining four facilities, two have a standard license and two have a conditional license. The two facilities with conditional ratings have both resolved their deficiencies. Hillhaven has provided and will continue to provide quality care. It ensures that quality care will be maintained within its facilities by drawing upon the professional resources four regional offices comprised of registered nurses, quality assurance monitors, regional dietitians, maintenance supervisors, employee relations specialists, and other administrative support personnel. Regional consultants visit company facilities monthly to plan, organize and monitor operations, and to conduct in-service training workshops. Overall, Hillhaven provides each facility with an in-depth quality assurance program. Gene Lynn d/b/a Careage Southwest Healthcare Center Gene Lynn (Careage) is the president and 100 percent owner of Careage Corporation. Since 1962, Careage has developed approximately 150 nursing homes and retirement centers, as well as 100 medically related facilities, in 22 states and the Virgin Islands. Until December 1986 it did not, however, own or operate any facilities. Currently, Careage operates four nursing homes in the United States (one in the State of Washington, two in the State of California, and one in the State of Arizona) , but none in Florida. The home office of Careage is located in Bellevue, Washington. Careage proposed to develop a new 120-bed skilled and intermediate care nursing home in Lee County with specialty units for subacute and Alzheimer's care, consisting of 45,500 square feet. It would include a patient care unit consisting of 2 isolation rooms and 7 private rooms with full bath and 45 semiprivate rooms with half-bath, an Alzheimer's unit consisting of 1 private room with full bath and 10 semiprivate rooms with half bath, central dining area, beauty-barber shop, quiet lounge, chapel, physical therapy room, occupational therapy room, outdoor patio areas, and exam-treatment room. As proposed, the nursing home meets or exceeds state standards. As initially reviewed by the Department, Careage's proposed facility was a single-story building containing 45,500 gross square feet, with an estimated total project cost of $4,150,000. As proposed, the total project cost equates to 34,583 per bed, and as designed provides 184-227 net square feet of living space for isolation/private rooms, and 227-273 net square feet of living space or semi-private rooms. Construction equipment costs were as follows: construction costs $2,583,125; cost per square foot $56.77; construction cost per bed $21,526; equipment costs $420,000; and equipment cost per bed $3,500. Careage's methods of construction, as well as its construction and equipment costs, are reasonable. The Careage facility would offer skilled and intermediate care, occupational therapy, physical therapy, recreational services and social services. Additionally, the proposal includes a special 21-bed unit dedicated solely to the treatment of Alzheimer's disease patients, and a dedicated 10-bed unit for subacute care which will accommodate technology dependent children care. Among the subacute services to be offered are hyperalimentation, IV therapy, ventilators, heparin flush, and infusion pumps for administration of fluids. Careage will offer respite care as beds are available, and will offer day care in a separate facility. Careage's projected utilization by class of pay as originally reviewed by the Department was as follows: private pay 49 percent, Medicaid 40 percent, Medicare 3 percent, subacute (private) 6 percent, and VA 2 percent. Careage's patients charges for its facility were projected as follows: private and VA (room rate only) $63.86, Medicaid (all inclusive rate) $59.23, Medicaid (all inclusive rate) $108.15, and private (other) /subacute (room rate only) $128.75. Careage's fill-up and occupancy projections as well as its projections of revenues and expenses, for its 120-bed facility were not shown to be reasonable. First, in light of the fact that there was no quantifiable demand for a dedicated Alzheimer's unit and subacute care unit, as discussed infra at paragraphs 126-129, no reliable calculation of fill-up and occupancy rates or revenues and expenses could be derived that was, as the Careage application is, dependent on such revenue stream. Second, the Careage pro forma was predicated on average rates experienced in Lee County. Since Careage proposes heavier nursing care than that currently experienced in Lee County, its estimates of patient charges are not credible. At hearing, Careage updated its 120-bed application to account for inflationary factors that had affected the project since it was first reviewed, and to correct two staffing errors. These updates did not substantially change the project. Careage has the available resources, including management personnel and funds for capital and operating expenditures, for project accomplishment and operation, and will be able to recruit any other necessary personnel to staff its facility. Its pro forma estimates were not, however, premised on reasonable assumptions, and Careage has failed to demonstrate the short term and long term financial feasibility of its 120-bed project. Following the Department's initial review of the applications in this batching cycle, it proposed to award a certificate of need to Careage for a 60- bed facility, premised on its conclusion that there was insufficient numeric need to justify an award of beds exceeding that number, notwithstanding the fact that the application of Careage was for 120 beds and did not request or propose a 60-bed facility. Notably, all financial, staffing, construction, equipment and other projections described in the Careage application were based on a 120- bed facility, and no information was provided regarding a 60- bed facility. Also notable is the fact that the other applicants were not accorded equal consideration. Not surprisingly, the proposed award of a CON for 60-beds to Careage was timely challenged, but Careage did not protest the Department's denial of its application for 120 beds but appeared as a respondent to defend the Department's decision to award it 60 beds. At hearing, Careage offered proof of the reasonableness of its 120- bed proposal over the objection of the other applicants. /5 Careage contends that its proposed 60-bed facility is a scaled down version of its 120-bed proposal Careage proposes to offer the same services in its 60-bed facility as it proposed in its 120-bed facility, including the 21-bed Alzheimer's unit and 10-bed subacute care unit. Its proposed 60- bed facility is not, however, an identifiable portion of its initial project. As proposed, the 60-bed facility would contain 26,900 gross square feet, and meet or exceed state standards. It would include a patient care unit consisting of 1 isolation room and 4 private rooms with full bath, 17 semi- private rooms with half-bath, an Alzheimer's unit consisting of 1 private room with full bath and 10 semi-private rooms with half-bath, together with the same amenities offered by the 120-bed facility, but on a reduced scale. As proposed, the total project cost for the 60-bed facility is $2,475,000, which equates to $41,250 per bed. As designed, the facility would provide the same net square footage of living space for private and semi-private rooms as the 120-bed facility. Construction equipment costs would be as follows: construction costs $1,431,750; cost per square foot $53.22; construction cost per bed $23,863; equipment costs $210,000; and equipment cost per bed $3,500. Careage's methods of construction, as well as its construction and equipments costs, are reasonable. Careage's projected utilization by class of pay in its 60-bed facility was as follows: private pay 47 percent, Medicaid 40 percent, Medicare 5 percent, subacute (private) 6 percent, and VA 2 percent. Careage's patient charges for its 60-bed facility were projected as follows: private and VA (room rate only) $66.00, Medicaid (all Inclusive rate) $63.50, Medicare (all inclusive rate) $120.00, private (other)/subacute (room rate only) $130.00. Careage's fill-up and occupancy projections, its projections of revenue and expenses, and its pro forma estimates for its 60-bed facility suffer the same deficiencies as those for its proposed 120-bed facility. Under the circumstances, Careage has failed to demonstrate the short term and long term financial feasibility of its 60-bed facility. While Careage has only owned and operated nursing homes for a short time, the proof demonstrates that it has and will continue to provide quality care for its residents. The Alzheimer's unit and subacute care units are reasonably designed, equipped and staffed for their intended functions. Staffing ratios in the subacute unit will be 6.0, and in the other areas of the facility 3.0. Careage currently utilizes a quality assurance program at each facility which includes a utilization review committee, safety committee, infection control committee, and pharmaceutical committee. Each facility also has a resident advisory council, community advisory council, and employee advisory council. Presently, Careage is developing a company level quality assurance program, and has initiated announced and unannounced site visits by a quality assurance expert to evaluate resident care, operations, maintenance and physical environment. The Department of Health and Rehabilitative Services The opinions expressed by the witnesses offered by the Department were premised on information available to them while these applications underwent "preliminary" review. The information available to them at that time, and represented by the State Agency Action Report (SAAR), was incomplete and inaccurate in many respects, including the services to be provided by some of the applicants and the approved bed inventory and occupancy rates utilized in the need methodology. These witnesses were not made privy to, and expressed no opinions, regarding the relative merits of the applications in light of the facts developed at hearing. Throughout the hearing, counsel for the Department objected to evidence from any applicant regarding "updates" (changes) to their applications as they were deemed complete by the Department prior to its initial review. It was the position of the Department's counsel, but otherwise unexplicated, that the only appropriate evidence of changed conditions after the date the application was deemed complete were those changes which relate to or result from extrinsic circumstances beyond the control of the applicant, such as inflation and other current circumstances external to the application. The majority of the "updated" material offered by the applicants at hearing did result from the effects of inflation, the passage of time between the application preparation and the dates of final hearing, changes in the market place regarding nursing salaries, changes in the Medicaid and Medicare reimbursement system and typographical errors in the application. Some changes in design were offered as a result of the applicant's experience with other construction projects and in order to comply with licensing regulations. There were also some changes which resulted from better information having been secured through more current market surveys. None of the applicants attempted to change their planning horizon, the number of beds proposed, the proposed location of the facility or the services to be offered except Careage. The Department has established by rule the methodology whereby the need for community nursing home beds in a service district shall be determined. Rule 10-5.011(1)(k)(2), Florida Administrative Code; formerly, Rule 10- 5.11(21)(b) Florida Administrative Code. The first step in calculating need pursuant to the rule methodology is to establish a "planning horizon." Subparagraph 2 of the rule provides: Need Methodology... The Department will determine if there is a projected need for new or additional beds 3 years into the future according to the methodology specified under subparagraphs a. through i. The Department interprets subparagraph 2, and the applicants concur, as establishing a "planning horizon" in certificate of need proceedings calculated from the filing deadline for applications established by Department rule. This interpretation is consistent with the numeric methodology prescribed by subparagraph 2, and with the decision in Gulf Court Nursing Center v. Department of Health and Rehabilitative Services, 483 So.2d 700 (Fla. 1st DCA 1986). Applying the Department's interpretation to the facts of this case establishes a "planning horizon" of July 1989. Pertinent to this case, subparagraphs 2a-d provide the methodology for calculating gross bed need for the district/subdistrict in the horizon year. In this case, the applicable district is District 8, and the applicable subdistrict is Lee County. The first step in the calculation of gross need for the horizon year is to derive "BA", the estimated bed rate for the population age group 65-74 in the district. This rate is defined by subparagraph 2b as follows: BA LB/ (POPC + (6 x POPD) Where: LB is the number of licensed community nursing home beds in the relevant district. POPC is the current population age 65-74 years. POPD is the current population age 75 years and over. The parties concur that the district licensed bed figure (LB), as well as the subdistrict licensed bed figure (LBD) is calculated based on the number of community nursing home beds as of June 1, 1986. The Department's Semi-Annual Nursing Home Census Report and Bed Need Allocation prepared for the July 1986 review cycle (July 1989 planning horizon) listed 4,193 licensed community nursing home beds in District 8 and 996 in Lee County. However, that count taken on May 1, 1986, did not include 120 new beds which were licensed in Charlotte County on May 8, 1986. The count also excluded 287 beds at four other facilities in the district, including 60 beds at Calusa Harbor in Lee County, because they were listed as sheltered beds according to Department records at that time. After passage of Section 651.118(8), Florida Statutes, the Department surveyed the facilities and found that the beds at these four facilities were operated as community beds rather than sheltered beds. Under the circumstances, the proof demonstrates that as of June 1, 1986, there were 4,600 licensed community nursing home beds in district 8 (LB) and 1,056 in Lee County (LBD). The formula mandated by the rule methodology or calculating BA requires that the "current population" for the two age groups be utilized. The rule does not, however, prescribe the date on which the "current population" is to be derived. Some of the applicants contend that the current population" for POPC and POPD should correspond to the period for which the average occupancy rate (OR) is calculated or the July batching cycle, OR based upon the occupancy rates of licensed facilities for the months of October through March preceding that cycle. Under this theory, January 1, 1986, as the midpoint of that period, is the appropriate date to calculate "current population" to derive PCPC and POPD. The Department contends that "current population" for POPC and POPD should be calculated as of July 1986, the filing deadline for applications in this review cycle. The Department's position is, however, contrary to its past and current practice. The need reports issued by the Department between December 1984 and December 1986, routinely used a three and one- half year spread between the base population period and the horizon date for "current population." In the January 1987 batching cycle, which cycle immediately followed the cycle at issue in this case, the Department utilized a three and one-half spread between the base population period and the horizon date for "current population" when it awarded beds in that cycle. The Department offered no explanation of why, in this case, it proposed to deviate from its past and current practice. Under the circumstances, January 1, 1986, is the appropriate date on which the "current population" is to be calculated when deriving POPC and POPD. The parties are also in disagreement as to whether population estimates developed after the application deadline can used to establish the current population. Rule 10- 5.011(k)2h, Florida Administrative Code, mandates that population projections shall be based upon the official estimates and projections adopted by the Executive Office of the Governor, but does not limit such proof to any particular estimate. The Department advocates the use of population estimates existent at the application deadline. Accordingly, it would apply the official estimates and projections adopted by the Executive Office of the Governor as of July 1, 1986. Other parties would apply the more recent estimates adopted by the Office of the Governor as of July 1, 1987. In this case, the use of either estimate would have no significant effect on the result reached under the rule methodology; however, since all population estimates and projections are only approximations rather than actual counts, it would be more reasonable from a health planning perspective to use the latest estimates of the 1987 population than the estimates available at the time of application. In this case, this means using July 1, 1987, estimates of January 1986 populations. These estimates are still "current" as of January 1986, since It is still the January 1986 population that is to be measured, and more reliable from a health planning perspective than the prior projection. In the same manner, July 1, 1987, estimates of horizon year 1989 populations (PCPA and POP), infra, would also be used rather than July 1, 1986, estimates of that population. Accordingly, Forum's calculation POPC (128,871), POPD (77,194), POPA (149,645), and POPB (95,748) is appropriate. (Forum Exhibit 10, Appendix A) Application of the methodology prescribed by subparagraph 26 to the facts of this case produces the following calculation: BA 4,600/(128,871 + (6 x 77,194) BA 4,600/(128,871 + 463,164) BA 4,600/592,035 BA .0077698 The second step in the calculation of gross need for the horizon year is to derive "BB", the estimated bed rate for the population age group 75 and over in the district. This methodology is defined by subparagraph 2c, and calculated in this case as follows: BB 6 x BA BB 6 x .0077698 BB .0466188 The third step in the calculation of gross need for the horizon year is to derive "A", the district's age adjusted number of community nursing homes beds" at the horizon year. This methodology is defined by subparagraph 2a as follows: A (POPA x BA) + (POPB x BB) Where: POPA is the population age 65-74 years in the relevant department district projected three years into the future. POPR is the population age 75 years and older in the relevant departmental district projected three years into the future. Application of the methodology prescribed by subparagraph 2a to the facts of this case produces the following calculation: A (149,645 x .0077698) + (95,748 x .0466188) A 1,162.7117 + 4,422.4086 A 5,585.12 The final step in the calculation of gross need in the horizon year is to derive "SA", the preliminary subdistrict allocation of community nursing home beds;" gross need in the case. 7/ This calculation is defined by subparagraphs 2d as follows: SA A x (LBD/LB) x (OR/.90) Where: LBD is the number of licensed community nursing home beds in the relevant subdistrict. OR is the average 6 month occupancy rate for all licensed community nursing homes within the subdistrict of the relevant district. Occupancy rates established prior to the first batching cycle shall be based upon nursing home patient days for the months of July 1 through December 31; occupancy rates established prior to the second batching cycle shall be based upon nursing home patient days for the months of January 1 through June 30. The batching cycle in which these applications were filed, however, occurred before the Department amended its rule to include the fixed need pool concept contemplated by subparagraph 2d. Accordingly, the parties concur that the six month period on which the average occupancy rate is calculated is not as set forth in subparagraph 2d of the current rule, but, rather, defined by former rule 1C--5. 11(21)(b)4 as follows: OR is the average occupancy rate for all licensed community nursing homes within the subdistrict of the relevant district. Review of applications submitted for the July batching cycle shall be based upon occupancy data for the months of October through March preceding that cycle... In calculating the occupancy rate (OR) for the licensed community nursing homes in the subdistrict (Lee County) the Department derived a figure of 91.91. The Department arrived at this figure based on the first day of the month patient census of each facility considered to have community beds (LBD=1,056), which included the 60 beds at Shell Point Nursing Pavilion; assumed that such census was maintained throughout the entire month; and then divided such patient days by the actual number of beds available. The Department's methodology is an accepted health planning technique, and comports with its previous practice. Some of the parties disagree with the technique utilized by the Department to calculate OR, and advocate the use of actual patient day occupancy to derive OR. This technique differs from the "first of the month" technique by utilizing the actual number of patient days experienced by the facility, as opposed to assuming a constant census based on first of the month data. This alternative methodology is, likewise, an accepted health planning technique, and if proper assumptions are utilized will yield a more meaningful result than the Department's methodology. In this case, the proponents of the "actual patient day occupancy" methodology, erroneously assumed that 160 beds at Shell Point Nursing Pavilion were community nursing homes beds, as opposed to 60 beds; and, based on an erroneous LBD of 1,156, derived a subdistrict occupancy rate of 92.97. Under such circumstances, these proponents calculations are not reliable, and the subdistrict occupancy rate derived by the Department is accepted. Applying the facts of this case to the methodology prescribed by subparagraph 2d produces the following gross need calculation for the subdistrict: 5A 5,585.12 x (1,056/4,600) x (.9191/.9) SA 5,585.12 x .2295652 x 1.0212222 SA 1309.36 The final step in the numeric need methodology is to derive net need from gross need. According to subparagraph 2i, this need is calculated as follows: The net bed allocation for a subdistrict, which is the number of beds available for Certificate of Need approval, is determined by subtracting the total number of licensed and 90 percent of the approved beds within the relevant department subdistrict from the bed allocation determined under subparagraphs 2.a. through f. unless the subdistrict's average occupancy rate for the most recent six months is less than 80 percent, in which case the net bed allocation is zero. The number of approved and licensed nursing home beds for the second batching cycle in 1987 shall be based on the number of approved and licensed beds as of August 1, 1987, in subsequent nursing home batching cycles, the number of licensed and approved beds to be used in establishing net need for a particular batching cycle shall be determined as of the agency's initial decision for the immediately preceding nursing home batching cycle. While the rule requires that net need be calculated by subtracting "the total number of licensed and 90 percent of the approved beds" In the subdistrict from the cross need previously calculated, it is silent as to the date that inventory should be calculated when, as here, the batching cycle at issue predates its enactment. In the face of this dilemma, the parties rely on the provisions of former rule 10-5.11(21)(b) , Florida Administrative Code, which was existent when their applications were filed to resolve their dispute. Under the circumstances, reference to former rule 10-5.11(21)(b), is appropriate. Former rule 10-5.11(21)(b)9 provides: The net bed allocation for a subdistrict, which is the number of beds available, is determined by subtracting the total number of licensed and 90 percent of the approved beds within the relevant departmental subdistrict from the bed allocation determined under subaragraphs 1 through 9 (sic 8).... (Emphasis added) While the former rule requires that net need be calculated by subtracting "the total number of licensed and 90 percent of the approved beds" in the subdistrict from the gross need calculated under subparagraphs (b)1-8, it is silent as to the date that inventory should be calculated. The Department asserts that the number of licensed beds should be calculated as of June 1, 1986 (the date established by subparagraph (b)7 of the former rule as the data base for calculating LB and LBD, and the number of approved beds as of December 18, 1986 (the date the Department's supervisory consultant signed the state agency action report). The other parties would likewise calculate licensed beds as of June 1, 1986, but would also calculate approved beds as of that date. The Department offered no reasonable evidentiary basis for its interpretation of the date at which the total number of licensed and approved beds are to be calculated under subparagraph (b)9 of the former rule. As discussed below, the dates used by the Department and the other parties for purposes of calculating net need were facially unreasonable. The Inventory of licensed and approved beds under subparagraph (b)9 of the former rule, as well as subparagraph 2i of the current rule, are inextricably linked. As approved beds are licensed, the approved bed inventory decreases and the licensed bed inventory increases. The Department's interpretation of the dates at which licensed and approved beds are to be counted is neither logical nor rational, since it could result in some beds not being counted as either licensed or approved. For example, if beds were approved and not yet licensed on June 1, 1986, but licensed before the consultant supervisor signed the SAAR (state agency action report), they would not be counted in either inventory. On the other hand, the other parties' approach would ignore all beds licensed or approved from previous batching cycles after June 1, 1986 which beds were intended to serve at least a portion of the future population. The fundamental flaw in the parties' approach to establishing an inventory date under subparagraph (b)9, was the assumption that subparagraph (b)7 of the former rule defined licensed bed inventory for purposes of subparagraph (b)9. The Department's rule must be construed in its entirety, and all parts of the rule must be construed so as to work harmoniously with its other parts. So construed, the only logical conclusion to be drawn, as hereinafter demonstrated, is that subparagraph (b)7 defines LB and LBD ("current" licensed beds) for the cross need calculation under the methodology defined by subparagraphs (b)1-4, and does not presume to define licensed beds for the net need calculation under subparagraph (b)9. Subparagraphs (b)1-4 and 7 of the numeric need methodology prescribed by the former rule is designed to yield a gross bed need for the horizon year. The keys to this methodology are the calculation of a current bed rate (BA) and current occupancy rate (OR) for the current using population, and the projection of those rates on the population to be served in the horizon year. A meaningful calculation of the current bed rate cannot, however, be derived without a current inventory of licensed beds (LB and LBD). Accordingly, the relationship between subparagraph (b)7, which defines the data base (June 1, 1986 in this case) for defining LB and LBD (the "current" licensed bed inventory) to the gross bed need calculation is apparent. The parties' suggestion that subparagraph (b)7 defines licensed bed inventory under subparagraph (b)9 not only ignores the inextricable link between subparagraph (b)7 and the gross bed need methodology, but also the language and purpose of subparagraph (b)9. The purpose of that subparagraph is to derive a realistic estimate of actual (net) bed need in the horizon year. Since all licensed and approved beds from previous batching cycles were intended to serve at least a portion of the horizon population, it would be illogical to ignore any of those beds when calculating net need. Accordingly, it would be unreasonable in this case not to count any beds that were licensed or approved from previous batching cycles between June 1, 1986, and the date a decision is rendered on these applications. Indeed, subparagraph (b)9 speaks to "the total number" of licensed and approved beds, not beds existent on June 1, 1986. In sum, subparagraph (b)7 cannot be read to define licensed bed inventory under subparagraph (b)9, and the parties' suggestion that it can is rejected as contrary to the clear language of the rule methodology. See: Boca Raton Artificial Kidney Center, Inc. v. Department of Health and Rehabilitative Services, 493 So.2d 1055 (Fla. 1st DCA 1986). Since the purpose of subparagraph (b)9 is to calculate a realistic estimate of the net bed need for the horizon year, it is appropriate to use the most current inventory of licensed and approved beds at the point a decision is rendered on an application. This assures to the greatest extent possible that the horizon population will not be over or undeserved. In those circumstances where the SAAR becomes final agency action, the Department's approach of calculating inventory on the date the supervisory consultant signs the SAAR, assuming that inventory includes licensed and approved beds on that date, might be reasonable. However, where, as here, the SAAR constitutes only preliminary agency action, and a de novo review of the application is undertaken, there is no rational basis for subsuming that inventory. The rule methodology considered, the only rational conclusion is that net need be derived on the date of de novo review, and that it be calculated reducing the gross need calculation by the inventory of licensed and approved beds from previous batching cycles existent on that date. As of the date of administrative hearing there were 1,056 licensed beds and 120 approved beds in the subdistrict. Applying the methodology prescribed by subparagraph 2i to the facts of this case calculates a net need of 145 community nursing home beds for the July 1989 planning horizon. Special Circumstances. The Department will not normally approve an application for new or additional nursing home beds in any service district in excess of the number calculated by the aforesaid methodology. Rule 10-5.011(1)(k), Florida Administrative Code. Succinctly, the need for nursing home services, whether they be general or special, is a product of the rule methodology, and not relevant to a calculation of need absent a demonstration of special circumstances. The Department has adopted by rule the methodology to be utilized in demonstrating special circumstances that would warrant a consideration of factors other than the numeric need methodology in deciding the need for nursing home services. That rule, 10-5.011(1)(k)2; Florida Administrative Code, provides: In the event that the net bed allocation is zero the applicant may demonstrate that circumstances exist to justify the approval of additional beds under the other relevant criteria specifically contained at Section 10-5.011. Specifically, the applicant may show that persons using existing and like services are in need of nursing home care but will be unable to access nursing home services currently licensed or approved within the subdistrict. Under the provision, the applicant must demonstrate that those persons with a documented need for nursing home services have been denied access to currently licensed but unoccupied beds or that the number of persons with a documented need exceeds the number of licensed unoccupied and currently approved nursing home beds. Existing and like services shall include the following as defined in statute or rule, adult congregate living facilities, adult foster homes, homes for special 505 home health services, adult day health care, adult day care, community care for the elderly, and home care for the elderly. Patients' need for nursing home care must be documented by the attending physicians' plans of care or orders, assessments performed by staff of the Department of Health and Rehabilitative Services, or equivalent assessments performed by attending physicians indicating need for nursing home care. In the instant case, some of the applicants have proposed special services, including an Alzheimer's unit, subacute care unit, and beds for technology dependent children. They offered, however, no proof that any person with a documented need for such services had been denied access to available beds that the number of persons with a documented need exceeded the number of available beds. Succinctly, there is no credible proof that the need for nursing home services in Lee County exceeds that calculated pursuant to the numeric need methodology. While there are no special circumstances existent in this case that would justify an award of beds in excess of that calculated by the rule methodology, that does not mean that consideration of the Alzheimer's, subacute and technology dependent children services offered by some of the applicants is not relevant to the comparative review of the subject applications. Rather, it means that the need for such services will presumptively be met within the need calculated by the rule methodology. How the applicants propose to address that need is, however, a matter for consideration in a comparative review of their applications. Each of the applicants propose to provide subacute care, with Careage proposing a special 10-bed subacute care unit which would accommodate technology dependent children. HCR and Careage propose special Alzheimer's care units; a 15-bed unit by HCR and a 21-bed unit by Careage. Hillhaven will admit Alzheimer's disease patients as presented, and will develop a dedicated Alzheimer's unit if demand should subsequently develop. The prevalence of Alzheimer's disease and the increased demand for subacute services brought about by DRGs, demonstrates that there will be a demand for such services within existing and proposed facilities. There was, however, no persuasive proof of any demand for technology dependent services in Lee County. While there is a demand for Alzheimer's disease care, and the preferred mode of care is in a separate unit specifically designed, staffed, and equipped to deal with this degenerative disease, there was no persuasive proof that the demand is such as to warrant the creation of a separate unit such as proposed by HCR and Careage. 10/ Absent such quantifiable demand, the application of Hillhaven more realistically addresses the need for Alzheimer's disease patients than does that of the other applicants. With regard to subacute care services, the proof likewise fails to quantify the demand for such services. Under such circumstances, Careage's proposed 10-bed subacute care unit is not objectively warranted, and does not serve to better its proposal to provide such services over the proposals of the other applicants. Consistency with district plan and state plan The District 8 health plan contains the following pertinent standards and criteria: Community nursing home services should be available to the residents of each county, 4 within District Eight. At a minimum, community nursing home facilities should make available, in addition to minimum statutory regulation, in the facility or under contractual arrangements, the following services: a. pharmacy h. occupational therapy b. laboratory i. physical therapy c. x-ray j. speech therapy c. dental care k. mental health counseling e. visual care l. social services f. hearing care m. medial services g. diet therapy New and existing community nursing bed developments should dedicate 33-1/3 percent of their beds to use for Medicaid patients. Community nursing home (skilled and intermediate care) facilities in each county should maintain an occupancy rate of at least 90 percent. No new community nursing home facility should be constructed having less than 60 beds... Each nursing facility should have a patient transfer agreement with one or more hospitals within an hour's travel time, or the nearest hospital within the same county. All community nursing homes and applicants for community nursing homes should document their history of participation in Medicaid and Medicare programs. ... The State Health Plan contains the following pertinent goals: GOAL 1: TO DEVELOP AN ADEQUATE SUPPLY OF LONG TERM CARE SERVICES THROUGHOUT FLORIDA. GOAL 2: TO ENSURE THAT APPROPRIATE LONG TERM, CARE SERVICES ARE ACCESSIBLE TO ALL RESIDENTS OF FLORIDA. Each of the applicants demonstrated that their proposal would conform, at least minimally, with the foregoing provisions of the state and local health plans. Of particular significance to Lee County is, however, an applicant's commitment to Medicaid service. The District 8 Council has reported that hospitals in Lee County are having difficulty placing Medicaid patients in nursing homes due to the unavailability of Medicaid beds. The current Medicaid experience is 46 percent. Therefore, the local council has directed that new and existing community nursing home developments should dedicate at least 33-1/3 percent of their beds for Medicaid patients. While all applicants propose to meet this standard, Hillhaven's proposal to dedicate 53 percent of its beds to Medicaid care is substantially greater than the commitment of the other applicants, and is consistent with its current experience in meeting a community's need for nursing home care. Availability, appropriateness, and extent of utilization of existing health care services Section 381.705(1)(b), Florida Statutes, requires Consideration of the availability, quality of care, efficiency, appropriateness, accessibility, extent of utilization, and adequacy of like and existing health care services in the service district. When the subject applications were filed, there were 1,056 licensed beds in Lee County with an occupancy rate of 91.91 percent. The nursing home bed supply in Lee County is obviously strained, and there exist no reasonable alternatives to the addition of new beds to the subdistrict. To coordinate with existing health facilities, each applicant proposes to establish appropriate transfer agreements and affiliations with local physicians, hospitals, and other health care providers. While some of the applicants have proposed an Alzheimer's unit and subacute care unit, the proof failed to demonstrate any quantitative need for such units in the subdistrict. Some applicants also proposed to provide day care in conjunction with their nursing home. Currently, there exists adequate day care in Lee County at little or no expense to the patient, and there was no persuasive proof of a need for additional day care services. Economies derived from joint health care resources HCR and Hillhaven each proposed 120-bed facilities which would provide for a more efficient and economical operation than a 60-bed facility. The 60-bed facilities proposed by Forum and Health Quest are, however, part of a larger complex which likewise lends itself to an efficient and economical operation. HCR, Hillhaven, Forum and Health Quest are major operators of nursing home facilities, and are thereby able to negotiate and obtain bulk prices for food, medical and nursing supplies. These savings are ultimately passed on to the residents. Additionally, by drawing upon a broad spectrum of expertise existent within their corporate networks, these applicants are best able to maintain and improve the services they offer. The criteria on balance In evaluating the applications at issue in this proceeding, none of the criteria established by Section 381.705, Florida Statutes, or Rule 10- 5.011(k), Florida Administrative Code, have been overlooked. As between the competing applicants, consideration of those criteria demonstrates that Hillhaven is the superior applicant whether it is evaluated on its application as initially reviewed by the Department or as updated at hearing. Among other things, the Hillhaven facility is spacious with large and well appointed patient rooms, its project costs are most reasonable (whether type 5 or type 4 construction), its programmatic proposal and staffing levels are most reasonable in light of existing demand, its provision for Medicaid services is the highest, and its patient charges are the lowest.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be entered granting Hillhaven's application for a certificate of need to construct a new 20-bed community nursing home in Lee County, and denying the applications of HCR, Forum, Health Quest and Careage. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 22nd day of November, 1988. WILLIAM J. KENDRICK 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 22nd day of November, 1987.
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, as well as the stipulation of facts "entered into by all parties, the following relevant facts are found: Along with six other applicants, the petitioner, Health Quest Corporation, d/b/a Lake Pointe Woods Health Center, and the respondent, Quality Health Facilities, Inc., d/b/a Sarasota Health Care Center, submitted applications for a Certificate of Need to construct and operate new nursing homes in Sarasota County, In June of 1982, the respondent Department of Health and Rehabilitative Services (HRS) determined to issue the application of Sarasota Health Care Center and deny the remaining seven applications. For the purposes of this proceeding, the parties have stipulated that there is a need for at least a 120-bed skilled and intermediate care nursing home in the Sarasota, Florida area. In November, 1982, respondent HRS adopted Rule 10- 5.11(21) , Florida Administrative Code, which provides a formula methodology for determining the number of nursing home beds needed in areas throughout the State. Briefly summarizing, this formula begins with a bed to population ratio of 27 per thousand population age 65 and over, and then modifies that ratio by applying a poverty ratio calculated for each district. The theoretical bed need ratio established for Sarasota County by this portion of the Rule's formula is 23.2 nursing home beds per thousand elderly population projected three years into the future. The population figures to be utilized in the formula are the latest mid-range projections published by the Bureau of Economic and Business Research (BEBR) at the University of Florida. After determining the theoretical need for nursing home beds in an area, the Rule purports to determine the actual demand for beds by determining the current utilization of licensed community nursing home beds, establishing a current utilization threshold and, if this is satisfied, applying a prospective utilization test too determine the number of beds at any given time. Applying the formula methodology set forth in Rule 10- 5.11(21) to Sarasota County results in a finding that there are currently 807 excess nursing home beds in that County. The need for sheltered nursing home beds within a life care facility are considered separately in Rule 10-5.11(22), Florida Administrative Code. Generally speaking, need is determined on the basis of one nursing home bed for every four residential units in the life care facility. Elderly persons 75 years of age and older utilize nursing homes to a greater extent than those persons between the ages of 65 and 74. Persons under the age of 65, particularly handicapped individuals, also utilize nursing home beds. The formula set forth in Rule 10-5.11(21) does not consider those individuals under the age of 65, and it does not provide a weighted factor for the age 75 and over population. In the past, the BEBR mid-range population projections for Sarasota County, compared with the actual census reached, have been low. Petitioner Health Quest, an Indiana corporation, currently owns and/or operates some 2,400 existing nursing home beds in approximately 13 facilities in Indiana. It holds several Certificates of Need for nursing homes in Florida and construction is under way. Petitioner owns 53 acres of land on the South Tamiami Trail in Sarasota, upon which it is constructing a 474-unit retirement center. It seeks to construct on six of the 53 acres a 120-bed nursing home adjacent to the retirement center. Of the 120 beds, it is proposed that 60 will be for intermediate care and 60 will be for skilled care. The facility will offer ancillary services in the areas of speech, hearing, physical, occupational, and recreational therapy. Thirty-five intermediate care beds would be classified as beds to be used for Medicaid recipients and the facility would be Medicare certified. Retirement center residents will have priority over nursing home beds. The total capital expenditure for the petitioner's proposed nursing home project was estimated in its application to be $3.1 million, with a cost per square foot of $46.29 and a cost per bed of approximately $26,000,00. As of the date of the hearing, the estimated capital expenditure for the petitioner's project as $3.9 million. The respondent Quality Health Facilities, Inc., d/b/a Sarasota Health Care Center (QHF), is a Mississippi corporation and owns nursing homes in Tennessee, North Carolina and Haines City, Florida, the latter site having been opened in August of 1983. It also holds three other outstanding Certificates of Need. QHF proposes to construct a 120-bed nursing home containing intermediate and skilled care beds which will be equally available to all members of the community. It is anticipated that it will have approximately 65 percent Medicaid usage and 5 percent Medicare usage. Though it has not yet selected its site, QHF plans to utilize a four-acre site near the City of Venice in Sarasota County. At the time of the application, the total capital expenditure for QHF's proposed project was estimated to be $2.3 million. Its construction costs were estimated at $1.16 million or $33.14 per square foot. QHF's recently constructed Haines City nursing home facility was completed at a construction cost of $1.22 million, or $31.00, per square foot. The Sarasota County facility will utilize the same basic design as the Haines City facility. At the current time, the cost of construction would be increased by an inflation factor of about ten percent. As of the date of the hearing, the projected capital expenditure for QHF's Sarasota County proposed facility was approximately $2.6 million or about $21,000.00 per bed. The owners of QHF are willing and able to supply the necessary working capital to make the proposed nursing home a viable operation. As depicted by the projected interest and depreciation expenses, the QHF facility will have lower operating expenses than the facility proposed by petitioner, Health Quest. In Sarasota County, there is a direct correlation between high Medicaid utilization and high facility occupancy. The long term financial feasibility of a 120-bed nursing home in Sarasota County is undisputed, as is the availability, quality of care, efficiency, appropriateness, accessibility, extent of utilization and adequacy of like and existing services in the health service area.
Recommendation Based upon the findings of fact and conclusions of law recited herein, it is RECOMMENDED that the application of Health Quest Corporation d/b/a Lake Pointe Woods Health Care, Inc. for a Certificate of Need to construct a 120-bed nursing home in Sarasota County be DENIED. It is further RECOMMENDED that the application of Quality Health Facilities Inc. d/b/a Sarasota Health Care Center for a Certificate of Need to construct a 120-bed nursing home facility in Sarasota County be GRANTED. Respectfully submitted and entered this 31st Day of October, 1983, in Tallahassee, Florida. DIANE D. TREMOR, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 31st day of October, 1983. COPIES FURNISHED: John M. Laird, Esquire 315 West Jefferson Blvd. South Bend, Indiana 46601 John T. C. Low, Esquire Paul L. Gunn, Esquire Low & McMullan 1530 Capital Towers Post Office Box 22966 Jackson, Mississippi 39205 James M. Barclay, Esquire Assistant General Counsel 1317 Winewood Blvd. Suite 256 Tallahassee, Florida 32301 David Pingree, Secretary Department of Health & Rehabilitative Services 1323 Winewood Blvd. Tallahassee, Florida 32301
The Issue The issue is whether Respondent, Department of Health, Board of Nursing Home Administrators (the “Department”), was “substantially justified” under section 57.111(3)(e), Florida Statutes,1 in initiating the underlying action against the nursing home administrator license of Petitioner, Sebrina Cameron, N.H.A. (“Petitioner” or “Ms. Cameron”).
Findings Of Fact Based on the record as a whole, the following Findings of Fact are made: The Department, through the Board, is the entity authorized by statute to issue licenses to nursing home administrators and to impose discipline on those licenses when warranted. § 468.1685(4), Fla. Stat. Ms. Cameron is a licensed nursing home administrator, having been issued license number NH 4950. Case No. 20-3025PL was initiated by the Department, a “state agency” for purposes of section 57.111(3)(f). Ms. Cameron qualifies as a “small business party” as defined in section 57.111(3)(d). Because the Administrative Complaint underlying Case No. 20- 3025PL was ultimately dismissed by the Board, Ms. Cameron is a “prevailing small business party” under section 57.111(3)(c)1. The sole issue presented in this bifurcated proceeding is whether the Department was substantially justified in bringing the Administrative Complaint against Petitioner’s nursing home administrator license. Section 57.111(3)(e) states that a proceeding is “substantially justified” if “it had a reasonable basis in law and fact at the time it was initiated by a state agency.” On May 4, 2020, the Department presented its investigation and recommendation in Department Case No. 2020-12066 to the Panel, which decides whether there is a sufficient legal and factual basis for the Department to move forward with formal charges in license discipline cases. The Panel reviewed the following materials (hereinafter “Panel Materials”): a draft of the proposed Administrative Complaint; a copy of the Department’s Order of Emergency Suspension of License; Petitioner’s detailed response to the allegations; a 980-page Supplemental Investigative Report dated April 23, 2020; and a 196-page Final Investigative Report dated April 22, 2020. The Panel found probable cause and authorized the filing of the Administrative Complaint against Ms. Cameron. The investigation and subsequent Administrative Complaint related to an outbreak of COVID-19 involving several residents at Cross Landings Health and Rehabilitation Center, a nursing home in Monticello. The outbreak commenced on or about April 5, 2020, when a resident at Cross Landings tested positive for COVID-19. By April 14, 2020, 11 additional residents had tested positive. On April 9, 2020, a team of four registered nurses (“RN Team”), contracted by the Department’s Division of Emergency Management, arrived at Cross Landings with the stated assignment of assessing the facility’s infection control procedures and providing education and training on hygiene practices, infection control, isolation procedures, and the proper use of personal protective equipment (“PPE”). The RN Team was also tasked with identifying and recommending actions to be taken to control the spread of COVID-19 infections. The RN Team worked at Cross Landings until April 14, 2020. The record indicates that the RN Team’s dealings with the staff of Cross Landings was contentious, particularly with regard to the facility’s owner, administrators, and senior nursing staff, who regarded the team’s behavior as high-handed, intrusive, and not consistent with its supposed mission of helping Cross Landings cope with the COVID-19 outbreak. From the RN Team’s point of view, Cross Landings’ leadership was uncooperative when not outright obstructive. At all times material to the Administrative Complaint, Cross Landings had two licensed nursing home administrators on site responding to the outbreak. The administrator of record was Mark Daniels. However, Mr. Daniels submitted his resignation to Cross Landings on April 7, 2020. During the team’s stay, Ms. Cameron was also at the facility in her role as regional administrator for the parent company of Cross Landings, to ensure continuity of care for the residents and to help on the administrative side. Petitioner argues that the title “regional administrator” was an honorific bestowed upon her by the parent company in recognition of her years of service to the organization. The title carried no additional powers or duties. Petitioner states that Ms. Cameron had no supervisory authority over Mr. Daniels, who was at all relevant times the administrator of record at Cross Landings. At the time of the investigation, the Department was unaware that the title “regional administrator” carried no actual authority. The Department understood the title to mean that Ms. Cameron was senior to Mr. Daniels and exercised some level of administrative authority at Cross Landings. It appeared to the RN Team that Ms. Cameron was a figure of authority at Cross Landings and that she was treated as such by the staff of the facility. The RN Team created daily reports detailing its observations at Cross Landings for April 9 through 11, 13, and 14, 2020. During its subsequent investigation, the Department interviewed the members of the RN Team regarding their observations at Cross Landings. The daily reports and the interviews were part of the investigative file that was before the Panel when it deliberated probable cause in Ms. Cameron’s case. The RN Team reported widespread failure in Cross Landings’ infection prevention and control measures, including the improper use of PPE by staff, inadequate hygiene procedures, the failure to properly isolate COVID-19 suspected or positive residents, the failure to timely notify staff members of COVID-19 positive residents, and the failure to properly screen individuals entering the facility, including Ms. Cameron.2 The RN Team also reported an overall failure to deliver adequate resident care, including residents who were soiled with feces or urine, 2 The RN Team’s reportage was disputed by Cross Landings and would have been subject to challenge by Ms. Cameron at any subsequent hearing. The RN Team’s reportage is relayed in this Final Order not as fact but as information that was available to the Panel in its deliberations. residents who did not have bed sheets, residents who were not receiving adequate wound care, and residents with undated and soiled surgical dressings. The RN Team reported being “shocked and horrified” by the conditions at Cross Landings. The RN Team reported that Ms. Cameron instructed Cross Landings’ staff to not listen to the RN Team’s recommendations and that Ms. Cameron called the RN Team “nothing but trouble.” Ms. Cameron and her fellow senior employees believed, not without reason, that the main purpose of the RN Team was not to help Cross Landings cope with the COVID-19 outbreak, but to compile a record for the purpose of disciplinary action against the facility and its administrators. The RN Team reported that Ms. Cameron, Mr. Daniels, and Director of Nursing Mary Lewis actively obstructed the RN Team’s efforts to improve conditions at the facility. The RN Team reported that the trio became increasingly hostile to the RN Team. The RN Team reported that Ms. Cameron, Mr. Daniels, and Ms. Lewis stated that they were following orders from the facility’s owner, Karl Cross. On or about April 14, 2020, the Department issued Quarantine/ Isolation Orders directing that 13 of Cross Landings’ 42 residents be relocated to another facility due to Cross Landings’ insufficient infection control practices and the resultant spread of COVID-19 within the facility. On or about April 15, 2020, the Department issued additional Orders requiring the remaining Cross Landings’ residents to undergo COVID-19 testing. Petitioner’s Motion does not dispute the factual allegations of the Administrative Complaint as to her actions at Cross Landings between April 9 and 14, 2020. Petitioner’s case rests on the legal argument that the Department cannot take disciplinary action against Ms. Cameron’s nursing home administrator license under the facts alleged because Ms. Cameron was not the designated administrator of record at Cross Landings. The Motion states: Here, the Administrative Complaint against Ms. Cameron was not substantially justified because Mark Daniels—and NOT Sebrina Cameron—was the designated administrator of Cross Landings at all times referenced in the Amended Complaint. Ms. Cameron was at all relevant times, and continues to be, the administrator of a completely different facility, Crosswinds Health and Rehabilitation Center (“Crosswinds”). These facts were known to the [Department]. The identity of the actual administrator was readily available to [the Department] and was easily determined through a simple review of readily available state records. Petitioner relies on a rule of the Agency for Health Care Administration (“AHCA”) regulating the licensure, administration, and fiscal management of nursing homes. Florida Administrative Code Rule 59A- 4.103(4) provides: Administration. The licensee of each nursing home must have full legal authority and responsibility for the operation of the facility. The licensee of each facility must designate one person, who is licensed by the Florida Department of Health, Board of Nursing Home Administrators under Chapter 468, Part II, F.S., as the Administrator who oversees the day to day administration and operation of the facility.[3] Each nursing home must be organized according to a written table of organization. (emphasis added). 3 This portion of the rule implements section 400.141(1)(a), Florida Statutes, which provides that a licensed nursing home facility shall “[b]e under the administrative direction and charge of a licensed administrator.” Section 400.021(1) defines “administrator” as “the licensed individual who has the general administrative charge of a facility.” The Motion notes that the Administrative Complaint acknowledges that Ms. Cameron was not the designated administrator of record at Cross Landings by repeatedly referring to her as the “regional administrator” of the facility. The Motion goes on to argue as follows: There are no rules, codes, statutes, or any other authoritative sources that recognize the existence of or define the responsibilities of a “regional administrator.” Ms. Cameron was given the honorific title as recognition of her years of quality service, but the title did not come with any legislatively recognized responsibilities, official responsibilities, authority, or monetary incentives for any time she chose to spend helping out at Cross Landings during the once-in-a-lifetime global pandemic. To be clear, Ms. Cameron was not required by contract, duties, law, or regulation to step foot in Cross Landings and put herself at risk during a deadly pandemic. Despite this, the [Department] elected to proceed against her license through [sections] 468.1755(1)(h) and (k). Count I of the Administrative Complaint alleged that Petitioner violated section 468.1755(1)(h), by engaging in fraud, deceit, negligence, incompetence, or misconduct in the practice of nursing home administration, which is defined as follows by section 468.1655(4): “Practice of nursing home administration” means any service requiring nursing home administration education, training, or experience and the application of such to the planning, organizing, staffing, directing, and controlling of the total management of a nursing home. A person shall be construed to practice or to offer to practice nursing home administration who: Practices any of the above services. Holds himself or herself out as able to perform, or does perform, any form of nursing home administration by written or verbal claim, sign, advertisement, letterhead, or card; or in any other way represents himself or herself to be, or implies that he or she is, a nursing home administrator. The Department argues that the statutory definition of the practice of nursing home administration does not limit its regulatory reach to the designated administrator of a nursing home, but reaches a person who holds herself out as able to perform or who does perform nursing home administration. The Department states that an AHCA rule regarding the overall operation of nursing home facilities does not govern the Department’s regulation of an individual licensee. The Department contends that Ms. Cameron’s undisputed actions at Cross Landings met the statutory definition of the practice of nursing home administration and that it was reasonable for the Panel to find probable cause based on those actions. The Department points out that Ms. Cameron used her title of regional administrator to order supplies on behalf of Cross Landings, including PPE and sanitizing products. Ms. Cameron verbally directed Cross Landings’ staff members. In one instance noted by the RN Team, a newly hired Cross Landings certified nursing assistant (“CNA”) was given a painter’s mask that was too large for her face. The RN Team instructed her to replace it with a smaller mask. The CNA told the RN Team that Ms. Cameron had given her the mask and that she had been given no training on COVID-19 procedures or PPE. Ms. Cameron subsequently refused to give the CNA a smaller mask and instead offered her a used N95 mask from the trunk of her car. When the CNA refused to put on the used mask, she was forced to resign from her position. Ms. Cameron represented Cross Landings in dealing with the Department regarding the placement of a resident who was suspected to have COVID-19. Ms. Cameron met with the RN Team on behalf of Cross Landings. The Department notes that Ms. Cameron held herself out as able to perform nursing home administration and/or represented or implied that she was a nursing home administrator at Cross Landings. Ms. Cameron was physically present at Cross Landings in her role as regional administrator. She employed the title “regional administrator” to some effect and used the administrator’s office while at Cross Landings. She was privy to communications between Mr. Cross and AHCA regarding the RN Team and COVID-19 infection control procedures at Cross Landings. Though she was not the administrator of record, Ms. Cameron held herself out and was treated as having actual administrative authority at Cross Landings during the COVID-19 outbreak and the RN Team’s visit in April 2020. There was a reasonable basis in law and fact to find that Petitioner engaged in the practice of nursing home administration at Cross Landings as defined in section 468.1655(4)(a) and/or (b), due to her performance of nursing home administrator services and/or by her holding herself out to be a nursing home administrator. Count II of the Administrative Complaint alleged that Petitioner violated section 468.1755(1)(k), by repeatedly acting in a manner inconsistent with the health, safety, or welfare of the patients of the facility in which she is the administrator. Chapter 468, enacted to ensure that every nursing home administrator practicing in Florida meets the minimum requirements for safe practice, defines a nursing home administrator as, “a person who is licensed to engage in the practice of nursing home administration in this state under the authority of this part.” § 468.1655(3), Fla. Stat. (2019). As noted above, section 400.021 defines “administrator” as “the licensed individual who has the general administrative charge of a facility.” The stated purpose of chapter 400, part II, is to provide for the development, establishment, and enforcement of basic standards for the health, care, and treatment of persons in nursing homes and the maintenance and operation of such institutions in a manner that will ensure safe, adequate, and appropriate care, treatment, and health of persons in such facilities. § 400.011, Fla. Stat. At all times relevant to this proceeding, Ms. Cameron was a licensed nursing home administrator pursuant to chapter 468 and used the title of regional administrator. The title “regional administrator” is not defined by statute but in context carries an ordinary meaning that the individual is the administrator supervising more than one nursing home in a geographic area. Ms. Cameron stated that she was at Cross Landings to ensure continuity of care after Mr. Daniels tendered his resignation. It was not illogical for the Department to conclude that “continuity of care” meant that Ms. Cameron was sent to Cross Landings to perform the duties of administrator as Mr. Daniels prepared for his departure. Ensuring “continuity of care” would certainly require control over the various components of a nursing home to provide health care and activities of daily living, including the management of nursing and housekeeping staff, oversight of meal services, and the facilitation of social and recreational activities. Such oversight or control is tantamount to the general administrative charge of the facility. Ms. Cameron would not have been able to ensure continuity of care if she did not have de facto general administrative charge of Cross Landings. Ms. Cameron’s general administrative charge over the facility was evidenced by her actions at Cross Landings, including ordering supplies, distributing supplies to staff members, directing staff members, communicating on behalf of the facility, meeting with the RN Team in the place of Mr. Daniels, and using the administrator’s office as her own. Ms. Cameron’s licensure as a nursing home administrator, her use of the title regional administrator, her stated purpose for being present at Cross Landings, and her actions at Cross Landings provide sufficient grounds for a reasonable person to believe that she had the general administrative charge of Cross Landings. Though she was not the administrator of record and did not have sole administrative charge of the facility, Ms. Cameron presented herself as the person in charge and was treated as such by Cross Landings’ staff. Based on the foregoing, at the time this proceeding was initiated, the Department had a reasonable basis in law and fact to find that Petitioner was the administrator at Cross Landings as defined in sections 468.1655(3) and 400.021(1), and was subject to discipline for repeatedly acting in a manner inconsistent with the health, safety, or welfare of the patients of the facility. During the probable cause hearing on May 4, 2020, the Panel discussed and considered whether Ms. Cameron was subject to discipline for her actions at Cross Landings. Members of the Panel raised questions about her status as the administrator of Cross Landings. The Department informed the Panel that Mr. Daniels was the administrator of record for Cross Landings. The Panel discussed what duties and obligations a licensed administrator other than the administrator of record would have in this specific scenario. The Panel considered that Ms. Cameron was the regional administrator for the parent company, that she was acting in an administrative capacity on the ground at Cross Landings, and that she therefore had some degree of responsibility. The Panel concluded that Ms. Cameron was operating in the capacity of administrator by being the regional administrator on site. The chair of the Panel reasonably concluded that a regional administrator would be in a position to exercise control over Mr. Daniels and that Mr. Daniels was reporting to Ms. Cameron. It is found that the information before the Panel was sufficient to support the Panel’s decision. The Department was substantially justified in finding probable cause and deciding to pursue an Administrative Complaint against Ms. Cameron.
Findings Of Fact Based upon my observation of the witnesses and their demeanor while testifying, the documentary evidence received, the stipulations of the parties and the entire record complied herein, I hereby make the following findings of fact: THE STIPULATIONS OF THE PARTIES The parties stipulated to the following facts: Forum timely filed its letter of intent and application with DHRS and the District IX Local Health Council for the July 1986 batching cycle. DHRS ultimately deemed the application complete and, following review, published its notice of intent to deny the application. Forum timely filed a petition requesting a formal administrative hearing pursuant to Section 120.57(1), Florida Statutes. The sole issue is whether there is a need for Forum's proposed services; additionally, it is DHRS's position that a lack of need for the project results in the project not being financially feasible in the short or long term. All other statutory and rule criteria were satisfied, at least minimally, except proof of need pursuant to Rule 10-5.011(1)(k) [formerly 10-5.11(21)(b)], Florida Administrative Code, and financial feasibility as it relates to need. FORUM'S PROPOSAL Forum is a publicly held health services company which owns, develops and operates retirement living centers and nursing homes on a national basis. Forum proposes to develop a retirement living center in Palm Beach County that would consist of 120 to 150 apartment units for independent living, a separate personal care unit (known in Florida as an adult congregate living facility), and a 60-bed nursing home component certified for skilled and intermediate care. Palm Beach County is in HRS Service District IX, Subdistrict 4. All three components of Forum's retirement living center would be physically connected and share some operational functions, such as dietary facilities and the heating plant. Such a design provides for an efficient operation as well as an economic distribution of costs facility wide. No specific site has been selected , although Forum has narrowed its focus to the eastern half of Palm Beach County. It is not economically feasible to acquire property or pay for an option on property until after receiving CON approval. The projected total cost of Forum's proposed 60-bed nursing home is $2,329,800. Forum has the necessary resources for project accomplishment and operation. Forum proposes to seek Medicare certification and will provide up to 25 of its beds for Medicaid patients. FINANCIAL FEASIBILITY Forum is a national company, with substantial experience in developing and operating nursing homes and retirement living centers. If need for the facility is shown, Forum would be able to capture a sufficient share of the nursing home market to render its proposed nursing home financially feasible while at the same time having no material negative impact on existing providers in the district. NUMERIC NEED Need for new or additional community nursing home beds in Florida is determined, preliminarily, by use of the methodology found in Rule 10- 5.011(1)(k), Florida Administrative Code. Additional beds normally are not approved if there is no need for beds as calculated under the rule. Pursuant to the rule, need for a defined nursing home subdivision is projected to a three- year planning horizon, in this case July 1989. The need methodology prescribed in the rule is as follows: A (POPA x BA) + (POPB x BB) or: The District's age-adjusted number of community nursing home beds for the review cycle for which a projection is being made [A] (The population age 65-74 years in the relevant departmental districts projected three years into the future [POPA] x the estimated current bed rate for the population age 65-74 years in the relevant district [BA]) + (The population age 75 years and older in the relevant departmental district projected three years into the future [POPB] x the estimated current bed rate for the population age 75 years and over in the relevant district [BB].) BA LB/(POPC) + (6 x POPD) or: The estimated current bed rate for the population age 65-74 years in the relevant district [BA] (The number of licensed community nursing home beds in the relevant district [LB]/the current population age 65-74 years [POPC] + (6 x the current population age 75 years and over [POPD]) BB 6 x BA or: The estimated current bed rate for the population age 75 years and over in the relevant district [BB] 6 x the estimated current bed rate for the population age 65-74 years in the relevant district [BA]. SA A x (LBD/LB) x (OR/.90) or: The preliminary subdivision allocation of community nursing home beds [SA] The district's age-adjusted number of community nursing home bids for the review cycle for which a projection is being made [A] x (The number of licensed community nursing home beds in the relevant subdistrict [LBD]/the number of licensed community nursing home beds in the relevant district [LB]) x (The average occupancy rate for all licensed community nursing homes within the subdistrict of the relevant district [OR]/.90) Rule 10-5.011(1)(k)(2)(i), Florida Administrative Code, provides that: The new bed allocation for a subdistrict, which is the number of beds available for CON approval, is determined by subtracting the total number of licensed and 90 percent of the approved beds within the relevant departmental subdistrict from the bed allocation determined under subparagraphs a. through i., unless the subdistrict's average estimated occupancy rate for the most recent six months is less than 80 percent, in which case the net bed allocation is zero. The appropriate planning horizon for the instant case is July 1989, corresponding to the review cycle which began July 15, 1986, and the subdistrict is Palm Beach County. THE NUMBER OF LICENSED COMMUNITY NURSING HOME BEDS IN THE RELEVANT DISTRICT (LB)/THE NUMBER OF LICENSED COMMUNITY NURSING HOME BEDS IN THE RELEVANT SUBDISTRICT (LBD) Rule 10-5.011(1)(k) requires that "review of applications submitted for the July batching cycle shall be based upon the number of licensed beds (LB and LBD) as of June 1 preceding this cycle..." On June 1, 1986, there were 5,459 licensed community nursing home beds in District XI (LB) and 4,084 licensed community nursing home beds in subdistrict 4 (Palm Beach County LBD). These figures include 220 licensed beds that were previously categorized as sheltered. In the instant case, the appropriate figure for LB is 5,459, and the appropriate figure for LBD is 4,084. APPROVED BEDS WITHIN THE RELEVANT DEPARTMENTAL SUBDISTRICT DHRS's interpretation of the rule is to include in the count of approved beds, those approved up to the date of the supervisor's signature on the State Agency Action Report (SAAR). In this case, there were 640 approved beds in Palm Beach County at that time. As of June 1, 1986, the same date as the licensed bed cutoff, there were 640 approved beds in the subdistrict. In Dr. Warner's opinion, approved beds should be determined as of the same time period as licensed beds in order to have consistency and avoid anomalies in the formula. This opinion is reasonable and appropriate. In the instant case, the figure to be applied in the formula for approved beds in the subdistrict is 640 approved beds. THE POPULATION AGE 65-79 YEARS IN THE RELEVANT DEPARTMENTAL DISTRICT PROJECTED THREE YEARS INTO THE FUTURE (POPA). THE POPULATION AGE 75 YEARS AND OVER IN THE RELEVANT DEPARTMENTAL DISTRICT PROJECTED THREE YEARS INTO THE FUTURE (POPB). The rule provides that the three year projections of population shall be based upon the official estimates and projections adopted by the Office of the Governor. For the purposes of calculating need, DHRS utilizes at the final hearing the figures for estimated population obtained from data available at the time of initial application and review. The set of population projections which were available when Petitioner's application was filed and reviewed were those published on July 1, 1986. Based on this data, which is reasonable to use, POPA 170,639; and, POPB 122,577. THE CURRENT POPULATION AGE 65-74 YEARS (POPC)/THE CURRENT POPULATION AGE 75 YEARS AND OVER (POPD). In calculating POPC and POPD, DHRS also utilizes at final hearing the most current data available at the time of initial application and review, in this case the July 1, 1986, release. Based on that data, POPC 153,005 and POPD 112,894. In the opinion of Dr. Warner, Forum's expert, the base for POPC and POPD should correspond to the period for which the average occupancy rate (OR) is calculated. For the July batching cycle, OR is based upon the occupancy rates of licensed facilities for the months of October through March preceding that cycle. According to Warner, January 1, 1986, as the midpoint of this time period, is the appropriate date to derive POPC and POPD in this case. The formula mandated by the rule methodology for calculating the estimated current bed rate requires that the "current population" for the two age groups be utilized. It is reasonable and appropriate for the base for POPC and POPD to correspond to the period for which the average occupancy rate is calculated. Supportive of Dr. Warner's opinion are the past practices of DHRS. Between December 1984 and December 1986, DHRS routinely used a three and one half year spread between the base population period and the horizon date in determining "current population" in its semiannual nursing home census report and bed need allocation. In the January 1987 batching cycle, which cycle immediately followed the cycle at issue in this case, DHRS utilized a three and one half year spread between the base population period and the horizon data for "current population" when it awarded beds. DHRS offered In this case, it proposed to use a three year spread between the base population period and the horizon dated for "current population" in calculating POPC and POPD. Using the July 1986 population release, POPC for January 1986 is 149,821 and POPD for January 1986 is 98,933. THE AVERAGE OCCUPANCY RATE FOR ALL LICENSED COMMUNITY NURSING HOMES WITHIN THE SUBDIVISION OF THE RELEVANT DISTRICT (OR). The rule requires the use of occupancy data from the HRS Office of Health Planning and Development for the months of the previous October through March when calculating a July batch of nursing home applicants. However, the rule is not instructive as to how one calculates this number. In this case, DHRS computed average occupancy rates based on the existing occupancy rates at applicable facilities on the first day of each month. Based on this occupancy data, which includes the data for the 220 previously sheltered beds in the subdistrict, occupancy rates for the July 1986 batch of Palm Beach County nursing home applicants is 83.75 percent. Forum's witness, Dr. Warner, determined that the correct occupancy rate was 85.46 percent for Palm Beach County for the period October 1985 to March 1986. Dr. Warner arrived at this figure by including paid reservation days. A paid reservation day is a day which is paid for by the patient or the patient's intermediary during which the patient is not physically in the bed. Typically, the patient will either be in the hospital, visiting relatives or otherwise away from the facility and will continue to pay for the nursing home bed, so that they will be able to return and not have someone occupy the bed. One of the goals and objectives of the District IX Local Health Plan is that paid reservation days be considered when bed need calculations are made. Calculating prepaid reservation days is consistent with the Rule because such beds are no longer available to the public and are therefore in use. Dr. Warner determined that during the applicable period, 1.25 percent of the licensed beds in the subdistrict were paid reservation days. Although taking paid reservation days into account would not be inconsistent with the rule, Forum failed to demonstrate that the 1.25 percent figure arrived at is valid for the applicable period, i.e., October 1985 to March 1986. Dr. Warner merely calculated a two-year average number of paid reservation days, broke this figure down to a six-month average and applied this average to the six-month period specified in the Rule. Gene Nelson, an expert called on behalf of Forum, calculated the occupancy rate as 88.72 percent in Palm Beach County for the appropriate period called for in the Rule. Nelson used the average monthly occupancy data obtained from medicaid cost reports for some facilities rather than first-day of the month data as used by DHRS. In addition, Nelson did not factor in the occupancy date of licensed beds in the extreme western portion of the County based on his belief that the District IX Local Health Plan mandates that the western area not be considered in any way with the eastern coast section of Palm Beach County for purposes of determining competitiveness. While the use of average full-month occupancy data is generally more reliable than using first-day of the month data, it is best, from a health planning prospective, to be able to use either all full-month data or all first- day of the month data. In making his calculations, Mr. Nelson mixed the two types of data, using full-month data when available and in other cases using first-day of the month data when full-month data was not available. It is inappropriate to fail to consider licensed beds in the extreme western portion of the County based solely on the local health plan. Among other reasons, the rule does not provide for exclusions for any of the subdistricts licensed facilities from the methodology. The appropriate and most reasonable occupancy rate (OR) in the instant case for the applicable time period is 83.75 percent. NET NEED Applying the above-referenced variables to the Rule formula produces the following results. July, 1986. District Allocation BA LB (POPC + (6 x POPD) - 5459 [149,821 + (6 x 98,833)] - .007349 BB - 6 x BA .044094 (.007349) July, 1989 Allocation (POPA x BA) + (POPB x BB) - (170,639 x .007349) + (122,577 x .044094) - 6659 Subdivision Allocation and Need SA A x (LBD / LB) x (OR 1.9) - 6659 x (4084 / 5459) x (.8375/.9) - 6659 x .74812236673 x .93055555555 4636 Subdistrict Allocation for Palm Beach County 4084 (Licensed Beds) 576 (90 percent of 640 Approved Beds) -24 (Bed Surplus)
Recommendation Based on the foregoing Findings of Fact, and Conclusions of Law, it is, RECOMMENDED that the application for certificate of need filed by Forum be Denied. DONE AND ORDERED, this 4th day of April, 1988, in Tallahassee, Florida. W. MATTHEW STEVENSON 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 4th day of April, 1988. APPENDIX TO RECOMMENDED ORDER, CASE NO. 87-0704 The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties to this case. Rulings on Proposed Findings of Fact Submitted by the Petitioner Adopted in substance in Finding of Fact 2. Adopted in substance in Finding of Fact 3. Adopted in substance in Finding of Fact 4. Adopted in substance in Finding of Fact 5. Adopted in substance in Finding of Fact 5. Adopted in substance in Finding of Fact 6. Adopted in substance in Finding of Fact 6. Adopted in substance in Finding of Fact 7. Adopted in substance in Finding of Fact 9. Sentence 1 is rejected as contrary to the weight of the evidence. Rejected as subordinate and/or unnecessary. 11. Adopted in substance in Finding of Fact 9. 12. Adopted in substance in Finding of Fact 9. 13. Adopted in substance in Finding of Fact 10. 14. Adopted in substance in Finding of Fact 12. 15. Adopted in substance in Finding of Fact 1. 16. Adopted in substance in Finding of Fact 14. 17. Adopted in substance in Finding of Fact 21. 18. Adopted in substance in Finding of Fact 20. 19. Adopted in substance in Finding of Fact 22. 20. Adopted in substance in Finding of Fact 22. 21. Adopted in substance in Finding of Fact 18. Adopted in substance in Finding of Fact 15. Adopted in substance in Finding of Fact 17. Adopted in substance in Finding of Fact 17. Adopted in substance in Finding of Fact 23. Rejected as a recitation of testimony and/or unnecessary. Rejected as subordinate and/or unnecessary. Adopted in substance in Finding of Fact 24. Rejected as a recitation of testimony and/or unnecessary. Adopted in substance in Finding of Fact 25. Rejected as a recitation of testimony and/or subordinate. Adopted in substance in Finding of Fact 25. Adopted in substance in Finding of Fact 21. Rejected as contrary to the weight of the evidence. Rejected as not supported by the weight of the evidence and/or unnecessary. Rejected as subordinate and/or unnecessary. Rejected as subordinate and/or unnecessary. Adopted in substance in Finding of Fact 27. Adopted in substance in Finding of Fact 28. Adopted in substance in Finding of Fact 27. Adopted in substance in Finding of Fact 28. Rejected as a recitation of testimony and/or subordinate. Rejected as misleading and/or subordinate. Rejected as subordinate and/or unnecessary. Rejected as contrary to the weight of the evidence. Rejected as contrary to the weight of the evidence. Rulings on Proposed Findings of Fact Submitted by the Respondent Adopted in substance in Finding of Fact 1. Adopted in substance in Finding of Fact 1. Adopted in substance in Finding of Fact 9. Adopted in substance in Finding of Fact 3. Rejected as contrary to the weight of evidence. Adopted in substance in Finding of Fact 13. Adopted in substance in Finding of Fact 18 and 19. Adopted in substance in Finding of Fact 16. Adopted in substance in Finding of Fact 23. Addressed in Conclusions of Law. Addressed in Conclusions of Law. Rejected as subordinate and/or unnecessary. COPIES FURNISHED: Thomas W. Stahl, Esquire 102 South Monroe Street Tallahassee, Florida 32301 R. Terry Rigsby, Esquire 325 John Knox Road Building C, Suite 135 Tallahassee, Florida 32303 Richard Patterson, Esquire Department of Health and Rehabilitative Services 2727 Mahan Drive Tallahassee, Florida 32308 Gregory L. Coler Secretary Department of Health and Rehabilitative Services 1323 Winewood Blvd. Tallahassee, Florida 32399-0700 John Miller, Esquire Department of Health and Rehabilitative Services 1323 Winewood Blvd. Tallahassee, Florida 32399-0700 Sam Power HRS Clerk Department of Health and Rehabilitative Services 1323 Winewood Blvd. Tallahassee, Florida 32399-0700 =================================================================
Findings Of Fact Respondent, Department of Health and Rehabilitative Services (HRS, Department,) is the state agency empowered to review, grant, or deny certificate of need applications. Careage Aire filed a certificate of need application with the Department proposing a new 60 bed nursing home for Escambia County, Florida. The application was assigned certificate of need #4660 by HRS and was reviewed in the July, 1986 batching cycle. The Department recommended denial of the certificate of need application on January 27, 1987, in a "State Agency Action Report." The parties to this cause submitted a joint prehearing stipulation which narrowed the issues to be presented at final hearing. The factual issues remaining for determination are thus as follows: Whether there is a need for the nursing home facility proposed; The appropriate inventory of licensed or approved beds in the relevant planning district; The appropriate occupancy rate for nursing home beds in the relevant planning district; The relevant population projection figures to be utilized in accessing the need for Careage Aire's proposed facility; Whether there is a need for the special services to be provided by Careage Aire; Whether the proposed patient charges for sub-acute care and private VA care are reasonable. The stipulated legal issues requiring determination include: Whether there is a need for the nursing home facility proposed; Whether there is a need for the proposed special services; Which time period should be used to fix the relevant population, occupancy rate, and bed inventory for review of the application. Additionally, it was stipulated that a timely petition for formal hearing was filed, and that the letter of intent was timely filed. It was also stipulated that the applicant is financially capable of proceeding to construct and operate the proposed project, that the applicant is capable of providing quality of care sufficient to meet pertinent regulatory requirements, and that the construction costs projected by the applicant, Petitioner, are reasonable. The Proposed Project Careage is a group of corporations owned by Gene E. Lynn, who has been involved in the nursing home industry for a long period of years. In the past, Careage has built more than 250 hospitals, nursing homes, and health-related facilities. It has built such facilities in approximately 30 states, centering its activities on the west coast of the United States. Careage does not currently operate any nursing home facilities in Florida, but has a number of applications pending. Careage is proposing to provide what might be termed an "upscale" nursing home in the sense of its providing certain special services and programs not commonly offered at nursing homes in Florida. This package of special services and programs is similar to those Careage operates at nursing homes in other states. Careage Aire, in proposing to construct a new 60 bed nursing home, has designated 21 beds for a discreet unit for the care of Alzheimer's disease patients. It will be a self- contained unit separate from the rest of the nursing home. Additionally, 5 beds will be provided for sub-acute services which, generally, are services involving more intense medical care or therapy than is the case in the normal skilled nursing home. Sub-acute services are analogous to those provided at extended care centers operated by hospitals for patients who are no longer required by their medical conditions to be actual inpatients in the hospital. Two of the beds proposed are identified as being dedicated to the treatment of technology dependent children, that is, children who are dependent upon machines or other devices for treatment or life support, such as ventilator patients. Additionally, Careage will provide other special services such as adult day care and respite care services at its proposed facility, those generally being described as part time residence in the nursing home by the patients involved. The facility proposed will be similar in design to the Careage facility in Coupeville, Washington. This design allows for various amenities and interior design features designed to enhance the quality of care rendered. Careage will thus provide an innovative semiprivate room bed configuration, which places the patients and beds "foot to foot" rather than beside each other. This configuration has been used in other nursing homes and it has been determined that this allows patients to more readily communicate with each other and enables them both to have a window view. The proposed facility will have a television receptacle across from every bed with speakers on the pillows so that residents can watch or listen to television without disturbing their roommates in a semiprivate room. Additionally, Careage Aire will provide three separate patient areas for residents. These areas will be the lobby, passive activity room and an active activity room. The "active room" will have crafts, paints, or other activities available to engage in, with the "passive" room being devoted to such activity as reading, card playing and other more sedate pursuits. As part of the normal family activity, Careage will open its dining room to the general public on Sundays. It has been found at other facilities that such a practice encourages the quality of care within its facility, by being regularly exposed to the public view. Additionally, the Petitioner will have such amenities as a popcorn machine and aquariums in the walls of the entrance lobby, which although not directly related to quality of nursing care, do represent amenities very popular with residents and contribute significantly to the residents and their families sense of well-being and confidence in the quality of service rendered. Appropriateness of Specialized Services in Nursing Home Setting The application proposes to provide several specialized services. Among those services are an Alzheimer's unit, sub-acute care unit and the provision of specialized care to technology dependent children. Alzheimer's disease is a degenerative neurological condition occurring most often after age 55. It is apparently an irreversible deterioration of brain cells and is characterized by short term memory loss, behaviorial changes and changes in personality accompanied by mood swings, and often manic depressive symptoms. In its final stages, patients usually become incontinent and are often not aware of their surroundings nor recognize family members. Such patients often become disoriented, restless, and combative and lose their ability to recognize places, people and other sensory stimuli. They also seem to lose their sense of time, and go through stages of wandering. Careage Aire proposes to provide a distinct 21 bed Alzeheimer's unit at the proposed facility. The provision of care for Alzeheimer's patients in a separate unit from other nursing home patients was shown to be the most appropriate way to care for them. This is because they can be offered specialized services, designed to fit their particular needs with less external stimuli and a more predictable environment. This tends to diminish the effects of many of the Alzheimer's symptoms which become more apparent when Alzheimer's patients are placed with other patients in a regular nursing home unit setting. The combative behavior of Alzheimer's patients can be alleviated by providing for their separate care in a specialized unit. They can tend to maintain their mental levels at the highest degree in a unit of the type proposed by the applicant. The rooms for instance will be identified not only by a room number, but also by distinct physical identifiers, which are color coded. This will allow the individual patient four different means of recognition of which room is his. Additionally, Careage Aire will provide a specially trained staff within the unit to assist in the proper diagnosis of Alzheimer's patients. In certain cases, Alzeheimer's patients are being misdiagnosed when they are merely experiencing drug interactions or other medical conditions which result in similar symptoms. The proposed design for the Alzheimer's unit includes a doorway separating it from the rest of the nursing home facility. The unit contains a control station for nursing supervision, activities and dining room, and a quiet room. At the back of the unit is a door opening onto a walkway within an attractively walled area where patients can walk and receive exercise and yet not wander into unsafe areas. In the walled area is a covered area for a picnic table and a resting bench. The area for walking enables the Alzheimer's patients who are subject to wander, to do so in a safe environment. The planning, physical layout and the training of the staff proposed by the applicant for the Alzheimer's unit constitutes appropriate quality care for Alzheimer's residents. None of the existing nursing homes in the County provide a true distinct Alzheimer's unit. Although existing nursing homes accept such patients and care for them in a nursing home floor setting, the treatment of Alzheimer's patients in a specialized and distinct unit is more effective, economical and appropriate. The types of services proposed to be provided by the applicant in this unit would result in the treatment of such patients in the least restrictive, most humane and economically feasible manner. Existing nursing homes in Escambia County often do not choose to deal with "heavy" care patients, which may result in their being discharged when their best interests would dictate otherwise. The applicant established that physicians treating patients with Alzheimer's disease in the area would refer them to Careage Aire for placement in an Alzheimers unit if it were built. Sub-Acute Care Services The applicant has allocated five of the proposed beds for sub-acute care patients. Sub-acute care has not been provided in nursing homes traditionally, since it is a more intensive type of care, normally associated with the extended care facilities operated by hospitals. Careage, however, has experience in other states in providing such services in a nursing home setting. The definition of this type service proposed by the applicant (and adopted in the State of California) includes numerous services such as hyper-alimentation, IV therapy, IV antibiotic therapy, morphine drip therapy, ventilators, IPPB treatments, heparin flush, infusion pumps for the administration of fluid, kangaroo pumps for tube feeders, specialized inhalation therapy treatments, and concentrated rehabilitative therapies. These services are similar to care provided in extended care beds operated by acute care hospitals. The provision of sub-acute care services is appropriate in a nursing home setting such as this. The existing nursing homes are not accepting ventilator dependent patients, for instance, and the early patient discharge from hospitals, mandated by the federal "DRG" system of reimbursement, has served to increase the need for "heavy care" of the type proposed for patients in non-hospital settings. Careage Aire also proposes to provide services for "technology- dependent" children, allocating two beds for that purpose. Providing such care for children is a new concept, but is increasing as medical technology becomes more advanced, which results in the survival of a large number of children who are ill or severally injured who would have died in former years. Such children with birth defects, brain damage, injuries from accidents, or neuromuscular disease often require specialized care which could be provided in a nursing home setting. Such care is less restrictive and more appropriate than housing such pediatric patients in an acute hospital setting. Additionally, the intermingling of younger patients with elderly patients can sometimes have a beneficial psychological impact on both patient groups. The local hospitals in the Pensacola area are experiencing difficulty in placing pediatric patients who require skilled care after hospital discharge. There are two such patients in the children's hospital associated with Sacred Heart Hospital in Pensacola at the time of this hearing and an additional two such patients in the neonatal unit of Sacred Heart Hospital. Placement of these ventilator dependent children has been an ongoing problem for the director of social work at Sacred Heart Hospital. In one instance, the director was required to look for placement for such a child for over seven months. The director of social work at Sacred Heart Hospital would use a nursing home such as this one proposed by Careage Aire which would accept Medicaid "ventilator- dependent" children and would consider the availability of that service in discharge planning for such patients. Existing Escambia County nursing homes are not accepting ventilator patients. Baptist Hospital in Pensacola does offer ECF services, but does not accept Medicaid patients into its ECF beds. Careage Aire also proposes to provide both adult daycare and respite care services at its nursing home facility. The provision of such services, involving elderly residents staying only a portion of the day or for a limited number of days at the nursing home facility before changing their residency back to their family homes, is certainly an appropriate and patient benefiting nursing home service. Need for Proposed Beds The proposed project is located in HRS service District 1. Sub- district 1-A of District 1 is composed of Escambia and Santa Rosa Counties. In determining need for a particular project, health planners utilize the inventory of licensed and approved beds for a district or sub-district, as the case may be. Additionally, need is projected within a given "planning horizon" for a service district or sub-district. For the July, 1986 nursing home batching cycle, in which this application was filed and reviewed, the relevant planning horizon is July, 1989. In Escambia County, there are 1,024 licensed community nursing home beds, with 30 sheltered beds and 140 "approved" community beds. Santa Rosa County has 180 licensed beds and 120 "approved" beds. In Sub- district 1-A there are 1,204 licensed community beds, 30 sheltered beds, and 260 approved community beds for the July, 1989 planning horizon. In determining the numerical need for nursing home facilities, the Department utilizes the "nursing home bed need rule" appearing at Rule 10.5.011(1)(k), Florida Administrative Code. That rule methodology for numerical need is referenced in the State Agency Action Reports regarding this application. Utilizing the bed inventory as of the application's filing date and utilizing a 90.94 percent occupancy rate for Sub-district 1-A, there results an 18 bed surplus, over actual need, for Sub- district 1-A as a whole. The same assumptions and methodology, however, result in a 45 bed, specific need for Escambia County itself. The Department's bed need rule states that "current" population figures are to be used in determining the population projection for purposes of the need calculation. The term "current", referencing population projections, is not defined in the rule itself, however it is generally taken to mean that which is most recent or "prevalent at the moment." 1/ It is reasonable from a health planning standpoint to utilize the most recent available population estimates for the relevant planning horizon, which is July, 1989. The use of the most current population data increases the accuracy with which the 1989 population forecast can be made. The most recently available population estimates are contained in the January, 1987 population report contained in Exhibit 11. That data, being available, should be employed in calculating need for the proposed beds. The underlying support documents prepared and compiled by the Department for nursing home occupancy and licensed bed inventory, indicate some confusion concerning the number of licensed beds and the occupancy levels at the Azalea Trace nursing home. The occupancy level data for that nursing home, as well as the reported number of licensed beds, show an unexplained fluctuation during relevant time periods involved in this application. The last three months of reported data by Azalea Trace shows that it was running at 96 percent occupancy. For the first quarter of 1987, however Azalea Trace merely indicated greater than 90 percent occupancy based upon 90 licensed beds. The number of licensed beds, however, have been reported as varying between 90 and 60 licensed beds and some reporting periods no data concerning numbers of licensed beds was reported at all. In light of the inconclusive data noted in the underlying source documents and in the absence of data being reported in certain months, it has not been demonstrated that the occupancy data and number of licensed beds contained in data relied upon by the Department (referenced in Exhibits 13 and 14 and transcript pages 89-97) is reliable. It is thus reasonable, from a health planning standpoint, to infer that Azalea Trace enjoyed the same average occupancy rate as other Escambia County nursing homes during the pertinent 6 month period used for determining sub-district occupancy, and such an inference is made at this juncture. No contradictory evidence was adduced. Accordingly, if it be assumed that Azalea Trace operated at the same occupancy rate as other Escambia County nursing homes for the pertinent 6 month period from October, 1985 to March, 1986, the resulting occupancy rate for the sub- district as a whole would be 92.4 percent. This is at variance with the 94.9 percent occupancy rate relied upon by the Department in arriving at the information in the State Agency Action Report. See Exhibit 11. If the occupancy rate of 92.4 percent is used for the sub-district, along with the employment of the most recent available population estimates based upon the January, 1987 reported estimates, discussed above; and if all other factors are static, a net need is shown for Escambia County of 81 nursing home beds for the July, 1989 planning horizon, and a net need of 25 beds in Sub- district 1-A as a whole. Local Health Plan Considerations The Northwest Florida Health Council, Inc. has prepared a local health plan which addresses the need for long-term care in District I. The local health plan dated March 26, 1986, was in force at the time the application was submitted for review and is the most recent version of the local health plan. The local plan lists several priorities for the review of CON applications for nursing homes in that district. Careage Aire's application for 60 beds has been shown to be consistent with the pertinent priorities identified by that plan. Priority number 1 of the local health plan states that counties within sub-districts which indicate a greater need, applying the state rule methodology, will receive priority over proposals for counties within such sub- districts which indicate less need. Application of the state rules methodology to Sub- district 1-A indicates there is a greater need in Escambia County, where the applicant proposes to construct its nursing home, than prevails in Santa Rosa County. Local health plan priority number 2 provides that the county with the greatest percentage of population aged 65 and over, living in poverty conditions, should receive priority over proposals from other counties with less of a corresponding percentage. The percentage of population 65 and older living in poverty in Escambia County was 22.4 percent. This is a greater percentage of persons in such category than were living in Santa Rosa County. Priorities 3 through 7 of that health plan are not applicable to this proceeding or have been satisfied by the application and are not at issue. The local health plan also includes a methodology for determining nursing home bed need. The local health plan methodology is based on a comparison of the percentage of local persons living in poverty between District 1 and the entire State of Florida. The District 1 poverty level is 22 percent, compared to a state average of 12.7 percent. The medicaid occupancy rate for Escambia County, in Sub-district 1- A, is 70 percent, compared to 57 percent for the State of Florida as a whole. If as a "reality check," one applies the local health council methodology (albeit different from the HRS rule methodology) to the data used in calculating need there results a bed need for the July, 1989 planning horizon of 120 beds for Sub-district 1-A as a whole. Need for Specialized Services Aside from the determination of whether a numeric need for a given certificate of need nursing home project exists, it is pertinent to consider specialized services which the applicant proposes. There is no existing Alzheimer's care unit in any nursing home in Escambia County at the present time. The applicant proposes such a unit for Sub-district 1-A. A reasonable estimate of the number of Alzheimer's patients presently in nursing homes in Sub-district 1-A is 367. None of these are in specialized care units. The estimates in the Department's "Alzheimer's Disease Initiative" published in May of 1986, indicate there may be as many as 3,957 Alzheimer's patients in Sub- district 1-A by July, 1989. See Exhibit 17 in evidence. There is a need in Sub-district 1-A, for the sub-acute care services proposed by the applicant. Careage Aire will admit Medicaid patients to its facility, including ventilator dependent patients. These services are not currently available in either nursing home or extended care facilities in the sub-district for Medicaid patients, who have a problem with "financial accessibility" to such services. There is a need for the services proposed to be provided to technology dependent children. There is an existing problem for the hospitals in the Pensacola area in successfully placing "technology dependent children" once they have progressed sufficiently to no longer require acute hospital care. The number of such children requiring ventilators or other speciality equipment is likely to increase with the improvement of medical technology which allows brain damaged or other severely handicapped children to survive, but be dependent upon speciality equipment. Additionally, Careage Aire proposes other speciality services, involving adult daycare and respite care services, which are currently needed in Sub-district 1-A and which would help alleviate some of the problems attendant to financial inaccessibility of nursing home care to some families. It would allow families to place elderly family members in nursing home care during the day while the family members work and allow them to be taken home each night. Such care would often be a feasible alternative for families who can not afford full time nursing home care and for patients whose condition does not necessarily require full-time nursing care, but who are unable to care for themselves if left entirely to their own devices for a full day. Patient Charges The applicant's patient charges or estimated patient charges are enumerated in Exhibit 1, Table 8. The $70 charge for Veteran's Administration patients is reasonable based on the level of care to be afforded and is lower than Careage's experience with such charges in other states in which it operates. The Medicaid charge of $59.50 and the $105 charge for Medicare patients was shown by the applicant's expert to be reasonable and that testimony was unrefuted. The rather unique sub-acute care service was shown to have an estimated charge of $135, which is less than that prevailing at the Baptist Hospital's existing extended care facility. The expert testimony in support of these charges establishes that they are reasonable. In summary, existing nursing home facilities in Sub- district 1-A are experiencing an increase in occupancy which is at high levels at the present time. The Department's bed need rule methodology allows flexibility to grant certificate of need applications even where there is no actual showing of a numeric need under that rule. In the instance situation, when the most current population projections for the static July, 1989 planning horizon are employed, in conjunction with the above found average occupancy levels for the sub- district, there is demonstrated an actual numeric need, albeit not for 60 beds or more for the entire sub-district. There was shown to be an 81 bed need for Escambia County itself. It is also true, however, that in view of the needed special services to be provided by the applicant and the fact that the relevant priorities of the local health plan have all been satisfied by the applicant, a need exists for the proposed 60 bed nursing home facility. In fact, although the rule-mandated methodology must be used in determining the question of numeric need, the rule allows for granting an application even when no numeric need exists by consideration of other factors, including the priorities and goals of the local health plan. It is noteworthy, in a corroborative sense, that the local health plan methodology reveals a need for 120 beds in Sub- district 1-A for the July, 1989 planning horizon. Although this methodology is not mandated to be considered by the Department's numeric need calculation rule, since "other circumstances" can be considered in favor of granting an application, even when numeric need is not shown to exist, such a factor, along with the special services offered by the applicant, corroborates the existence of a need for the proposed project, especially since some need for beds is shown by the "rule calculation" itself.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record, and the candor and demeanor of the witnesses, it is, therefore RECOMMENDED that the application of Gene E. Lynn, Careage Aire Health Care Center for a certificate of need authorizing construction and operation of a 60 bed nursing home in Escambia County, Florida, be approved. DONE and ENTERED this 31st of December, 1987, in Tallahassee, Florida. P. MICHAEL RUFF 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 31st day of December, 1987.
