The Issue Which of the applications for certificates of need for community nursing home beds for the Palm Beach County July, 1991, planning horizon filed by Whitehall Boca, an Illinois limited partnership; Manor Care of Boca Raton, Inc. d/b/a Manor Care of Boca Raton; Vari-Care, Inc. d/b/a Boulevard Manor Nursing Center; and Maple Leaf of Palm Beach County Health Care, Inc., should be granted, if any?
Findings Of Fact In November, 1988, the applicants in this proceeding filed applications for certificates of need for nursing home beds in District IX, subdistrict 4 (Palm Beach County) for the July, 1991, planning horizon. The Department of Health and Rehabilitative Services (hereinafter "HRS") published a fixed need pool applicable to this batching cycle of 62 additional nursing home beds for Palm Beach County. Maple Leaf of Palm Beach County Health Care, Inc., a wholly-owned subsidiary of Health Care and Retirement Corporation of America (hereinafter "HCR") proposes to add 30 nursing home beds to its approved 90-bed nursing home to be located in the Jupiter area of northern Palm Beach County. HCR's 30-bed addition would be accomplished by construction of a new 20-bed wing and the conversion of 10 private rooms to semi-private rooms. HCR will license and operate its nursing home through Maple Leaf of Palm Beach County Health Care, Inc., a corporation wholly-owned by HCR and established expressly for the development of this project. There is no operational difference between Maple Leaf of Palm Beach County Health Care, Inc., and HCR. HCR has been in the business of developing and operating nursing homes for over 25 years and operates 130 facilities with 16,000 nursing home beds in 19 states. In Florida, HCR operates 10 nursing homes and has several additional facilities under development. The 90-bed approved nursing home to which HCR seeks to add 30 beds will offer extensive rehabilitation, subacute care, high tech services and a 20-bed special care unit for Alzheimer's Disease and dementia victims. HCR's application for the 30-bed addition does not propose any additional special programs, but the rehabilitative and restorative care capability of the nursing home will be available to the patients admitted to the 30 additional beds. The new construction proposed by HCR consists of a sixth 20-bed wing (pod) added to the nursing home. Upon completion, the 120-bed nursing home will consist of 46,000 square feet with six individual resident pods and a central core area for administrative and support services. Each pod consists of 20 beds, and three pods comprise one nursing unit. One nursing unit is located on each end of the nursing home. Each three-pod unit has its own dining and activities areas. It will not be necessary to construct any additional support services for the proposed 30-bed addition. The pod design proposed by HCR provides unique and innovative benefits to the residents of the nursing home. The pod design breaks down the traditional institutional corridor design into smaller, residential-like increments. Instead of long corridors with rooms on each side, living areas are constructed in 20-bed increments (pods) clustered around a home-like living area or atrium located in the center of the pod. Each atrium is intended to have an identity of its own, such as a sitting area, activity area, library, living room, or game room. The pod design is much more residential in character than the traditional nursing home. HCR nursing homes, including this 30-bed addition, incorporate design elements necessary for both skilled nursing care and subacute care. The 30-bed addition proposed by HCR will meet subacute care standards. Vari-Care, Inc. d/b/a Boulevard Manor Nursing Center (hereinafter "Vari-Care or Boulevard") suggests than its design is superior because it proposes to provide piped-in oxygen to rooms designated for subacute care. However, there is no requirement for oxygen supplies to be built into a room in order to provide subacute care. In today's technology, equipment for oxygen is brought into the room. HCR's allocation of equipment costs for this addition include equipment for the provision of subacute care. The project cost for the 30-bed addition proposed by HCR is $706,000 or $23,533 per bed. The total project cost for the approved 90 beds would be $3,865,000, or $42,944 per bed. Combining the 90- and 30-bed projects results in a total project cost of $4,571,000, or $38,092 per bed. Economies of scale make HCR's 120-bed nursing home more cost effective than construction of only the 90-bed nursing home. Purchase of additional land is not required for the HCR addition. HCR's total project costs for its 30-bed addition and for its resulting 120-bed facility are lower than those of any competing applicant. HCR enjoys economies of scale in its purchase of equipment for nursing homes because of the number of projects that it has under development at any given time and because of the national contracts which it has with material and equipment suppliers. HCR's volume purchasing allows HCR to obtain substantial discounts which, in turn, allows HCR to provide higher quality furnishings and equipment at competitive prices. HCR projects a second year utilization of 93.1% for the 30 additional beds, comprised of 42% Medicaid patients, 10% Medicare patients and 48% private pay and insurance patients. The 90-bed approval has a Certificate of Need (hereinafter "CON") condition which requires a minimum 33% Medicaid payor mix. The overall Medicaid payor mix at the 120-bed nursing home is projected to be 35%. All of the beds including the added beds at the HCR nursing home will be certified to serve Medicaid patients. HCR's most recent history of service to Medicaid patients is 59.4% companywide, which includes a range of 26.7% to 90.4% in Florida facilities. HCR will be able to fulfill its commitment to Medicaid patients in the addition. HCR intends to meet any conditions which include a requirement of 42% Medicaid utilization in the 30 added beds. HCR's utilization projections are reasonable. The HCR nursing home will be accessible to all residents of the service district. HCR proposes the following patient charges for 1992: private room, $101.66; semi-private room, $87.17; Medicaid, $83; and Medicare, $86. HCR's patient charges for 1992, the only year for which each applicant submitted charges, are lower than any competing applicant's charges. In determining the financial feasibility of this 30-bed project, HCR took into consideration financial feasibility of the approved 90-bed nursing home as well as the financial feasibility of the total 120-bed project. The 30- bed addition proposed by HCR as well as the resulting 120-bed nursing home are financially feasible. HCR has never had a nursing home license denied, revoked, or suspended and has never had a nursing home placed into receivership. HCR has never experienced a condition in one of its nursing homes which threatened or resulted in direct significant harm to any of its residents. At the time of hearing, HCR operated four nursing homes in Florida which had superior ratings, including one nursing home which, though continuing to be operated by HCR, underwent a technical change of ownership and thus became ineligible for a superior rating. HCR also operates nursing homes in West Virginia, which has a licensure rating system similar to that of Florida's. In West Virginia, all of HCR's nursing homes have licensure ratings comparable to Florida's superior rating. HCR adheres to extensive quality assurance (hereinafter "QA") standards which are based upon, and in some instances more stringent than, state and federal regulations. The purpose of the QA standards is to ensure the highest possible quality care for the residents of the nursing home. HCR utilizes a multi-tiered system to monitor compliance with the QA standards. Each nursing home performs quarterly a quality assurance audit to determine its compliance with the quality assurance standards. From the regional level, HCR provides professional services consultants, typically registered nurses or registered dieticians, who serve as problem solvers and trouble shooters for facilities within their region and typically visit each facility at least once a month. These professional consultants, who are employees of HCR, act as support for the nursing homes within their region, working with directors of nursing, administrators, registered dieticians, and the department heads in the individual nursing homes to ensure compliance with QA standards and monitor the quality of care provided in the nursing homes. Each HCR nursing home is subjected to an annual QA audit performed pursuant to a contract by an independent, outside organization. After the annual survey, the nursing home is provided with a written report and is required to submit a written plan of correction for any identified deficiencies. Implementation of the plans of correction and ongoing compliance with the QA program are monitored by the professional services consultants and management. HCR utilizes a formalized acuity program which provides for a total assessment and evaluation of each resident to determine the level of care needed for each resident. After admission, the required level of care may change. It is common for the condition of a nursing home resident to change during the nursing home stay. HCR's formalized acuity program takes into account these changes in condition and allows the nursing home to provide the level of staffing appropriate to the level of care required by each resident. The staffing proposed by HCR exceeds state requirements. There will be 13.6 total FTE RN, LPN, and nurse aide staff for the 30-bed addition, organized with 6.126 FTE staff on the first shift, 4.374 on the second shift, and 3.1 on the third shift. This is equivalent to a total staff per resident ratio for the 30 additional beds of .493, and a shift staff per bed ratio for the three shifts of .20, .15, and .10, respectively. HCR's 120-bed nursing home will have 78.4 total FTE RN, LPN, and nurse aide staff, or .653 total nursing staff per resident. The shift staffing in the 120-bed HCR nursing home will consist of 35 FTE for the first shift, 25.2 for the second, and 18.2 for the third, which is equivalent to a shift staff per bed ratio of .29, .21, and .15, respectively. The level of staffing proposed by HCR will enable HCR to provide high quality patient care. The staffing proposed by HCR in its 30-bed addition is higher than any competing applicant except Manor Care of Boca Raton, Inc. d/b/a Manor Care of Boca Raton (hereinafter "Manor Care") and the staffing for HCR's 120-bed facility is the highest of any of the applicants. Vari-Care sought to demonstrate that its design of providing showers in each resident's room was superior. There are safety concerns relating to providing showers in each patient room. Residents receiving skilled and subacute care usually have to be assisted in and out of tubs or showers. Most residents in the HCR nursing home will not be able to enter or bathe unassisted in a shower or tub. Although it is possible for some patients to be rolled into showers in wheel chairs, baths are superior to showers for increasing circulation and preventing decubitus (skin breakdown). Each HCR nursing unit provides a central bathing unit each for males and for females. Central tubs and showers are easier for disabled residents because of the availability of hydraulic lifting devices to assist the residents in and out of the tubs and showers. There are no hydraulic lifting devices in individual rooms. HCR's QA standards establish procedures for protecting patient privacy and patient dignity during times of bathing, and HCR always uses privacy curtains and individual showers for men and women. HCR and each other applicant provided a description of their plans for various operational details of their proposed nursing homes, including plans for recruitment, career ladders, preadmission screening, appropriateness review, discharge planning, utilization review, QA programs and procedures, specialized programs, resident surveys, residents' councils, security and protection of residents' property, dietary services, linkage with local providers, activity coordination, spiritual development, mental health services, restorative and normalizing activities, quality of life enhancements, training-related plans for staff development and improvement of staff skills, and the availability of the facility for training programs. Compliance with these plans and procedures is important in providing high quality of care to nursing home residents. The plans and procedures described in the HCR application are appropriate. Nursing home beds in Palm Beach County are clustered into three distinct areas: the northern area near Jupiter, the middle area near West Palm Beach and Boynton Beach, and the southern area near Boca Raton and Delray Beach. The social and economic environments of these areas and the highway support system suggest the reasonableness of these divisions, although the Local Health Council has not subdivided Palm Beach County into these three areas for formal health planning purposes. At the time of hearing, there were eight approved nursing home projects with 584 new nursing home beds under development in Palm Beach County: 210 of these approved beds were to be located in southern Palm Beach County; 284 beds were to be located in the mid-Palm Beach County area; and 90 beds were to be located in the northern Palm Beach County area. The only new nursing home in the northern Palm Beach County area is the HCR nursing home. HCR will be located in one of the least affluent sections of Palm Beach County. The HCR nursing home will enhance competition in the service area, because it is the only new nursing home to be located in the northern Palm Beach County area and the quality of services to be offered by HCR will challenge existing facilities to enhance their quality of care. Whitehall Boca, an Illinois limited partnership (hereinafter "Whitehall") is an existing, combined ACLF and nursing home located in Boca Raton in southern Palm Beach County. Whitehall is licensed for 73 skilled nursing beds and 115 ACLF beds. However, because Whitehall has converted some semi-private ACLF rooms to private rooms, its effective ACLF capacity is 62. Whitehall proposes to convert 27 ACLF beds to nursing home beds. Whitehall's expressed purpose for the conversion is to meet the demand for nursing home beds from some of their existing ACLF residents. Structurally, the facility is two-stories and consists of two "V"- shaped wings on each floor. Three of the four wings have identical floor plans. The other wing consists of laundry, kitchen, and mechanical facilities, and nine semi-private ACLF resident rooms. The three identical wings each contain 28 resident rooms, two community tubs, and two showers. One of these wings is currently used for ACLF residents only, another is exclusively designated for skilled nursing, and the third wing is divided between 14 ACLF rooms and 14 skilled nursing rooms. Whitehall proposes to convert the 25 ACLF beds located in these 14 rooms of this third wing to 24 skilled nursing beds. Additionally, three existing skilled nursing rooms located on the first floor will be converted from private to semi-private rooms. In total, the conversion will result in Whitehall's nursing home beds increasing from 73 to 100, configured in 12 private and 44 semi-private bed, rooms. This conversion can be accomplished without construction or additional equipment and would involve only $70,000 in new expenditures (representing attorneys' and consultants fees). During the three years prior to filing its CON application, and as long as it has been eligible, Whitehall has received superior licensure ratings. Whitehall directs its marketing so as to attract residents from outside Palm Beach County and from outside the State of Florida. The visibility that this marketing provides Whitehall makes it better able than its competitors to fill the new beds to be awarded in this proceeding, but makes it less likely that any approved additional nursing home beds would be available to residents of Palm Beach County. Therefore, granting Whitehall's CON application could result in the need for new beds in Palm Beach County remaining unsatisfied. To foster career advancement, Whitehall pays 100% tuition for courses of study that relate directly to its employees' jobs. Whitehall also pays 50% tuition for any course of study an employee pursues that does not pertain to their position at Whitehall. Whitehall Boca contracts with Professional Medical Review, a quality assurance review organization. Whitehall Boca's procedure for quality assurance is that Whitehall's Director of Nursing provides to Professional Medical Review data which quantifies the quality of care that is provided at Whitehall. Professional Medical Review then assembles the data and, with guidelines established by that organization, provides Whitehall with its analysis of that data. With that data, Whitehall plans a method of correction. In addition, Whitehall performs its own in-house, day-to-day quality assurance. This level of quality assurance involves documentation of the quality of patient care, infection control, and safety. Because incoming residents may have difficulty adapting to the nursing home setting, Whitehall has created the "newcomers" Sunshine Group to assist in this transition. If further assistance in the transition process is necessary, Whitehall refers the resident to specialized counseling. Whitehall staffs more dietary personnel than other facilities its size because it offers individual catering throughout the entire facility through its contract for food services provided by the Marriott Corporation. It also makes room service available to all residents. Whitehall has in place a restorative dining program. This program is designed for residents who are not eating independently, but are capable of being restored to this level. The restorative dining program at Whitehall stresses the use of special utensils, modifications of diet, and independent eating training. Whitehall provides hospice services on two levels. The first is Whitehall's in-house social worker who is available to the facility's terminally ill residents on a day-to-day basis. The second consists of Whitehall's association with Hospice by the Sea, a private organization that provides counseling to terminally ill patients. Whitehall arranges with amateur entertainers, school children groups, The Humane Society, the YMCA, and the Girl Scouts to provide its residents with entertainment and linkages to the outside world. Whitehall's architectural design provides extraordinary amenities that improve the residents' quality of life. Whitehall's facility features original artwork and elaborate moldings in the corridors, hallways and patient rooms, making it residential in nature. Whitehall's patient rooms are home-like in design and are all equipped with brand name residential furniture. Each room has a quilted bed spread and a designer headboard. The ceilings in the rooms are nine feet high rather than the standard eight feet required by code. Additionally, each room is centrally heated and cooled and has an individual thermostat and fan speed control. The Whitehall facility features a "market square" which provides an outdoor street setting for a dental office, podiatry office, saloon where beer and wine are served, gift shop and a designated chapel for religious services. Whitehall's dining room is large and elegant. The tables are covered with linens, and fresh flowers are placed on each table. Whitehall has an outdoor patio with an awning to provide shade. Entrance to the patio is facilitated by automatic sliding glass doors which allow residents in wheelchairs to move about conveniently. The corridors in the Whitehall facility are ten feet wide rather than eight feet as required by code. Wall coverings and fixtures are used in the corridors. At Whitehall, breakfast is served by special order at any time during the morning. For lunch, Whitehall serves hot and cold foods, i.e., sliced meats and salads (egg and tuna). For dinner, Whitehall serves a variety of meals which are posted on a daily menu. Whitehall offers an Alzheimer support group for families of Alzheimer patients - these groups are open to residents' families as well as to the public generally. Whitehall coordinates a diabetes support group that meets regularly at the facility. Whitehall also conducts an annual health fair, seminars on a variety of subjects and brings in speakers on health related issues all of which are open to the general public. In terms of geographic accessibility to necessary medical services, Whitehall is strategically located. It is conveniently situated between I-95 and the Florida Turnpike in southern Palm Beach County. It is further west than any of the competing applicants which is the area where the majority of growth in the county is taking place. In terms of offering new techniques and quality of care for patients through relationships with research entities, Whitehall is currently the site of a clinical research project of the F.A.U. School of Nursing into the "life cycle of humans." The purpose of the project is to acquaint nursing students with an understanding of the role of the elderly in American society, to develop in them a more thorough understanding of the many functions of a long-term care facility. The Florida Board of Nursing requires nurses to undergo continuing education and obtain a certain number of continuing education units (CEU) in order to maintain their licensure. The nurse training seminars conducted by Whitehall are recognized by the Board of Nursing for CEU credit. These seminars are also open to the public. The costs and methods of conversion proposed by Whitehall are not in question. The beds Whitehall seeks to convert were originally constructed to nursing home code. As a result, the only modification necessary to implement its conversion is the installation of curtain tracks in rooms being converted from private to semi-private. Whitehall maintains referral agreements and other contacts to link it to the surrounding community. Whitehall maintains links with the following hospitals in the area: Boca Community Hospital; Delray Community Hospital and West Boca Hospital. Whitehall estimates that the total project cost for the 27-bed conversion will be $1,368,188 or $50,674 per bed. Whitehall's estimates include $209,090 for land costs or $7,744 per bed. The original costs for the Whitehall building was over $8,000,000. Financially, the Whitehall operation is a highly-leveraged investment, which results in Whitehall paying a high rate of interest. Interest costs on the Whitehall construction mortgage are approximately $1,100,000 per year. Whitehall has never admitted Medicaid-eligible residents to its facility and does not offer to serve any Medicaid-eligible residents in its proposed 27-bed conversion. Although Whitehall's refusal to accept Medicaid- eligible residents is based upon Whitehall's belief that the level of reimbursement for those patients is insufficient for Whitehall to continue to maintain its existing levels of amenities and service, Whitehall has performed no calculations to determine what its Medicaid reimbursement would be or whether it would have to decrease its level of care or amenities in order to accept Medicaid-eligible residents. Whitehall has accepted a small percentage of Medicare-eligible patients in the past, but Whitehall does not propose to certify any portion of the 27-bed conversion to provide care to Medicare- eligible patients. Whitehall has distributed $909,000 to its partners since Spring, 1988. Whitehall's projection of revenues and expenses after the 27-bed conversion assumes a yearly disbursement to partners of $500,000. Thus, high charges are necessary to cover the substantial mortgage interest and partnership dividends. Whitehall projects patient room charges in 1992 of $181 for a standard private room, $115 for a semi-private room, and $96 for Medicare reimbursement. This room rate applies to both nursing home and ACLF residents at Whitehall. The private pay charges projected by Whitehall are higher than those of any other applicant. Whitehall's semi-private room charge is the highest in Palm Beach County. Whitehall projects that it will have 79 total FTE direct care staff in the combined nursing home/ACLF in the second year of operation after conversion of the 27 beds. However, Whitehall's staffing projections are based upon a patient census of 130, which includes ACLF residents. Upon conversion of the 27 ACLF beds, Whitehall will have only 100 nursing home beds, not 130. Whitehall did not fully describe its staffing per shift. It is not possible to determine how Whitehall's nursing home beds will be staffed. Whitehall does not propose to change its staffing levels as a result of the conversion of 27 ACLF beds to nursing beds. An ACLF resident does not require as high a level of staffing as a nursing home resident. Because 27 ACLF beds are being converted to 27 nursing home beds, Whitehall's level of staffing for nursing home patients will be reduced if Whitehall does not add staff. Approximately 10% of Whitehall's nursing home residents come from outside Florida. Approximately 15% to 20% of Whitehall's nursing home residents come from outside Palm Beach County. Whitehall has been operating 62 ACLF beds rather than its full licensed complement of ACLF beds for approximately six years. Whitehall's 62 ACLF beds are occupied at approximately 80% to 85% occupancy. Most of the beds which Whitehall proposed to convert to nursing home beds are occupied by ACLF residents, who tend to be long-term residents. Whitehall's occupancy projections require its 27 converted beds to be filled to 95% occupancy within the first quarter of their operation. However, Whitehall does not assume that it is going to fill the 27 additional nursing home beds with its ACLF patients (in spite of Whitehall's stated purpose to convert the beds for use by ACLF residents) and Whitehall does not intend to atop admitting ACLF residents to its facility. Whitehall was unable to explain how it could continue to accommodate its ACLF patients while at the same time meeting its nursing home occupancy projections. The financial projections and schedules prepared in support of the Whitehall application are based upon facility-wide revenues and expenses for nursing home and ACLF residents. Whitehall prepared no financial feasibility projections for the 100-bed nursing home which will result from the 27-bed conversion or for the 27-bed conversion. It is not possible to determine from the evidence submitted by Whitehall whether this 27-bed conversion or the resulting 100 nursing home bed operation will be financially feasible in the long term. Boulevard is an existing nursing home located in Boynton Beach in the mid-Palm Beach County area. Boulevard currently operates 110 nursing home beds. Boulevard has a license to operate 44 additional beds acquired from Mason's Nursing Home. Boulevard is constructing a new wing to house the 44 beds. During construction, those 44 beds are inactive. Twenty-five (22.7%) of Boulevard's existing 110 beds are certified for Medicaid and 56 are certified for Medicare. When the 44 additional beds become operational, Boulevard's Medicaid certified beds will increase to 43 (27.9%). Vari-Care, Inc., a Delaware public corporation established in 1968, operates 25 nursing care facilities throughout the country, 20 of which are nursing homes. Since its inception, Vari-Care has operated its nursing facilities consistent with its corporate credo, "health care hospitality," that is, providing a health care environment with many of the hospitality characteristics commonly offered by the hotel and restaurant industries. Vari-Care operates three superior-rated nursing homes in Florida including Boulevard Manor Nursing Center, located on Seacrest Boulevard in Boynton Beach, Palm Beach County, Florida, which it has operated since 1976 and purchased in 1988. All nursing homes owned or operated by Vari-Care in Florida, including Boulevard Manor, have received superior ratings since the rating system has been in effect in Florida. Vari-Care's nursing homes outside Florida have always received the highest or next-to-highest rating in states having a nursing home rating system. All nursing homes owned or operated by Vari-Care in Florida, including Boulevard Manor, comply with or exceed staffing ratio requirements established by applicable laws, rules, and regulations. Boulevard Manor is currently medicare certified, does not have any outstanding deficiencies with the Health Care Financing Administration, has satisfied the Health Care Financing Administration's conditions of participation during its past three surveys, and has never been the subject of any certification or licensure revocation proceeding or moratorium. Vari-Care has never owned or operated a nursing home which has had its license revoked, been decertified from Medicare, or had its Medicare participation status revoked. Vari-Care provides managerial, programmatic, and operational resources to nursing homes it owns and operates, including the provision of a full-time Operations Director, who performs an operational review in each facility on a quarterly basis. Vari-Care's quality assurance program at Boulevard Manor incorporates the use of a regional nurse to perform approximately 25 to 30 quality assurance audits in a nursing home for each visit. After conducting the audit, the nurse confers with the nursing home's Director of Nursing and Administrator to review the scoring results and analyze any problems discovered. The Director of Nursing then turns the audits over to an established quality assurance committee within the nursing home to review the audits and determine what corrective actions need to be taken. The quality assurance committee makes recommendations to the Administrator and Director of Nursing, who formulate and institute an action plan. Vari-Care's quality assurance program meets or exceeds legal requirements. Boulevard Manor's utilization review plan evaluates the effectiveness and appropriateness of care rendered to Medicaid and Medicare patients. Reviews are performed by a committee comprised of two physicians having no financial interest in Boulevard Manor, the Administrator, the Director of Nursing, the Assistant Director of Nursing, and other professional personnel. The utilization review committee meets at a minimum on a monthly basis and on an on- call basis if there is a need. Boulevard Manor's activity program offers 4 to 5 activities on a daily basis, including educational programs, entertainment, and religious activities. Residents of Boulevard Manor are apprised of daily activities through rounds made by Boulevard Manor's staff, daily announcements posted on the facility's bulletin board, and a monthly newsletter designed to inform the residents, staff, community, and families of activities and events at the nursing home. Quality of life enhancements available to Boulevard Manor residents include: an ice cream and gift shop; non-institutional, residential-style furniture throughout the facility; a private dining room for residents and their family members; a chapel and library; a special foster grandparents program; color televisions and private baths within each room; an on-site laundry facility; and a barber and beauty shop. Community programs at Boulevard Manor include: participation in a Meals-on-Wheels program in conjunction with a neighboring church; a "speakers bureau" where nursing home residents go out into the community; visits with students from area schools, including Atlantic High School; a volunteer program for community activities; a voter registration program for residents that are not currently registered voters; and a respite care program for residents requiring care for a short period of time to relieve their usual caretaker. Boulevard Manor has extensive links within the community through informal and formal agreements with acute care hospitals, HMOs, physicians, rehabilitation facilities, the area's Veteran's Administration hospital and clinics, mental health and substance abuse programs, other nursing homes, ACLFs, adult day care programs, adult foster homes, hospice and home health agencies, social service agencies, and other related health care and human services programs. Intensive rehabilitative services available to residents at Boulevard Manor include speech, occupational, physical, and musical therapies, extra- nutritional therapy and dietary training, reality therapy for dementia and other patients, chemical therapy for sufferers of terminal illnesses and severe pain, bladder/bowel retraining and managing of incontinence, active and passive range of motion exercises, and ambulation programs to learn or relearn how to use walking aids and prostheses. Boulevard Manor's provisions for treatment of residents with mental health problems include a contract with a local psychiatrist, Dr. Tom O'Leary, a contract with Hospice-by-the-Sea, in-house programs offered by specially trained staff for treatment of Alzheimer's patients, and relationships with other community mental health resources. The majority of Vari-Care's facilities, including Boulevard Manor, are "clustered" in a particular geographic region with at least two other facilities operated by Vari-Care. Economies of scale resulting from this "clustering" concept include the use of one Regional Director and QA Nurse for all facilities in a particular area, and the ability to enter into regional food vendor contracts which contemplate a similar menu at all area facilities for better quality food at significant savings. Boulevard Manor's educational program includes ongoing affiliations with training programs and schools in the immediate area including Palm Beach Junior College, in which professors from the college teach training courses on such subjects as sexuality, motivation, and controlling personal stress. The addition of a subacute care unit would expand the availability of training programs for professional staff. Career advancement opportunities and other incentives and employee benefits such as tuition reimbursement and recruitment bonuses enable Boulevard Manor to recruit and maintain highly qualified staff at all levels. Boulevard Manor is geographically accessible to its community. It is located 1/2 mile east of 1-95, is directly accessible by public transportation, and is adjacent to Bethesda Memorial Hospital. Boulevard Manor makes use of the out-patient services provided at Bethesda Memorial Hospital including patient therapy, chemotherapy, radiation therapy, X-rays, and blood transfusions. Vari-Care integrates its "health care hospitality" philosophy into the design of its proposed bed addition at Boulevard Manor by offering non- institutional, residential-style furniture throughout the facility, corridors that are not straight but are avenues with room offsets, ceilings that are not flat but vary in height, and a mall concept around a courtyard with landscaping. Unique design features at Boulevard Manor include a drive-up entrance with a covered canopy, a large lobby with hotel-like furniture, a reception area, accent lighting, a beauty shop, a chapel and a study off the lobby, an ice cream and gift shop, a private dining room, a staff lounge and dining area, and a child day-care center for staff. Vari-Care's proposed 26 beds will be housed in semi-private accommodations wherein a partition wall enables each resident to have his or her own window, air conditioning unit, television, full bath, "roll-in" shower to accommodate wheelchairs, and walk-in closet. A partition in the room creates, in effect, a private room within a semi-private accommodation. There will be 120 square feet per resident in the semi-private rooms, which exceeds the State of Florida requirement for semi-private space in nursing homes. Vari-Care proposes to add 26 beds to its facility. Ten of the beds will be added by new construction in each wing of the existing 110-bed structure, bringing that structure up to 120 beds with two nurses stations. The remaining 16 beds will be added by converting 16 private rooms in the new 44-bed addition to semi-private rooms. There are no design changes required in the new wing, other than the conversion of 16 private rooms to semi-private rooms. Vari-Care proposes to certify 15 (58%) of the 26 additional beds to serve Medicaid-eligible residents. Vari-Care does not propose to certify any additional Medicare beds. Vari-Care projects a 32% Medicaid payor mix after addition of the 26 beds. This projection is based solely upon Vari-Care's intent to certify 58 (32% of 180) beds for Medicaid. Vari-Care's application describes a "high demand" for Medicaid beds and Vari-Care testified to a need for additional Medicaid beds. Nevertheless, only 25 of Boulevard's existing beds and 58 of Boulevard's proposed 180 beds will be Medicaid certified. Vari- Care's ability to serve Medicaid patients will be limited by the fact that it will certify only a portion of its beds. Vari-Care's projections of a 32% Medicaid payor mix are inconsistent with its historical payor mix of approximately 20%. Vari-Care's testimony that it will achieve 32% Medicaid simple because it will certify 32% of its beds is inconsistent with Vari-Care's testimony that it has never reached its maximum capacity for Medicaid patients in its existing facility. Vari-Care owns two other nursing homes in Palm Beach County, Medicana located in Lake Worth and The Fountains located in Boca Raton. Boulevard provided 18% of its patient days to Medicaid-eligible residents in calendar year 1988, and provided approximately 20% for the year to date at the time of hearing. In 1988, Medicana provided 15.5% of its patient days to Medicaid- eligible residents, and The Fountains provided 19.6%. Vari-Care's total project cost for the 26-bed addition will be $1,095,353 or $42,129 per bed. This cost includes the cost overrun anticipated by Vari-Care in its new wing but not included in the application estimates. The portion of that cost overrun allocable to the 16-bed conversion in the new wing is $106,408, or $6,650 per bed. Vari-Care's project cost estimates include land purchase costs of $107,620, or $4,139 per bed. Vari-Care projects patient charges in 1992 of $117 for a private room, $107 for a semi-private room, $87 as its Medicaid reimbursement, and $161 as its Medicare reimbursement. The long-term financial feasibility of Vari-Care's proposal is demonstrated by a positive net income for the first two years of operation, the ability of Vari-Care to service its debt adequately, its low debt-to-equity ratio, and its strong projected current ratio. Vari-Care testified that it does not intend to provide subacute care in its new 44-bed wing but that it would provide subacute care in the additional 16 beds in that wing. Boulevard's new wing incorporates design elements intended by Vari-Care to facilitate subacute care, such as piped-in oxygen. However, neither the design nor the construction of this new wing are contingent upon the approval of the 16-bed conversion. From a design standpoint, nothing proposed by Vari-Care in its application will enhance Boulevard's ability to provide subacute care. Boulevard's physical plant will be constructed to provide subacute care in the new wing, regardless of whether this application is approved. Vari-Care presented a schematic with its application which designated those private rooms to be converted to semi-private rooms. At final hearing, Vari-Care identified those rooms to be designated as the distinct subacute care unit. However, the rooms which Vari-Care designated for subacute care are not the same rooms to be converted from private to semi-private. Four of the rooms in the subacute care area are already semi-private rooms. Only four of the beds to be converted to semi-private use are located within the designated subacute care area. Therefore, except for four beds, Boulevard's designated subacute care unit will be in place upon completion of the 44-bed addition. Vari-Care described subacute care as care between acute hospital therapy and nursing home therapy or services not normally provided in a nursing home because of expense, specialized equipment and additional staffing that is necessary. Vari-Care cited examples of subacute care which it would provide to be respirator and ventilator care, tracheotomy care, IV services and decubitus care. However, Boulevard already provides subacute care, including tracheotomies, IV therapy, antibiotic therapy, pain management, dehydration and nutritional services, and decubitus care. Currently, subacute care at Boulevard is provided in the dedicated Medicare wing. The only type of subacute care which Boulevard will add is respirator and ventilator care. However, Vari-Care has not attempted to quantify the number of ventilator or respirator patients that it would treat. In any event, a CON is not required to provide ventilator or respirator care. The subacute care patients which Boulevard currently treats in the existing 110 beds are predominantly Medicare patients. Vari-Care expects 50% of the patients in the new 16 subacute beds and 10% of the patients in the 44 new beds to be Medicare patients. However, Boulevard does not propose to certify any additional Medicare beds, and only 1% of its Medicare patients will be treated in the existing 110 beds after construction of the new wing. Although Boulevard mist recently experienced a 14% Medicare utilization, or about 15 Medicare patients, Vari-Care's application assumes a 7.22% Medicare utilization, or about 12 patients (.0722 x 170), after the addition of a subacute care unit. The new subacute care beds will not increase the number of Medicare patients which Boulevard treats. Virtually all of the Medicare patient load which Boulevard now treats in its existing 110 beds will be treated in the new wing, and about half of Boulevard's current Medicare patient load will move to the new 16 subacute care beds. Subacute care requires a much higher level of staffing. The administrator of the Boulevard nursing home testified that the staffing ratios for the new addition, "as one of the conditions of the CON", are "much higher than" the current staffing levels, because of the planned subacute care. The CON condition referred to by the administrator was the condition imposed by HRS in its intent to approve the Vari-Care application. This condition would require a direct care staff to bed ratio (RNs, LPNs, and nurse aides) of .18 for the first shift, .12 for the second shift, and .08 for the third shift. Actually, these staff ratios reflect the current staffing levels at Boulevard's 110-bed facility. The testimony of the Boulevard administrator was contradicted by Vari-Care's Vice President of Operations, who testified that Boulevard's current staffing ratios will be maintained by Boulevard in the 26 new beds. There is no evidence that Boulevard will provide a much higher level of staffing in the addition. Boulevard's staffing is lower than that of any other applicant. Boulevard's proposed total nurse staffing for the second year of operation of the 180-bed nursing home is 73.5 total FTE, which is equivalent to a staff per resident ratio of .432. The shift staffing proposed by Boulevard is 33 FTE for the first shift, 24 FTE for the second, and 17 FTE for the third, which is equivalent to a shift staff per bed ratio of .18, .13, and .09 respectively. These staff ratios are roughly equivalent to those required by HRS in its condition for the 26-bed addition. Boulevard's proposed 16-bed subacute unit is closely related to its new 44-bed wing. However, the staffing proposed by Vari-Care for the new 44-bed wing is inconsistent with the staffing proposed by Vari-Care for the 16-bed subacute unit. When Vari-Care submitted its CON application for the new 44-bed wing, it proposed a direct care nursing staff of 88.02 total FTE for the resulting 154-bed facility. The staffing described by Vari-Care for the 154-bed facility is higher than the staffing which Vari-Care now proposes for the 180- bed facility. The staffing proposed by Vari-Care is inconsistent with its testimony that it did not intend to provide subacute care in the 44-bed addition and that higher staffing is required to provide subacute care. Vari-Care has not submitted an application consistent with its proposal for subacute care. Vari-Care has not quantified any need for the only two forms of subacute care, ventilator care and respirator care, which it does not currently provide. Although subacute care is acknowledged to require a higher level of staffing, the level of staffing proposed by Vari-Care is essentially the same as that in its existing 110-bed facility and is lower than that proposed for its 154-bed home. Boulevard's facility design is not dependent upon its proposal to provide subacute care. The rooms designated for subacute care are not the same as the rooms containing the beds to be converted from private to semi-private beds. The level of staffing proposed by Vari-Care is actually lower than that proposed by any other applicant, none of whom proposes to add subacute care through these pending applications. Manor Care is a 120-bed skilled nursing home facility in Boca Raton, south Palm Beach County. It holds final CON approval for a 30-bed dedicated Alzheimer unit. The Alzheimer unit will open in June, 1990. Manor Care currently holds a superior license and has held a superior license for as long as the facility has been eligible for one. Currently, 30% of its total patient days are for Medicaid residents. Of Manor Care's existing 120 beds, 36 beds (30%) are licensed for Medicaid. That is consistent with the CON condition on the original facility that 30% of the beds be licensed for Medicaid. Manor Care offers full physical therapy, occupational therapy, and speech therapy services. Manor Care offers a full complement of skilled nursing care, including tracheotomy, IV therapy and decubitus care. Manor Care classifies these specific services as skilled nursing care," not "subacute care." Manor Care characterizes "subacute care" as those services which would normally be delivered in a rehabilitation hospital. Subacute care requires 3 times the staffing normally provided in a nursing home. Manor Care believes that examples of subacute care are spinal cord injury and head trauma. On the other hand, Vari-Care chooses to characterize the services of tracheotomy, IV therapy and decubitus care as "subacute" care, and that is what it proposed to provide in its dedicated subacute unit. Manor Care offers these skilled services throughout its facility; it does not utilize a dedicated unit to provide them. Medicare patients in nursing homes normally require skilled nursing care. In this regard, 11.6% of total patient days at Manor Care in 1988 were for Medicare residents. That represents the highest Medicare percentage in Palm Beach County. Manor Care employs the state-of-the-cart approach for providing nursing home services. For example, Manor Care holds CON-approval to establish a 30-bed dedicated Alzheimer unit with specialized staff and programming. Manor Care is the only existing provider in this proceeding which treats Alzheimer disease in a segregated modality. (HCR's approved facility will also house a dedicated Alzheimer unit.) Manor Care has neither transferred nor voided any CON. Manor Care has had no Medicare conditions of non-compliance. Its license has never been revoked, suspended or denied. Manor Care has had no beds decertified by Medicare or Medicaid. Manor Care has no intention of selling its facility. Manor Care of Boca Raton, Inc. d/b/a Manor Care of Boca Raton is a wholly-owned subsidiary of Manor Healthcare Corp. Manor Healthcare Corp. owns 155 nursing homed in 28 states. It has 9 nursing homes and 3 ACLFs in the State of Florida. Manor Healthcare has established six regional-based offices with a full complement of staff to assist its individual nursing homes in all areas of operations. It has a regional office in Orlando to service Florida. Through its corporate and regional offices, Manor Healthcare employs a team of professionals who are responsible for providing support functions to the nursing centers, such as: quality assurance, nursing training, administration, purchasing, facility planning, assisted living, Alzheimer care, managed care, accounting, dietary, marketing, staff recruitment, and chaplaincy. This centralized support system enhances operational capabilities and efficiencies. Manor Healthcare's primary goals are quality assurance and quality of care. It seeks to return nursing home residents to the community as soon as possible. In this regard, Manor Healthcare, on the average, returns 45% of its residents to the community. Manor Care proposes to add 30 skilled beds to its facility by locating them on the 2nd Floor above the 30-bed Alzheimer unit. This addition will include 15 semi-private rooms, lounge space, office space, conference space, an elevator, and a nursing station. Manor Care will offer the same quality, level and scope of skilled nursing services in the 30-bed addition as currently offered at its facility. The proposed addition will be integrated into the existing facility. The addition will be adjacent to existing therapy areas and near several dining room and lounge areas. Due to substantial existing ancillary areas, these 30 beds can be added without adding much ancillary spaces. Manor Care expressly agrees to the following CON conditions: 30 skilled nursing beds; 2.8 nursing hours per patient day; 37% Medicaid patient days in the addition; and 9400 square feet on the 2nd Floor. The total project cost (before CON application fee) for the 30-bed addition is $1,270,700. Manor Care projects that the 30-bed addition will be in use by June 1, 1991. The project cost will be 51% debt-financed; the rest will be financed with equity funds. The nursing and other staff at Manor Care are well qualified; its staffing ratios exceed licensure requirements by at least 25%. The proposed staffing levels, including the 30-bed addition, also exceed licensure requirements by at least 25%. Manor Care maintains an educational program plan to improve the ability of staff to meet the demands of its nursing home residents. These programs will continue to be employed at the Manor Care facility. All employees are required to attend educational programs pertinent to the improvement of skills within their respective disciplines. All employees are required to attend annual programs on fire prevention, accident prevention, infection control, effective communication, and the psychosocial/psychophysical aspects of aging. Health care seminars are sponsored by Manor Care on a quarterly basis. Topics cover a wide range of subjects related to enhancing quality of care in nursing homes. These seminars are available to facility staff and community health care professionals. Manor Care maintains a restorative program intended to enable each resident to achieve maximum function with the ultimate goal of returning patients back to the community whenever possible. For those unable to return home, the program seeks to ensure that all residents continue to function at their maximum potential. Examples of specific restorative programs include: progressive ambulation; bowel management; bladder management; self-feeding training; activities of daily living training; pain management for chronic and post operative pain; muscle control training and others. In this regard, Manor Care utilizes its "Excel Care" computerized system intended to document and evaluate the success of its restorative and rehabilitative programs. This program allows for the efficient monitoring of residents' responses to therapy and nursing care. Per this system, every unit of care is measured by outcome standards. The outcome standards describe the expected results in the patient's condition if treatment and therapy is successfully carried out. Manor Care maintains a utilization review committee comprised of three physicians, the administrator, the social services director, and the Director of Nursing. Its purpose is to meet every 30 days to assess patients and to ensure that appropriate and effective utilization of services is being provided. The purpose of Manor Care's QA program is to promote and support optimum quality standards in all disciplines. This objective is accomplished through: continuing in-service education programs; on-going consultation among corporate quality standards staff and QA regional specialists; unannounced annual surveys conducted by a Manor Healthcare QA team of health care professionals; and on-going surveying of guarantor/resident satisfaction with nursing home services. The Manor Care nursing home is reviewed annually on an unannounced basis by the QA interdisciplinary team of Manor Healthcare Corp. specialists. The QA review criteria meet all the minimum standards set by Medicare and exceed the most stringent state regulations throughout the country, including Florida. The unannounced annual review covers the following areas: resident care, dietary, activities, housekeeping, laundry, physician services, maintenance, medical records, pharmacy services, social services, administrative records and safety. Manor Care of Boca Raton was internally surveyed in January, 1989. It rated within the top 10% of all 150 Manor Healthcare facilities in the country. Within 30 days of an admission, the patient's guarantor is mailed a "satisfaction survey" form. The guarantor is asked to evaluate Manor Care's performance as to nursing, dietary, activities, therapies, etc. The form is self-addressed and is to be mailed to the Manor Healthcare corporate offices. Manor Care maintains an 800 toll-free health care hotline that is a direct line to the QA department of Manor Healthcare. This is available to all persons who want to ask questions, obtain information, make suggestions, or who require follow-up on unresolved concerns at the individual nursing home level. In effect, this serves as a consumer hotline. Manor Care designs and maintains activity programs that are responsive and appropriate to meet the physical, mental, and social needs of its residents. They include at least the following: various therapy activities; large group activities weekly; at least two religious activities per week; facility-wide general visits from the public; special events; birthday parties; activities after the evening meal; therapeutic programs for residents with special needs (such as stroke victims or blind persons); outings away from the nursing home; music activities; and special holiday events. Manor Care maintains a formalized program for involving families and community volunteers to promote the quality of life for its residents. Community volunteers participate on a routine basis in providing services to the residents, such as: reading to residents, distributing newspapers and magazines, assisting on community outings, and assisting with correspondence. These services bring the community closer to the nursing home residents. Manor Care establishes and maintains linkages with state and local health care providers to ensure that a continuum of care is available to residents and to facilitate community involvement by the nursing center. These community linkages and referral agreements include: local hospitals, physician specialists, therapists, home health agencies, adult day-care centers, area agencies on aging, homemaker services, private insurance companies, ACLFs, and other community agencies. Manor Care currently holds transfer agreements with four local hospitals. Manor Care works very closely with local agencies to ensure that residents are located in the most appropriate setting for their needs. Manor Care maintains linkages and agreements with less intensive institutions to meet the needs of those persons or residents who do not require or no longer require nursing home care, such as: adult day-care, meals-on-wheels, and senior centers. Due to existing ancillary space, Manor Care can add its proposed 30- bed unit at a relatively small cost. Manor Care already has ample dining room space, activity areas, therapy areas, and social areas which can accommodate an additional 30 beds without difficulty. In addition, Manor Care already retains the core nursing, administrative, therapy, and other staff required to operate a nursing home. As such, additional staff for the 30-bed addition is not substantial. The Manor Care application therefore provides a cost-effective approach to add nursing home beds to the community. Manor Care currently offers and will continue to offer clinical and training opportunities to students currently enrolled in nursing educational programs at local technical schools and universities. Manor Care also provides services to persons seeking to become certified nursing assistants. Manor Care serves as a clinical site for gerontological rotations for nursing students at Palm Beach Community College. Manor Care is developing a similar internship program with Atlantic Vocational Technical School and seeks to develop clinical affiliations with South Technical Vocational School and Florida Atlantic University. This working relationship not only trains students and health care professionals, but also provides Manor Care valuable resources in staff recruitment and development. Manor Care sponsors and will continue to sponsor nurse "refresher" courses which are taught by local area nursing school instructors. Persons wishing to renew their nursing licenses and certification can do so through this course work. Manor Care finances these nurse refresher programs. Manor Care sponsors and finances various health care seminars on a quarterly basis. These seminars are advertised in local hospitals, adult day- care centers, and other agencies. These seminars are available to both Manor Care staff and community health care professionals. Manor Care maintains a "career ladder" program which enables Manor Care employees (both at the facility and within the Manor Healthcare Corp. system) to reach their career goals through promotion, career advancement programs, and tuition support for additional schooling. Both the financial statements of Manor Care of Boca Raton and Manor Healthcare Corp. (which will provide the debt financing) demonstrate the financial strength and financial resource availability to accomplish and operate the proposed 30-bed addition. Manor Care has historically been very accessible to Medicare and Medicaid residents. In 1988, 11.9% total patient days were for Medicare patients. This represented the highest percentage in Palm Beach County. In calendar year 1989 to date, Manor Care has provided 30% of total patient days to Medicaid patients. For its proposed 30-bed addition, Manor Care commits to a minimum of 37% Medicaid If the 30 beds are approved, Manor Care's total facility after one year of operation would provide 34% Medicaid. Manor Care's historical and projected Medicare/Medicaid commitment is substantial, particularly when considered with the other existing providers/applicants in this case: Actual Actual Projected 1988 Medicare 1988 Medicaid Total Facility Medicaid After First Year of Operation Whitehall 1.3% 0 0 Vari-Care 5% 18.0% 26.65% Manor Care 11.9% 26.8% 34% The pro formas in the Manor Care application are reasonable. These pro formas demonstrate that the Manor Care proposal is financially feasible in the long-term. The pro formas are based on reasonable assumptions. The projected utilization underlying the pro formas is reasonable. The projected charges are reasonable. The projected staffing levels, staff salaries, and the other expenses were based on existing data and expense levels, and then reasonably inflated forward. Manor Care's proposed 30-bed addition will be integrated into the existing facility. The addition will benefit from existing, innovative quality of life features designed to enhance privacy and personal choice options for residents and family members. These features include: beauty/barber shop, formal private dining room, lobby areas, therapy areas, activity/recreational areas, specially-equipped rehabilitation dining room, distinct lounge area for families, self-contained Alzheimer's unit, carpeted conference room, several private room accommodations, outdoor patio areas, each patient room with its own bathroom, and reading rooms. In addition, the patient rooms are larger than the state requires and are very proximate to the nursing stations. The Manor Care facility incorporates many residential design and home-like features. Color schemes are emphasized for a home-like atmosphere, such as: muted vinyl wall covering; color-coordinated draperies, bedspreads and curtains (residents can choose their color scheme at admission); and lounges which are theme-decorated around particular purposes, such as a game room. Patients are permitted to exercise choice in furnishings and decorations. Patient room size is a major factor in controlling construction costs. At Manor Care, the rooms are rectangular with the shorter walls on the outside. This design minimizes exterior wall space, which is more expensive to construct than interior wall space. Minimized exterior walls also improve energy efficiency. The proximity of nursing stations to the patient rooms at Manor Care is cost-effective. The rectangular room shape reduces the cost of construction by reducing corridor length and square footage. Shorter corridors are less costly and also are more operationally efficient. The central core area at the facility concentrates the ancillary and support areas. Administrative areas are centrally located for easy access by residents and families. Resident lounges are located near the nursing station, thereby facilitating supervision by nursing staff. The State Health Plan consists of three broadly-stated goals. Goal 1 is to develop an adequate supply of long-term care services throughout Florida. Each of the four proposals for additional beds is consistent with this goal in that each proposal contributes to the supply of beds determined to be needed in Palm Beach County. Goal 2 of the State Health Plan is to develop a supply of appropriate long-term care services that are accessible to all residents. The HCR, Manor Care, and Vari-Care proposals are consistent with this goal in that each would supply nursing home services to those in need of such services, and their nursing homes will be accessible to all residents of the planning district, including Medicaid patients. Further, HCR will be the only new facility in northern Palm Beach County, and Manor Care is located in southern Palm Beach County, which experiences the highest demand for nursing home beds in Palm Beach County. Lastly, all three of those applicants will accept a significant number of Medicaid and Medicare patients. On the other hand, the Whitehall application is not consistent with this goal. First, Whitehall has never served Medicaid residents and does not propose to do so. Second, Whitehall does not provide substantial Medicare: .7% in 1987, and 1.3% in 1988. Third, Whitehall may not be affordable for many Palm Beach County residents. Its charges are the highest in Palm Beach County. Fourth, Whitehall markets itself to non-Florida residents. About 20% of its nursing home and ACLF patients reside outside Florida. Hence, approval of Whitehall's 27-beds does not promote access for Palm Beach County or Florida residents. Goal 3 is to insure that long-term care services are appropriately utilized throughout Florida. All four applicants have in place utilization and pre-admission screening programs for appropriate utilization of nursing home services. Accordingly, the proposals of HCR, Vari-Care, and Manor Care are consistent with the State Health Plan; however, the proposal of Whitehall is not. The District IX Local Health Council has adopted five long-term care CON allocation factors which are applicable to proposals for additional nursing home beds in Palm Beach County. The first factor is that freestanding nursing homes should have a minimum of 120 beds in urban subdistricts. Palm Beach County is an urban subdistrict in District IX. HCR's proposal is consistent with this recommendation in that the HCR proposal will bring HCR's nursing home up to the minimum 120-bed size unit. Manor Care is consistent with this recommendation in that it is an existing 120-bed facility with a 30-bed Alzheimer unit approval. Likewise, Vari-Care meets this recommendation since it is a 154-bed facility. Whitehall, however, fails to meet this recommendation since it only has 73 nursing home beds and only seeks approval for 27 more, for a total of 100 beds. Within this first recommendation is a recommendation that priority be given to additions to nursing homes so that the total capacity would reach, but not be greater than, 120 beds. The HCR proposal is consistent with this recommendation in that its proposal, if granted, would increase the number of beds in that facility to only 120. Accordingly, HCR should be given priority in this proceeding in order to meet the first recommendation in the Local Health Council. To the contrary, Whitehall should be given no priority since it does not propose to meet the first recommendation of the Local Health Council. The second recommendation of the Local Health Council is that all new nursing homes and expansions should agree that a minimum of 30% of its patient days will be provided to Medicaid-eligible patients, if such patients are available within the subdistrict. Medicaid-eligible are available within the subdistrict and accounted for more than 700,060 patient days in Palm Beach County in calendar year 1988. HCR's proposal for 42% of its additional patient days to be devoted to Medicaid-eligible patients exceeds the recommendation of the Local Health Council, and the facility-wide commitment to 35% of its patient days to Medicaid-eligible patients likewise exceeds the recommendation. Similarly, Manor Care agrees to a 37% Medicaid condition to its CON approval and, therefore, this factor is satisfied. Likewise, Vari-Care projects a 32% Medicaid payor mix. Whitehall will serve no Medicaid patients, and, accordingly, fails to comply with this recommendation of the Local Health Council. The third recommendation of the Local Health Council is that priority should be given to applicants who demonstrate a range of long-term care services. HCR's 120-bed facility would offer a range of services to all of its patients including those in the proposed addition. Similarly, Manor Care Vari- Care, and Whitehall propose and provide a range of services to their patients and will do so in their proposed additions. The fourth recommendation of the Local Health Council is that priority should be given to applicants who demonstrate a documented history of providing good residential care, staff ratios that exceed minimum requirement, provisions for the treatment of residents with mental health problems, and the inclusion of intensive rehabilitation services The HCR, Manor Care and Vari-Care proposals are consistent with this recommendation in that their staffing ratios exceed minimum requirements, they provide treatment for residents -with mental health problems, they have documented their ability to provide good quality care by operating facilities with superior licenses, and intensive rehabilitation services will be available to their residents. Medicare participation often indicates the level of intensity of skilled services offered at a facility. In this regard, Whitehall's Medicare participation of .7% in 1987 and 1.3% in 1988 does not demonstrate a substantial commitment to intensive skilled or rehabilitation services. The fifth recommendation of the Local Health Council is that priority should be given to applicants who propose service to a distinct patient population that currently is not being served within the Subdistrict. No applicant identified a distinct patient population that is not currently being served within the Subdistrict. Whitehall suggests that its application promotes this factor since it has Jewish patients. It does not suggest that the other applicants do not have Jewish patients. However, there are already three dedicated Jewish nursing homes in Palm Beach County. The presence of three dedicated Jewish nursing homes clearly indicates that the Jewish population is currently being served within the Subdistrict. Whitehall further concedes that its services (frozen Kosher dinners) is not the equivalent of those services of offered at a dedicated Jewish nursing home. Accordingly, no applicant should receive priority pursuant to this final recommendation of the Local Health Council since no applicant has identified a distinct population not currently being served, and no applicant has proposed to serve such a population. Accordingly, the HCR, Vari-Care, and Manor Care proposals comply with the District IX Local Health Council plan, but the Whitehall application does not. HCR's proposed facility will be located in northern Palm Beach County, Vari-Care's facility is located in central Palm Beach County, and Manor Care and Whitehall are located in very close proximity to each other in southern Palm Beach County. The two facilities in southern Palm Beach County both have licensure ratings of superior. It is clear that Whitehall's facility is more luxurious than that of Manor Care (and the other applicants for that matter), and its patient charges are high enough to offer many quality of life enhancements which other facilities are unable to offer. For example, Whitehall offers its patients room service, complimentary beer and wine, and a chauffeur- driven Cadillac for excursions outside the nursing home. However, Manor Care offers services more indicative of a high quality of care than Whitehall. Per its application, Whitehall will not staff its 3-11 or its 11-7 shift with nursing administrators, therapists, nurse-aides, activity directors, or social services. In comparison, Manor Care will provide such staff in its 3- 11 shift, and nurse-aides in the 11-7 shift. Whitehall does not provide in- house physical therapists. Manor Care employs physical therapists. Whitehall provides minimal skilled nursing services based on its small levels of Medicare participation. Whitehall proposes no additional Medicare-certified beds. Manor Care maintained the highest level of Medicare participation in Palm Beach County in 1988. At Whitehall, Alzheimer's patients are mingled in with other nursing home patients. Manor Care has final CON approval to establish a 30-bed dedicated Alzheimer unit so as to treat Alzheimer disease in the most appropriate modality. Whitehall mixes its ACLF and nursing home residents. They share dining rooms, activities, staff, and occupy the same floor. That is very uncommon. Regents Park of Boca Raton (hereinafter "Regents Park"), operated by Petitioner Health Quest Management Corporation III, is a 120-bed nursing center located in Boca Raton. Whitehall is located only about one mile from Regents Park, and Manor Care is located three to five miles from Regents Park. Approximately 90% of Regents Park's patients come from the Boca Raton area. Most are referred to the facility by Boca Hospital and West Boca Hospital. Like Regents Park, Manor Care and Whitehall also receive referrals from Boca Hospital and West Boca Hospital. Regents Park's general nursing program is the bedrock of the facility's service program. Additionally, Regents Park offers an established rehabilitation program. The facility maintains a fully equipped rehabilitation department housed in a specialized module that was built onto the facility some years ago. All of Regents Park's Medicare patients, as well as a substantial proportion of its skilled care patients, participate in the rehabilitation program. Boca Raton's local hospitals refer patients to Regents Park for rehabilitation. Most nursing homes experience less than half the Medicare utilization of Regents Park and Manor Care. These two facilities have historically ranked among the largest providers of Medicare services in Palm Beach County, despite their close proximity. Regents Park also offers an established program for low-functioning patients, which includes Alzheimer's patients and patients suffering from other dementias. Approximately thirty residents participate in the low-functioning program, and the program has four specialized staff. Health Quest claims that it would lose staff and patient days if Whitehall or Manor Care were approved. At the same time, Health Quest admits: it would not release staff; it would not limit current services; Health Quest is an excellent provider and can compete in the future for new residents; and Health Quest staffs well above minimum licensure requirements. Hence, by its own admission, Health Quest failed to show any credible or meaningful adverse impact if Manor Care or Whitehall were approved. Health Quest estimates it might suffer only a $12,000 or a $26,000 net loss if either application were approved. That amount does not constitute substantial, adverse impact.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is, therefore, RECOMMENDED that HRS enter a Final Order Approving the application of HCR for a CON for 30 additional nursing home beds; Approving the application of Manor Care for a CON for 30 additional nursing home beds; Denying the application of Vari-Care for a CON for 26 additional nursing home beds; and Denying the application of Whitehall for a CON for 27 additional nursing home beds. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 22nd of January, 1990. LINDA M. RIGOT Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 22nd day of January, 1990. APPENDIX TO RECOMMENDED ORDER DOAH CASE NUMBERS 89-2502, 89-2504, 89-2505, 89-2506, and 89-2507 Health Quest's proposed findings of fact numbered 1, 2, 5, 6, 8, 10, 26, 28, and 31 have been adopted either verbatim or in substance in this Recommended Order. Health Quest's proposed findings of fact numbered 3, 7, 27, and 32 have been rejected as unnecessary for determination of the issues involved in this proceeding. Health Quest's proposed findings of fact numbered 4, 11-15, 21, 23-25, 29, 30, and 33-35 have been rejected as not being supported by the weight of the credible evidence in this proceeding. Health Quest's proposed findings of fact numbered 9, 16-20, 22, and 36 have been rejected as being subordinate to the issues involved in this proceeding. Health Quest's proposed findings of fact numbered 37 and 38 have been rejected as being immaterial to the issues involved herein. Health Quest's proposed findings of fact numbered 39-48 have been rejected as not constituting' findings of fact but rather as constituting argument of counsel, recitation of the testimony, or conclusions of law. Health Quest's proposed findings of fact numbered 49-79 have been rejected as being irrelevant to the issues involved in this proceeding. HRS' proposed findings of fact numbered 1, 4, and 5 have been adopted either verbatim or in substance in this Recommended Order. HRS' proposed findings of fact numbered 2 and 6 have been rejected as being unnecessary for determination of the issues involved in this proceeding. HRS' proposed findings of fact numbered 3 and 7 have been rejected as not constituting findings of fact but rather as constituting argument of counsel, recitation of the testimony, or conclusions of law. HRS' proposed finding of fact numbered 8 has been rejected as being subordinate to the issues involved in this proceeding. HRS' proposed finding of fact numbered 9 has been rejected as not being supported by the weight of the credible evidence in this proceeding. HRS" proposed finding of fact numbered 10 has been rejected as being contrary to the weight of the credible evidence in this proceeding. HCR's proposed findings of fact numbered 1-29 and 31-54 have been adopted either verbatim or in substance in this Recommended Order. HCR's proposed finding of fact numbered 30 has been rejected as being irrelevant to the issues involved in this proceeding. Vari-Care's proposed findings of fact numbered 1-3, 5-8, 13, 15, 18- 23, 31, 33, 34, 37, 38, 41 42, 48, 50-54, 58, 61, 64, 70, 75, 76, 78, 79, and 82 have been adopted either verbatim or in substance in this Recommended Order. Vari-Care's proposed findings of fact numbered 4, 12, 24-27, 66, 69, 74, and 91 have been rejected as not being supported by the weight of the credible evidence in his proceeding. Vari-Care's proposed findings of fact numbered 9-11, 28, 30, 40, 43, 44, 63, 77, 80, 84, 85, and 90 have been rejected as not constituting findings of fact but rather as constituting argument of counsel, recitation of the testimony, or conclusions of law. Vari-Care's proposed findings of fact numbered 14, 16, 32, 35, 36, 39, 45-47, 49, 59, and 73 have been rejected as being subordinate to the issues involved in this proceeding. Vari-Care's proposed findings of fact numbered 17, 29, 55, 65, 67, 68, and 72 have rejected as being unnecessary for determination of the issues involved in this proceeding. Vari-Care's proposed findings of fact numbered 56 and 81 have been rejected as being immaterial to the issues involved herein. Vari-Care's proposed findings of fact numbered 57, 60, 62, 71, 83, and 86-89 have been rejected as being irrelevant to the issues involved in this proceeding. Whitehall's proposed findings of fact numbered 39, 47, 75-77, 82, 84, 85, 93, 118, 119, 146, and 151 have been rejected as being immaterial to the issues involved herein. Whitehall's proposed findings of fact numbered 1, 6, 11, 16, 21, 30, 34, 41, 48, 51, 54-56, 58, 59, 61, 65, 66, 74, 78, 88-90, 92, 96, 97, 99, 106, 121, 124, 126, 137, 139, 141, 142, 147, 148, and 150 have been adopted either verbatim or in substance in this Recommended Order. Whitehall's proposed findings of fact numbered 2, 7-9, 12, 13, 17-19, 29, 31, 40, 43-46, 63, 64, 83, 86, 91, 107, 128, 131, 136, 140, and 152 have been rejected as not being supported by the weight of the credible evidence in this proceeding. Whitehall's proposed findings of fact numbered 3, 50, 101, 111-117, 125, 129, 155, and 156 have been rejected as being irrelevant to the issues involved in this proceeding Whitehall's proposed findings of fact numbered 20, 23-25, 27, 38, 42, 49, 52, 57, 60, 67, 69, 70, 72, 73, 79-81, 87, 94, 95, 98, 100, 102-105, 108- 110, 120, 122, 123, 127, 130, 134, 135, 143-145, and 149 have been rejected as being subordinate to the issues involved in this proceeding. Whitehall's proposed findings of fact numbered 4 and 5 have been rejected as not constituting findings of fact but rather as constituting argument of counsel, recitation of the testimony, or conclusions of law. Whitehall's proposed findings of fact numbered 10, 22, 26, 28, 36, 37, 53, 62, 68, 71, 132, 133, 138, 153, and 154 have been rejected as being unnecessary for determination of the issues involved in this proceeding. Whitehall's proposed findings of fact numbered 14, 15, 32, 33, and 35 have been rejected as being contrary to the weight of the credible evidence in this proceeding. Manor Care's proposed findings of fact numbered 1, 2, 4, 5, 7-9, 11, 13-24, 27-37, 39, 40, 42, 43, 45, 47, 48, 50, 51, 53, 54, 57, 58, 60, 63, 64, 66, 69, 71-73, 75-78, 80, 81, 83, 89, 93-99, 102, 103, 107, 108, 110-113, 121, 130-141, 143-145, 147, and 149 have been adopted either verbatim or in substance in this Recommended Order. Manor Care's proposed findings of fact numbered 3, 101, 104, 106, 117, and 148 have been rejected as not constituting findings of fact but rather as constituting argument of counsel, recitation of the testimony, or conclusions of law. Manor Care's proposed findings of fact numbered 6, 12, 38, 49, 55, 56, 59, 65, 67, 68, 74, 82, 90, 92, 100, 114, 116, and 118-120 have been rejected as being unnecessary for determination of the issues involved in this proceeding. Manor Care's proposed findings of fact numbered 10, 26, 41, 44, 46, 52, 61, 62, 70, 79, 86-8, 105, 109, 115, 122, 142, 146, 150, and 151 have been rejected as being subordinate to the issues involved in this proceeding. Manor Care's proposed findings of fact numbered 25, 84, 91, and 123- 129 have been rejected as being irrelevant to the issues involved in this proceeding. Manor Care's proposed finding of fact numbered 85 has been rejected as being immaterial to the issues involved herein. COPIES FURNISHED: Samuel J. Dubbin, Esquire Gerald M.Cohen, Esquire STEEL HECTOR & DAVIS 4000 Southeast Financial Center Miami, Florida 33131-2398 Steven W. Huss, Esquire 1017 Thomasville Road Suite C Tallahassee, Florida 32303 Charles M. Loeser, Esquire 315 West Jefferson Boulevard South Bend, Indiana 46601 Byron B. Mathews, Jr., Esquire 700 Brickell Avenue Miami, Florida 33131 Richard Patterson, Esquire Department of Health and Rehabilitative Services 2727 Mahan Drive Fort Knox Executive Center Tallahassee, Florida 32308 James C. Hauser, Esquire Messer, Vickers, Caparello, French & Madsen, P.A. Post Office Box 1876 Tallahassee, Florida 32302 Alfred W. Clark, Esquire Post Office Box 623 Tallahassee, Florida 32302 Sam Power, Agency Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 John Miller, General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 =================================================================
The Issue Whether a $1,500 administrative fine should be levied against respondent on grounds that it failed to timely correct four Class III violations of nursing home standards.
Findings Of Fact On August 25-26, 1980, the Department inspected Richey Manor, a licensed nursing home located at 505 Indiana Avenue, New Port Richey, Florida. Various deficiencies were identified and discussed with the nursing home staff. Thereafter, on October 24, 1980, the Department sent Richey Manor a written citation which listed the deficiencies noted in August, classified them, and set dates by which they were required to be corrected. The deficiencies pertinent to this proceeding were: (1) funds of deceased patients were not deposited in an interest-bearing account, (2) the nurse call system in patient Room 14 was inoperable, (3) the dry wall ceiling in the south entrance corridor was damaged, and (4) specific `products and disinfectants required by Richey Manor's approved infection control policies were unavailable. 2/ The citation identified these as Class III deficiencies. The first three were required to be corrected by September 25, 1980, the fourth by October 25, 1980. (Testimony of Fullerton; P- 2.) Class III deficiencies are those violations which have an indirect or potential relationship to the health, safety, or security of the nursing home patients. Three of the deficiencies fulfill these conditions: a workable nurse call system and infection control program have an obvious potential relationship to the health of the patients; vermin may gain access through the hole in the dry wall and have similar adverse effects. However, as now conceded by the Departments the failure to deposit funds of deceased patients into an interest- bearing account does not indirectly or potentially relate to the health, safety, or security of patients. (Testimony of Fullerton.) Richey Manor timely corrected or attempted to correct three of the four deficiencies noted. During August, 1980, it hired Tampa Sound Company to repair the nurse call system; two visits were required and the repairs were satisfactorily completed by November. An infection control committee was formed to revise and update the infection control policies. By November, 1980, the policies had been revised; supplies and equipment necessary for their implementation were then available. During August, 1980, the hole in the ceiling: at the entry way was repaired; however, the repair was inadequate. By January 12, 1981, the hole in the ceiling had reopened. The fourth deficiency remained uncorrected: no action was taken by Richey Manor to place funds of deceased patients in an interest-bearing account. (Testimony of McGlawn, Fullerton; P-1, R-1, R-2.)
Recommendation That the Department impose a total fine of $500 against Richey Manor for the two violations which were not adequately and timely corrected. DONE AND RECOMMENDED this 10th day of December, 1981, in Tallahassee, Florida. R. L. CALEEN, JR. 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 10th day of December, 1981.
The Issue Whether Respondent violated Rule 10D-29.17(2)(g), Florida Administrative Code, and should be administratively fined in the amount of $500.00. At the commencement of the hearing, and upon inquiry by the Hearing Officer, Respondent was identified as Greynolds Park Manor, Inc., doing business as Greynolds Park Manor Rehabilitation Center.
Findings Of Fact Respondent operates a nursing home licensed under Chapter 400, Florida Statutes, at 17400 W. Dixie Highway, North Miami Beach, Florida. The Administrator of the Home is George N. Leader. In 1976, Ellsworth Smith, an auditor for the petitioner, went to Respondent's place of business to conduct an audit of its 1973 records and accounts. Smith was Acting Medicaid Audit Supervisor and the purpose of the audit was to determine whether federal funds channeled through the State of Florida for the care of Medicaid patients were in order. In 1973, a nursing home could be reimbursed for the "reasonable costs" of care of a Medicaid patient in an amount up to $400 per month. If the cost of caring for a patient was more than that maximum, the home suffered the loss. However, if such costs did not reach that sum, the home was required to reimburse the State accordingly. If contributions or donations were received by the home for specified Medicaid patients, such sums would be deducted from the amount of support paid by the State. On the other hand, if contributions were made to the home for its general purposes, such amounts were not deductible from Medicaid payments. (Testimony of Smith, Conners) In the course of the audit, Smith checked the journal entries and savings account passbook, and found that $57,493.97 was listed as "contributions-savings." A further source of income was listed in the amount of $2,100 for domiciliary care. However, no records were provided to him showing the detailed sources of these funds. Smith requested the records from Leader and was told by him that the Division of Family Services of HRS had copies of forms signed by patients indicating that these funds represented voluntary contributions. Upon checking with that agency, Smith found that no forms were in its possession for the year 1973. Leader refused to provide Smith with a copy of a list of contributors and amounts until he had an opportunity to consult with his legal counsel and accountant. He also told Smith that the contributions represented funds that had been pledged from individuals who either "came off the street" or were friends of patients. (Testimony of Smith, Leader) Smith reported to his supervisor that he was unable to complete the audit of Respondent because of his inability to secure back-up records concerning the contributions and domiciliary item. All he was able to do was to reconcile the balances of total receipts and withdrawals from the trial balance and adjustment sheets that had been made up by Respondent's accountant. Subsequent efforts were made to obtain documentation concerning Respondent's income to no avail. On September 9, 1976, Smith and his supervisor, John J. Coppinger, met with Leader at the nursing home. At the meeting, Leader produced a list of surnames of contributors for the monies in question, but was either unwilling or unable to provide the full names and addresses of these individuals. He declined to permit the auditors to remove the lists and claimed that he was unable to copy it because his copy machine was broken. Leader again stated at this time that the donations had come from strangers who had driven or walked by the premises and had been impressed by the attractiveness of the nursing home. Leader further stated that the source of the additional $2,100 in question was of no concern to the State and declined to divulge its source. (Testimony of Coppinger, Respondents's Exhibit 1) In an effort to check the source of contributions, Smith reviewed the patients' records which showed the name of the next-of-kin or spouse and sent 18 letters to some of these individuals requesting information concerning any contributions they might have made to Respondent. He received eleven responses, in which all of the individuals stated that they had been required to make contributions to the home as a condition of the patient's admission. However, Smith did not pursue the matter further because a copy of the contributors list had not been provided him to use in checking against patients' records. Contributions as a condition of admission of a specified Medicaid patient would be deducted from the amounts paid by the State to the nursing home. (Testimony of Smith, Conners) There was a conflict in the testimony at the hearing between petitioner's auditors and Respondent's accountant as to the sufficiency of the Respondent's records as to contributions to enable a proper audit. Respondent's accountant was of the opinion that because the patient ledger cards provided the names of the patients' next-of-kin, Petitioner could have written all of these individuals to determine the circumstances surrounding any donations given to the nursing home. On the other hand, Petitioner's auditors asserted that this would place an undue burden upon the State and it was the Respondent's responsibility to have available at the time of audit records sufficiently detailed to identify clearly the source and amount of each contribution, including full names and addresses. It is found that such records reasonably are required to be produced in order that they may permit an audit by commonly recognized procedures. (Testimony of Smith, Silverman) George N. Leader, who is also president of Greynolds Park Manor, Inc., testified that since the contributions did not relate to patient care but had been pledged and given for the general use of the nursing home, he saw no necessity to retain addresses of the contributors or to make entries into patient ledger cards. He claimed that every donation was accompanied by a required form that showed it was not related to patient care and that these forms had been provided to the payment worker of the Division of Family Services who picked them up at the nursing home. This statement, of course, contradicts that of Smith who was unable to find any such forms for 1973 in the records of that state agency. Leader also testified that when the Medicaid program began in the early 1970's, there were no clear guidelines (nor any today) from the State that spell out the precise types of documentation necessary with regard to contributions and that this lack of guidance caused confusion in his mind and in the minds of other nursing home administrators. However, contradictory testimony of Smith and Conners established that almost all other nursing homes routinely provide names and addresses of contributors to State auditors. It is therefore found, based upon Leader's conflicting statements to the State auditors as to the source of income from contributions, that an auditor would have been unable to make a complete audit of Respondent's records pertaining to contributions because of insufficient available information. (Testimony of Leader, Smith, Conners) Leader also testified that the $2,100 item had been paid by a face peeling firm for lease of space in the nursing home and that such income had no connection with operation of the home itself. However, Coppinger testified that such income would reduce the amount of depreciation of the facility chargeable to the State by Respondent. It is found that information to explain the stated sum was not made available to state auditors at the time of their audit. (Testimony of Leader, Coppinger)
Recommendation That an administrative fine in the amount of $500 be imposed upon Respondent Greynolds Park Manor, Inc. under the authority of subsections 400.102(1)(c) and 400.121(8), Florida Statutes, for violation of Rule 10D- 29.17(2)(g), Florida Administrative Code. DONE and ENTERED this 22nd day of February, 1977 in Tallahassee, Florida. THOMAS C. OLDHAM Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: James G. Mahorner, Esquire Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32301 Elliot Shaw, Esquire One Biscayne Tower, Suite 1700 2 South Biscayne Boulevard Miami, Florida 33131
The Issue Whether Petitioner was legally justified in issuing a conditional license rating to Respondent.
Findings Of Fact Petitioner is the state agency responsible for licensing and regulating nursing homes in the State of Florida. Respondent operates a licensed nursing home at 13900 Northeast 3rd Court in Miami, Florida. At the time of the events giving rise to this case, Florence Lipinsky (Mrs. Lipinsky) was 78 years old, and had been living at Claridge House since 1997. Previously, Mrs. Lipinsky had lived in at least one other nursing home, Regents Park at Aventura (Aventura). At the time Mrs. Lipinsky resided at Aventura, that facility and Claridge House had no corporate relationship. However, at the time of the events giving rise to this case, Aventura and Claridge House were under the same ownership and management. At all times material to this case, Mrs. Lipinsky was a "vulnerable adult" within the meaning of Section 415.102(26). She suffered from extreme cognitive impairment, also known as dementia. She was unable to perform any of the tasks of daily living unassisted. For years prior to the events giving rise to this case, Mrs. Lipinsky was non-verbal, mostly bed bound, and able to take nutrition only through a feeding tube. She was generally unresponsive to visitors and caregivers. Simply put, she was helpless. Once her dementia became severe enough to require nursing home care, there was never any realistic expectation that Mrs. Lipinsky would ever be able to care for herself in any way, or to make health care decisions on her own behalf. The latter function had been taken over years before by her son and health care surrogate, Stuart Lipinsky (Lipinsky). Lipinsky also assumed financial responsibility for his mother's care. He regularly visited the nursing home administrative office to pay her bill, in cash. The entire time Mrs. Lipinsky resided at Claridge House, she was given the anti-anxiety medication Buspar. For a portion of the time that she resided at Claridge House, she was also given Risperdal, an anti-psychotic drug. Sound medical practice requires that a prescription drug not be administered unless a qualified physician has determined that the benefit to be obtained outweighs the risk of adverse side effects and/or drug interactions. This is especially true with powerful mood and behavior altering medications such as Buspar and Risperdal. The need for appropriate medical supervision is even more pronounced with a patient like Mrs. Lipinsky, who is unable to communicate meaningfully with doctors, and is dependent upon those who look after her to understand her needs based solely upon their observations of her behaviors over time. Mrs. Lipinsky was first prescribed Risperdal in early 2000. A consulting psychiatrist discontinued that medication on March, 12, 2001. In the summer of 2001, Lipinsky began to speak to the Administrator at Claridge House, Eddie Bursztyn, (Bursztyn) about his family situation. At that time, Bursztyn had served in the top position at Claridge House for a decade, and had recently, in addition to his Claridge House duties, taken over the top administrative position at Aventura. Lipinsky shared his personal, divorce-related problems with Bursztyn, and also shared that he was planning to remove his mother from Claridge House for a period of time. Eventually, he revealed to Bursztyn that he desired to transfer his mother to Aventura under an alias which would include a fake social security number. There was no medical purpose for such a transfer. All of the staff and services necessary to care for Mrs. Lipinsky were in place at Claridge House. Nothing which would improve her medical condition or otherwise enhance the quality of her life was offered at Aventura. Bursztyn, as well as the on-site administrator at Aventura, initially objected to transferring Mrs. Lipinsky under a false name. However, Bursztyn relented upon being informed that Mrs. Lipinsky's doctor, one Leonard Pianko (Pianko), was willing to cooperate with Lipinsky in falsifying patient records so as to facilitate the transfer. According to Bursztyn his "compassion took over" when he learned that Pianko was cooperating with Lipinsky. In addition, Bursztyn testified that he had no right or power to interfere with Lipinsky's plan to transfer his mother. This testimony is not credible. Bursztyn's demeanor under oath, viewed in the context of the entire record, compels the conclusion that Bursztyn abandoned his obligations to Mrs. Lipinsky and inappropriately adopted the view that the person paying the bill, in this case Mrs. Lipinsky's son, would be accommodated, whether or not he was acting in his mother's best interests. Bursztyn made no effort to determine what was motivating Lipinsky's scheme. Although he had years of administrative experience in what is a highly regulated industry, Bursztyn did not seek counsel or assistance from attorneys, regulators, or adult protective service workers with knowledge of how a nursing home resident can be assisted when her health care surrogate proposes a course of action which offers no discernable benefit to the resident. The need for further inquiry by Bursztyn was especially apparent here. For reasons discussed below, a change of residence posed serious risks to a cognitively impaired person such as Mrs. Lipinsky. The nature of those risks would be immediately apparent to any competent nursing home administrator, and were in fact apparent to Bursztyn. Nevertheless, Bursztyn actively facilitated the reckless and unethical behavior of the doctor and the health care surrogate by creating the false records necessary to effect the transfer. Bursztyn attempts to justify his conduct by asserting that Lipinsky, as health care surrogate, had the legal right to remove his mother from Claridge House. But Lipinsky did not have a legal right to demand that records be falsified. Nor could Lipinski have forced Bursztyn to admit his mother to a nursing home owned and operated by the owners of Claridge House. Bursztyn's participation in Lipinski's scheme was not born of respect for the law. Rather, it was a cynical bottom- line decision made for the sake of keeping the business of a cash customer. To that end, Bursztyn directed the preparation of transfer paperwork which falsely stated that Lipinsky was going home in the care of her son. He was further responsible for the preparation of documents identifying Mrs. Lipinsky as Marjorie Silver. A social security number was created for "Mrs. Silver," as well, and on October 1, 2001, she was sent by ambulance to Aventura under the alias. Medication orders for Mrs. Lipinsky were delivered to Aventura, also under the false name. Mrs. Lipinsky would remain at Aventura for 63 days at which time she was again transported by ambulance to Claridge House. Upon her admission at Aventura, some members of its staff recalled Mrs. Lipinsky from her previous stay, which occurred at least four years prior to the 2001 admission. The evidence establishes that those employees who knew her called her by her right name. There is no competent evidence that anyone ever addressed her as Marjorie or Mrs. Silver. There is a risk inherent in any patient transfer by ambulance or other vehicle. No purpose beneficial to Mrs. Lipinsky was served by the two ambulance rides needed to effect her transfer from and readmission to Claridge House. For a geriatric patient suffering from dementia, the applicable standard of care precludes ambulance transport absent a legitimate benefit to be obtained by the patient at the destination to which she is to be transported. The change in physical surroundings and staffing which attends the transfer of a patient from one nursing home to another would be stressful even for a young person who is in possession of her faculties and merely suffers from a minor, temporary physical disability. The standard of care for geriatric patients who suffer from dementia acknowledges that such drastic changes in surroundings and daily routine can be traumatic to a person who is physically helpless and unable to give and receive meaningful communication. The decision by Claridge House officials to subject Mrs. Lipinsky to significant changes in her surroundings was not prompted by legitimate reason, medical or otherwise. When a patient is newly admitted to a nursing home, staff is required to prepare an extensive chart. This process is highly labor intensive. Personnel from all disciplines are involved, including nurses, dieticians, social services, activities counselors, etc. All must do observations and assessments, and conduct chart reviews and conferences, in order to develop an appropriate care plan. Because a person suffering with dementia cannot offer coherent assistance to staff, staff must discern for themselves, over time, what is normal behavior for the patient. This makes the process all the more expensive and time consuming for staff and stresses the patient, as well. It is, therefore, not to be done except for legitimate reasons relating to the delivery of appropriate patient care. Almost immediately upon arrival at Aventura, Mrs. Lipinsky began to exhibit symptoms of agitation and distress sufficient to warrant a psychiatric consultation. The psychiatrist ordered that she be medicated with the antipsychotic drug Risperdal. Had Mrs. Lipinsky remained in her familiar environment, Risperdal may, as Claridge House argues, needed to have been reintroduced in her care plan for reasons unrelated to the stresses related to the transfer. This can never be known. What is known is that the medically unjustifiable transfer led swiftly and directly to a determination at Aventura that her condition had deteriorated to the point that an antipsychotic was necessary. Claridge House acknowledges, as it must, the unanimous weight of professional opinion that cognitively impaired individuals should, whenever possible, be maintained in a familiar and stable environment. A change in surroundings and caregivers, even when appropriately done for the purpose of providing improved care, will often trigger agitation and restlessness, as it did here. Claridge House defends its conduct with the assertion that it did not have the authority to prevent the transfer. In the context of the facts of this case, this argument is disingenuous. As noted above, at a minimum, Claridge House had the right to not cooperate in Lipinsky's scheme. Instead, Claridge House embraced a course of conduct which put its resident at risk of distress that could, and in this case did, lead to the need for use of a powerful drug from which she had previously been weaned. Claridge House had the last and best chance to spare Mrs. Lipinsky the risks associated with a move. Instead, it actively embraced the scheme to assure that the income stream from Mrs. Lipinsky would continue uninterrupted.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency for Health Care Administration enter a final order finding that Claridge House's license rating is “conditional” for the period from December 14, 2001, through January 28, 2002, and assessing costs pursuant to Section 400.121. DONE AND ENTERED this 11th day of October, 2002, in Tallahassee, Leon County, Florida. FLORENCE SNYDER RIVAS Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 11th day of October, 2002.
The Issue The issues for determination are: (1) whether the noncompliance as alleged during the August 30, 2001, survey and identified as Tags F324 and F242, were Class II deficiencies; (2) whether the "Conditional" licensure status, effective August 30, 2001, to September 30, 2001, based upon noncompliance is appropriate; and (3) whether a fine in the amount of $5,000 is appropriate for the cited noncompliance
Findings Of Fact Charlotte is a nursing home located at 5405 Babcock Street, Northeast, Fort Myers, Florida, with 180 residents and is duly licensed under Chapter 400, Part II, Florida Statutes. AHCA is the state agency responsible for evaluating nursing homes in Florida pursuant to Section 400.23(7), Florida Statutes. As such, in the instant case it is required to evaluate nursing homes in Florida in accordance with Section 400.23(8), Florida Statutes (2000). AHCA evaluates all Florida nursing homes at least every 15 months and assigns a rating of standard or conditional to each licensee. In addition to its regulatory duties under Florida law, AHCA is the state "survey agency," which, on behalf of the federal government, monitors nursing homes that receive Medicaid or Medicare funds. On August 27 through 30, 2001, AHCA conducted an annual survey of Charlotte's facility and alleged that there were deficiencies. These deficiencies were organized and described in a survey report by "Tags," numbered Tag F242 and Tag F324. The results of the survey were noted on an AHCA form entitled "Statement of Deficiencies and Plan of Correction." The parties refer to this form as the HCFA 2567-L or the "2567." The 2567 is the document used to charge nursing homes with deficiencies that violate applicable law. The 2567 identified each alleged deficiency by reference to a Tag number. Each Tag on the 2567 includes a narrative description of the allegations against Charlotte and cites a provision of the relevant rule or rules in the Florida Administrative Code violated by the alleged deficiency. To protect the privacy of nursing home residents, the 2567 and this Recommended Order refer to each resident by a number (i.e., Resident 24) rather than by the name of the resident. AHCA must assign a class rating of I, II or III to any deficiency that it identifies during a survey. The ratings reflect the severity of the identified deficiency, with Class I being the most severe and Class III being the least severe deficiency. There are two Tags, F242 and F324 at issue in the instant case, and, as a result of the August 2001 survey, AHCA assigned each Tag a Class II deficiency rating and issued Charlotte a "Conditional" license effective August 30, 2001. Tag F242 Tag F242 generally alleged that Charlotte failed to meet certain quality of life requirements for the residents, based on record review, group interviews, and staff interviews, and that Charlotte failed to adequately ensure that the residents have a right to choose activities that allow them to interact with members of the community outside the facility. On or about August 24, 2001, AHCA's surveyors conducted group interviews. During these interviews, 10 of 16 residents in attendance disclosed that they had previously been permitted to participate in various activities and interact with members of the community outside the facility. They were permitted to go shopping at malls, go to the movies, and go to restaurants. Amtrans transportation vans were used to transport the residents to and from their destinations. The cost of transportation was paid by Charlotte. An average of 17 to 20 residents participated in those weekly trips to dine out with other community members at the Olive Garden and other restaurants. During those trips, Charlotte would send one activity staff member for every four to six residents. The record contains no evidence that staff nurses accompanied those select few residents on their weekly outings. The outings were enjoyed by those participants; however, not every resident desired or was able to participate in this particular activity. Since 1985, outside-the-facility activities had been the facility's written policy. However, in August 2000, one year prior to the survey, Matthew Logue became Administrator of the facility and directed his newly appointed Activities Director, Debbie Francis, to discontinue facility sponsored activities outside the facility and in its stead to institute alternative activities which are all on-site functions. Those residents who requested continuation of the opportunity to go shopping at the mall or dine out with members of the community were denied their request and given the option to have food from a restaurant brought to the facility and served in-house. The alternative provided by the facility to those residents desiring to "interact with members of the community outside the facility" was for each resident to contact the social worker, activity staff member, friends or family who would agree to take them off the facility's premises. Otherwise, the facility would assist each resident to contact Dial-A-Ride, a transportation service, for their transportation. The facility's alternative resulted in a discontinuation of all its involvement in "scheduling group activities" beyond facility premises and a discontinuation of any "facility staff members" accompanying residents on any outing beyond the facility's premises. As described by its Activities Director, Charlotte's current activities policy is designed to provide for residents' "interaction with the community members outside the facility," by having facility chosen and facility scheduled activities such as: Hospice, yard sales, barbershop groups for men and beautician's day for women, musical entertainment, antique car shows, and Brownie and Girl Guides visits. These, and other similar activities, are conducted by "community residents" who are brought onto the facility premises. According to the Activities Director, Charlotte's outside activities with transportation provided by Amtrans buses were discontinued in October of 2000 because "two to three residents had been hurt while on the out trip, or on out-trips."1 Mr. Logue's stated reason for discontinuing outside activities was, "I no longer wanted to take every member of the activities department and send them with the resident group on an outing, thereby leaving the facility understaffed with activities department employees." The evidence of record does not support Mr. Logue's assumption that "every member of the facility's activities department accompanied the residents on any weekly group outings," as argued by Charlotte in its Proposed Recommended Order. Charlotte's Administrator further disclosed that financial savings for the facility was among the factors he considered when he instructed discontinuation of trips outside the facility. "The facility does not sponsor field trips and use facility money to take people outside and too many staff members were required to facilitate the outings." During a group meeting conducted by the Survey team, residents voiced their feelings and opinions about Charlotte's no longer sponsoring the field trips on a regular basis in terms of: "feels like you're in jail," "you look forward to going out," and being "hemmed in." AHCA's survey team determined, based upon the harm noted in the Federal noncompliance, that the noncompliance should be a State deficiency because the collective harm compromised resident's ability to reach or maintain their highest level of psychosocial well being, i.e. how the residents feel about themselves and their social relationships with members of the community. Charlotte's change in its activities policy in October of 2000 failed to afford each resident "self- determination and participation" and does not afford the residents the "right to choose activities and schedules" nor to "interact with members of the community outside the facility." AHCA has proved the allegations contained in Tag F242, that Charlotte failed to meet certain quality of life requirements for the residents' self-determination and participation. By the testimonies of witnesses for AHCA and Charlotte and the documentary evidence admitted, AHCA has proven by clear and convincing evidence that Charlotte denied residents the right to choose activities and schedules consistent with their interests and has failed to permit residents to interact with members of the community outside the facility. Tag F324 As to the Federal compliance requirements, AHCA alleged that Charlotte was not in compliance with certain of those requirements regarding Tag F324, for failing to ensure that each resident receives adequate supervision and assistance devices to prevent accidents. As to State licensure requirements of Sections 400.23(7) and (8), Florida Statutes (2000), and by operation of Florida Administrative Code, Rule 59A-4.1288, AHCA determined that Charlotte had failed to comply with State established rules, and under the Florida classification system, classified Tag F324 noncompliance as a Class II deficiency. Based upon Charlotte's patient record reviews and staff interviews, AHCA concluded that Charlotte had failed to adequately assess, develop and implement a plan of care to prevent Resident 24 from repeated falls and injuries. Resident 24 was admitted to Charlotte on April 10, 2001, at age 93, and died August 6, 2001, before AHCA's survey. He had a history of falls while living with his son before his admission. Resident 24's initial diagnoses upon admission included, among other findings, Coronary Artery Disease and generalized weakness, senile dementia, and contusion of the right hip. On April 11, 2001, Charlotte staff had Resident 24 evaluated by its occupational therapist. The evaluation included a basic standing assessment and a lower body assessment. Resident 24, at that time, was in a wheelchair due to his pre-admission right hip contusion injury. On April 12, 2001, two days after his admission, Resident 24 was found by staff on the floor, the result of an unobserved fall, and thus, no details of the fall are available. On April 23, 2001, Resident 24 was transferred to the "secured unit" of the facility. The Survey Team's review of Resident 24's Minimum Data Set, completed April 23, 2001, revealed that Resident 24 required limited assistance to transfer and to ambulate and its review of Resident 24's Resident Assessment Protocols (RAPs), completed on April 23, 2001, revealed that Resident 24 was "triggered" for falls. Charlotte's RAP stated that his risk for falls was primarily due to: (1) a history of falls within the past 30 days prior to his admission; (2) his unsteady gait; (3) his highly impaired vision; and (4) his senile dementia. On April 26, 2001, Charlotte developed a care plan for Resident 24 with the stated goal that the "[r]esident will have no falls with significant injury thru [sic] July 25, 2001," and identified those approaches Charlotte would take to ensure that Resident 24 would not continue falling. Resident 24's care plan included: (1) place a call light within his reach; (2) do a falls risk assessment; (3) monitor for hazards such as clutter and furniture in his path; (4) use of a "Merry Walker" for independent ambulation; (5) placing personal items within easy reach; (6) assistance with all transfers; and (7) give Resident 24 short and simple instructions. Charlotte's approach to achieving its goal was to use tab monitors at all times, to monitor him for unsafe behavior, to obtain physical and occupational therapy for strengthening, and to keep his room free from clutter. All factors considered, Charlotte's care plan was reasonable and comprehensive and contained those standard fall prevention measures normally employed for residents who have a history of falling. However, Resident 24's medical history and his repeated episodes of falling imposed upon Charlotte a requirement to document his records and to offer other assistance or assistive devices in an attempt to prevent future falls by this 93-year-old, senile resident who was known to be "triggered" for falls. Charlotte's care plan for Resident 24, considering the knowledge and experience they had with Resident 24's several falling episodes, failed to meet its stated goal. Charlotte's documentation revealed that Resident 24 did not use the call light provided to him, and he frequently refused to use the "Merry Walker" in his attempts of unaided ambulation. On June 28, 2001, his physician, Dr. Janick, ordered discontinuation of the "Merry Walker" due to his refusal to use it and the cost involved. A mobility monitor was ordered by his physician to assist in monitoring his movements. Charlotte's documentation did not indicate whether the monitor was actually placed on Resident 24 at any time or whether it had been discontinued. Notwithstanding Resident 24's refusal to cooperatively participate in his care plan activities, Charlotte conducted separate fall risk assessments after each of the three falls, which occurred on April 12, May 12, and June 17, 2001. In each of the three risk assessments conducted by Charlotte, Resident 24 scored above 17, which placed him in a Level II, high risk for falls category. After AHCA's surveyors reviewed the risk assessment form instruction requiring Charlotte to "[d]etermine risk category and initiate the appropriate care plan immediately," and considered that Resident 24's clinical record contained no notations that his initial care plan of April 23, 2001, had been revised, AHCA concluded that Charlotte was deficient. On May 13, 2001, Dr. Janick visited with Resident 24 and determined that "there was no reason for staff to change their approach to the care of Resident 24." Notwithstanding the motion monitors, on June 17, 2001, Resident 24 fell while walking unaided down a corridor. A staff member observed this incident and reported that while Resident 24 was walking (unaided by staff) he simply tripped over his own feet, fell and broke his hip. Charlotte should have provided "other assistance devices," or "one-on-one supervision," or "other (nonspecific) aids to prevent further falls," for a 93-year-old resident who had a residential history of falls and suffered with senile dementia. Charlotte did not document other assistive alternatives that could have been utilized for a person in the condition of Resident 24. AHCA has carried its burden of proof by clear and convincing evidence regarding the allegations contained in Tag F324.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that: The Agency enter a final order upholding the assignment of the Conditional licensure status for the period of August 30, 2001 through September 30, 2001, and impose an administrative fine in the amount of $2,500 for each of the two Class II deficiencies for a total administrative fine in the amount of $5,000. DONE AND ENTERED this 13th day of February, 2003, in Tallahassee, Leon County, Florida. FRED L. BUCKINE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 13th day of February, 2003.
