The Issue Which of two applications for a Certificate of Need (CON) to operate a hospice in Service Area 8B, Collier County, Florida, should be granted: CON 9967 filed by Hope Hospice and Community Services, Inc., or CON 9969 filed by VITAS Healthcare Corporation of Florida?
Findings Of Fact The Parties AHCA The Agency for Health Care Administration is responsible for the administration of the Certificate of Need (CON) Program in Florida and for carrying out Florida's CON Law. See § 408.031, Fla. Stat., et seq. The Agency is designated both "as the state health planning agency for purposes of federal law . . . [and as] the single state agency to issue, revoke, or deny certificates of need . . . in accordance with present and future federal and state statutes." § 408.034(1), Fla. Stat. HON Hospice of Naples, Inc. (HON), a not-for-profit corporation qualified as a "501(c)(3)" charitable organization under the Internal Revenue Service Code, is a community-based full service hospice. Founded in 1983 by a group of volunteers who wanted to improve care for those suffering terminal illnesses in Collier County, HON is governed today by community representatives that comprise a 19-member board of directors. HON is the only hospice currently licensed to provide hospice services in Service Area 8B, Collier County. It is licensed to provide hospice program services and to operate a freestanding general inpatient program facility in the county. Since 1988, HON has been continuously Medicare and Medicaid certified. It has been accredited by the Joint Commission for Accreditation of Health Care Organizations since 2001. HON accepts all Collier County patients, regardless of religious beliefs, sexual orientation, and circumstances, including how the patient may be challenged physically or mentally. HON provides its services wherever the Collier County patient resides: in their own homes (approximately 50%); in skilled nursing facilities and assisted living facilities (45%); in jails, shelters and the Georgeson Hospice House (5%); and in a small fraction of cases in hospitals. Patients are also accepted regardless of ability to pay. In 2006, HON provided $344,000 in charity care to those who did not have the resources to pay for hospice care. HON's principal office is located on the same campus with the Frances Georgeson Hospice House (the "Georgeson House"), HON's 16-bed freestanding hospice general inpatient facility. The main office and Georgeson House are centrally located and geographically accessible in relation to the most populated portions of the county. HON has four branch offices placed where the greatest number of hospice patients reside in the county. The offices are in Marco Island, Immokalee, North Naples (near the Collier-Lee County line), and South Naples. HON consistently relies on donations from the community to cover shortfalls from operations. From 2002-2006, HON lost between $1.5 million and $4.5 million annually on operations, before contributions were considered. Contributions over the same period ranged from $1.5 million to $4.4 million. HON relies on contributions to allow it to continue to provide a wide array of enhanced core, non-core and community services beyond what reimbursement covers. Collier County has been well served by HON, an available, accessible, high quality, not-for-profit community-based hospice. VITAS VITAS is a for-profit Florida corporation licensed to provide hospice services in Florida. It is a wholly-owned subsidiary of VITAS Healthcare Corporation ("VITAS Healthcare") which operates more than 40 hospice programs in the nation and is the largest hospice provider in the country. VITAS has a sister corporation, VITAS of Central Florida, Inc. The two operate hospice programs in Hospice Service Areas 4B, 7A, 7B, 7C, 9C, 10, and 11 that include Orange, Osceola, Seminole, Brevard, Volusia, Flagler, Miami-Dade, Monroe, Broward, and Palm Beach Counties. VITAS and its predecessor entities have provided comprehensive hospice services throughout South Florida in excess of 28 years. It has a storied history that commenced in the mid-seventies with the organization of a group of hospice volunteers by Hugh Westbrook, an ordained United Methodist minister, and Esther Colliflower. These initial efforts led to the incorporation of Hospice Care, Inc., in Miami as one of the nation's first hospice programs. Reverend Westbrook and Ms. Colliflower continued their pioneering endeavors in hospice as leaders in the successful effort to create a federal payment system for hospice. In the early 1990's Hospice Care, Inc., was converted into a for-profit entity. The term VITAS, derived from the Latin word for "lives," was incorporated into the name of the corporation to symbolize the mission of VITAS Healthcare: the preservation of the quality of life for those who have a limited time to live. VITAS Healthcare is a wholly owned subsidiary of Chem-Ed, a for-profit corporation. Chem-Ed has had an interest in VITAS Healthcare at least since 1991 when it was an owner of 25% of VITAS Healthcare stock and one of its executives, Tim O'Toole took a seat on the VITAS Healthcare board of directors. In 2004, the majority ownership of VITAS Healthcare was sold to Chem-Ed and Tim O'Toole became VITAS Healthcare's Chief Executive Officer. Most of the senior management stayed intact after the acquisition by Chem-Ed. Among the reasons for retaining senior management was to continue VITAS Healthcare's values in the wake of the acquisition. The main value is "putting patients and their families first." Hope Hope Hospice and Community Services, Inc. (Hope), is a not-for-profit community-based hospice organization incorporated as a 501(c)(3) charitable corporation under the Internal Revenue Code. Hope is governed by a board of directors, all of whom are residents of Hope's service area. As business and community leaders in Southwest Florida, Hope's Board members know the Hope service area well. Their in depth knowledge of the community enhances their sensitivities to the needs of the communities served by Hope. Founded in 1979 by a group of clergy, nurses, and other volunteers in Lee County, Hope became a Medicare certified hospice in 1984. Since 1991, Samira Beckwith has served as Hope's President and CEO. Ms. Beckwith has been actively involved in hospice since 1976, and has received numerous state and national awards for her work in hospice and end-of-life issues. Originally licensed to serve Service Area 8C (Lee, Hendry, and Glades Counties), Hope has been licensed since 2006 to serve Service Area 6B (Polk, Hardee, and Highlands Counties) as well. Hospice Care Hospice care may be provided in any location where a patient has lived or is temporarily residing such as a private home, family member's home, assisted living facility (ALF), nursing home, hospital or other institution. There are four levels of hospice care: routine home care, general inpatient care (GIP), continuous care and respite care. The majority of hospice patients receive routine home care. This level of care may be provided in the patient's home, a family member's home, a nursing home or an ALF. Routine care comprises the bulk of hospice patient days. Continuous care is also provided in the patient's home. Unlike routine home care, continuous care is nursing assistance at a time of crisis for the patient. Typically, it is for control of acute care pain or symptom management on a short-term basis. Continuous care is usually intermittent. The use of the term "continuous" as a descriptive adjective to describe this type of hospice care, therefore, makes "continuous care" a misnomer. Continuous care requires a minimum of 8 hours of one-on-one care in a 24-hour period with at least 50% of the care provided by a nurse. The other half of the care may be provided by personal care assistants or nurses' aids. General inpatient care or GIP refers to the care a hospice patient receives in an inpatient setting such as a hospital, a Medicare-certified nursing home or in a freestanding hospice unit. This type of care involves increased nursing and physician care for patients with symptoms temporarily out of control and in need of round- the-clock nursing to manage complications. The least used level of hospice care, respite care is provided to patients in an institutional setting such as a nursing home, ALF or freestanding hospice unit in order to allow care givers at home, such as family members, a short break or "respite" from the demands of caring for a terminally ill patient. Penetration Rates An objective measure of accessibility of a hospice program is the penetration rate ("P-rate") in the hospice's service area. P-rate is the ratio of hospice admissions to total deaths in a service area. It is a basis for planning for hospice programs in the state of Florida. Hope touts its P-rate in Service Area 8C as a basis for its superiority over VITAS. Its P-rate in Service Area 8C has always exceeded the state-wide average. For the June 2006 reporting period, its P-rate was 62% when the statewide average was 56%. Hope has continually increased its P-rate at a rate higher than the rate of increase of the statewide average. The Fixed Need Pool and the SAAR On October 6, 2006, AHCA published a fixed need pool for one new hospice program in Service Area 8A for the second batching cycle of 2006. On October 27, 2006, HON filed a challenge to the fixed need pool. The challenge was denied by final order. HON appealed. The appeal was dismissed. In the meantime, five hospice organizations submitted letters of intent and CON applications for a new hospice in Service Area 8A: VITAS, Hope, HCR Manor Care Services of Florida (HCR), Evercare Hospice of Collier County (Evercare), and Odyssey Healthcare of Collier County, Inc. AHCA issued its State Agency Action Report (SAAR) on February 23, 2007. The SAAR approved VITAS' application and denied the others. Notice of AHCA's decision was published in the March 9, 2007, edition of the Florida Administrative Weekly. Between March 12, 2007 and March 29, 2007, HON and three of the denied applicants (Hope, Odyssey, and HCR) filed petitions challenging the approval of VITAS' application. The petitions of Hope, Odyssey, and HCR also challenged the denials of their respective applications. Evercare did not challenge any of the Agency's decision. On March 23, 2007, VITAS filed a petition supporting the decisions of the Agency and requesting comparative review of its application with the applications of the other applicants that had challenged AHCA's decision. In their applications, VITAS and Hope aspire to meet the need published for a single new hospice in Service Area 8A. They also contend in their applications that "special circumstances" demonstrate need for an additional hospice program in Collier County. The need formula in Florida Administrative Code Rule 59C-1.0355 (the "Hospice Programs Rule"), produces a fixed need pool for "1" or "0." The Agency's position is that the formula can never generate a fixed need pool in excess of 1. See Fla. Admin. Code R. 59C-1.0355(4)(a): Numeric Need for a New Hospice Program. Numeric need for an additional hospice program is demonstrated if the projected number of unserved patients who would elect a hospice program is 350 or greater. The net need for a new hospice program in a service area is calculated as follows . . . . (Emphasis supplied). The existence of a fixed need pool of "1," alone, does not prove there are gaps in service if there is an existing hospice provider in the service area. HON's expert, Mr. Davidson elaborated on this point at hearing: The purpose of the rule is not to identify service areas where existing providers are not getting the job done now . . . it's a temptation to interpret a fixed-need pool that way but it's an incorrect temptation. [T]he rule . . . identifies service areas where the growth in hospice admissions is projected to be sufficiently large to enable a new program to be approved without digging into the level of service of the existing provider. Tr. 3708-3709. In this case, the fixed need pool of 1 was attributable more to projection of service area deaths than the use of penetration values used in the formula for calculating fixed need. When a fixed need pool of "1" has been published, and an applicant responds to the numeric need and also alleges that special circumstances exist to justify approval of a new hospice, the Agency views the special circumstance allegation, even if proved, to be a potential preference for the applicant in the context of comparative review. The existence of a special circumstance is not a basis for the approval of more than one applicant in a batching cycle. The Hospice Programs Rule is interpreted by AHCA to permit the approval of only one hospice program in any one batching cycle. This interpretation stands so that only the superior application may be approved even in cases where: a.) there are two hospice organizations qualified to meet numeric need and b.) coincidentally there are special circumstances that would otherwise justify the inferior application's approval. Adverse Impact to HON if Two Programs Approved If the applications of both VITAS and Hope were to be simultaneously approved, HON would experience a significant reduction in average daily census (ADC). By 2009, it is reasonably projected that its census would be reduced to 180 patients, a decrease from 2007 of about 61 patients in the second year of operation for the two new programs. Net income (including donations) for HON in the second year of operation for two new programs, if ADC were decreased by 61 patients, would likely be reduced by approximately $1.2 million. Historically, HON has a net operating loss before contributions ranging from $1.5 million to $4.5 million. The likely reduction in net income would be significant. Reduction in HON's programs would be necessary to make up for the lost revenue. A number of community programs would have to be eliminated. Core and non-core services would have to be reduced. It is possible that there would an indirect adverse impact to HON as well: a breach of trust perceived by the community and donors when community services which have come to be expected are reduced or withdrawn. Service Area 8B: Collier County Service Area 8B, located in Southwest Florida along the coast of the Gulf of Mexico, consists of one county. Collier County is relatively large in area. Its population of around 360,000 is most dense along the coast in the county's westerly parts. Service Area 8A borders Service Area 8C to the north and Service Area 10 and 11. The more populated communities in Collier County are more congruent with communities in adjacent Service Area 8C, where Hope operates. Service Areas 10 and 11, where VITAS operates, on the other hand, are separated from the densely populated areas of Collier County by wide expanses of relatively unpopulated borderlands. Service Areas 8A and 8C have some similar demographics. For example, both are less densely populated than the state as a whole. Both service areas are growing at a rate that is faster than the rate of growth of the state as a whole. The percentage of the two service areas in the 65+ age cohort is the same and is higher than the statewide average for that age cohort. The two have a similarity in the percentage of Hispanic population. The median household net worth in both service areas is higher than the statewide average, considerably so in the case of Collier County. The two service areas have similar mortality rates and a similar array of causes of death for their residents. Proximity of Hope to Collier County Health Care Facilities Collier County has four hospitals, two within each local health care system. NCH Health System (NCH) operates Naples Community Hospital and, less than 10 miles from the Lee County line, North Naples Hospital. Health Management Associates (HMA) operates Physicians' Regional Hospital at Pine Ridge Road and at Collier Boulevard. The two NCH hospitals have 681 beds, while the HMA hospitals have approximately 180 beds. Collier County has many skilled nursing facilities. Collier County hospitals serve some residents of Service Area 8C. The import of the proximity of Hope's current operations in Lee County and Service Area 8C to Service Area 8A was summed up at hearing by Hope's expert planner, Jay Cushman: Because of Hope's proximity to the proposed service area, it has relationships that already exist between important providers of health services in service area 8B including hospitals. From time to time, residents of Hope's service area are hospitalized in Collier County, and Hope's staff visits them if they are going to be referred back to Lee County or other counties in service area 8C as hospice patients. Hope Hospice also operates a long-term care diversion program ["LTCD Program"] which includes services to residents of Collier County. So Hope Hospice is already engaged in providing social and health services to service area 8B in a way that puts them in a natural position to identify patients who are in need of hospice care and to see that their admission to hospice care is accessible and a matter of continuity of care between their participation in the [LTCD Program] and potential admission to hospice. Tr. 2899-2900. Furthermore, of Collier County residents requiring hospitalization, six percent are admitted to hospitals in Lee County. In contrast, the relationship between Collier County residents and admissions to Miami- Dade or Broward County hospitals is insignificant. Having a presence in an adjacent service area does not guarantee success for Hope. When Hope sought to expand to Service Area 6B (Polk, Highland, and Hardee Counties), it made arguments of "contiguous" communities and "established referral networks." Yet, Hope only achieved approximately one-third of its projected first year admissions in Service Area 6B. If Hope is approved as a result of this proceeding and Hope continues its management of the LTCD program in Collier, moreover, it is likely to have an adverse impact on HON with regard to certain referrals. If VITAS is approved, the potential for a hospice operated LTCD program to facilitate referral advantages will not exist. VITAS will not start an LTCD program if its application is approved. The differing impact that co-batched applicants might have on an existing provider is considered by AHCA to be relevant to comparative review. COMPARATIVE REVIEW Relative Impact on HON; Donations Unlike VITAS, which has an affiliated foundation that accepts memorials, bequests and unsolicited donations, Hope and HON actively solicit and depend on donations to cover operating losses annually. HON's only source of revenues are Medicare, Medicaid, and Insurance (combined 82%); Contributions and fundraising (16%); and thrift shop revenue (2%). From 2002-2006 inclusive, HON lost between $1.5 million and $4.5 million on operations, before contributions were considered. Contributions over the same period ranged from $1.5 million to $4.4 million. HON relies heavily on contributions to make up annual shortfalls in revenue and to allow it to continue providing a wide array of core, non-core and community services beyond what reimbursement covers. HON's operational expenses annually exceed revenue, because of HON expenses incurred to ensure quality and accessible care. For example, HON employs highly trained clinicians and deploys them on specialty teams. In addition to its regular home care teams, HON has a Float Team, to ensure there are no service gaps. It also has a Central Facilities Team, comprised of RNs and Aides, experienced with the unique needs of nursing home based hospice patients who exclusively serve HON's patients in nursing homes and assisted living facilities. It also has an On-Call/After Hours Team, a special Weekend Home Care Team, an Admissions and Intake Team, and complementary therapies. Besides the RNs assigned to direct patient care, HON also employs RNs for all key managerial positions. At HON the CEO, Director of Compliance, Clinical Services Directory, Quality Manager, Clinical Education Director, General Inpatient Care (GIP) Clinical Manager and all team managers are all experienced RNs. This depth in personnel allows more clinicians to spend more time with patients and families and to deliver high quality specialized care. It is expensive. It involves hiring and retaining the most experienced, specialized and certified clinicians available. HON has one of the lowest nurse to patient ratios in Collier County: 1 nurse to every 11 patients in home care and 1 nurse to every 4 patients in GIP. These lower ratios mean more care at the bedside and more support for the patient and family. HON uses certified home health aides and nurses assistants rather than homemakers to perform homemaker services for patients. HON has placed certified RNs in all of its key management and care giver positions, with high concentrations of certified RNs on the specialty teams. The certification of hospice and palliative care nurses and home health aides signifies the highest level of competency and specialization in the end of life clinical care. Charitable contributions received by HON, to offset operational losses are broadly categorized as "solicited" and "unsolicited." Solicited funds are monies that HON raises through newsletters, direct solicitation, special events, and individual and corporate underwriting. Unsolicited money comes from memorial gifts and bequests, primarily from patients and patient families. Although Naples may be the one of the wealthiest communities in Florida in terms of disposable wealth, it does not mean there is an inexhaustible pool of money for charitable contributions. The window of opportunity to sponsor a well attended charitable fundraising event in Collier County is January through April. A Naples Charity Register is published annually, to confirm for the donors and event sponsors how the limited space on the calendar of charitable events has been allocated. Each year, there are over 300 not-for-profit organizations in Collier County competing for a weekend, between January and April, to schedule their fundraiser. Solicited funds received from special events are the result of relationship HON nurtures with other organizations in the community. Special event funding is not limited to HON; the market for fundraising in Collier County is highly competitive. Each new fundraising season requires that HON renew relationships, which can be preempted at any time by another charity. HON's historical relationships simply do not guarantee that a community organization will in the future choose to give charitable dollars to HON. HON's ability to maintain these relationships with donors is enhanced by the fact that it is currently the only not-for-profit hospice in Collier County. Like HON, Hope is also heavily dependent on donations and charitable contributions to cover Hope's annual operating losses, which historically range from $1 million to $5.1 million annually. As in the case of HON, Hope is a 501(c)(3) charitable organization, authorized to solicit donations from the general public and to provide receipts for those donations, so that donors can take tax deductions for their donations. The amount of contributions Hope solicits is impressive. In 2006, when all contributions and net assets released from restrictions/satisfaction of donor requirements were considered, Hope raised $4.3 million in charitable contributions. Hope is more successful than the average hospice at raising charitable donations for its hospice program. It has a track record of being committed to raising substantial amounts of money in its own service area through special events. Hope solicits its larger donations from the same sort of activities (tennis and golf charity events) as does HON. Hope's enthusiasm for special event soliciting is exemplified by Hope's decision to include a notice of the "Hope Gala" in the 2006-2007 Naples Charity Register, to directly solicit funds from the Naples area in which Hope is not licensed as a hospice, to fund a Hospice House that Hope had already built in its own service area. It is reasonable to expect that if awarded a CON, Hope would solicit contributions by sponsoring special events in Collier that would directly compete with HON for a seasonally limited pool of solicited special event and corporate donations. It is also reasonable to expect that corporate and individual donors with a history of giving to HON would instead split hospice donations between Hope and HON. In CY/FY 2006, 71% of the charitable contributions received by HON were from solicited sources. Solicited sources can be divided into three broad categories. Special events accounted for 18% of charitable contributions, solicited corporate underwriting 19%, and direct mail and newsletters 34%. Unsolicited bequests and memorials accounted for the remaining 29% of charitable contributions. Solicited contributions from special events and corporate donations exceeded $750,000. If Hope is awarded a CON, HON's fundraising expert project Hope will reduce solicited donations from special events and corporations, which HON would have otherwise received, by at least one half the first year and potentially more than one half in successive years. While the projection may overstate the immediate reduction in HON's share of solicited donations, it is reasonable to project that HON's share of all solicited donations will be reduced roughly by half at some point not long after Hope received a CON were it to do so. It is logical also to conclude that Hope would compete for and reduce HON's receipts from direct mail and newsletter solicitations. VITAS is a for-profit corporation. It is not likely to compete with Hospice of Naples for charitable contributions from the community. Nor does VITAS' charitable Foundation receive contributions on the scale of Hope. VITAS raises approximately $1 to 1.5 million per year nationwide from its hospice programs, most of which is the result of memorial gifts, rather than community fundraising. It is virtually certain that VITAS' entry into the community will have minimal impact on HON's fundraising efforts. VITAS has committed to working collaboratively with HON to limit the impact VITAS would have on HON's donations. VITAS has agreed, as a condition subsequent to approval of its CON, to provide HON's charitable donation solicitation materials and brochures to VITAS patients and families. VITAS' charitable foundation primarily helps fund and support end of life research, such as the Duke Institute for End-of-Life Care, which benefits all hospices. It is reasonable to expect that if VITAS was awarded a CON, HON would continue to receive much needed solicited donations from direct mail, newsletters, corporations, and special events, in an amount approximating HON's historical solicitations. In sum, an approved VITAS program will have significantly less adverse impact on donations to HON than will an approved Hope program. VITAS' offer to accept as a condition on its CON a requirement that VITAS make HON donation solicitation literature available to VITAS' patients is significant. It confirms a collaborative approach to informing the community. It also gives potential donors a choice: donate to a hospice that uses its donated dollars locally or to one that funds end of life care research and improvement. Different Models of Care VITAS offers a model of care different than that provided by HON or that would be provided in Collier County by Hope. The difference flows from the nature of VITAS' organization as a business. It is a wholly-owned subsidiary of a large, for-profit corporation with national resources, VITAS Healthcare Corporation. VITAS Healthcare Corporation, in turn, is a wholly-owned subsidiary of Chem-Ed, a for-profit corporation that is publicly traded and that engages in business unrelated to hospice with nation-wide scope. Chem-Ed, operates under a business model that seeks to maximize shareholder value and returns. Publicly traded companies often make strategic decisions based upon the stock's performance rather than the business' viability or services provided. Chem-Ed provides its executives at VITAS with performance-based compensation incentives that reward them with bonuses premised upon performance. Chem-Ed monitors the financial performance of its hospice programs with respect to the Medicare spending limit (the "Medicare Cap"). The Medicare Cap is a limit on the total annual payments Medicare makes to a hospice based on the number of first time hospice beneficiaries served by the hospice. The Medicare Cap is intended to ensure that Medicare does not spend more for hospice patients, on average, than for conventional medical care patients at the end-of-life. From Chem-Ed's perspective, hospice programs that operate just below or just above the Medicare Cap optimize profitability. A Medicare provider that exceeds its Medicare Cap must pay back to the government the money it was paid by the government above the cap. In the event that VITAS Healthcare determines that one of its subsidiary programs is going to exceed its cap, there is incentive, especially under a business model of delivering hospice care, to take corrective action. Corrective action could be directed at patient mix and patient admissions. This potential was described at hearing by Hope's expert health planner as: [M]anaging patient mix and admissions from the highest levels of the company for a local program in order to protect the bottom line. And this is without regard . . . to whether or not the needs of the community are being met; whether or not changing the patient mix would enhance or deny access to groups of patients; whether the admission discharge rate and length of stay are appropriate or not. It's all regard to whether the [hospice] program is exposing the [parent] company to a financial risk. Tr. 3034. The business organization context within which VITAS Healthcare operates will provide VITAS with the benefits of economies of scale in a number of its activities. In stark contrast, HON and Hope are two local, not-for-profit, community-based hospice providers. Hope employs a model of care called the Open Access Model because it emphasizes the elimination of barriers to access to hospice care. These barriers may include costliness and the difficulty posed for a patient having to choose between parenteral nutrition and hospice care as described in Hope Ex. 27. The exhibit is an article described by Mr. Cushman as: [S]uggest[ing] that the financial exposure that a hospice assumes when it adopts an open access model of care may be too great to bear for hospice programs that are less than an average daily census of 200. [The article] also discusses some of the issues facing patient and physician who want to refer patients to hospice, as they transition between curative and palliative care, and how open access programs, by providing an easier transition . . . assume a greater cost . . . provide more access to hospice services and lengthen the hospice stay. Tr. 3005-3006. Other barriers include a primary language of the patient other than English, cultural traditions, remote location of the patient's home, lack of access to basic social and health services, lack of information about hospice care, and the reluctance of the attending physician to deal with end-of-life issues. An example of Hope's use of the Open Access Model is its willingness to pay for necessary palliative chemotherapy and radiation therapy when there are no other resources available to a hospice patient to cover such care. Hope's related social and health services such as the Long Term Care Diversion Program enhance access to hospice services in Hope's service area. Employment of the model is reflected in Hope's higher than average hospice penetration rates for Service Area 8C. There are other differences between the approaches to hospice care taken by VITAS and Hope. For example, Hope favors Freestanding Hospice Houses for inpatient care whereas VITAS favors Hospital Dedicated Inpatient Units. Freestanding Hospice Houses vs. Hospital Dedicated Inpatient Units Both freestanding hospice houses and hospital dedicated inpatient units have advantages and disadvantages. See VITAS Ex. 57, Ch. 2, p. 35. VITAS sees Hospital Dedicated Inpatient Units as superior particularly from the viewpoint of doctors and ancillary services. VITAS frequently contracts for dedicated hospital inpatient units. It has never built a freestanding hospice house and does not intend to build one in Collier County. VITAS proposes, instead, to begin providing care in scatter beds in hospitals and then would seek to establish dedicated units when the census justified it. Two Collier County hospitals have indicated intention to enter contracts with VITAS if its application is approved. Naples Community Hospital has done the same. Hope prefers freestanding hospice houses because with a homelike environment they provide a secure and comfortable place for those who prefer not to die at home or who may not have a caregiver at home. Furthermore, consistent with the nature of Hope as a community-based hospice, freestanding hospice houses provide community identity and visibility. Hope operates three freestanding hospice houses to provide GIP and residential hospice services. They are HealthPark (16 GIP beds), Cape Coral (24 GIP beds and 12 residential beds) and Joanne's House/Bonita Springs (16 GIP and 8 residential beds). They are staffed by on-site nurses social workers, aides, therapists, and physicians. Medications and other supplies are available on site. Hospice houses are Hope's primary mechanism for providing inpatient care but it also provides GIP services in a dedicated unit at Shell Point, a SNF/CCRC located in Lee County. Hope developed the polices and procedures in place in the unit and is responsible for managing patient care. The unit is jointly staffed by Hope and Shell Point employees with Shell Point providing the routine nursing care. Even though the unit is dedicated for use by Hope, Hope pays a per diem only for the beds actually occupied by its hospice patients. No costs were incurred by Hope to renovate the space for use as a hospice unit. Hope also provides GIP through a "scatter bed" arrangement with other nursing homes and hospitals within Service Areas 8C and 6B. Hope staff provide daily visits to Hope patients in the hospital setting and regular visits in the nursing homes. Hope staff attend team meetings in nursing homes and ALFs for purposes of reviewing care plans and participating in joint care planning with facility staff. Hope staff also regularly meet with the facility administrators and nurses to obtain feedback on the quality of services provided by Hope. For Collier County, Hope's CON application proposed a mixture of scatter beds in hospitals and nursing homes and to use Joanne's house in Bonita Springs. Just as VITAS intends to resort to its primary mechanism for the delivery of inpatient services once its census in Collier County justifies it, Hope intends to build a freestanding hospice house in Collier County when its census reaches 100 patients. It projects that it will reach such a census in Year 4 of operation. HON operates a freestanding hospice house in Collier County. While it has some scatter beds, most of HON's inpatient care is provided in its hospice house. Hope, in its current operations, builds and utilizes hospice houses as its main mechanism for providing inpatient service. VITAS does not. VITAS provides inpatient service in dedicated units in hospitals. The criteria for a patient to receive GIP are substantially the same as the criteria for continuous care: emergency care or control of acute pain or symptom management. The big difference between the two is where GIP is provided. Inpatient care, for the most part, is provided by VITAS in the hospital. The patient's home is generally the site of where the hospice patient receives continuous care. Aside from the different models of care and approaches to GIP care, there are other differences between Hope and Vitas. VITAS CON Conditions In its application, VITAS offered to condition its CON in the following ways: Conditions of the Application Core Services Provide palliative radiation, chemotherapy and transfusions as appropriate for treating symptoms: It is VITAS Healthcare Corporation's position that these services are a core service as appropriately provided palliative care is a requirement of Medicare conditions of participation. This will be measured via a signed declaratory statement by VHCF which may be supported via review of patient medical records. Provision of hospice services 24 hours a day, seven days a week as indicated by the patient's medical condition: It is VHCF's position this is a requirement of Medicare conditions of participation. This will be measured by VHCF's continued Medicare certification. VHCF will admit all eligible patients without regard to their ability to pay: It is VHCF's position this is a requirement of Medicare conditions of participation. This will be measured by VHCF's continued Medicare certification. Non-Core Services Commit to having every patient being assessed by a physician upon admission to the hospice: This will be measured via a signed declaratory statement by VHCF which may be supported via review of patient medical records. A physician will serve as a member on every care team and provide patient visits as required: This will be measured via a signed declaratory statement by VHCF which may be supported via review of patient medical records. On the first day of hospice care responsive patients will be asked to rate their pain on the 1-10 World Health Organization pain scale (severe pain to worst pain imaginable). A pain history will be created for each patient. These measures will be recorded in Vx via a telephone call using the telephone keypad for data entry. These outcome measures will include greater than 60 percent of patients who report severe pain on a 7-10 scale will report a reduction to 5 or less within 48 hours. Implement a Pet Therapy program to begin immediately: This will be measured via a signed declaratory statement by VHCF. Operational/Programmatic Conditions Establish satellite hospice offices in Immokalee and Marco Island during the first year of operation: This will be measured via submission of the office address and location to AHCA and publication of such addresses in the provider's collateral material. Implement a TeleCare Program to begin immediately: This will be measured via publication of the relevant collateral materials for the provider and patient community. Establish a Local Ethics Committee to begin upon certification: This will be measured via publication of the names and relevant information of the Ethics Committee members and the related scheduled of meetings. Implementation of CarePlanIT, a handheld bedside clinical information system, by the end second year of operation: This is measured by identification of the CarePlanIT budget on Schedule 2 of this application and will be measured at the time of implementation via a signed declaratory statement by VHCF. See VITAS Ex. 1, Tab 5, Summary of Conditions attached to Schedule C of CON 9969. In its PRO, the Agency lists five other conditions1 provided by VITAS: Offer VHCF educational programs to Hospice of Naples staff, physicians and patients. Provide Hospice of Naples Foundation information to VHCF patients and their families seeking to donate funds to hospice services. Upon certification of VHCF Collier, its parent entity - VITAS Healthcare Corporation - will make a $20,000 charitable contribution to Hospice of Naples. 65% Non-Cancer patients. Establish a Clinical Pastoral Education program to begin immediately. Core services are required to be offered by hospice programs. The three conditions in VITAS' application related to "Core Services," therefore, cover services that are not typically subject to conditions since they must be provided whether the application is conditioned upon them or not. The advantage to making them subject to a condition, however, is that the CON holder can be fined for not meeting the condition. The Agency approved the VITAS application and denied the others because in its estimation the VITAS application was clearly superior. See VITAS Ex. 274, Deposition of Jeffrey Gregg, at 16. The decision was described as an "easy call," id., at 17 because no other applicant proposed conditions that were close to the significance of the conditions proposed by VITAS. In its PRO, the Agency continues to maintain that the VITAS' conditions are far superior to those offered by Hope: Hope's conditions, by contrast [to those offered by VITAS], were less impressive: Hope Hospice will open an office in Naples and an office in Immokalee during the first year of operation. Hope Hospice will conduct education and outreach programs in Collier County aimed at enhancing access to the population under 65 and to cancer patients who require palliative therapies. Hope Hospice will implement an emergency preparedness plan capable of maintaining the hospice admissions function during hurricane emergencies. To show conformance with the condition related to office locations, Hope Hospice will forward to the Agency copies of the business licenses and/or certificates of occupancy that who that Hope Hospice has occupied office space in Naples and in Immokalee in Service Area 8B during the first year of operation. Hope Hospice will also forward to the Agency copies of educational and outreach programs and attendance sheets that document efforts to enhance access to the population under 65 and to cancer patients who require palliative therapies. Hope Hospice will also forward to the Agency copies of its emergency preparedness plan for Service Area 8B. Recommended Order Proposed by the Agency for Health Care Administration, at 8, paragraph 26. Experienced Staff/Industry Leaders Many VITAS employees have 15-20 years of hospice experience, including employees in positions of leadership. VITAS' management team consists of recognized leaders in the hospice industry. Its founders were founding members of the National Hospice and Palliative Care Organization (NHPCO). VITAS has maintained an active leadership within the organization. VITAS' employees serve on a number of significant NHPCO committees. They have actively participated in shaping NHPCO's guidelines on a multitude of topics and are frequent lecturers at NHPCO conferences. The size of VITAS allows it to attract and recruit high caliber physicians, RNs, social workers and chaplains. Ability to grow within the company allows VITAS to retain its best employees. Extensive Education and Training Resources VITAS' economies of scale have allowed it to amass extensive hospice internal and external education materials. VITAS has developed unique training materials for staff. It has also developed specific physician and easy to understand community educational materials for patients and families. Many educational materials are translated into other languages including Spanish. All of VITAS materials are easily accessible on VITAS Intranet Service. VITAS, because of size, is able to dedicate significantly more resources to staff education and training than most hospices. VITAS has a significant distance learning program, as well as ongoing dedicated corporate personnel that visit local programs for training. It also maintains teaching affiliates with universities and community colleges for residency and fellowship training of RNs, physicians, and other healthcare professions. Among its training and education efforts is the coordination of specialized training. For example, Dr. Kinzbrunner has dedicated substantial time to writing the Jewish Hospice Manual and traveling to various programs to help educate them to become certified by the National Institute for Jewish Hospices. Similarly, Colonel Jaracz's full-time responsibility is to formulate VITAS' Choices for Veterans initiatives and visit local programs to ensure they are carrying out these initiatives. VITAS places a great deal of emphasis on educational materials for the patient and family. Hope has a different philosophy, at least at the time of admission. On some occasions Hope might provide brochures related to specific therapies if the patient will be receiving them at home. Usually, however, Hope limits the educational materials it provides at admission to a single brochure about Hope Hospice in general. As Toni Granchi, Professional Relations Coordinator for Hope Hospice, explained in her deposition: "I don't want to inundate them with a bunch of brochures . . . . I don't want to give them everything on the first visit. It's very overwhelming." Hope Ex. 152, at 9-10. In contrast to Hope's approach at the difficult moment of admission to hospice, VITAS sees "reinvesting in the materials that will improve [VITAS'] care and educate the family [as] critical." Tr. 116. Whichever approach is superior, the extent of VITAS' educational materials that would be available in Service Area 8 if VITAS is approved will add a new dimension to hospice education in Collier County. Dedicated New Start Team VITAS has had a dedicated start up team since 2002. This group is headed by Executive Vice President Deirdre Law, an RN with more than 20 years of hospice experience. The team includes several RNs with extensive hospice experience. They train clinical managers, ride with new hire nurses and provide patient care until the new nurses demonstrate competency. An example of the work of the VITAS start up team was offered at hearing by Kathy Laporte, VITAS' Senior General Manager for the Brevard and Volusia County programs. When VITAS' program started in Brevard County, a patient care administrator helped Ms. Laporte learn VITAS' policies, procedures and support tools. Support was offered to the business manager and in managing continuous care. The start-up team stayed with the Brevard Program until the program could be sustained without them, for "about a year." Tr. 1224. The success of the VITAS start- up team is demonstrated by VITAS' growth in five years to become the largest provider in the Brevard market despite competition from three exiting providers, two affiliated with hospitals. In addition to the full-time dedicated start-up team, VITAS uses specialized personnel who are active in new start programs. Among them are Sarah McKinnon who provides start-up services in general staff education, Dr. Kinzbrunner in Jewish hospice training and certification and medical directorship, Colonel Jaracz in Veteran training and outreach, Robin Fiorelli in bereavement and volunteer services and Mike Hansen in IT services. VITAS start up teams and specialized start-up services have had significant new start experience in opening hospices in a number of competitive environments. It has opened 20 programs in the last five years, three in Florida. VITAS has never had a start-up program fail. As a community-based hospice much smaller relative to VITAS, Hope has not had start-up experience comparable to that of VITAS. Its one new start is in Service Area 6B. In its CON application, Hope had projected 321 admissions in Year 1. In its first year of operation, Hope achieved 92 admissions. Service Area 6B is Hope's only experience in a competitive market because it is the only provider of hospice services in Service Area 6C. Advanced Information Technology Because of the strength of its financial resources, VITAS has been able to invest $10 million into its customer computer system called Vx or "VITAS Exchange." The system allows it to perform patient analysis and research studies that improve hospice care. After testing in the Fall of 2007, VITAS will begin to roll out VxNext to make Vx more user friendly allow the gathering of more detailed patient information. A technology refresher to Vx, VxNext requires an investment of $13 million. The latest VITAS Information Technology (IT) project is CarePlanIT, a customized care planning system and electronic medical record. Currently 14 hospice programs, about one in three VITAS programs, are operational on CarePlanIT. The rollout of CarePlanIT has been going on for about three years. Increase in the percentage of VITAS hospice programs over those years has been slowed by the addition of so many new VITAS programs in the past five years. VITAS reasonably conditioned its CON on having CarePlanIT operational in Collier County by Year 2. Hope uses an "off-the-shelf" system, Misys, for its medical records. Unlike CarePlanIT customized for VITAS, Misys was not customized for Hope; nor is it specifically designed for hospice. Put simply, Hope's system is not "leading edge" information technology like CarePlanIT. Customized, leading edge, information technology is too expensive for Hope, as one would expect for a community-based hospice. Telecare VITAS' Telecare system is a centralized call center that answers the telephone calls for VITAS' programs after hours. There are several advantages to Telecare. Clinicians are available to answer questions immediately. The system uses defined criteria to determine if an after hours visit should be made. It divides responsibility between the decision-maker as to whether an after hours visit is needed and the RN who actually makes the visit. This division is advantageous because after hours care occurs at a time that is regarded by many as inconvenient. When the decision is made to undertake a visit, the local on-call RN is dispatched immediately. Many of VITAS' clinicians at the call center are fluent in Spanish and other languages minimizing the barrier that language can be at a moment of stress. Disaster Capability VITAS' IT systems have built-in redundancy. The main site is in a bunker in Miami above the 100 year floodplain in a facility that had been an AT&T switching center. The walls are three feet thick concrete. In addition, VITAS is running concurrent dual systems in Chicago and has 100% redundancy for all systems in a bunker in Phoenix, Arizona. The Miami site has generator capacity to run for two weeks without power but could be switched to Phoenix with little to no down time in the event of a disaster. VITAS' size gives it the advantage of the ability to bring in clinical personnel from other parts of the country should there be a disaster that displaces some staff. Outreach Programs There are no existing hospice outreach programs for the Jewish population in Collier County, but the special needs of Collier County Jewish hospice patients are being served by HON. Dr. Kinzbrunner championed the Jewish hospice initiative for VITAS. At hearing, he offered reasons why some Jewish people might be less likely to utilize hospice service than non-Jewish people. Through its educational and training programs, VITAS teaches staff to be sensitive to Jewish cultural and religious issues including understanding specific Jewish customs and traditions. VITAS also makes an effort to reach the Hispanic populations in the areas it serves. It has a significant number of Spanish speaking staff. Its experience in South Florida and Texas consists of work with highly concentrated Hispanic populations. Furthermore, VITAS offers all of its standard hospice forms and much of its educational materials in Spanish. The African American population in Collier County is not as high as other parts of the state; it constitutes 20,000, just less than 7% of the population. VITAS' efforts to educate and reach into minority communities is significant. Its staff is recognized in the industry as providing substantial resources to increase minority access to hospice. Collier County has a significant population of Veterans. The Department of Veteran Affairs has determined that in recent years the number of Veterans' deaths in the county has been approximately 1550 annually. Veterans have special needs at the end of life. These include unique psychosocial needs related to military service, retrieval and obtaining military awards and medals and coordination of military benefits to which patients and families may be entitled. VITAS has a well-developed, detailed program targeted to meet the special needs of veterans. Hope makes an effort to recognize and serve the special needs of Veterans as well. Its psychosocial staff must participate in a special training program designed to educate the staff on the needs of Veterans. Its "Wounded Warrior" program sensitizes Hope staff to the special needs of combat veterans as opposed to those who did not experience combat, the psychosocial needs of veterans of different wars, the special needs of women veterans and special needs of veterans suffering from post-traumatic stress disorder. Hope staff and volunteers, many of them veterans themselves, are trained to build a rapport with Veterans and to help them deal with guilt, anger and anxiety when associated with the Veteran patient's service. Hope regularly reaches out to the Veteran population through local veterans organizations such as the Veterans of Foreign Wars. The special needs of its patients who are Veterans are provided for in a number of other ways as well by Hope. HOPE Required Services Hope provides all of the required Medicare core services directly through its employees, including physicians. It also provides all of the required Medicare non-core services. Unlike some hospices, Hope provides home health aide services and homemaker services directly through its employees in order to better assist its patients and their families. Complementary Therapies Hope offers complementary therapies that enhance the quality of care and the quality of life for hospice patients. Hope offers music therapy through its six licensed music therapists. Other complementary therapies offered by Hope are art therapy, pet therapy and aromatherapy. Hope also offers massage therapy as part of its holistic approach to the care of its patients. Massage therapy can reduce the amount of pain medication that a patient requires and can help alleviate other symptoms as well. Non-required Services In addition to the required core and non-core services, Hope provides non-required services to its patients. They include residential care, a caregiver program for patients who do not have a caregiver at home or whose caregiver at home is not able to provide necessary home care services, and grief services beyond the scope of hospice bereavement services. Other non-required services offered by Hope include the "Dream a Dream" Program. Through this program, Hope patients with a final wish are assisted in making it a reality. Examples include fishing in a private fishing pond, providing plane tickets for far away loved ones to visit the hospice patient, and holding a wedding in the hospice house chapel to enable the Hope patient to attend. Hope has also provided funds for home improvements to make a patient's home more comfortable, providing memorial services conducted by a Hope chaplain at a Hope chapel free of charge to the family of a Hope patient. Hope exceeds the Medicare COP requirement that volunteers provide 5% of patient care. It has done so through special volunteer programs that include "vigil volunteers" sitting at the bedside of the patient, "video volunteers" who make video and audio remembrances for the family and "personal treasure volunteers" who make keepsake items for the family from an article of the patients clothing. Hope offers classes in Continuing Education (CEUs) to all nurses and social workers in the community. It has conducted workshops on coping with grief and loss during the holidays and presentations by Rabbi Kushner on loss and issues related to death and dying. Since 1990 Hope has offered an annual bereavement camp for children aged 6 to 16. The weekend camp is attended by about 70 children from across southwest Florida. Hope sponsors numerous programs designed to educate the physician community about hospice and special programs to help the community deal with specific tragedies or life events. These have included programs for families of service men and women deployed to the Middle East, a 9/11 support group and programs for persons dealing with stress and loss caused by hurricanes. Community Services and Programs Hope provides other community services not required for Medicare certification that are also not provided by HON or VITAS. Hope Life Care is a long term care diversion Medicaid-waiver program Hope provides together with AHCA and the Florida Department of Elder Affairs. PACC is a program for all-inclusive care for children who have a life-limiting illness but may not be eligible yet for hospice. Located in central Lee County, the HOPE Adult Day Health Center is available for elders who cannot be at home by themselves during the day and require a setting with limited supervision. Funded through the Area Agency on Aging, HOPE Connections is a continuing care for the elderly program designed to help frail elderly continue to live in their homes and avoid being admitted to a nursing home or hospital. These community-based non-hospice programs are consistent with Hope's mission of assisting all in need, especially the frail and the elderly who may not qualify for hospice services, across different levels of care that best meet their needs. They also enhance continuity of care for the those who ultimately qualify for hospice care and receive it from Hope. Hope's Clinical Services Hope has received numerous awards in recognition of the excellent quality of care it provides. There are other outward signs of the excellence of its quality of care. For example, it completed its most recent Medicare/Medicaid certification survey with no deficiencies. Hope is accredited by the Community Health Accreditation Program (CHAP) although not by JCAHO. CMS relies upon CHAP certification for participation in Medicare and Medicaid programs. Hope chose to seek accreditation through CHAP rather than JCAHO because of its view that CHAP's accreditation process is more stringent and comprehensive. Hope exceeds the voluntary standards established by NHPCO. It is also a participant in the NHPCO Quality Initiative, which requires a self-assessment as well as other activities related to quality assurance. Hope places emphasis on an individualized approach to every patient and family members over making printed materials available. Hope staff spends time with patients and family in order to establish an individualized plan of care. Hope's Admission Process Hope's Care Resources Department has a staff of 16 who handle the intake of patient referrals to hospice. The Department handles initial inquiries and coordinates the collection of medical records and the physician's order that certifies the patient's condition as terminal. This admission process ensures that the patient meets Medicare eligibility guidelines. All calls pertaining to patient referrals are taken by Hope immediately. Staff typically responds to a referral within 24 hours of request for services. After normal working hours and on weekends and holidays, the After Hours Triage Staff of local registered nurses responds to a referral as well as answering questions of families and dispatching staff, including on-call physicians, as needed. The referred patient is assigned to an inter- disciplinary care team (the "IDT Team") that will provide care for the admission visits, development of the patient's plan of care, and care thereafter. Having the IDT Team conduct admission visits provides the advantage of continuity of care. It fosters early development of a relationship between the IDT and the patient and family and promotes arrangements for the unique and special needs that a patient and family may have. Hope's Medical Team Hope's Medical Director, Mary Stegman, M.D., is board-certified in Hospice and Palliative Medicine, Pain Management and Internal Medicine. She is board-eligible in Hematology-Oncology. Hope employs five physicians other than Dr. Stegman including Dr.Guercio who is board- certified in internal medicine. Dr. Guercio is also board- eligible in pulmonary medicine and serves as the medical director of Joanne's House and the physician on one of Hope's IDT teams. Hope employs ten part-time physicians, including a surgical and pediatric specialist. Dr. Lipschutz is board certified in Hospice and Palliative Care Medicine. A liaison as needed to facilitate patient care discussions between Hope staff and community physicians, Dr. Lipschutz has been involved with Hope since 1992. Hope provides several different types of therapies not provided by other hospices. It has developed evidence-based algorithms for the care of its patients. They include specific clinical pathways or protocols for dealing with specific diseases or symptoms. Veteran Care All of Hope's psychosocial staff must participate in a special training program designed to educate them on the special needs of veterans. The "Wounded Warrior" program sensitizes Hope staff to the special needs of combat vs. non-combat veterans, the psychosocial needs of veterans of the different wars, women veterans, and veterans suffering the effects of post- traumatic stress disorder ("PTSD"). Hope staff and volunteers (many of whom are themselves Veterans) are trained to build a rapport with these veterans and to help them address the feelings of guilt, anger, and anxiety they may have. In addition, Hope nurses are trained to recognize the physical symptoms of patients with PTSD (such as terminal restlessness) and in effective methods to treat such symptoms. All of Hope's veteran patients are presented with a personalized certificate of appreciation and "Thank You letter" from Hope's CEO in a formal ceremony honoring their service to our country. Hope regularly reaches out to local veterans organizations such as the VFW and Knights of Columbus, and provides speakers to educate their members about hospice. Hope is successful in providing for the special needs of its veteran patients. Hope's Pastoral Counseling/Chaplaincy Program Hope employs 15 chaplains who provide spiritual support and counseling to patients and their families. As members of the IDT, Hope chaplains participate in the team meetings, provide resources to patients and families, and serve as an advocate for the patient. Team chaplains regularly consult with other members of the IDT as spiritual issues arise with individual patients or family members. When requested, Hope chaplains also perform memorial or funeral services for Hope patients. Hope chaplains serve as liaisons with community clergy and community leaders, and attend ministerial association meetings. Finally, Hope chaplains provide in-service training for other Hope staff, as well as for community clergy interested in learning about hospice care. All of Hope's chaplains have Masters of Divinity or masters degrees in religious training. All are ordained and certified by their faith group, and all must complete Hope's orientation, clinical training, and mentoring programs. In addition, many of Hope's chaplains have undergone CPE training. Following admission, every patient and the patient's family are visited by the IDT chaplain unless they decline such a visit. The chaplain assesses the spiritual care needs of the patient and family. Hope chaplains do not approach spiritual care in a "cookie cutter" fashion, since even persons of the same faith may have different spiritual needs. Rather, Hope addresses each patient's needs on an individual basis, and strives to meet those specific needs. For example, depending on the patient, Hope chaplains may provide active or passive counseling, life reviews, facilitate the resolution of problems among family members, join in prayer or read scripture. Spiritual care is available to Hope patients on a 24-hour/7-day per week. If a patient requests clergy of a particular faith, the IDT chaplain serves as a liaison to community clergy to ensure that the appropriate clergy visits the patient. Hope's interdenominational chaplains have successfully met the spiritual care needs of patients of a variety of faiths including Buddhism. All of Hope's chaplains are educated and trained in different faiths, including the Jewish faith. When a Hope patient wishes to be attended by a rabbi, those arrangements are made by Hope. Hope has a good relationship with all of the rabbis in its service area and provides excellent care to its Jewish patients. Many local rabbis serve on Hope committees, and some have provided training to Hope staff. Local rabbis also have participated in educational programs which Hope has presented or sponsored which touch upon grieving and mourning in a Jewish context, including lectures by authorities like Rabbi Grolman and Rabbi Kushner. Although Hope at one time sponsored a CPE Program, Hope now sponsors and participates in programs leading to certification by the Association of Death Educators and Counselors ("ADEC"). Persons completing the ADEC program are certified in thanatology (the study of death, dying, grief, and bereavement). Unlike CPE, ADEC certification is not restricted to chaplains, but rather is open to other IDT members, social workers, private therapists, school counselors and other professionals. For these reasons the ADEC curriculum is preferred by Hope over CPE. Hope's Bereavement Services Hope provides a comprehensive array of bereavement and grief counseling services. Each of Hope's IDT's includes a master's level social worker or bereavement counselor trained to assist the patient and family in addressing issues of grief and providing bereavement support. Volunteers who have received special training in helping persons cope with grief and loss are also involved in providing bereavement support. All patients receive a psychosocial assessment at the time of admission, which includes a bereavement assessment. That information is then provided to the IDT, and a determination made as to whether an "anticipatory grief referral" requiring immediate attention is necessary. If so, a counselor will visit with the patient and family within 24 hours to begin assisting the patient and family. Once the patient dies, another assessment is done of the patient's family and loved ones to determine whether early bereavement counseling is required, or whether the normal bereavement process will be followed. Ordinarily, three weeks following death, Hope counselors will contact all persons who have been identified by the IDT as significant in the patient's life to determine whether they would like to receive bereavement counseling, on either an individual or group basis. Letters are sent to family and significant others at 3 weeks, 3 months, 6 months, 12 months, and 15 months following the patient's death. Each of the letters includes an invitation to attend one of the many support group meetings offered by Hope, or to arrange for individual counseling if desired. About 800 persons attend one or more of the Hope-sponsored group sessions each month. Although Medicare guidelines require that bereavement support be provided for up to 13 months following the patient's death, Hope provides bereavement counseling for a minimum of 15 months and for as long as an individual chooses. Hope offers bereavement counseling and grief support to the community at large. This includes the Rainbow Trails Program, a camp for children ages 6 to 16 who have suffered a loss. Hope also offers a Healing Hearts Program which is specifically geared to persons whose loss is the result of a suicide, and another program for persons who have lost a same-sex partner, among others. Hope also offers special crisis response counseling for persons dealing with deaths in school or the workplace. If approved, Hope will provide excellent quality chaplaincy and bereavement programs for its patients in Collier County. Hope's Success in Staff Recruitment and Retention Hope has in its management several people who have obtained certification as Senior Professionals in Human Resources ("SPHR"). SPHR certification assures that these individuals have demonstrated expertise in the core principals of human resource practices such as staff training, development, performance management and assessing current as well as future workforce needs. Hope provides a benefits package which actually attracts new staff to seek employment with Hope. Hope provides quality education to its staff and has supervisory staff certified to assist new staff in achieving accreditation and certification, including certified hospice and palliative care nurses (CHPN). Hope provides cross-training, assistance, and management to avoid burn- out. Hope has considerable experience in recruitment in Southwest Florida. Hope recruits staff through advertising, job fairs and on-site recruiting at local schools. Hope has partnerships with Hi-Tech, Lorenzo Walker, Edison College and Florida Gulf Coast University (FGCU) for developing new nurses and social workers. Hope serves as a clinical site for student interns, who participate in rotations at Hope. These are primarily nursing students, but health care administration, social work and music therapy students also participate. Both Edison and FGCU have campuses in Lee and Collier Counties. HON and Hope currently compete for staff. Healthcare providers in Lee and Collier advertise and compete in both counties to recruit new staff. Hope has some staff living in Collier County. Numbers of staff members have worked for one of the two at one time and the other hospice at another time. The competition would intensify and the overlap increase if Hope's application is approved. Hope also has many employees living in the Bonita Springs area, close to Collier County. One is Dr. Guercio, the IDT physician for Team 100, which would help serve Collier County. He lives in Bonita Springs. Before joining Hope he practiced medicine in Collier County for over 20 years. Hope has not had any difficulties maintaining staff. Hope's salaries are in-line with other local healthcare providers, and Hope could successfully recruit the staff needed for its Collier County program. Hope's Proposed Program for SA 8B Hope will use contract facilities in Collier County for most of the GIP and respite services required by its patients in Service Area 8B. Hope plans to open at least one dedicated GIP unit in a nursing home within Collier County soon after approval of its application. Hope will also be able to enter into contracts for GIP with all four local hospitals. Hope's three hospice houses, moreover, will be available to meet some of the needs of the residents of Service Area 8B for GIP, respite and residential services. Hope has commitments in writing from two hospitals and two SNFs. These contracts will provide for coordinated care whenever a hospice patient is also a nursing home resident or a hospital patient. Hope has inpatient, nursing facility, and ambulatory care service contracts in areas accessible to patients in both Service Areas 8B and 8C. Hope's proposed Service Area 8B hospice program will provide a comprehensive range of hospice services, including physician services, nursing services, home health aide services, social services, and all other services required by state and federal law. Hope will provide services that are not reimbursed by Medicare or other insurance, such as bereavement and chaplain services, massage, music, art, and pet therapies. If approved, Hope will provide the required core and non-core services in its Collier County program as well as the non-required services it now offers in 8C and 6B. Hope currently operates in conformance with Medicare COPs and will do so should its Collier County program be approved. If approved, Hope will establish team offices in Bonita Springs, South Naples, and Immokalee. These locations will provide visibility for Hope's program and increase access to hospice services throughout Collier county. Joanne's House is located in Bonita Springs, less than two miles from the Lee/Collier County line. This new facility will be available and convenient to most northern Collier County patients requiring GIP, residential, and respite care. The IDT assigned to Hope's Immokalee office will serve the entire eastern region of Collier County. This office will be approximately 25 miles from Hope's Lehigh office and therefore convenient if staff are needed to travel between those offices. In addition to servicing the IDT, the Immokalee location will also be available for volunteer training, bereavement support meetings and providing information about hospice. Like Service Area 8C, Service Area 8B is also culturally diverse. As with its Service Area 8C program, Hope will also be successful in addressing the special needs of the culturally diverse communities of Service Area 8B. Hope's startup experience in Collier County will differ from the startup of its Service Area 6B program, where Hope served the more rural areas first. As noted, Lee and Collier counties are contiguous and continuous and Hope already has a substantial presence in Collier County, including its long term care diversion program, staff and volunteers who live there, and the numerous existing relationships with physicians, hospitals, nursing homes, and ALFs. Hope will be even more successful in expanding its hospice program into Collier County. Since they are frequently in Collier County on a regular basis, Hope's key leadership staff are familiar with Collier County and will be available to assist with Hope's Collier startup. If approved, Hope will be successful in implementing its proposed hospice program. Hope has the manpower, expertise and know-how to successfully implement a quality program in Collier County. Community Support for Hope Hope's application is supported by at least 133 local letters of support submitted to AHCA. A number of the letter writers testified by deposition in support of the application. They include hospital CEOs; the CEOs of SNFs, ALFs and other elder services; heads of regional businesses; and other involved in Collier County community organizations. The Lee and Collier County communities are related. The business and residential corridor is continuous between the two counties and there is no visible demarcation between them. Many businesses that operate in Lee also operate in Collier. Over the years, Hope has developed relationships with community leaders whose business serve both counties. Hope has volunteers who live in Collier County and has identified others who would volunteer for Hope if its application is approved. There are several physician group practices with offices and hospital practices in both Lee and Collier County. Hope has relationships with physicians located in Bonita Springs and northern Collier County whose practices include residents of both Lee and Collier counties. These physicians include oncologists, cardiologists, pulmonologists, gerontologists, and family practitioners, many of whom refer patients to Hope. Hope staff are familiar with Collier County health care providers and it enjoys a good reputation in Collier County. Through the Hope Life Care Program, Hope has contracts with two SNFs and seven ALFs in Collier County. A number of Collier County SNFs have transferred patients to Joanne's House. Naples Community Hospital and two HMA hospitals in Collier County have indicated intention to enter contracts for GIP with Hope if its application is approved. Underserved Groups? In its CON Application, Hope identified four groups in Service Area 8B it claims to be underserved. One of the groups is "patients under the age of 65." Hope's proof that the group is underserved consists of a comparison between historical deaths for the group to projected admissions for the group. Although the Hospice Program Rule uses this approach in its formula for calculating the Fixed Need Pool, the approach does not support the conclusion that existing providers have not historically been accessible to a particular demographic cohort or that the group suffers due to a gap in service. As Mr. Davidson opined at hearing, the approach: could suggest that there is [a gap in service]. But the data [relied on by Hope]. . . do not provide any kind of a reliable basis for . . . substantial levels of underservice . . . with rare exceptions. And this case is not one of those exceptions. (Tr. 3698). In order to establish the existence of a service gap using a penetration rate as the measure, it is necessary to compare historical deaths to historical admissions. Hope did not do so. Its comparison of historical deaths to projected admissions renders unpersuasive its claim that patients under the age of 65 are underserved in Collier County. Hope claims there are other underserved groups: (1) cancer patients in need of palliative chemotherapy and/or palliative radiation (PC/PR); (2) residents of the Immokalee area, and (3) patients needing access to hospice services during periods before and after hurricanes. Patients in Need of PC/PR The claim that there is an underserved group of patients in need of PC/PR in Collier County is problematic. The Agency does not have a standard for evaluating the appropriateness of PC/PR; nor is there a standard universally accepted in the hospice industry. In the absence of a standard, the propriety of using PC/PR in any one case, therefore, is up to the clinician. Whether it goes forward, too, is additionally dependent on patient choice. Patient choice requires adequate information and understanding on the part of the patient and family, in other words, "fully informed choice." Hope relies on its level of spending on PC/PR compared to levels of spending elsewhere to support its claim that there is a gap in PC/PR service in Collier County. Hope has spending on PC/PR that is high compared to other hospice programs. Hope attributes the high levels to its Open Access Model of Care, a model that reveals, in its view, need for PC/PR that might not be discovered in service areas without a provider that follows the Open Access Model. Comparing PC/PR delivered in different service areas on the basis of dollars spent or volume of patients receiving PC/PR, however, is not sufficient to show that PC/PR is required more often in service areas in which less is spent on PC/PR. The record in this proceeding does not show that Hope patients were inappropriately provided PC/PR. Nonetheless, it does not support the level of PC/PR service provided to Hope patients either. Hope did not provide case-by-case clinical evidence that its PC/PR service were required. Furthermore, and most significantly, Hope did not submit clinical evidence that patients in need of PC/PR in Collier County did not receive it. Both applicants indicate they will provide PC/PR to patients in need of such service. Only VITAS, however, agreed to a condition of its CON to have patient records audited to determine that receipt of the service was supported by fully informed choice. Immokalee The Immokalee area is a low income migrant community. Predominantly Hispanic, Immokalee also has a Haitian Creole community. Much of the population lacks education. Hope proposes to establish an office in the Immokalee area. It would serve the entire eastern Collier County area and will be a center where people can come for volunteer training, for bereavement support meetings, and for getting information about hospice care. Hope plans to locate an IDT in Immokalee. The IDT will serve the county's eastern region. From a service perspective, HON views Immokalee as part of North Collier County. North Collier County includes north Naples, portions of Bonita Springs located in Collier County, Immokalee, Golden Gate, and adjacent rural areas. North Collier County is served by HON's Central and North Teams. The Central team is a specialty team that sees only patients residing in nursing homes or ALFs. The North Team sees patients receiving home care and who are residing in their homes, halfway houses or anywhere else their home may be. HON has two offices to serve North Collier County; the North Branch Office located about 1/2 miles from the Collier/Lee County line, and an office located in Immokalee. HON's presence in Immokalee, however, has not been constant since it was first initiated. The office had been opened and then closed before being opened again. HON opened the North Branch Office in 2003. It accommodates the North Interdisciplinary Team. The office has two suites, appropriate signage, and ample space to accommodate the IDT and various groups who meet there for bereavement and other events. The geographic location of the North Branch Office is appropriate to allow the team members to reach Immokalee. But it would be a service improvement for an IDT to be located in Immokalee as proposed by Hope. HON's office in Immokalee is located in the Career and Service Center, also known as the "One Stop." The One Stop consists of approximately nine different social service organizations located in one building. The One Stop is considered a key location in Immokalee. Immokalee residents can access the services of the Department of Children and Families, as well as food stamps, Medicaid, employment and vocational-rehabilitation services. By having its office located in the One Stop, people are easily able to access information on end-of-life care services. As a tenant of the One Stop, HON's hospice office has use of the One Stop conferences rooms, which have capacity for over 200 people. HON uses the conferences rooms to hold different functions, such as volunteer training or seminars on coping with the holidays. HON's ADC for the north Collier area is 50-60 patients, and of those, the Immokalee area has an ADC of approximately 6-7 patients. The North Team is staffed and organized to deliver direct hands-on hospice care to Immokalee and adjacent rural areas, especially to the Hispanic population. The North Team includes 5 RNs, two social workers, a chaplain, four home health aides, a volunteer coordinator, a physician, a bereavement counselor, an RN clinical manager, and a clinical assistant. Staffing ratios are 10 patients per RN, which is a more intense level of staffing and patient care than the prevailing NHPCO guidelines of 12 patients per RN. The Team includes an additional RN who is a pediatric nurse specialist and who speaks Creole and Spanish. Seven of the IDT members of the North Team are bilingual. Fluency in Spanish, French, and Creole allows North Team clinicians serving this area to directly communicate with patients, a better alternative than resort to non-clinician employees or telephonic language services. When not deployed in the field visiting patients, the Team uses the north branch office and the Immokalee branch office. Three of the nurses and two of the certified home health aides on the North Team are certified in Hospice and Palliative Care. The sparse populations in large portions of the North Team's service area has not justified in HON's view the addition of a third branch office in North Collier County. All HON patients and families receive a Caregivers Guide, either in a Spanish or English version. In addition to general patient care information, which is reviewed and re-reviewed with the patients and families by IDT members, the Guide includes a number where hospice clinicians can be reached 24 hours a day, 7 days a week. HON's Immokalee office is staffed with a full time community resource coordinator, whose primary function is to support the communities in Immokalee. HON's resource coordinator is the contact person for education, referrals and access to HON's services in Immokalee. She speaks English and Spanish. Another role of the resource coordinator is to provide bereavement support to the community. The resource coordinator facilities a monthly bereavement community support group for grief and loss in Immokalee. She also recruits volunteers from Immokalee. Immokalee residents primarily get their information by word of mouth. HON has been successfully involved in Immokalee social service events, not only to support the community, but also to provide education and information to the different social service organizations and the participants of the programs. HON's presence in Immokalee has made it easier for people to develop a rapport and dialogue regarding the end-of-life care issue. HON's community resource coordinator in Immokalee is an active member of the Immokalee Interagency Council, the Weed and Seed initiative, and the HIV and AIDS Network Coalition for Collier County. The Immokalee Interagency Council consists of over 90 different agencies, which provide services in the Immokalee Community. The Council meets monthly. Their general purpose is to inform the community and the other organizations of their individual services. The Immokalee Weed and Seed initiative is a federal government, juvenile justice initiative that was provided to the Immokalee community to better establish relations between community residents and law enforcement. It is in its fifth and final year. The HIV and AIDS Network Coalition for Collier County is a committee comprised of individuals that come together from different medical and social service organizations to better understand and meet the needs of the Immokalee community. The involvement by HON's community resource coordinator in these important organizations promotes awareness of hospice services. When an emergency such as a hurricane is declared in Immokalee, HON's community resource coordinator reports to the hurricane shelter in Immokalee. Seventy-two hours before a hurricane, she is provided with a list of HON patients. Her role is to maintain contact with HON home care staff, and if they are unable to make contact with a hospice patient during that time, she will physically check on the patient and report back to the main office. All services provided by HON are available to the residents of Immokalee. HON provides information on hospice services to the library, for distribution to the public, on a regular basis. The Immokalee Friendship House is a temporary emergency homeless shelter in Immokalee that serves as a referral source for the community. Annually it assists approximately 1,000 homeless families and individuals. Friendship House has 8 to 15 residents per year who are HON hospice patients. HON has never declined to see a hospice patient at Friendship House or declined to deliver care there. Immokalee Friendship House is completely satisfied with Hospice of Naples. Their clients are well taken care of by HON. From Friendship House's perspective, HON is one of the stronger agencies in Immokalee. HON's community resource coordinator comes to the Immokalee Friendship House for individual and group bereavement counseling. She has also provides bereavement training to the Friendship House staff. Despite HON's efforts toward serving residents of the Immokalee area, they have less access to hospice than do residents of the more urban portions of Collier County. Hope would be able to serve Immokalee through its new local office, through the use of contracted inpatient beds in Lehigh and their planned new hospice house. These locations would provide a real option to hospice patients from Immokalee as evidenced, for example, by travel patterns from the Immokalee area. They trend toward Lehigh and Fort Myers rather than to Naples. Collier Health Services is a not-for-profit primary care provider with multiple locations throughout Collier County. It operates a primary care clinic in Immokalee, provides about half of all services provided AIDS/HIV patients in the county and is part of a program to bring Florida State University medical students to Immokalee for training in rural family medicine. Collier Health Services has indicated a willingness to coordinate care with Hope in the Immokalee community and believes it would be a good relationship based upon past experience with Hope. Hope criticizes HON's commitment to Immokalee because of the lack of a continuous presence there as shown by the opening, closing and the re-opening of its office. But a continuous presence by Hope is not guaranteed either. It conditioned its application on opening "an office in the first year of operation." Hope Ex. 1, Schedule C. To show conformance with the condition, as a special feature of the condition, Hope promised to forward to the Agency copies of the business license and/or certificate of occupancy that show occupation of office space in Immokalee during the first year of operation. Neither the condition nor the special feature of the condition guarantees that Hope's office in Immokalee will be present after the first year of operation. Nonetheless, Hope's presence if continuous, would aid and enhance effective service of the Immokalee community's hospice needs. Hope conditioned its application on having an office in Immokalee but so did VITAS. Unlike VITAS, Hope has a history of serving rural areas in Florida. However much Hope's presence would enhance service to the Immokalee area, the evidence is unpersuasive that the Immokalee area is underserved. HON efforts to serve the Immokalee area are effective. Patients in Need of Service When Disaster Strikes Hope's claim that there have been underserved patients in Collier County in times of disaster is based on events associated with Hurricane Wilma. The eye of Hurricane Wilma made landfall just south of Naples in Collier County on October 24, 2005. The impact of the storm was greater in Collier County than it was in Lee County. More services were interrupted and more people were without power and transportation in Collier County than in Lee County. In Collier County, "all of the government services and most community agencies, physicians' offices, . . . were shut down and . . . went into lockdown mode." Tr. 3462. During the hurricane and in its wake, HON continuously operated the Georgeson House. It accommodated the needs of 23 patients who were relocated to the House right before the arrival of the storm. The Georgeson House is rated to withstand a Category 4 hurricane and can accommodate up to 32 patients with all the equipment, supplies and staff to support those patients in an emergency. In the event of evacuation, HON has an agreement with Physicians Regional Hospital, about 1/8th of a mile from Georgeson House to relocate the patients to hospital beds. For a five-day period, two days before the arrival of the hurricane, the day of the storm and the two days after, HON received no referrals. Consequently, it admitted no patients from October 22 through October 26, 2005. Had it received referrals during the five days, HON was accessible and had the ability to admit patients. On the day the hurricane made landfall and for the two days afterward, in addition to the service provided at the Georgeson House, HON contacted its patients by telephone. As soon as the authorities allowed road travel, HON was able to visit its patients. It visited the majority within 48 hours of the storm event. Hope admitted approximately 20 patients during the same five-day period. In Lee County, there was only a short time that Hope was not able to admit or visit patients. It ended shortly after Hurricane Wilma made landfall when the emergency operations center announced that road travel was safe. Hope has a detailed Disaster Management Plan. See Hope Ex. 1, CON 9967 Vol. 2, Supplementary Appendices, Tab 22. In the event of a Disaster Watch, the plan dictates, "Admissions to Hope Hospice and Hospice Houses will be discontinued." Id., I. Disaster Watch, 1. e. iii. There is no persuasive evidence that had Lee County suffered the same impact that Collier County did from Hurricane Wilma that it would have been able to respond any better than HON did in October of 2005. There is, in short, no evidence that there has been unmet need for hospice services by disaster victims in Collier County. Utilization Projections and Financial Feasibility Each Applicant's projected utilization appears reasonable and achievable. Each applicant demonstrated short-term and long- term financial feasibility. Medicaid Patients and the Medically Indigent Both Hope and VITAS have documented a history of service to Medicaid and medically indigent patients. Hope will serve Medicaid patients and the medically indigent if its application is approved. So will VITAS.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Agency for Health Care Administration approve CON 9969, an application for a new hospice program in Service Area 8B filed by VITAS Healthcare Corporation of Florida, and deny CON 9967, an application for a similar program filed by Hope Hospice and Community Services, Inc. DONE AND ENTERED this 3rd day of March, 2008, in Tallahassee, Leon County, Florida. S DAVID M. MALONEY Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 3rd day of March, 2008
The Issue The issue is whether Petitioner’s application for a Certificate of Need to establish a new hospice program in Hospice Service Area 8B should be approved.
Findings Of Fact Parties (1) Hope Hope is a not-for-profit corporation. Hope has operated a hospice program in SA 8C -- Lee, Glades, and Hendry Counties –- since 1981. Hope is the sole provider of hospice services in SA 8C. Hope’s SA 8C hospice program is one of the largest hospices in Florida; in 2003, it had more than 3,200 admissions. Hope is licensed by the Agency and it is a Medicare- certified provider. Hope was accredited by the Community Health Accreditation Program (CHAP) in December 2003. CHAP is a nationally-recognized accrediting body for hospices. Hope’s main office is in Ft. Myers, which is in central Lee County. Hope also has offices in Lehigh Acres, which is in eastern Lee County, and a counseling center in Boca Grande, which is in northwest Lee County. Hope currently has approximately 50 inpatient hospice beds where it provides inpatient and respite care. Those beds are located in “hospice houses” in Ft. Myers and Cape Coral, which are both in Lee County. Hope has Agency approval for an additional 24 inpatient hospice beds. Those beds will be located in a “hospice house” that is currently under construction in Bonita Springs, which is also in Lee County. In addition to its Lee County offices and inpatient facilities, Hope has offices in Clewiston and Buckhead Ridge. Clewiston is in Hendry County, and Buckhead Ridge is in Glades County. Hope’s Clewiston office opened in 1996, and its Buckhead Ridge office opened in 2001. Prior to opening those offices, Hope served Glades and Hendry Counties from its Lehigh Acres office, which opened in 1993. Hope divides its patients amongst four care teams, each of which serves patients in a specific geographic region of SA 8C. One team serves patients in and around Lehigh Acres, Clewiston, and Buckhead Ridge; one serves patients in Cape Coral and Pine Island; one serves patients in Ft. Myers and North Fort Myers; and one serves patients in South Fort Myers and Bonita Springs. Each of Hope’s care teams includes multiple nurses, social workers, home health aides, chaplains, therapists, volunteers, and other professionals involved in the hospice care provided to Hope’s patients. The staffing of the care teams is sufficient to deliver high quality hospice care to the group of patients being served by each care team. Hope does not have a separate clinical admissions team; an “admission specialist,” whose function is more clerical than clinical, typically is the first Hope employee to visit the patient after he or she is referred to Hope. The admission specialist begins processing the patient's admissions paperwork; the initial clinical assessment of the patient and the completion of the admissions process occurs later that day, or sometimes the following day, when the patient is evaluated by a nurse and a social worker. The nurse and social worker that do the initial clinical evaluation of the patient are typically the same individuals that will be caring for the patient after he or she is admitted to Hope. The primary purpose of having the nurse and social worker that will be caring for the patient do the initial evaluation is to enhance continuity of care. Hope adheres to the “open access” philosophy, which is embodied in the “Hospice Service Guidelines” published by the National Hospice and Palliative Care Organization (NHPCO). NHPCO is the national trade association of hospices. The Guidelines are different from the “Standards of Practice for Hospice Programs,” which is also published by NHPCO. The Standards of Practice document was not introduced into evidence in this proceeding. The “open access” philosophy embodied in the Guidelines is not yet the standard of practice in the hospice industry; it is an “expectation” or benchmark that industry is moving towards. The goal of “open access” is to remove or minimize all barriers to accessing hospice care, including barriers associated with the availability of palliative chemotherapy and palliative radiation treatment. Proactive education and outreach activities to the community and to physicians and other referral sources is also part of the “open access” philosophy. As stated in Hope’s PRO and as more fully discussed below, Hope has adopted a “sales and marketing model” that it uses to “outreach to physicians and other referring entities, in order to enhance referrals and access to care.” Hope has recently won several national awards, including the 2003 Circle of Life Citation of Honor from the American Hospital Association and NHPCO for its “open access” policies, and the 2003 Pinnacle Award from the American Pharmacists Association Foundation for its pain and symptom management protocols. Hope is a financially-sound organization. Its audited financial statements from September 30, 2002, reflect that it had unrestricted net assets of $19.6 million, including $7.8 million in cash and $5.5 million in other current assets. Hope is a profitable organization. It had operating income of $4.65 million and $3.45 million during its fiscal years ending September 30, 2001 and 2002, respectively. Hope is a successful fundraising organization. Its financial statements reported contributions of approximately $2.9 million and $2.4 million for the fiscal years ending September 30, 2001 and 2002, respectively. Hope regularly distributes newsletters about its hospice program to the community and to physicians. Its community newsletter is published quarterly and is sent to approximately 30,000 persons; its physician newsletter is published bi-monthly and is sent to approximately 1,500 physicians and their staff. Hope’s employees regularly hold workshops and make presentations to community organizations, nursing homes, churches and other entities about the hospice services provided by Hope and the general benefits of hospice. Those community education and outreach efforts are only a small part of the “community development” activities that Hope uses to attract patients. Indeed, as discussed in Part F(2)(c) below, the primary focus of Hope's community and professional relations staff is to build and maintain relationships with physicians (primarily oncologists) and health care facilities that refer patients to Hope. Hope provides access to all hospice-eligible patients who request hospice services without regard to the patient’s ability to pay or payer status. (2) HON HON is a not-for-profit corporation. HON has operated a hospice program in SA 8B -– Collier County –- since 1983. HON is the sole provider of hospice services in SA 8B. HON is licensed by the Agency and it is a Medicare- certified provider. HON was certified by the Joint Commission on Accreditation of Health Care Organizations (JCAHO) in August 2001, and it was recently re-certified. JCAHO is a nationally- recognized accrediting body for hospices and other types of health care facilities. HON has five physical locations in Collier County. Four of the locations are west of Interstate 75 in or around Naples; the fifth location is in Immokalee, which is a rural community approximately 40 miles east of Naples. HON has approximately 30 inpatient hospice beds where it provides inpatient and respite care. Sixteen of the beds are in a “hospice house” that is co-located with HON’s main office in central Naples, and the remainder of the beds are located in space that HON leases from a nursing home in northern Naples. The beds at the nursing home opened in March 2003, and the “hospice house” opened in October 2003. Prior to opening those inpatient units, HON provided inpatient and respite care to its patients at Naples Community Hospital (NCH) pursuant to a contract. The NCH beds are still available to HON, as needed. HON had approximately 1,300 admissions in 2003, and at the time of the hearing, its average daily census (ADC) was approximately 245 patients. HON’s admissions and ADC have steadily grown since its inception, and absent a material change of circumstances (such as the approval of Hope’s CON application), the growth trend at HON is expected to continue as a result of the projected population growth in SA 8B and HON’s increasing penetration rate. HON provides hospice care to its patients through three care teams, which are based out of offices in and around Naples. The north care team serves patients in the northern portion of Collier County, including the Immokalee area. The south care team serves patients in the southern portion of the county. The central care team serves “specialty” patients throughout the county, which include patients residing in long- term care facilities and patients whose primary language is not English. Each care team includes one physician, a nurse manager, six-to-eight nurses, two-to-three social workers, a chaplain, three home health aides, a bereavement counselor, a volunteer coordinator, and a clerical support person. The staffing of the care teams is sufficient to deliver high quality hospice care to the group of patients being served by each care team. The only staff person based out of HON's Immokalee office is a social worker, but the members of the north care team who serve patients in the Immokalee area use the office for charting and other purposes. In addition to the care teams described above, HON has separate admissions teams consisting of nurses and social workers that are responsible for conducting the initial patient assessment and completing the admissions paperwork once a patient is referred to HON. HON’s admissions teams conduct admissions 24 hours a day, seven days a week. The admissions team nurses and social workers that conduct the initial patient assessment are not the same nurses and social workers that will be caring for the patient once he or she is admitted to HON. After admission, the patient will be assigned to one of the three care teams –- northern, central, or southern -– identified above. HON is a fiscally-sound organization. As of December 31, 2003, it had net assets of approximately $16.1 million, and no long-term debt. HON is a profitable organization. In 2003, HON had total revenues of approximately $15.5 million and net income of approximately $3.3 million. HON is a successful fundraising organization. It raised all of the funds necessary to construct its main office in 1992, and between August 2001 and December 2003, it was able to raise $10 million to improve its main office, expand its services, and construct its “hospice house.” HON holds a number of well-established fund-raising events in Collier County each year, which raise between $350,000 and $400,000 in donations annually. Those donations account for approximately one-third of HON’s annual donations. HON’s success in its fund-raising efforts is a reflection of the community’s support for, and its perception of HON, both historically and on an on-going basis. HON has approximately 230 employees, including full- time, part-time, and per diem staff. HON currently employs a full-time medical director, and five other physicians on a full-time or part-time basis. Prior to April 2003, however, the medical director was the only physician employed by HON. HON operates an extensive community education program about the hospice services that it provides. The program includes newsletters and regular participation in and presentations to a variety of community groups by HON employees. HON does not specifically focus on increasing referrals through sales and marketing efforts directed to oncologists or other physicians. HON provides a number of free services to the residents of Collier County in addition to the services that it provides to its hospice patients that are not reimbursed by Medicare. For example, HON provides a psychologist who conducts grief workshops for children in the community who have lost loved ones through death, and it provides counselors and other assistance to the Alzheimer’s Support Network in Naples to help the Network develop and implement programs for managing grief in Alzheimer’s families. HON provides access to all hospice-eligible patients who request hospice services without regard to the patient’s ability to pay or payer status. (3) Agency The Agency is the state agency that administers the CON program, and it is responsible for reviewing and taking final agency action on CON applications. Application Submittal and Review and Preliminary Agency Action The FNP published by the Agency for the April 2003 batching cycle identified a need for zero new hospice programs in SA 8B. That determination was challenged by Hope, but the challenge was subsequently withdrawn. Hope timely filed a letter of intent and a CON application in the April 2003 batching cycle through which it sought to establish a new hospice program in SA 8B, which is immediately to the south of SA 8C where Hope currently provides hospice services. Hope's SA 8B application was designated as CON 9695 by the Agency. In the same batching cycle, Hope also filed an application to establish a new hospice program in SA 8A, which is immediately to the north of SA 8C. That application is the subject of another pending proceeding at the Division, DOAH Case No. 03-2013, etc. Hope’s application complied with all of the applicable submittal requirements in the statutes and the Agency’s rules. The application was complete and all applicable filing fees were paid. The Agency comparatively reviewed Hope’s application with the CON application filed by Heartland, which also sought to establish a new hospice program in SA 8B. The Agency’s review complied with all of the applicable requirements in the statutes and the Agency’s rules. On August 22, 2003, the Agency issued its State Agency Action Report (SAAR), which summarized its comparative review of the applications filed by Hope and Heartland and recommended denial of both applications. The Agency published notice of its decision to deny Hope's and Heartland's applications in the September 12, 2003, volume of the Florida Administrative Weekly as required by the statutes and the Agency's rules. Hope and Heartland timely challenged the denial of their respective applications. Heartland withdrew its challenge to the denial of its application prior to the final hearing, and it did not participate in the hearing in any way. The Agency reaffirmed its opposition to Hope’s application at the hearing through the testimony of Jeffrey Gregg, the Bureau Chief of the Agency’s CON program. Hospice Care, Generally Hospice care is provided to patients who are at or near the end of their lives. To be eligible for hospice care, the patient must have been diagnosed with a terminal illness from which the patient is expected to die within six months if the disease runs its normal course. Hospice care is considered palliative care rather than curative care. The purpose of palliative care is to provide comfort to the patient rather than to cure the patient. Curative care is inconsistent with the eligibility requirement for hospice that the patient's illness be terminal. Hospice care includes a comprehensive range of services provided by physicians, nurses, social workers, chaplains, therapists, and volunteers, which address the psychosocial and spiritual needs of the patient in addition to the physical pain associated with the dying process. Hospice care also includes services provided to the patient’s family, including grief counseling during the dying process and after the patient’s death. Hospice care is collaboratively provided through care teams, or interdisciplinary teams (IDTs), which are composed of individuals in the various disciplines identified above. There are four general types or “levels” of hospice care: routine home care (RHC), continuous care, inpatient care, and respite care. More than 80 percent of all hospice care is RHC. The types of services provided in RHC vary based upon the patient’s needs, but they typically include health care services provided by a nurse or a home health aide and counseling provided by a social worker or chaplain. RHC is provided in the patient’s home. Continuous care involves the full-time placement of a nurse or home health aide in the patient’s home to manage a medical crisis that might otherwise require inpatient care. Inpatient care is for the management of a medical crisis or pain that is out of control. It is provided at a licensed inpatient hospice facility (commonly referred to as a “hospice house”) or at an acute care hospital pursuant to a contract between the hospice and the hospital. Respite care allows the patient to be temporarily relocated to a nursing home, hospital, or “hospice house” to give the patient's primary caregiver a break. Hospice care is covered by Medicare, and Medicare is the largest payer source for hospices, both generally and specifically in Hope’s and HON’s hospice programs. Medicare pays a per diem rate to the hospice that varies based upon the type of care being rendered. For example, the per diem rate for RHC in 2003 was approximately $115. The hospice receives the per diem rate for each patient, whether or not services are provided to the patient on a given day. Medicare-certified providers such as Hope and HON are required to comply with the Conditions of Participation in the Medicare regulations, 42 CFR Part 418, in order to receive reimbursement from Medicare for the hospice services that they provide to their patients. Hope and HON are also required to comply with the state licensure requirements in Part IV of Chapter 400, Florida Statutes, and Florida Administrative Code Rule 58A-2. The Medicare regulations require hospice providers to directly provide certain “core” services, including nursing, social work, and counseling. Other services, such as physician services, therapies, and medications, may be provided through third parties pursuant to a contract with the hospice. The Medicare regulations make the hospice responsible for all medical tests, durable medical equipment, biologicals, and other medically necessary services related to the patient’s terminal illness once the patient elects the Medicare hospice benefit. Hospices are required to admit hospice-eligible patients without regard to the patient’s ability to pay, and as stated above, Hope and HON each do so. The Medicare regulations require hospices to have a medical director, who is responsible for the overall medical supervision of the hospice's patients and for setting medical policies and procedures for the hospice. The medical director, or his or her physician designee, is required to participate in the development and maintenance of each hospice patient’s care plan. The patient’s care plan is required to be developed when the patient is first admitted to hospice, and it is required to be continually updated as warranted by the patient’s condition and needs. Development of the care plan is to be a collaborative process involving the hospice medical director, the IDT, any consulting physicians, the patient, and the patient’s family. There are four classes of physicians commonly involved in hospice care: referring, attending, consulting, and hospice. The referring physician is the physician that refers the patient to hospice after determining (in conjunction with the hospice medical director) that the patient is eligible for hospice. The attending physician is the physician that is primarily responsible for the patient’s care once the patient becomes a hospice patient. The consulting physician is a physician, typically one with some sort of specialty (such as oncology), who is consulted by the attending physician while the patient is a hospice patient. The hospice physician is the medical director of the hospice or other physician employed by the hospice. The attending physician will either be the referring physician or the hospice physician, depending upon whether the referring physician is comfortable with having primary responsibility for the patient’s care once the patient becomes a hospice patient. A referring physician who chooses not to be the attending physician might become a consulting physician, which is particularly common when the referring physician is a specialist such as an oncologist. The hospice physician is the attending physician for a majority of the patients at both Hope and HON. In order for a patient to be admitted to hospice, the hospice medical director must agree with the referring physician's assessment that the patient has a terminal illness that is expected to run its course in less than six months. Once a patient is admitted to hospice, the only physician who can separately bill Medicare for services rendered to the patient is the attending physician. For services rendered by the attending physician related to the patient’s terminal illness, the “professional component” (i.e., the patient examination or other hands-on physician care) of the attending physician’s bill is submitted to and reimbursed by Medicare; the “technical component” of the attending physician’s bill (e.g., medical tests, drugs administered) is submitted to and reimbursed by the hospice. For services unrelated to the patient’s terminal illness, the attending physician’s entire bill is submitted to Medicare for reimbursement. The hospice is not responsible for any portion of the bill. Other physicians, such as consulting physicians, submit their bills to the hospice rather than to Medicare. The hospice pays the consulting physician’s bill in the first instance. The professional component of the bill is then submitted by the hospice to Medicare for reimbursement above and beyond the per diem rate paid to the hospice; the technical component of the bill is paid by the hospice without any additional reimbursement from Medicare. Medicare contracts with a fiscal intermediary who is responsible for reviewing bills from Medicare-certified providers to determine whether the treatment was actually rendered and whether it was medically necessary and appropriate; however, because the technical component of the consulting physician's bill is paid by the hospice, not Medicare, it is not subject to review by the fiscal intermediary. Medicare reimburses physician services at a standard rate, which is typically referred to as the “Medicare allowable rate.” Generally, it is beneficial to the patient for hospice care to be initiated as early as possible after the patient is determined to meet the hospice eligibility criteria so that the patient and his or her family receives as much support as possible during the dying process. As a result, longer lengths of stay in hospice can be viewed as beneficial. Longer lengths of stay can also be viewed as detrimental to the extent that they are being motivated by the financial interests of the hospice and/or the consulting physicians, who each have the potential to benefit financially from a patient living longer in hospice. The hospice benefits because it receives a per diem payment for each day that the patient is enrolled in its program, and as discussed in Part F(2)(c) below, the consulting physician can benefit if he or she is able to continue to provide services to the patient that he or she otherwise may not have be able to provide without having to justify the medical appropriateness of the services. Longer lengths of stay are not necessarily an indicator of hospice quality of care, which depends more upon the services that the patient is receiving from the hospice than the length of time that the patient is enrolled in hospice. Longer lengths of stay are an indicator of the accessibility of hospice care because they tend to reflect that patients are being referred to, and admitted into hospice earlier in the dying process. Penetration rates, which are the ratio of hospice admissions in a service area (by age/disease cohort or overall) to the total number of deaths in service area (by age/disease cohort or overall), are a more well-accepted measure of the accessibility of hospice care than are lengths of stay. The FNP formula used by the Agency to determine need for additional hospice programs in a service area is driven in large part by the penetration rates achieved by the existing hospice(s) in the service area. Hospices in Southwest Florida and Relevant Demographics of Hospice Service Areas 8B and 8C Southwest Florida is divided into three hospice service areas, 8A, 8B, and 8C. SA 8A consists of Charlotte and DeSoto Counties; SA 8B consists of Collier County; and SA 8C consists of Lee, Glades, and Hendry Counties. Each of those service areas currently has a single hospice provider: Hospice of Southwest Florida, Inc., in SA 8A; HON in SA 8B; and Hope in SA 8C. There are no approved, but not yet licensed hospice programs in any of those service areas. The 2002 population of SA 8B was approximately 276,000. The population is projected to grow by 21.3 percent over the next five years. Approximately 24 percent of the SA 8B population is in the 65 and older (“65+”) age cohort, which is higher than the statewide average of 17 percent. The 65+ age cohort is the group most likely to utilize hospice services. 108. The three-year average death rate in SA 8B is 0.009131, which is slightly lower than the statewide average of 0.010218. 109. The number of deaths in SA 8B is projected to increase by 14.1 percent -- from 2,398 to 2,736 -- over the July 2004 through June 2005 planning horizon applicable to this case. Spanish is the most common second language in SA 8B, and it is particularly prevalent in and around the Immokalee area. SA 8B and SA 8C are similar in that most of the population is concentrated in the western portions of the service areas along the coast and the eastern portions of the service areas are rural and sparsely populated. SA 8B and SA 8C are also demographically similar. For example, both service areas are less densely populated than the state as a whole; both service areas are growing at a faster rate than the state as a whole; the percentage of each service area’s population in the 65+ age cohort is the same and is higher than the statewide average for that age cohort; the median household net worth in both service areas is higher than the statewide average; both service areas had similar mortality rates and a similar array of causes of death for their residents; and both have a single, well-established hospice provider. Because of the similarities between SA 8B and SA 8C, they should have similar hospice penetration rates. Any material differences between the penetration rates in the service areas can be attributed to differences in the management and operation of HON and Hope. For calendar year 2002, which is the period reflected in the FNP, the overall penetration rate for SA 8B (44.3 percent) was higher than the overall statewide penetration rate (43.8 percent), but it was significantly lower than the overall penetration rate for SA 8C (54.7 percent). The data for calendar year 2003, which was the most current available at the time of the hearing, reflects a significant increase in the overall penetration rate in SA 8B to 53.7 percent. That rate is higher than the statewide penetration rate of 48 percent, and it is only slightly lower than the 55.3 percent penetration rate in SA 8C. Hope’s Proposed SA 8B Hospice Program Hope’s proposed SA 8B hospice program is essentially an expansion of its existing SA 8C program’s service area. The policies and procedures that Hope utilizes in its existing program will be implemented in its proposed SA 8B program. The policies include Hope’s commitment to serving patients and families without regard to caregiver status, homelessness, or HIV/AIDS status, and without regard to their ability to pay. The procedures include the protocols and algorithms used by Hope’s nurses to help them manage the most common pain symptoms found in hospice patients, including anxiety, fatigue, and depression, as well as Hope's detailed protocols for pediatric hospice patients. The protocols are used by the hospice nurses as a guide in the assessment of the patient; the identification of treatment options; the administration of medications, when indicated and pre-authorized by the physician; and the facilitation of the nurse’s communications with the physician and pharmacist about the patient’s condition and course of treatment. Hope intends to establish an office in Naples to serve central and south Collier County. The office will be located in leased space; no new construction is proposed. Hope intends to serve northern Collier County from its existing Bonita Springs office, which is in Lee County close to the border of Collier County. Hope intends to serve the Immokalee area from its existing Lehigh Acres office, which is closer to the Immokalee area than is Naples. Additionally, Hope conditioned the approval of its application on its establishment of a “counseling and education center” in Immokalee during the first two years of operation of its proposed SA 8B hospice program. Hope is not proposing any inpatient hospice beds as part of its SA 8B program. Hope intends to provide inpatient and respite care through contractual arrangements with existing nursing homes and hospitals in Collier County and/or through the use of its inpatient facilities in Lee County. Hope’s proposed SA 8B hospice program will provide a comprehensive range of hospice services, including physician services, nursing services, home health aide services, social services, and all other services required by state and federal law. Hope intends to provide services that are not reimbursed by Medicare or other insurance, such as bereavement services, chaplain services, and massage, music, art, and pet therapies. Hope currently provides those services in its existing hospice program in SA 8C. Hope expects to receive the vast majority of its referrals to its proposed SA 8B hospice program from physicians’ offices, which is consistent with its experience in SA 8C. Hope projected in its CON application that a majority of its patients from Service Area 8B will have diagnoses other than cancer, which is consistent with HON's experience in SA 8B. Hope projected in its application that approximately 86 percent of the admissions at its proposed SA 8B hospice program will be Medicare patients, approximately six percent of the admissions will be Medicaid patients, and approximately two percent of the admissions will be charity patients. The application states that these figures are consistent with Hope’s experience in SA 8C, and the evidence establishes that they are reasonable. Hope projected in its application that its proposed SA 8B hospice program will have 183, 259, and 304 admissions in its first three years of operation. By the seventh year of operation, Hope projected that its proposed SA 8B hospice program will have 529 admissions. Those figures represent 15 percent (year 1), 20 percent (year 2), 22 percent (year 3), and 30 percent (year 7) of the projected hospice admissions in SA 8B. Those market shares are at the high end of the range of the market shares achieved by other recent start-up hospice programs that entered into single-provider markets; however, under the circumstances of this case, the market shares projected by Hope are actually somewhat understated. In projecting the total number of hospice admissions in SA 8B, Hope assumed that the overall penetration rate in the service area would increase each year based on its presence in the market. The assumption of an increasing penetration rate is reasonable, but attributing that increase to Hope’s presence in the market is not. Indeed, the evidence reflects that penetration rate in SA 8B has been steadily increasing over the past several years to levels consistent with and even higher than the rates projected by Hope in its application. Hope’s projected admissions translate into ADCs of 32.9 patients (year 1), 51.4 patients (year 2), 61.6 patients (year 3), and 107 patients (year 7). The ADC figures are based upon a 65.7-day average length of stay (ALOS) in year one, which increases to 74-day ALOS in year seven. The ALOSs and ADCs projected by Hope are consistent with Hope’s experience in SA 8C and are reasonable in light of Hope’s “open access” policies. The methodology used to calculate the projected admissions and the ADCs is reasonable, and Hope will be able to achieve its projected utilization levels. Indeed, as more fully discussed in Part G below, the projected admissions are actually understated because the penetration rate and market share assumptions made by Hope are too low. Hope projected in the application that the total project costs for the establishment of its proposed SA 8B hospice program will be $144,208. The largest line-item cost -- $59,818 –- is for “preoperational staffing, recruiting and training.” The projected costs are reasonable. Hope intends to fund the costs of its proposed SA 8B hospice program with "cash on hand" and operating revenues from its existing SA 8C hospice program. Hope has sufficient financial resources to fund the costs of its proposed SA 8B hospice program along with its other ongoing capital projects, including its proposed establishment of a hospice program in SA 8A. Hope projected in its application that it will need 12.88 full-time equivalents (FTEs) to staff its proposed SA 8B hospice program in its first year of operation, and that it will need an additional 7.12 FTEs (for a total of 20 FTEs) in its second year of operation. It was stipulated that the projected staffing levels are reasonable, and the evidence establishes that Hope will be able to recruit the necessary FTEs at the salaries projected in its application. In addition to the FTEs projected in the application, Hope will utilize volunteers to “provide both patient and administrative support.” Hope projects that its proposed SA 8B hospice will have approximately one volunteer per patient, or approximately 30 volunteers in the first year of operation and 50 volunteers in the second year of operation. Hope has been successful in recruiting and retaining volunteers in SA 8C. It will likely be able to recruit and retain sufficient volunteers for its proposed SA 8B hospice program despite the seasonal fluctuations in the availability of volunteers in SA 8B; indeed, SA 8C experiences similar seasonal fluctuations in the availability of volunteers. The payer mix and revenues projected in Schedule 7A of Hope's application and the expenses projected in Schedule 8A of the application are reasonable. Hope projected in its application that its proposed SA 8B hospice program would generate a net loss from operations of $18,509 in its first year, and that it would generate a net profit from operations of $87,027 in its second year. These projections are reasonable. Hope projected that it will have non-operating revenue of $63,310 and $92,697 in the first and second years of operations. Those amounts include “donations/memorials and bequests” that Hope expects to receive as well as a net of $10,000 -- $15,000 in revenues and $5,000 in expenses -- in fundraising revenues. Although Hope’s application states that the fundraising revenue “included in the financial projections is in line with the historical experience at Hope Hospice,” Hope’s audited financial statements reflect that Hope received contributions of $2.47 million and $2.97 million for the fiscal years ending September 30, 2001 and 2002, respectively. Even if 33 percent of those contributions were attributed to fund- raising expenses, which is the ratio used in the application to project the fundraising income, the $10,000 of net fund-raising revenue projected by Hope for its proposed SA 8B program is significantly understated.1 Alleged “Special Circumstances” Hope identified five “special circumstances” in its CON application which, in its view, support the approval of its proposed SA 8B hospice program. As more fully discussed below, the preponderance of the evidence does not support Hope’s claims. Inadequate Service to Persons Under 65 The first special circumstance alleged in Hope’s CON application is that persons under the age of 65 are being underserved by HON. The justification offered by Hope for this special circumstance was statistical data; there was no testimony from physicians or community witnesses related to this special circumstance. The primary statistical data relied upon by Hope are the penetration rates in SA 8B for cancer and non-cancer patients under the age of 65 for the calendar-year 2002 time period reflected in the FNP calculations. Because HON is the only hospice provider in SA 8B, the penetration rates for the service area reflect the penetration rates achieved by HON. The penetration rates for those age/disease cohorts are components of the formula by which the Agency calculates the hospice FNP; the penetration rate for cancer patents under the age of 65 (“U65C patients”) is the P1 factor, and the penetration rate for non-cancer patients under age 65 (“U65NC patients”) is the P3 factor. HON’s penetration rate for U65C patients for calendar-year 2002 was 57.3 percent, which was lower than the statewide average of 74.8 percent for that age/disease cohort. HON’s penetration rate for U65NC patients for calendar-year 2002 was 10.7 percent, which was lower than the statewide average of 14.7 percent for that age/disease cohort. By contrast, the penetration rate achieved by Hope in SA 8C for those age/disease cohorts in calendar-year 2002 was higher than the relevant statewide averages; its penetration rate for U65C patients was 89.3 percent, and its penetration rate for U65NC patients was 16.9 percent. The data for calendar-year 2003, which was the most current available at the time of the hearing, shows a significant increase in HON’s penetration rates for persons under the age of 65; its penetration rate for U65C patients was 96.21 percent (as compared to the statewide average of 82.6 percent), and its penetration rate for U65NC patients was 16.82 percent (as compared to the statewide average of 15.98 percent). HON’s penetration rates in those age/disease cohorts is higher than the penetration rates achieved by Hope in SA 8C over the same time period; Hope’s penetration rate in calendar- year 2003 for U65C patients was 87.85 percent, and its penetration rate for U65NC patients was 14.75 percent. To the extent that the lower penetration rates in SA 8B for patients under the age of 65 in calendar-year 2002 reflected a “gap” in the hospice services provided by HON or an “unmet need” in SA 8B, that gap no longer exists and the unmet need is being met. Accordingly, the first special circumstance alleged by Hope in its application was not proven. Denial of Access to Persons on Palliative Chemotherapy and Palliative Radiation The second special circumstance alleged in Hope’s CON application was that persons who are receiving or may need to receive palliative chemotherapy or palliative radiation (hereafter “palliative chemo/radiation”) are being denied delayed access to hospice by HON. Palliative Chemo/Radiation, Generally Palliative chemo/radiation are medical treatments whose primary purpose is to reduce the size of the patient’s malignant tumors, thereby relieving the pressure exerted by those tumors on other organs and reducing the pain associated with that pressure. Unlike curative chemotherapy and radiation whose purpose is to cure the patient’s cancer and to allow the patient to have a normal life expectancy, the purposes of palliative chemo/radiation are symptom reduction and improved quality of life during the dying process. Palliative chemo/radiation is typically administered by oncologists, who are physicians that specialize in the treatment of cancer. The treatments are typically administered in the oncologist’s office. The toxicity of the chemotherapy and the resulting side-effects (e.g., fatigue, nausea, etc.) have to be weighed against the benefits of the treatment for each patient. Similarly, the burdens of radiation treatment (e.g., interruption of other pain control measures to transport the patient to the radiation facility) have to be weighed against the benefits of the treatment for each patient. In some cases, particularly as the patient’s tumor burden increases, the burdens associated with palliative chemo/radiation will outweigh the benefits. Palliative chemo/radiation is expensive. The average cost of a treatment is $750, but the cost can be as high as $2,500 per treatment, and the treatments are typically administered on a weekly basis. The costs of the chemotherapy drugs and the radiation treatments are a larger component of those costs than are the costs of the physician services related to the administration of the drugs/treatments. An oncologist administering palliative chemo/radiation to a non-hospice Medicare patient submits his or her bills directly to Medicare and those bills are subject to review by the fiscal intermediary as described above. When palliative chemo/radiation is administered to a hospice Medicare patient by an oncologist who is acting as a consulting physician, the professional component of the palliative chemo/radiation bill is paid by Medicare as a “pass- through” charge submitted by the hospice; the technical component (i.e., the chemotherapy drugs and the radiation treatment itself) is paid by the hospice, not Medicare. Oncologists make more money on the drugs that are administered as part of the palliative chemo/radiation treatment than they do on the professional services related to the administration of the drugs. Because the costs of palliative chemo/radiation that are not passed-through to Medicare typically exceed the per diem payment that the hospice receives from Medicare for the patient, the costs of the patient’s palliative chemo/radiation are effectively being subsidized by the per diem payments received by the hospice for other patients. As a result, it is important for hospices that provide large amounts of palliative chemo/radiation to increase their admissions and/or their ALOS in order to remain profitable. Most hospice patients who are receiving palliative chemo/radiation were receiving that treatment at the time of their admission to hospice. It is far less common that a patient not receiving palliative chemo/radiation at the time of his or her admission to hospice is started on that course of treatment after being admitted to hospice. At the time the patient is admitted to hospice, the oncologist is in the best position to determine whether the patient is benefiting from palliative chemo/radiation because he or she has an established physician-patient relationship with the patient; however, the hospice medical director is still required to do an independent assessment (typically through a review of the patient’s medical records) of the appropriateness of palliative chemo/radiation as part of the development of the patient’s initial care plan. Once the patient is a hospice patient, the hospice medical director is responsible for the implementing and monitoring the patient’s care plan and, as a result, the medical director should be the physician making the ultimate decision (with the input of the consulting oncologist, the IDT, the patient, and the patient’s family) as to the continuation or termination of palliative chemo/radiation treatments. To that end, it is important for the medical director to monitor the effectiveness and appropriateness of the palliative chemo/radiation being administered to the hospice’s patients. Hospices have a financial incentive not to provide, or not to continue to provide palliative chemo/radiation to their patients because the hospice is not reimbursed for a large part of the high costs associated with those treatments; however, the evidence was not persuasive that the disincentive to providing palliative chemo/radiation is as significant as Hope’s witnesses suggested.2 HON’s Approach to Palliative Chemo/Radiation in Service Area 8B HON does not categorically deny palliative chemo/radiation to its patients, and it does not refuse to admit or delay the admission of patients who are receiving palliative chemo/radiation.3 HON provides palliative chemo/radiation to its patients where it shown that the treatments are actually benefiting the patient and that the benefits outweigh the burdens on the patient. The consulting oncologist is involved in the benefit-burden analysis, but he or she does not have sole discretion as to whether palliative chemo/radiation will be continued. Among other things, HON’s medical director uses a fatigue algorithm and the “Palliative Care Practice Guidelines in Oncology” published by the National Comprehensive Cancer Network in evaluating the benefit and burden to the patient of continuing palliative chemo/radiation. HON’s medical director also uses objective information such as laboratory results and imaging data, which HON requires the consulting oncologist to provide, in the benefit-burden analysis. HON’s approach is consistent with the Medicare regulations, which vest the ultimate responsibility for the patient’s pain and symptom management in the hospice medical director, not the consulting oncologist. It is also consistent with the “Medical Director Model” published by the American Academy of Hospice and Palliative Medicine. The amount of palliative chemotherapy provided by HON in 2000, 2001, and 2002, was higher than the “national average,”4 when measured on a cost per patient served basis or cost per patient day basis. The amount of palliative radiation provided by HON in 2002 was also higher than the “national average” when measured on a cost per patient served basis or cost per patient day basis; it was lower than the “national average” in 2000 and 2001. HON does not defer to the oncologist’s determination that the patient’s palliative chemo/radiation should be continued once the patient becomes a hospice patient. The determination as to whether to continue the palliative chemo/radiation is made as part of the development and monitoring of the patient’s care plan. HON's medical director is ultimately responsible for developing the patient's care plan, which is done with the input and collaboration of the patient, patient’s family, the IDT, and the consulting oncologist. HON reimburses the consulting oncologist at 100 percent the Medicare-allowable rate for palliative chemo/radiation administered by the oncologist. Hope’s Approach to Palliative Chemo/Radiation Hope’s approach to palliative chemo/radiation is much different from HON’s approach, and Hope intends to replicate its existing policies in its proposed SA 8B hospice program. The differences start in the way that Hope interacts with its referral sources, particularly physician groups such as Florida Cancer Specialists (FCS). FCS has over 40 medical oncologists with offices in Ft. Myers, Naples, and several other cities in southwest Florida. Hope generates the vast majority of its admissions from physicians. In 2002, for example, approximately 90 percent of its referrals -- 3,002 out of 3,335 -- were from physicians. The disproportionate number of physician referrals at Hope is explained, at least in part, by Hope’s “aggressive and assertive” sales and marketing efforts directed to physicians. In that regard, Hope’s “professional relations coordinators” have been trained by a sales and marketing professional to spend most of their time where it is likely to generate the most sales. Hope employs four professional relations coordinators, who along with a professional relations director and a community relations coordinator, make up Hope’s Professional Relations Department. That Department is Hope’s “sales and marketing arm.” Hope’s professional relation coordinators most frequently visit physicians’ offices, and primarily oncologists’ offices such as FCS. Indeed, the professional relations coordinator whose region included FCS’s Ft. Myers office testified that she visits FCS, on average, three to five times per week. The professional relations coordinators’ primary purpose when visiting physicians’ offices is to encourage physicians to make earlier referrals to Hope, thereby increasing the Hope’s ALOS and utilization. Another significant difference in Hope’s approach to palliative chemo/radiation is the degree of control that the oncologist continues to have over the patient’s course of treatment after the patient is enrolled in hospice. Hope's medical director does not routinely monitor or determine the effectiveness and appropriateness of the palliative chemo/radiation administered to its patients; instead, that monitoring is done by the oncologist administering the treatments. As a result, the treatments continue as long as the oncologist determines that they are benefiting the patient.5 Stated another way, for those patients at Hope receiving palliative chemo/radiation, the consulting oncologist effectively controls the patient’s care plan, at least to the extent of the pain management through palliative chemo/radiation, without any significant input from or oversight by Hope’s medical director or the IDT. Another difference is that Hope uses a third party administrator (TPA) to pay the bills submitted by the consulting oncologists and other physicians. The TPA performs essentially ministerial duties in processing the bills for payment. It does not do a chart review or any other analysis to determine whether the palliative chemo/radiation or other services billed by the physician were actually delivered or whether those services were medically- appropriate. The practical effect of using the TPA to pay the bills submitted by the consulting oncologists is that those components of the bills that are not passed through to Medicare –- e.g., the cost of the chemotherapy drugs or radiation treatments –- are not subjected to any type of utilization review. The TPA pays the bills submitted by consulting oncologists (and other consulting physicians) at 100 percent of the Medicare allowable rate, typically within 30 days after the bill is submitted. Hope’s use of the TPA to pay its consulting physicians, in conjunction with the level of control that it gives to its consulting oncologists over the administration of the patient’s palliative chemo/radiation treatments, creates an incentive for oncologists to refer their patients to Hope. The incentive is not financial in the sense that the oncologist will be reimbursed at a higher rate, but rather it is based upon the reimbursement being made without subjecting the treatment or the bills to the same level of review that they would be subject to if the patient was not enrolled in hospice and the oncologist billed Medicare directly. The end-result of Hope’s policies related to palliative chemo/radiation can be seen in the level of expenditures made by Hope for those services, both to FCS and in total, as compared to HON and the “national average.” Hope paid FCS over $1.1 million in 2002, and over $1.7 million in 2003 for services rendered by FCS physicians to patients at Hope, which primarily consisted of palliative chemo/radiation services. No other physician group received more reimbursements from Hope than did FCS. In 2002, Hope’s total palliative chemo/radiation expenditures were approximately nine times (i.e., $1.83 million to $207,000) higher than HON’s palliative chemo/radiation expenditures even though Hope only had four times (i.e., 1,344 to 331) as many cancer admissions as did HON. In 2003, Hope’s palliative chemo/radiation expenditures were more than 12.5 times (i.e., $2.58 million to $201,500) higher than HON’s palliative chemo/radiation expenditures even though Hope only had 2.3 times (i.e., 1,333 to 571) as many cancer admissions as did HON. Similarly, on a per-cancer admission basis, Hope’s palliative chemo/radiation expenditures were approximately two times that of HON in 2002 ($1,365 to $625) and approximately 5.5 times that of HON in 2003 ($1,937 to $353). The disparity between Hope’s and HON’s palliative chemo/radiation expenditures is comparable to the disparity between Hope’s expenditures and the “national average.” Ultimate Findings Related to Palliative Chemo/Radiation as a “Special Circumstance” The evidence was not persuasive that hospice patients on or in need of palliative chemo/radiation in SA 8B are being underserved by HON despite the fact that HON provides considerably less palliative chemo/radiation than does Hope in the adjacent SA 8C. If anything, the evidence suggests that those services are being overutlized in SA 8C. The evidence was also not persuasive that HON has policies that inappropriately deny or unreasonably delay access to hospice for patients on or in need of palliative chemo/radiation, even though HON’s approach to providing those services differs markedly from Hope’s approach. If anything, the evidence suggests that Hope improperly delegates too much authority and control to the consulting oncologist over the management of hospice patients on palliative chemo/radiation. Accordingly, the second special circumstance alleged by Hope was not proven. Inadequate Service to African-Americans The third special circumstance identified in Hope’s CON application is that African-Americans are not being adequately served by HON. Hope expressly abandoned this alleged special circumstance at the hearing through the testimony of its health planner and the stipulations of its counsel. Inadequate Intensive Hospice Care The fourth special circumstance alleged in Hope’s CON application is that intensive hospice care (i.e., inpatient care and continuous care) is not being adequately provided by HON. Hope expressly abandoned this alleged special circumstance at the hearing through the testimony of its health planner and the stipulations of its counsel. Inadequate Service to the Immokalee Area The fifth special circumstance alleged in Hope’s CON application is that the Immokalee area is being underserved by HON. Immokalee is an unincorporated area in northeastern Collier County composed of zip codes 34142 and 34143. It is approximately 40 miles from Naples. Immokalee has approximately 20,000 year-round residents, and its population grows to as many as 40,000 residents during the growing season. Immokalee is a rural, economically-disadvantaged area, and it is generally underserved for health and social services. In 1993, a charitable organization donated a building in Immokalee to HON. HON remodeled the building to include eight hospice residential beds and office space for the care team members serving patients in the Immokalee area. HON closed that office in the fall of 1994 because the residential beds were not being sufficiently utilized. HON sold the building (for the cost of the renovations that it made to the building) to an organization that provides social services to residents of the Immokalee area. HON has continuously provided hospice services to residents of the Immokalee area since 1983 when it began operating in SA 8B, even though it only had physical office space in the Immokalee area for a short time in the mid-1990’s. HON’s service of the Immokalee area is similar to Hope’s service of Glades and Hendry Counties, which are the rural counties served by Hope in SA 8C. Hope did not have a physical office in those counties until 1996 (Hendry County) and 2001 (Glades County), but according to Hope’s chief executive officer, Hope was still able to adequately serve those counties. HON continued to serve patients in the Immokalee area after it closed its Immokalee office in the fall of 1994. HON remained involved in the Immokalee community after it closed its Immokalee office, but prior to April 2002 its involvement was minimal, and did not include the same level of proactive community education and outreach that it is currently doing.6 HON has recently become more visible in the Immokalee community. For example, HON placed advertisements (in both English and Spanish) in the 2003-04 phone books the serve the Immokalee area; it is now regularly advertises in the local Immokalee newspapers (in both English and Spanish); and it recently joined the Immokalee Chamber of Commerce. HON has also recently engaged in a number of proactive community education and outreach activities in the Immokalee area. For example, a HON representative regularly participates in the meetings of the Immokalee Interagency Council, which is a collection of social service agencies that meet monthly to coordinate with each other in an effort to ensure that there are no gaps in the social services provided to Immokalee residents. HON’s renewed involvement in the Immokalee community began in April 2002 when it assigned a “social services coordinator," Kathleen Hill, to the Immokalee area. Ms. Hill was based out of HON’s main office in Naples, but she was in the Immokalee area “a minimum of two to three times a week” meeting with patients and communicating with community organizations regarding the hospice services offered by HON. Ms. Hill continued in that position until April 2003. HON decided to reestablish an office in the Immokalee area in mid-2002, well before April 2003 when Hope submitted its letter of intent to the Agency for its proposed SA 8B hospice program. That decision was based, in part, on a need to reduce the crowded conditions at HON’s main office by moving staff to satellite offices. HON’s new Immokalee office opened in August 2003. The office is staffed by social worker Lillian Cuevas, who is primarily responsible for providing education and information about hospice and HON to community organizations in the Immokalee area. Ms. Cuevas has actively engaged in those education and outreach efforts since she filled Ms. Hill’s position in September 2003. No direct patient care is provided out of the Immokalee office, but the office is used by the care team members serving patients in the Immokalee area as a place to do charting work. HON’s current Immokalee office serves essentially the same functions as the “counseling and education center,” which Hope committed in its application to open within two years after the approval of its proposed SA 8B hospice program. HON penetration rate in the Immokalee area in 2002 was 29.35 percent. That rate is considerably lower than the penetration rate achieved by HON for SA 8B as a whole, which is not unexpected given the geographic and demographic characteristics of the Immokalee area. The penetration rate achieved by HON in the Immokalee area in 2002 was lower than the 36.44 percent7 overall penetration rate achieved by Hope in the two rural counties that it serves, but it was higher than the 26.92 percent penetration rate achieved by Hope in Glades County alone. The difference in the penetration rates achieved by HON and Hope in the rural areas of their respective service areas is not material, and that difference does not in and of itself constitute a special circumstance that would warrant the approval of a new hospice program in SA 8B, particularly since the physical presence that Hope has proposed for Immokalee is essentially the same as that which HON currently has. In sum, the evidence fails to establish that the Immokalee area is or has been underserved by HON. Moreover, HON’s recent reestablishment of an office in the Immokalee area is expected to help HON increase its penetration rate in the Immokalee area and ensure that that the area continues to be adequately served in the future. Indeed, Hope’s health planner testified that he does not know whether Immokalee continues to be an underserved area in light of HON’s recent reestablishment of an office in the area. Accordingly, the fifth special circumstance alleged by Hope in its application was not proven. Impact on HON As stated above, Hope projected in its application that it will have 183, 259, and 304 admissions at its proposed SA 8B hospice program in its first three years of operation. Those figures also represent the number of “lost admissions” at HON since HON is currently the sole provider of hospice services in SA 8B; however, as discussed below, those figures are materially understated. First, in projecting the total number of hospice admissions for SA 8B, Hope used penetration rates that are lower than those actually achieved by HON. The penetration rates used by Hope were based upon the assumption that “gap with the Service Area 8C penetration rates” would be closed by the seventh year of operation of Hope’s proposed SA 8B hospice program; however, the calendar- year 2003 data reflects that the “gap” between the penetration rates in SA 8B and SA 8C has effectively been closed already. The effect of using the lower penetration rates is that the total number of hospice admissions for SA 8B projected in the application for 2003 and beyond are materially understated and not reliable. On this issue, the projections made by HON’s health planner regarding the total number of hospice admissions for SA 8B during Hope’s first three years of operation –- i.e., 1,490 (year 1), 1,605 (year 2), and 1,736 (year 3) -- are more reasonable than Hope’s projections in the application. Second, the projections in the CON application assume that Hope’s proposed SA 8B program will take an equal percentage of the cancer and non-cancer patients that would have otherwise been served by HON. Specifically, in the first year of operation, Hope projects that it will get 15 percent of SA 8B’s cancer patients and 15 percent of the service area’s non-cancer patients; in the second year of operation, Hope projects that it will get 20 percent of each category’s patients; and in the third year of operation, Hope projects that it will get 22 percent of each category’s patients. The assumption that Hope will take an equal number of cancer and non-cancer patients from HON each year is not consistent with the evidence regarding Hope’s “open access” philosophy towards palliative chemo/radiation or the testimony of oncologists in SA 8B regarding their intent to refer their patients to Hope rather than HON if Hope’s application is approved.8 Indeed, based upon that evidence and testimony, it is reasonable to expect that Hope will get a significantly larger percentage of the cancer patients in SA 8B than will HON. On the issue of the percentage of cancer patients that Hope will take from HON, the projections of HON’s health planner are more reasonable than the projections of Hope’s health planner.9 Specifically, it is reasonable to expect that Hope will get 25 percent, 50 percent, and 75 percent of the cancer patients in SA 8B in its first three years of operation. The effect of Hope's getting a larger percentage of the service area’s cancer patients is that its total admissions and, hence, HON’s “lost admissions” will more likely be 289, 533, and 787 in its first three years of operation.10 Those admissions translate into projected market shares for Hope of 19.4 percent, 33.2 percent, and 45.3 percent in its first three years of operation, based upon the total number of admissions projected by HON’s health planner for SA 8B over that period. Those market shares are reasonable and attainable, even after taking into account HON’s status as the long-time incumbent hospice provider with considerable community support. The ultimate effect of the “lost admissions” is that HON’s ADC will be 169 patients (rather than 210 patients) in the first year of operation of Hope’s proposed SA 8B hospice program; 151 patients (rather than 226) in the second year of Hope’s program; and 134 patients (rather than 245 patients) in the third year of Hope’s program.11 The financial impact on HON of the “lost admissions” is significant, both in terms of the lost patient revenues from the admissions and the lost donations and bequests that HON would have otherwise received from those patients. That financial impact is material, even though HON has a strong balance sheet because the impact will be cumulative and continuing in nature. The “lost admissions” would require HON to eliminate certain services that it currently provides, including a number of “non-core” services (e.g., massage and pet therapies) that enhance the hospice experience of the patient and his or her family; however, the evidence was not persuasive that HON would have to eliminate as many services as it projected in Exhibit HON-28. Indeed, HON provided those services in the past when its census was at levels similar to those which would result from “lost admissions” to Hope.12 To the extent that Hope’s entry into SA 8B would adversely impact HON’s ability to recruit and retain staff and/or volunteers, that impact is mitigated by HON’s expectation that it would need to cut services and staff as a result of the admissions that it would lose to Hope. The evidence was not persuasive that Hope’s entry into SA 8B will benefit HON by increasing awareness of hospice services and thereby increasing the overall penetration rate for hospice services in the service area, particularly since the calendar-year 2003 data reflects that the penetration rate in SA 8B is already 53.7 percent, which is the fifth highest in the state and only 2.9 percentage points lower than SA 9C, which has the highest penetration rate in the state at 56.6 percent. In sum, the approval of Hope’s application will have a material and adverse impact on HON from a financial and programmatic perspective because HON will be transformed from a growing hospice into one with a declining census, which in turn, will limit HON’s ability to provide the same range and quality of services that it currently provides. Applicable Statutory and Rule Criteria Section 408.035, Florida Statutes (2004)13 (a) Subsections (1), (2), and (5) (Need for Proposed Services; Accessibility of Existing Services; and Enhancing Access) As stated above, there is no numeric need for a new hospice program in SA 8B under the Agency’s rule methodology. Statistically speaking, HON is adequately meeting the need for hospice services in SA 8B. Its penetration rate has consistently been higher than the statewide average, and the calendar-year 2003 data, which was the most current available at the time of the hearing, shows that HON's penetration rate is one of the five highest in the state. Because a hospice’s penetration rate is, a measure of the hospice’s success in making its services accessible to terminally-ill patients in its service area, there is no need for an additional hospice in SA 8B from an access-to-care perspective. There is also no need for an additional hospice program in SA 8B from a quality of care perspective. HON is accredited by JCAHO and it performs well on the annual state licensure surveys, which provide objective measures the high quality of care at HON. The anecdotal evidence presented by Hope regarding the inappropriate medication and/or treatment of HON patients and the routine overmedication of HON patients was not persuasive. Most of that testimony was from individuals who had no specialized training or experience in hospice and palliative care or the unique medication issues associated with dying patients in hospice. The fact that certain medications are discontinued by HON upon the patient’s admission into hospice is not in and of itself an indicator of a quality of care problem at HON. Indeed, it is entirely appropriate for the hospice medical director to reevaluate each medication that the patient is taking at the time of his or her admission to hospice in order to determine (in conjunction with the patient, patient’s family, and the patient’s other physicians) whether those medications are appropriate since the goals of care in hospice are pain management rather than curative care. The evidence establishes that HON’s medical director does precisely that before discontinuing medications that the patient is taking at the time of his or her admission to hospice. The evidence was not persuasive that HON requires its patients to execute do-not-resuscitate orders (DNRs) as a condition of admission such that patients who do not have DNRs are being denied or delayed access to hospice care by HON. Instead, the evidence establishes that HON discusses DNRs with its patients at the time of admission and on an ongoing basis, consistent with the guidelines of the American Medical Directors Association, but that it does not require its patients to execute a DNR as a condition of admission. The evidence was not persuasive that access to hospice care needs to be “enhanced” for any subset of the population in SA 8B, particularly those allegedly underserved groups identified in Hope’s application. See Parts F(1), (2), and (5) above. To the contrary, the evidence establishes that HON is providing sufficient and appropriate outreach in SA 8B regarding the hospice services that it provides. Moreover, to the extent that Hope’s proposed SA 8B hospice program would “enhance” access to hospice for patients on palliative chemo/radiation because of Hope’s aggressive sales and marketing efforts designed to get oncologists to refer their patients to Hope earlier, the evidence was not persuasive that such “enhancements” are appropriate under the Medicare regulations or necessarily beneficial to the patient. In sum, criteria in Section 408.035(1), (2), and (5), Florida Statutes, weigh against the approval of Hope’s application. Subsection (3) (Applicant’s Quality of Care) Hope provides quality care at its existing hospice program in SA 8C.14 Hope has several ongoing initiatives through which it continuously evaluates its internal operations and delivery of services to its patients. The purpose of those initiatives is to enhance the quality of care that Hope provides. It is reasonable to expect that Hope will provide quality care in its proposed SA 8B hospice program because it intends to utilize its current policies and procedures in its proposed program, including its pain and symptom management protocols which guide the treatment of almost all of Hope’s patients at its existing SA 8C program. The protocols, which help to ensure that patients receive consistent and quality hospice care, are not unique to Hope. Indeed, HON has developed similar pain and symptom management protocols that guide the treatment of almost all of its patients. HON provides high quality care at its existing hospice program in SA 8B.15 Indeed, the quality of care that will be provided by Hope in its proposed program is lower than that provided by HON in at least two respects. First, Hope has fewer bilingual direct-care employees than does HON. Only five of Hope’s direct-care employees are bilingual. As a result, Hope relies upon volunteer interpreters to enable its direct-care employees to communicate with patients and families for whom English is not the primary language. By contrast, HON has 25 direct-care employees, including its medical director, who are bilingual in Spanish and English; and it has approximately 15 other direct-care employees who speak French, Creole, Portuguese, Polish, Armenian, Thai/Laotion, sign language, and/or German in addition to English. This allows HON’s direct-care employees communicate directly (rather than though an interpreter) with the patient and his or her family, and it also fosters sensitivity to the patient’s cultural/ethnic values. HON has Spanish versions of its brochures, caregiver’s guide, admissions forms, and other materials, which it provides to patients and families whose primary language is Spanish rather than English. Hope also provides some of its documents and forms in Spanish as well as English. Second, even though Hope’s ALOS exceeds the ALOS at HON and the “national average,” the amount that Hope spends on nursing costs is lower than the “national average” and the amount spent on nursing costs by HON, both on a per patient basis and on a per patient-day basis. In 2002, for example, Hope’s ALOS was 62.51 days, HON’s ALOS was 49.13 days, and the “national average” was 47.79 days. In that same year, Hope’s nursing expenditures were $1,158.09 per patient (or $18.53 per patient-day) whereas the “national average” was $1,540.43 per patient (or $33.06 per patient-day) and HON’s nursing expenditures were $2,250.84 per patient (or $45.82 per patient day). The effect of the higher ALOS and lower expenditures on nursing at Hope is that its patients are staying longer but receiving less, or less-intense direct patient care than HON’s patients.16 There are slight differences in the admissions processes at Hope and HON –- e.g., HON uses designated admissions teams of nurses and social workers for the initial clinical assessment of its patient in order to streamline and eliminate delays in the admission process, whereas the initial clinical assessment of Hope’s patients is done by the nurse and social worker that will be caring for the patient in order to promote continuity of care; however, the evidence was not persuasive that those differences make the admission process and/or the overall quality of care at Hope materially better than that at HON, or vice versa. In sum, Hope satisfies the criterion in Section 408.035(3), Florida Statutes, because it has a history of providing quality care in its existing SA 8C hospice program and it has the ability to provide quality care in its proposed SA 8B hospice program; however, this criterion does not materially weigh in favor of the approval of Hope’s application because HON is currently providing high quality care in SA 8B. Subsections (4) and (6) (Availability of Resources and Financial Feasibility) Hope has adequate personnel and funds to expand its current hospice program into SA 8B as proposed in its CON application. Hope has adequate financial resources to fund the cost of its proposed SA 8B hospice program and its other ongoing and proposed capital projects, including its proposed SA 8A expansion. As a result, Hope’s proposed SA 8B hospice program is financially feasible in the short-term. Hope’s proposed SA 8B hospice program is projected to generate a net profit from operations in its second year (see Finding of Fact 141), and as a result, Hope’s proposed SA 8B hospice program is financially feasible in the long-term. In sum, Hope’s application satisfies the criteria in Section 408.035(4) and (6), Florida Statutes. Subsection (7) (Fostering Competition that Promotes Cost-effectiveness) The establishment of a new hospice in SA 8B will necessarily increase competition for hospice care in the service area because there is currently only one hospice in SA 8B; however, the evidence was not persuasive that such competition would benefit the hospice patients in SA 8B or the community at large. The evidence was not persuasive that fostering competition is a consideration that should be given significant weight in the hospice context because hospice care does not lend itself to competition in the traditional sense because its “consumers” are terminally-ill patients and their families. Indeed, Hope’s chief executive officer acknowledged that the free market system should not drive the establishment of hospices, and that not all standard business approaches are appropriate for the hospice industry. Moreover, the evidence was not persuasive that competition between Hope and HON would promote cost- effectiveness. To the contrary, Hope’s entry into SA 8B would likely result in a dramatic increase the utilization of palliative chemo/radiation services in the service area, which as discussed above, is costly. Accordingly, the criterion in Section 408.035(7), Florida Statutes, weighs against approval of Hope’s application. Subsection (8) (Costs and Methods of Construction) Hope is not proposing any new construction in connection with its proposed SA 8B hospice program, and as a result, the criterion in Section 408.035(8), Florida Statutes, is not applicable. Subsection (9) (Medicaid and Charity Care) Hope did not condition the approval of its CON application on the provision of a minimum level of patient days to Medicaid and/or charity patients. The financial projections in Schedule 7A of Hope’s application assume that six percent of the patient days at its proposed SA 8B hospice program will be attributable to Medicaid patients and that two percent of its patient days will be attributable to charity patients. The evidence is insufficient to evaluate the significance of the percentages of Medicaid and charity care patient days projected by Hope. For example, the record does not reflect how those percentages compare to the statewide average for hospices and/or HON’s actual experience in SA 8B. The evidence is also insufficient to evaluate Hope’s past provision of hospice care to Medicaid and charity patients; even though the notes accompanying Schedule 7A state that the proposed payer mix (and, hence, the Medicaid and charity patient-day percentages) is based upon “the experience of the applicant and the proposed service area,” the record does not include Hope’s Medicaid cost reports or other data showing its actual experience in SA 8C. Nevertheless, it is clear from the evidence that Hope has a history of providing free services for the benefit of the local community that it serves. For example, Hope provides its bereavement services to the entire community, not just hospice patients and families; it offers a bereavement camp known as Rainbow Trails for children who have a death in the family even if the deceased was not a hospice patient; and it provides crisis counseling to the children in the local schools as needed. Hope also administers a “VOCA” program that works with the local State Attorney’s office and the Florida Highway Patrol to counsel persons who are victims of crime or who are involved in serious traffic accidents. Approximately 80 percent of the cost of the VOCA program is funded by a grant Hope received from the Attorney General’s Office; the remaining 20 percent is funded by Hope. The significance of the free services provided by Hope is mitigated by the fact that HON provides similar free services to the community. See Finding of Fact 51. Moreover, the criterion in Section 408.035(9), Florida Statutes, is not entitled to great weight in this proceeding because Hope, like HON and all other hospices, is required by law to serve all hospice-eligible patients who request hospice services regardless of their ability to pay. Subsection (10) (Designation as a Gold Seal Nursing Home) Hope is not proposing the addition of any nursing home beds and, as a result, the criterion in Section 408.035(10), Florida Statutes, is not applicable. (2) Section 408.043(2), Florida Statutes The statutory criteria in Section 408.043(2), Florida Statutes -- “need for and availability of hospice services in the community” –- encompass essentially the same issues as the criteria in Subsections (1), (2) and (5) of Section 408.035, Florida Statutes, and, the findings related to those subsections equally apply to the evaluation of Hope’s application under Section 408.043(2), Florida Statutes. See Part H(1)(a) above. (3) Rule Criteria Florida Administrative Code Rule 59C-1.0355(4)(e) Florida Administrative Code Rule 59C-1.0355(4)(e)1. provides that preference will be given to an applicant who commits to serve populations with “unmet needs.” Hope committed in its application to open a "counseling and education center" in Immokalee during the first two years of the operation of its program, and it committed to engage in a “special outreach program to educate the medical and consumer communities in Service Area 8B about the effectiveness of hospice care for patients under the age of 65.” Those commitments are aimed at two of the population groups in SA 8B that Hope contends are being underserved by HON; however, as discussed in Parts F(1) and (5) above, Hope failed to prove that those population groups are being underserved by HON or that they have "unmet needs." Florida Administrative Code Rule 59C-1.0355(4)(e)2. provides that preference will be given to an applicant who proposes to provide inpatient care through contractual arrangements with existing health care facilities unless the applicant demonstrates a more cost-effective alternative. Hope plans to provide inpatient care “through contractual arrangements with existing nursing homes and hospitals or through the use of its three existing and approved facilities in Lee County.” This approach is reasonable, and the record does not reflect whether there is a more cost-effective alternative. Florida Administrative Code Rule 59C-1.0355(4)(e)3. provides that preference will be given to an applicant who has a commitment to serve patients without primary caregivers at home, the homeless, and patients with AIDS. Hope plans to serve homeless patients, patients without caregivers at home, and patients with AIDS in its proposed SA 8B program; it has a history of serving such patients in its existing hospice program, as does HON. The fact that HON has a history of serving such patients reduces the weight given to the preference in Florida Administrative Code Rule 59C-1.0355(4)(e)3., in evaluating Hope’s application. Florida Administrative Code Rule 59C-1.0355(4)(e)4., which gives preference to an applicant who commits to establish a physical presence in the underserved county or counties of a three-county hospice service area, is inapplicable because there is only one county in SA 8B. Florida Administrative Code Rule 59C-1.0355(4)(e)5. provides that preference will be given to an applicant who proposes to cover services that are not specifically covered by private insurance, Medicaid, or Medicare. Hope plans to provide services that are not covered by private insurance, Medicaid, or Medicare, including chaplain services, therapies (e.g., massage, pet, music, art), and bereavement services to families of non-hospice patients; it has a history of providing such unreimbursed services as part of its existing hospice program, as does HON. The fact that HON has a history of providing similar unreimbursed services reduces the weight given to the preference in Florida Administrative Code Rule 59C-1.0355(4)(e)5. in evaluating Hope’s application. Florida Administrative Code Rule 59C-1.0355(5) Florida Administrative Code Rule 59C-1.0355(5) requires the applicant for a new hospice program to include evidence showing that that its proposal is “consistent with the needs of the community and other criteria contained in the local health council plans.” The applicable local health council plan includes the following preferences related to hospice care: Preference shall be given to applications that indicate a willingness to serve patients with HIV/AIDS and the homeless, as well as traditionally underserved populations. Preference shall be given to applications that propose either new or use of unused inpatient facilities that best provide for the care of patients and families. Preference shall be given to applications that demonstrate a commitment to provide services that do not impose barriers to care, such as requiring a caregiver or providing intensive palliative care. Preference shall be given to applications that exceed 80% occupancy level during the period of January through March on an annual basis, and in the event of multiple locations under one license, any individual location applies. Preference shall be given to applications that meet the minimum volume requirement as specified in the rule within the applicant’s core service area. The local health plan criteria are not as significant because of the 2004 amendments to the CON law –- Chapter 2004- 383, Laws of Florida -- which effectively eliminated the local health plan as a consideration in CON review. In any event, except for the third and fifth preferences, the local health plan preferences are either inapplicable or materially similar to the preferences in Florida Administrative Code Rule 59C-1.0355(4)(e) discussed above. Thus, the findings related to that rule equally apply to the evaluation of Hope’s application under Florida Administrative Code Rule 59C-1.0355(5). With respect to the third preference, Hope demonstrated that its policies do not discourage the admission patients receiving intensive palliative care, such as palliative chemo/radiation. Indeed, as discussed in Part F(2)(c) above, Hope’s polices effectively encourage the admission of those patients. Thus, to the extent that the local health plan preferences are still relevant, Hope is entitled to the third preference; however, for the reasons stated above in Part F(2)(d), that preference is not given significant weight in relation to the other statutory and rule criteria. With respect to the fifth preference, the minimum volume requirement in the Agency’s hospice rule is 350 admissions per year, which represents the volume arguably necessary to support a comprehensive range of hospice services. Hope projected in its application that its proposed SA 8B hospice program would achieve that volume by its fourth year of operation and, as discussed in Part G above, it is more likely to achieve that volume by its second year of operation. Moreover, Hope’s proposed SA 8B program is essentially an expansion of its existing hospice program, which had more than 3,200 admissions in 2003. With respect to the consistency of Hope’s application with the needs of the community, Hope's proposed SA 8B hospice program is not inconsistent with the needs of patients in the service are under the age of 65, patients in the service area in need of palliative chemo/radiation, and/or patients in the Immokalee area; however, as discussed in Part F above, Hope failed to establish that there was an "unmet need" in those areas that needs to be addressed through the establishment of a new hospice program in SA 8B. Florida Administrative Code Rule 59C-1.0355(5) also requires the applicant to include letters of support from various types of entities and organizations in the service area endorsing the hospice program being proposed by the applicant. Hope’s application includes letters of support from physicians, nursing homes, members of the Immokalee community and other individuals, and religious and community organizations. Five of the nine physician letters were from oncologists, three of whom are FCS oncologists. Hope’s application does not include any letters of support from an acute care hospital in SA 8B, even though the application states that Hope may provide respite and inpatient care through contractual arrangements with the local hospital. Florida Administrative Code Rule 59C-1.0355(6) Florida Administrative Code Rule 59C-1.0355(6), quoted below, requires the applicant to include a detailed description of its proposed hospice program in the CON application. Among other things, the rule requires the application to include the projected number of admissions for the first two years of operations, the arrangements for providing inpatient care, and proposed community education and fundraising activities. Hope’s application included all of the information required by Florida Administrative Code Rule 59C-1.0355(6); the description of the project in the application is reasonable and attainable; and as discussed above, Hope will likely exceed the number of admissions projected in its application.
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Agency issue a final order denying Hope’s application, CON 9695, to establish a new hospice program in SA 8B. DONE AND ENTERED this 24th day of January, 2005, in Tallahassee, Leon County, Florida. S T. KENT WETHERELL, II Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 24th day of January, 2005.
The Issue Whether a need exists for an additional hospice in Agency for Health Care Administration service area 1. Whether the certificate of need application of Bay Medical Center to establish the hospice, on balance, meets the criteria for approval.
Findings Of Fact The Agency For Health Care Administration (“AHCA”) is the state agency which administers the certificate of need (“CON”) program for health care facilities and services in the state. AHCA published a need for one additional hospice program in service area 1, in Volume 22, Number 5 of the Florida Administrative Weekly (February 2, 1996). Bay Medical Center (“BMC”), which currently operates a hospice in service area 2A, is the applicant for CON 8377 to establish the additional hospice program in service area 1. Hospice of Northwest Florida, Inc. (“HNWF”) is an existing provider of hospice services in both service areas 1 and 2A. Service area 1 encompasses Escambia, Santa Rosa, Okaloosa, and Walton Counties. Adjacent service area 2A includes Bay, Holmes, Washington, Jackson, Calhoun and Gulf Counties. Hospice care is provided to terminally ill persons, defined as those with a life expectancy of six months or less if their disease runs its normal course. It is palliative and comfort-oriented, rather than curative. Clinical, pschosocial, and spiritual services are provided by an interdisciplinary team, which includes a physician, nurses, social workers, home health aides, chaplains, and bereavement counselors. In addition to paid staff, hospices also use volunteers. Social workers, chaplains, and bereavement counselors work with patients' families for up to a year following death. Services are provided in patients' homes, nursing homes, or acute care hospitals. Hospice care is less expensive than aggressive acute care for the terminally ill. It is estimated that every dollar of hospice care saves a dollar and a half in Florida. Hospice services began in the United States in the 1970’s and were approved for government reimbursement in the 1980’s. Routine home hospice care is reimbursed at a per diem rate, for which the hospice provides care, and pharmaceutical drugs and supplies. Hospices also receive financial support from fund raising activities, and typically provide substantial community services which are otherwise unfunded and not reimbursed. These include community outreach programs in churches and schools, and services to families in which a death was accidental. In 1985, the national hospice penetration rate or P Factor (the percentage of total deaths in which patients received hospice care) was approximately 8 percent. By 1995, the P Factor had increased to 17 percent, with the greatest rate of growth in the most recent five years. In Florida, approximately 29.6 percent of all deaths occur after a person has been admitted to a hospice program. In service area 1, the P Factor is 21 percent. Bay Medical Center BMC is a legislatively - created independent special governmental district, authorized initially to provide health care services to Bay County, but now also to surrounding areas. It operates a 353-bed public, not-for-profit full service hospital in Panama City, Florida, but does not receive tax support. Over 190 physicians staff BMC’s hospital with every specialty, except rheumatology, endocrinology, and neonatology. BMC’s tertiary services include an open heart surgery program. BMC also provides ambulatory or outpatient services. Since 1992, BMC has operated a hospice program in service area 2A, with offices in Panama City (on the campus of the BMC hospital) and in Marianna. The Marianna office opened in February 1997, as a result of the Florida Legislature's 1995 amendment to the enabling legislation allowing BMC to offer services beyond Bay County. The 1995 legislation also expressly authorizes BMC to provide hospice services and to create other organizations to further its mission. The Board of Directors of BMC created the Bay Medical Center Hospice (BMCH). BMCH is governed by a board of directors which is separate and distinct from the board of BMC, although BMC is the entity licensed to operate the hospice program in service area 2A. The BMCH board members live and work in each of the six counties of service area 2A. BMC, which holds the existing license, is the applicant in this proceeding. The board of BMC met on the day that the letter of intent was due, February 19, 1996. A few days prior to the meeting the Chairman of the Board executed the letter of intent, and sent it to a health planning consultant in Tallahassee. After the Board met and passed the resolution authorizing the filing of the letter of intent, the consultant filed the letter of intent with AHCA in Tallahassee. In service area 2A, BMCH has an average daily census of 58-64 patients. BMC projected and HNWF stipulated that BMC can reasonably attain 250 admissions for a total of 12,471 patient days in year one, and 300 admissions for 18,706 patient days in year two of operation in service area 1. BMCH currently advertises its hospice services on television and radio stations, and in newspapers with coverage extending into service area 1. Fund-raising events, including the holiday tree lighting program, are used to market hospice services. Hospice services are also explained in newsletters which reach 27,000 households and all physicians in the area. BMC purchased over 100 sixty-second radio spots, which aired on three stations over a two month period in 1996. The hospice radio spots reached an estimated 87,000 people an average of five times each. BMC estimates a total project cost of $129,591, if CON 8377 is approved, to extend hospice services into service area 1. BMC proposes to condition CON 8377 on the provision of a minimum of 12.8 percent Medicaid and 3.65 percent charity care by the end of the second year of operation, and the care of 7 AIDS patients (with a minimum of 350 total visits) each year. Hospice of Northwest Florida HNWF is an existing provider of hospice services in AHCA service areas 1 and 2A. It is the only licensed hospice in service area 1 and competes with only BMC in 2A. HNWF, organized by hospitals in Pensacola, was issued a CON in December 1982 and a license in 1983, to operate a hospice in Escambia, Santa Rosa, Okaloosa, Walton, Holmes, Washington and Jackson Counties. The home office of HNWF is located in Pensacola. HNWF admitted its first patients and families in January 1984. In 1987, HNWF opened a branch office in Fort Walton Beach, later apparently consolidated with a Niceville office, to serve Okaloosa and Walton Counties. An additional branch office was opened in Marianna in 1991. An adjunct medical director for the Marianna and Niceville offices was hired in 1996. In December 1995, HNWF received a CON waiver and its license was amended to allow it to operate in the remainder of service area 2A, in Bay, Gulf, and Calhoun Counties. HNWF then opened a branch office in Panama City, in August 1996. HNWF also operates, and is expanding from six to eight beds, a residential facility in Pensacola, to house hospice patients without homes or without at-home caregivers. Prior to opening the Panama City office, HNWF historically served Holmes, Washington, and Jackson Counties, while BMCH served patients in Bay, Gulf, Washington, and Calhoun Counties. From 1993 to the present time, HNWF has increased its contracts or agreements from the Pensacola hospital to all of the hospitals in the service areas, including two military hospitals, from none to virtually all assisted living facilities, and from five to all except two or three nursing homes. HNWF operates an extensive outreach and educational effort, including a monthly half-hour television show, which is estimated to reach over 200,000 people in Escambia and Santa Rosa Counties. Other efforts include radio talk show appearances, speaking engagements reaching over 5,000 people in 1996, and extensive direct physician contact. HNWF also relies on it chaplaincy and bereavement programs to extend information about hospice care, particularly to culturally diverse groups of people. Despite these efforts, the number of hospice patients in service area 1 has remained relatively constant. HNWF served 969 patients in calendar year (CY) 1995, and 963 in CY1996. HNWF contends that its lack of growth is due, in part, to declining referrals from nursing homes despite increased referrals from other sources. HNWF attributes the nursing home decline to government investigations of suspected excessive nursing home reimbursements. There is no waiting list for HNWF's services, and its goal is to admit patients within 24 hours of referral. HNWF criticized BMCH’s outreach efforts as inadequate and misdirected, attracting only “easy” patients, those easily diagnosed as qualified for hospice care by well-informed referral sources. On this basis, HNWF expects BMC to take hospice patients from HNWF and not from any growth in hospice patients. HNWF also expects competition from BMC to adversely affect its ability to provide enhanced and unfunded services, including bereavement services in schools, on military bases, and in work- places, and its ability to operate satellite offices and the residential facility. Revenues from patient care are supplemented by donations and grants. In 1992, HNWF established a foundation to coordinate fund raising efforts. The approval of the BMC application, according to HNWF, will also affect the types of hospice services available in the area. In general, more sophisticated hospice services can be provided by larger hospices, including palliative chemotherapy and radiation. BMC’s expert testified that HNWF will continue to be a large hospice with or without the approval of a CON for BMC, and that the additional program will create additional demand for the service. The parties stipulated that subsections 408.035(1)(m) and (3), Florida Statutes, and Rule 59C-1.0355(7) and (8), Florida Administrative Code, are not applicable to this proceeding. At hearing, the parties also stipulated that BMC's list of capital projects meets the requirements of subsection 408.037(2)(a). Rule 59C-1.0355(4)(a) - Numeric Need; Subsections 408.035(1)(b) - like and existing services; (d) - available alternatives Rule 59C-1.0355, the hospice rule, includes the formula for calculating the numeric need for hospice programs. Numeric need exists if the projected total number of hospice patients in service area one for the planning horizon (1400 for July 1997) minus the actual number of hospice patients in the base year (969 in calendar year 1995) is equal to or greater than 350 (in this case, 431). The statewide P Factor, 29.6 percent, is used in the formula to calculate the ratio of projected hospice patients to projected total deaths. The statewide rate represents the normative minimum applied to each service area by operation of the formula in the rule. In service area 1, the P Factor in the base year was 21 percent. The statewide P Factor is an average of rates for various disease categories and ages. Those rates range from a high of hospice care for 70.9 percent of deaths due to cancer in people 65 and over, to a low of 14.1 percent for people under 65 with all other diseases. BMC cites HNWF's relatively low hospice penetration rate as proof of the need for an additional hospice program to create and accommodate additional potential demand. HNWF asserts, however, that certain local circumstances cause the deviation from the statewide P Factor. HNWF also contends that more people received hospice services than the number used in the formula for the base year. The result, according to HNWF is an excess projected demand for hospice services by the July 1997 planning horizon. The extenuating local circumstances cited by HNWF, are the sizable active duty military population, the strong Medicaid AIDs program, the aggressiveness of home health agencies, the prevalence of cancer centers, and the established practice parameters of medical doctors in the service area. The number of active duty military in service area 1 is 23,162. The number of those who die from terminal illnesses is statistically insignificant, because it is military policy to retire personnel who are diagnosed with terminal illnesses, which enhances death benefits to survivors. BMC's expert confirmed that policy and the improbability of serving military patients, although HNWF has served military base families after active duty casualties. Military families represent some of those served by HNWF in the base year, who are not included in the numeric need formula as hospice admissions. In the numeric need formula, according to BMC's expert, military personnel are included in projected deaths to younger age cohorts from causes other than cancer. Of the 431 projected additional hospice admissions, BMC’s expert calculated that, at most, 3 projected hospice deaths of those result from including the active duty military population. By contrast, HNWF's expert testified that the military population of 23,162 multiplied by the statewide death rate of .008 results in an estimated 186 deaths, or approximately 62 hospice patients. The background information in support of the fixed need pool, prepared by AHCA, shows that AHCA calculates projected hospice patients by age and disease. The actual base year service area non-cancer deaths under 65 (1010) divided by the actual service area total deaths (4562), times total projected deaths (4816) gives the total projected deaths non-cancer under 65 (1066). Of the 1066 deaths, 150 are expected to be hospice patients. It is not reasonable to assume that 186 deaths will occur among active duty military, or that 62 of the 150 non- cancer hospice patients under 65 will be in that group. It is more reasonable to assume, as BMC's expert did and as the state numeric need methodology does, that the age cohort of that group has and will continue to have a significantly lower death rate and lower hospice admissions than the 65 and over population. HNWF's expert health planner was unable to distinguish service area 1 from the rest of the state in terms of the strength of the Medicaid AIDs waiver program, the presence of prisons, the existence of home health agencies, the presence of cancer centers, or physicians' practice patterns. Similarly, BMC's expert found no statistical relationship between home health agency visits and hospice utilization. BMC's expert also noted that some hospices provide services to prisoners. HNWF's expert agreed that there is no prohibition to providing hospice services to prisoners. In some areas of the state, such as Gainesville and Tampa, cancer centers co-exist with high levels of hospice utilization. There was no evidence to distinguish physicians' practice patterns in service area 1 from the areas of the state. The argument that HNWF served more than the reported 969 in the base year, through it AIDs support groups, in schools, and for families in which deaths were accidental also does not distinguish HNWF. The evidence shows that hospices typically provide services to persons other than patients and their families, and benefit in terms of marketing and fund-raising. The incidence of AIDS in service area 1 is below that of the state. That could affect the gap between 21 percent and 29 percent, by approximately 3 or 4 percent. Late referrals to hospice services can adversely affect utilization rates. The federal government program, Restore Trust, initiated a HCFA Inspector General's investigation into charges of waste, fraud, and abuse in nursing homes and home health agencies. The decline in referrals to hospice programs coincided with the investigation, while hospice referrals and admissions in non-nursing home settings increased. There is no evidence, however, that service area 1 nursing homes were subject to more intense scrutiny than any others in the state. In fact, the Executive Director of HNWF testified that the effects of Restore Trust were national. The active duty military population difference of 3 fewer projected hospice deaths, and the 3 or 4 percent gap in the P Factor due to the lower incidence of AIDs are insufficient to explain the gap between P Factors of 21 and 29 percent. BMC's expert's estimate that ninety percent of the gap results from the lower than average P Factor is, at most, reduced to eighty-six percent. From 1994 to 1996, as the hospice utilization statewide reached 27.7 percent, the rate increased from 22 to 27 percent in service area 2A. By contrast, the rate increased from 17 to 22 percent in service area 1. For the six months ending December 31, 1996, the rate in service area 1 declined to 18 percent, while that in service area 2A increased to 24 percent. One of the highest rates in service area 2A is in relatively rural Washington County, in which BMC and HNWF have the greatest overlap in services. HNWF has approximately 60 percent and BMC has 40 percent of the hospice market in Washington County. In western Washington County, hospice rates range from 27 to 100 percent, with the remainder of the county in the 18 to 27 percent range. In service area 2A, there has been a steady increase in hospice admissions for HNWF and BMC, except for a decline at BMC immediately after HNWF opened an office in Panama City. Subsection 408.035(1)(a) - need in relation to district and state health plans; Rule 59C- 1.0355(5) and (4)(e) District health plan allocation factor one favors applicants having hospice services available seven days a week, district-wide for 24 hours a day as needed, regardless of a client’s ability to pay. BMCH currently complies with the requirement in service area 2A and can do so in service area 1. By carefully selecting patients, hiring staff in appropriate locations to serve the patients, and expanding slowly geographically, as HNWF has done, BMC can meet the requirements. Initially, BMC will focus on adjacent Okaloosa and Walton Counties. District allocation factor two, for proposals to add beds or use existing inpatient facilities rather than construct new facilities, is met by BMC. By proposing to contract with existing hospitals and nursing homes, BMC also meets the preference in Rule 59C-1.0355(4)(e)2. State health plan preference one, for applicants who seek Medicare certification, is consistent with BMC’s current and proposed operations. State health plan preference two favors members of the National Hospice Organization ("NHO") and applicants accredited by the Joint Commission on Accreditation of Health Care Organizations ("JCAHO"). BMCH is a member of the NHO. BMC is JCAHO-accredited, after receiving a rating of ninety-six of a possible one hundred in the scoring system in December 1996. Recently, BMCH was separately surveyed by the JCAHO, and received favorable exit comments. BMCH is also annually surveyed by AHCA, which identified no deficiencies in its January 1996 report. BMCH and HNWF each had one complaint regarding practices and procedures in 1996. A BMCH nurse disposed of controlled drugs when no longer needed in the patient's home, without the required signature of the patient's family representative on the disposal record. HNWF received a complaint and disciplined the responsible admitting nurse who failed to convene the appropriate staff to timely prepare an Interdisciplinary Care Plan. Neither incident indicates that the hospices are not providing a high quality of care. It is reasonable to expect BMC hospice to meet the requirements of the preference and to provide appropriate hospice care. See, also, subsection 408.035(1)(b) and (c), on the quality of care of the existing hospice and the applicant’s ability to provide quality of care. In proposing to establish a physical presence in rural, underserved Walton County, BMC meets state preference three and the preference in Rule 59C-1.0355(4)(e)4. State health plan preference four for applicants proposing to meet unmet needs of specific groups, such as children, is consistent with BMC's current and proposed operations. The same preference is also a requirement of Rule 59C-1.0355(4)(e)1. State health plan preference five favors applicants proposing residential services to patients without at-home assistance. BMC proposes to provide caregivers or to use existing inpatient facilities to provide residential services. The proposal is, therefore, also consistent with Rule 59C- 1.0355(4)(e)3 as it relates to those who are without primary caregivers at home or who are homeless. The sixth and final state health plan preference, for hospices proposing to use additional beds in existing facilities rather than new construction, is not applicable to the BMC proposal. On balance, the BMC application meets the preferences in the rule, and in state and district health plans. Subsection 408.035(1)(b) and (1)(d) - availability and quality of like and existing services; other alternatives Alternatives to hospice care include home health, acute, and nursing home care, all of which are available. The state policy, as reflected in numeric need methodology, encourages the use of hospice services until every service area achieves the state norm. Consistent with that policy, theoretically, HNWF could be even more aggressive in marketing and outreach than it has been. Historically, for BMC and HNWF, however, hospice services are more available, more accessible, better utilized, and higher in quality of care in areas in which they compete. Subsection 408.035(1)(c) - economics and improvements of joint, cooperative or shared resources Because BMC operates an existing hospice, it is reasonable to expect economics of scale and improvements based on its experience, if it establishes a second hospice. BMC expects to use existing human resources and billing departments. Subsection 408.035(1)(f) - need for special equipment or services not available in adjoining areas The statutory criterion is inapplicable to the case. Subsection 408.035(1)(g) and (h) - need for research, educational, health professional training BMC's is not a proposal which is intended to assist a research or educational program. In-service and volunteer training programs are proposed for the benefit of its staff and to assure the quality of its own services. Subsection 408.035(1)(h) - available manpower, management personnel; (1)(i) - immediate and long-term financial feasibility of the proposal BMC has over $21 million in cash, and revenues and gains in excess of $4 million for the year ending September 30, 1995. BMC has and continues to generate sufficient funds to provide over $24 million for planned capital projects over the next two years, including $129,591 in costs for the additional hospice program. BMC’s proposal is financially feasible in the short term. HNWF claims that the BMC proposal is not financially feasible in the long term, based on understated salaries, wages, and benefits, travel expenses, depreciation, and interest. Salaries, wages, and benefits are based on the staffing ratios at BMCH, which, according to HNWF, serves a more concentrated population in Panama City. Initially, BMC plans to serve Okaloosa and Walton Counties from a Destin office, with staff appropriately located throughout the areas to timely and efficiently serve patients. BMC plans to hire 6.6 full time equivalent (FTEs) administrative staff and 11.4 FTEs patient care staff. HNWF asserts that BMC will need an additional 1.7 FTEs for nurses, 2.6 for home health aides, and 1 FTE for a social worker. HNWF also questioned the ability of BMC to implement its proposed children's programs without a registered nurse with pediatric experience. HNWF asserted that .4 FTE for a chaplain was inadequate, as is reliance primarily on volunteer chaplains. The adequacy of the proposed staffing is supported by calculating the 50 day average length of stay times the annual volume of 250 patients, times 1.6 (the projected worked hours per patient day), which equals 10.85 FTEs for patient care. BMC's 11.4 FTEs for patient care in year one is a reasonable, conservative complement of staff. In addition, HNWF received 19 percent of its 1996 hours worked from volunteers, and has a history of hiring specialized staff and establishing specialized programs and departments when justified by the demand for those services. For its first seven or eight years, HNWF was well- served by a volunteer medical director. The bereavement coordinator was hired in 1990. The children's bereavement specialist was hired in 1993, when bereavement and social services became separate departments. Travel expenses, projected by BMC, were also criticized by HNWF. HNWF would increase miles for each visit from 13.9, as estimated in BMC’s CON application, to 18.3 miles per visit as experienced by HNWF. One assumption, which invalidates HNWF’s projection of travel distances, is that each separate visit will originate and end at the Destin office, not that BMC staff would make some visits going directly from their residences to the patient's home, or that they would arrange schedules to make several visits without returning to the office between each visit. In addition, BMCH will initially cover two counties rather than the entire service area. As a result of a mathematical error in the BMC CON application, the depreciation expense for year one of operations is $25,578, not $21,962. HNWF's expert's adjustments to interest expenses assumed that any additional expenses would require additional borrowing. BMC, however, has not materially underestimated expenses, considering the $3,616 difference in depreciation. The pro forma is conservatively based on revenues and expenses without reliance on charitable donations, although hospices typically depend on donations to break-even financially. In 1996, HNWF received a total of $339,780 in contributions. To estimate what BMC might expect in District 1, it is reasonable to exclude from HNWF's experience, approximately $80,000 in interest on reserve invested income (used by HNWF in 1996) and $90,000 in grants, since BMC has not applied for any grants. The balance, representing memorials and fund-raising of $240,000 reasonably indicates the level of contributions which a new BMC hospice might expect in service area 1. That level, for BMC, is proportionately half that projected by BMC, or $60,000 to $80,000 in year one, and $130,00 to $185,000 in year two of operations. With a projected loss in income of $28,091 in year one, a projected profit of $74,054 in year two, and considering historical hospice fund-raising, BMC's operation of a hospice in service area 1 is reasonably expected to be financially feasible in the long term. Adverse Impact Subsection 408.035(1)(l) - probable impact on costs, effects of competition. Using BMC's experts' utilization projections for service area 1, HNWF projects that its net operating income will decline from a negative $408,070 to a negative $655,712 in year one, and from a negative $355,404 to a negative $612,696 in year two. Approximately $420,000 in total contributions to HNWF is expected each year, although that number has increased annually since 1993, from 183,750, to $224,415 in 1994, to $282,368 in 1995, and $339,780 in 1996. BMC suggests that the adverse impact analysis should consider HNWF's total operations in service areas 1 and 2A to determine financial feasibility. Health planning experts for both BMC and HNWF acknowledge that there are up to 431 more people available for hospice admissions than are currently receiving hospice services. They also agree that number will increase by approximately 100 a year as the population increases, and that the presence of a new hospice provider will increase hospice penetration rates. In addition, as HNWF's witnesses emphasized, nursing home hospice admissions were depressed temporarily due to a government investigation. BMC’s expert also noted that, as long as available admissions exist, increasing hospice utilization is largely a function of how the hospice delivers its services. For example, the historic requirement that patients have a caregiver at home has adversely affected HNWF’s penetration rate. As recently as November 1996, at least one referral source, Sacred Heart Hospital, in Pensacola was distributing an HNWF brochure which specifically required an eligible hospice patient to have “[a] capable caregiver in the home to meet the patient’s day-to-day basic needs." Essentially, the same requirement is included in a list of admissions criteria on page 49 of BMC's CON application. HNWF and BMC have both changed their policies and now admit patients without caregivers, which is reasonably expected to increase admissions of patients. With competition to identify and alleviate access barriers, HNWF and BMC are better able to increase hospice utilization rates by eliminating self-imposed constraints. Based on the rapid increase in hospice utilization in service area 2A after HNWF began to compete with BMC, it is reasonable to assume the same effect of competition in service area 1. By the year 2000, BMC's expert reasonably projects hospice penetration rates of 29 percent in service area 1, equaling the current statewide average. As the late entrant into a limited geographical area within the market, BMC is projected to capture approximately one-third of that market by the years 2000 to 2001, leaving two thirds for HNWF. At the same time BMC and HNWF are reasonably expected to divide in half the market in service area 2A. At those levels, HNWF will range, in total projected admissions for both service areas, from 1,186 to 1,400, from 1997 to 2001. The evidence that a BMC hospice in service area 1 will not adversely impact HNWF is more persuasive. The suggestion that health care providers or the public will be confused by the presence of BMCH in service area 1 is rejected. Subsection 408.035(1)(n) - The applicant’s past and proposed provision of health care services to Medicaid patients and the medically indigent. BMC is a disproportionate share Medicaid provider, having historically provided over 97 percent of all indigent care in Bay County. In 1995, the charity care write-off was over $8.5 million. The effect of approving BMC’s CON is increased hospice penetration in service area 1, caused by an expanding market for hospice services. As a disproportionate share provider of inpatient acute care services, BMC is uniquely capable of identifying and referring low income patients for hospice care. Subsection 408.035(1)(0) - The applicant’s past and proposed provision of services which promote a continuum of care in a multilevel health care system, which may include, but is not limited to, acute care, skilled nursing care, home health care, and assisted living facilities. BMCH is a part of a multilevel system with levels of care ranging from a 353-bed acute care tertiary hospital to a home health agency. Because of 1995 legislation, these services are available to persons beyond the boundaries of Bay County. Consistent with this statutory criterion, hospice services should also be extended.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency For Health Care Administration enter a Final Order issuing CON 8377 to Bay Medical Center to establish a hospice program in service area 1, conditioned on providing annually a minimum of 12.8 percent Medicaid care, 3.65 percent charity care, and service to a minimum of 7 AIDs patients with a minimum of 350 visits. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 19th day of May, 1997. ELEANOR M. HUNTER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 19th day of May, 1997. COPIES FURNISHED: Richard Ellis, Senior Attorney Agency for Health Care Administration 2727 Mahan Drive Fort Knox Building 3, Suite 3431 Tallahassee, Florida 32308-5403 Darrell White, Esquire William B. Wiley, Esquire McFarlain, Wiley, Cassedy & Jones, P.A. Post Office Box 2174 Tallahassee, Florida 32315-2174 J. Robert Griffin, Esquire J. Robert Griffin & Associates, P.A. 2559 Shiloh Way Tallahassee, Florida 32308 Sam Power, Agency Clerk Agency For Health Care Administration 2727 Mahan Drive Fort Knox Building 3, Suite 3431 Tallahassee, Florida 32308-5403 Jerome W. Hoffman, General Counsel Agency For Health Care Administration 2727 Mahan Drive Fort Knox Building 3, Suite 3431 Tallahassee, Florida 32308-5403
The Issue Whether the certificate of need (“CON”) applications filed by Cornerstone Hospice & Palliative Care, Inc. (“Cornerstone”); Suncoast Hospice of Hillsborough, LLC (“Suncoast”); and VITAS Healthcare Corporation of Florida (“VITAS”), for a new hospice program in Agency for Health Care Administration (“AHCA” or the “Agency”) Service Area 6A (Hillsborough County), satisfy the applicable statutory and rule review criteria sufficiently to warrant approval, and, if so, which of the three applications, on balance, best meets the applicable criteria for approval.
Findings Of Fact Based upon the credibility of the witnesses and evidence presented at the final hearing, and on the entire record of this proceeding, the following Findings of Fact are made: The Parties AHCA AHCA is designated as the single state agency for the issuance, denial, and revocation of CONs, including exemptions and exceptions in accordance with present and future federal and state statutes. AHCA is also the state health planning agency. See §§ 408.034(1) and 408.036, Fla. Stat. In addition, AHCA is the agency designated as responsible for licensure and deficient practice surveys for health facilities, including hospices. See ch. 408, Part II and § 400.6005-.611, Fla. Stat. Pursuant to Florida Administrative Code Rule 59C-1.0355(4)(a), the Agency established a numeric formula for determining when an additional hospice program is needed in a service area. The Agency's need formula determined a need for one new hospice program in SA 6A in the application cycle at issue. That determination is unchallenged. None of the applicants argued that more than one new hospice program should be approved for Hillsborough in this cycle. Suncoast The Hospice of the Florida Suncoast (“Suncoast Pinellas”) was founded in 1977, and was one of the first hospices in Florida, and in the nation. Although it operates only in Pinellas County, Suncoast Pinellas has grown to become one of the largest nonprofit hospices in the country. Suncoast Pinellas is a subsidiary of Empath Health (“Empath”), which also provides a number of non-hospice services. As discussed further below, Empath is currently undergoing a merger with Stratum Health System (“Stratum”), which operates Tidewell Hospice in Sarasota and Manatee Counties. The Chief Executive Officer (“CEO”) of Empath and Suncoast Pinellas is Rafael Sciullo. Mr. Sciullo was recruited to be CEO of Suncoast Pinellas in 2013, where he has served ever since. When Mr. Sciullo arrived at Suncoast Pinellas, the company operated a human immunodeficiency virus (“HIV”) testing and treatment program, a PACE program, a home health program, and a palliative care program. Mr. Sciullo became concerned that patients in the HIV, PACE, and home health programs were not comfortable hearing the word “hospice,” as those patients did not view themselves as hospice patients. Mr. Sciullo reorganized Suncoast Pinellas by creating Empath in order to alleviate this concern with a more inclusive and mission directed organization. Empath is an administrative services provider that provides support to its affiliates, which include Suncoast Pinellas, Empath Partners in Care (“EPIC”),2 Suncoast PACE, Suncoast Hospice Foundation, and programs for palliative care, pharmacy, durable medical equipment (“DME”), and infusion services. Through its affiliates, Empath already provides several services within Hillsborough, including EPIC HIV services and support, and palliative care. The federal definition of hospice care requires a prognosis of a six- month or less life expectancy. However, Florida’s definition permits patients with a 12-month prognosis. Under its supportive care program, Suncoast Pinellas offers hospice services to patients with a prognosis of six to 12 months. As one of the largest not-for-profit hospices in the nation, Suncoast Pinellas offers specialized programs for veterans, the Jewish population, African Americans, the Hispanic population, and disease groups such as heart failure, Alzheimer’s, and COPD. The applicant entity for the CON is Suncoast Hospice of Hillsborough, LLC. If approved, Suncoast will appear beside Suncoast Pinellas in Empath’s organizational chart, operating as a subsidiary under the Empath Health, Inc., family of companies. Empath has entered into a Memorandum of Understanding with Stratum to merge the two organizations. The merger has not yet been accomplished; the companies are currently in the process of conducting due 2 Empath’s EPIC program provides programs and services to persons impacted by HIV and AIDS throughout the Tampa Bay area. diligence. However, the two companies have already agreed that if the merger is consummated, Mr. Sciullo will serve as the CEO of the merged entity, and will be in charge of both original entities after the merger. According to Mr. Sciullo, the merger will not distract or otherwise serve as an impediment to Suncoast’s plans to implement its new hospice program in Hillsborough. Cornerstone Cornerstone is a 501(c)(3) community-based, not-for-profit entity, founded in 1981 by compassionate nurses in Eustis, Florida, to care for patients during their last days of life. Licensed in 1984, Cornerstone (formerly, Hospice of Lake and Sumter, Inc.) has since grown to serve three hospice service areas (3E, 6B, and 7B) which encompass seven central Florida counties, including Polk County, which is contiguous to Hillsborough. Cornerstone has spent more than 35 years serving tens of thousands of patients and their loved ones in the Central Florida region. As a local, not-for-profit hospice, Cornerstone’s governing body is comprised of leaders from the communities it serves, and its board would be expanded to include new members from Hillsborough. This fosters local accountability to the populations Cornerstone serves. Due to its not-for-profit status, Cornerstone is also legally and ethically bound to benefit its communities, and its earnings are reinvested locally rather than inuring to the benefit of private owners. The Cornerstone Hospice Foundation is an independent, 501(c)(3), nonprofit foundation led by community volunteers. The purpose of the Foundation is to raise money for Cornerstone’s community programs, hospice houses, and for people with no method of paying for hospice. Cornerstone Health Services, LLC, is an affiliated entity which provides non-hospice palliative care services to patients. Cornerstone also includes Care Partners, LLC, which is a consulting and group purchasing organization that provides information and materials to other hospices and group purchasing options. Cornerstone leadership has extensive experience in hospice, including development and expansion of new programs in Florida and elsewhere. Cornerstone has achieved significant growth and expansion within its existing service areas in recent years, led largely by the team that would lead Cornerstone’s expansion into Hillsborough. Cornerstone serves all patients in need regardless of race, creed, color, gender, sexual orientation, national origin, age, disability, military status, marital status, pregnancy, or other protected status. Hospice and palliative care are the only healthcare services Cornerstone provides. This focus assures that Cornerstone is committed to providing high quality care to meet the needs of hospice patients and their families. VITAS VITAS Healthcare Corporation (“VITAS Healthcare”), the corporate parent of VITAS, is the largest provider of end-of-life care in the nation. VITAS Healthcare was initially founded in 1978 in South Florida. At that time, its leaders helped organize bipartisan legislative efforts to establish the state and federal regulatory mechanisms that guide the provision of hospice services today. Upon its inception, VITAS programs in Dade and Broward Counties participated in a federal demonstration project that resulted in the development of model clinical protocols and procedures used by hospice programs across the country. In 2018, VITAS Healthcare served 85,095 patients and maintained an average daily census of 17,743 patients among its 47 hospice programs in 14 states and the District of Columbia. As of 2018, VITAS Healthcare employed 12,176 staff members, including over 4,700 nurses nationwide. VITAS currently serves 46 of Florida’s 67 counties, which covers about 72% of Florida’s population. VITAS serves 16 of AHCA’s 27 hospice service areas under three separate licenses. VITAS successfully operates 34 satellite offices in Florida and provides facility-based care through freestanding inpatient units as well as its contracts with hospitals and nursing homes. In Florida in 2018, VITAS served over 36,000 patients, providing 3.3 million days of care with an average daily census of 9,028 patients. This was no aberration—at the time of the filing of its 6A CON application, VITAS had admitted over 35,000 patients in Florida during 2019. In addition to providing the four required levels of hospice care (see ¶ 35), VITAS also provides a full continuum of palliative and supportive care, and additional unreimbursed services that are beneficial to the hospice population it serves. VITAS has over 40 years of experience as a hospice provider, and has developed comprehensive outreach, education, and staff training programs and resources designed specifically to address the unique needs of a wide range of patient types, communities, and clinical settings. Similarly, VITAS recognizes that the needs of Florida patients vary between service areas, and it has endeavored to provide programs and services tailored to meet the needs of each community. In its Florida programs, VITAS provides complete hospice care, including medications, equipment and supplies, expert nursing care, personal care, housekeeping assistance, emotional counseling, spiritual support, caregiver education and support, grief counseling, dietary, physical, occupational and speech therapy, and volunteer support. VITAS has a long history of providing significant levels of care to all patients without regard to the ability to pay, as well as a demonstrated commitment to underserved populations such as the homeless, veterans, AIDS population, and minorities. VITAS provided almost $7 million in charity care in Florida in 2018, and $7.25 million in 2019 at the time it submitted its CON application. VITAS ensures that anyone who is appropriate for hospice services has the right to access them. VITAS is committed to giving back to the communities it serves through meaningful donations. It accomplishes this goal through VITAS Community Connections, a nonprofit organization, which makes donations and grants to local organizations and families. In 2018, VITAS made over $161,000 in charitable contributions to organizations in Florida. In that same year, VITAS contributed over $700,000 to sponsoring Florida community events. At the time of filing its Hillsborough application, VITAS employed nearly 5,500 persons in Florida, 2,235 of which are nurses. VITAS encourages and assists its nurses in obtaining board certification in hospice and palliative care through training, compensation incentives, and support. Due to VITAS Healthcare’s multi-state operations, VITAS can readily recruit staff to Florida from other markets. VITAS also relies on volunteers in a variety of roles to enhance patient care. In 2018, VITAS used 1,165 active volunteers in Florida, who provided over 145,054 volunteer hours. VITAS is led by an extremely experienced and highly qualified leadership team, many of which have long and successful tenures with the company. Hospice Care Generally Hospice refers both to care provided to terminally ill patients and the entities that provide the care. Hospice care is palliative care. Palliative care relieves or eliminates a patient's pain and suffering and helps patients remain at home. It differs from curative care, which seeks to cure a patient's illness or injury. 42 C.F.R. § 418.24(d); §§ 400.6005 and 400.601(6), Fla. Stat. Hospices provide physical, emotional, psychological, and spiritual comfort and support to patients facing death and to their families. The Medicare and Medicaid programs pay for the vast majority of hospice care. The services those programs require hospices to offer and the services the programs will pay for have become, de facto, the default definition of hospice care, the arbiter of hospice services, and the decider of when a patient is terminally ill. Florida requires a CON to establish a hospice program and regulates hospices through licensure. §§ 400.602 and 408.036(1)(d), Fla. Stat. Florida considers a patient with a life expectancy of one year or less to be terminally ill and eligible for Medicaid payment for hospice care. § 400.601(10), Fla. Stat. To be eligible for Medicare payment for hospice services, a patient must have a life expectancy of six months or less. 42 C.F.R. § 418.20; 42 C.F.R. § 418.22(b)(1). A hospice must provide a continuum of services tailored to the needs and preferences of the patient and the patient’s family delivered by an interdisciplinary team of professionals and volunteers. §§ 400.601(4) and 400.609, Fla. Stat. Hospice programs must provide physical, emotional, psychological, and spiritual support to their patients. A hospice must provide physician care, nursing care, social work services, bereavement counseling, dietary counseling, and spiritual counseling. 42 C.F.R. § 418.64; § 400.609(1)(a), Fla. Stat. In Florida, hospices must also provide, or arrange for, additional services including, but not limited to, “physical therapy, occupational therapy, speech therapy, massage therapy, home health aide services, infusion therapy, provision of medical supplies and durable medical equipment [DME], day care, homemaker and chore services, and funeral services.” § 400.609(1)(b), Fla. Stat. Federal requirements are similar. 42 C.F.R. § 418.70. Hospices are required to provide four levels of care. The levels are routine home care, general inpatient care, crisis care (also called continuous care), and respite care. Since hospice’s goal is to support a patient remaining at home, hospices provide the majority of their services in a patient’s home. Routine home care is the predominant form of hospice care. Routine care is for patients who do not need constant bedside support. A hospice may provide routine care wherever the patient lives. The location could be a residence, a skilled nursing facility (SNF), an assisted living facility (ALF), some other residential facility, or a homeless camp. Continuous care, sometimes called crisis care, may also be provided wherever the patient resides. It is more intense services for a short period of time. Continuous care supports a patient whose pain and symptoms are peaking and need quick management. With continuous care, unlike routine care, a nurse may be at a patient’s bedside 24 hours a day, seven days a week. Continuous care is an option allowing a patient to avoid admission to an inpatient facility. Hospices provide general inpatient care in a hospital, a dedicated nursing unit, or a freestanding hospice inpatient facility. To qualify for inpatient care, a patient must be acutely ill and need immediate assistance and daily monitoring to the extent that they cannot be cared for at home. Hospices must offer around-the-clock skilled nursing coverage for patients receiving general inpatient care. Respite care is caregiver relief. It allows patients to stay in an inpatient setting for up to five days in order to provide caregivers respite. Florida law requires hospices to accept all medically eligible patients. Each hospice must make its services available to all terminally ill persons and their families without regard to age, gender, national origin, sexual orientation, disability, diagnosis, cost of therapy, ability to pay, or life circumstances. A hospice may not impose any value or belief system on its patients or their families, and must respect the values and belief systems of its patients and their families. § 400.6095(1), Fla. Stat. Hospices frequently offer additional, uncompensated services that are not required by Florida licensure laws or federal Medicare requirements. Pre- hospice care and community counseling are two examples. Hospices often establish programs to meet the needs of particular populations, such as the Hispanic, African American, Jewish, veteran, and HIV/AIDS communities. Cornerstone, Suncoast Pinellas, and VITAS provide the hospice services required by state laws and funded by the Medicare benefit. All three providers also offer services beyond those required by, or paid for by, government programs. The Fixed Need Pool and Preliminary Agency Decision Pursuant to its rule-based numeric need methodology, AHCA determined and published a fixed need for one new hospice program in SA 6A, Hillsborough, in the second batching cycle of 2019. Under the Agency's need methodology, numeric need for an additional hospice program exists when the difference between projected hospice admissions and the current admissions in a service area is equal to or greater than 350. In this instance, the difference between projected hospice admissions and current admissions in SA 6A was 863, and therefore a numeric need for an additional hospice program exists in Hillsborough.3 In addition to the three litigant applicants, three other entities filed applications seeking approval for the new program. Those three applications have been deemed abandoned and are not at issue herein. On February 21, 2020, the Agency published its preliminary decision to award the hospice CON to Suncoast, and to deny the remaining applications. Thereafter, Cornerstone and VITAS both filed timely petitions for formal administrative hearing contesting the Agency’s preliminary decision. On April 1, 2020, Suncoast filed a “Cross Petition, Notice of Related Cases and Notice of Appearance” in support of the Agency decision on the competitively reviewed applications. None of the applicants petitioning for 3 According to AHCA’s need methodology, absent a showing of “not normal” circumstances, only one new hospice program may be approved for a SA at a time, regardless of the multiples of 350 “need” that may be shown. Fla. Admin. Code R. 59C-1.0355(4)(c). hearing alleged “special circumstances” or “not normal” circumstances in their application. Service Area 6A: Hillsborough County As can be seen by the map below, Hillsborough is located on the west coast of Florida along Tampa Bay. It includes 1,048 square miles of land area and 24 square miles of inland water area. Hillsborough is home to three incorporated cities: Tampa, Temple Terrace, and Plant City, with Tampa being the largest and serving as the county seat. The county is bordered by Pasco County to the north, Polk County to the east, Manatee County to the south, and Pinellas County to the west. (Source: Google Maps) According to AHCA’s Florida Population Estimates 2010-2030, published February 2015, Hillsborough’s total population as of January 2020 was estimated to be 1,439,041. Hillsborough’s total population is expected to grow to 1,557,830 by January 2025, or 8.25% over that five-year period. In 2020, 14% of Hillsborough’s population was aged 65 and older. According to the 2010 U.S. Census, 35.4% of the county population age 65 and older has a disability, and 17.2% of the county population is below the poverty level, compared to 12.2% statewide. The Hillsborough County Department of Health (“HCDOH”) reports that the county has a diverse mix of residents, with 52% White, 16% African American, 26% Hispanic, and 5% other races. Of the Hillsborough households living below the poverty level, 23.73% are Hispanic/Latino and 31.07% are African American. Nearly 10% of Hillsborough residents report not speaking English “very well.” The most recent U.S. Census indicates that the median income for households in Hillsborough is $54,742, considerably below the national average, with 17.2% reported below poverty level. A larger percentage of the county’s residents (3.3%) received cash assistance than did the state’s residents (2.2%), and a larger percentage (15.7%) received food stamp benefits than is the case for the state overall (14.3%), as reported by HCDOH. Hillsborough is currently served by two hospice providers: Lifepath Hospice (“Lifepath”); and Seasons Hospice and Palliative Care of Tampa, LLC (“Seasons”), a for-profit company. Following approval after an administrative hearing, Seasons was newly licensed to begin operations in Hillsborough in December 2016. Florida’s hospice CON rule prevents need for a new program from being shown for a period of two years following the addition of a new program to a service area. The purpose of the two-year forbearance is to allow new programs to gain a foothold in the market, and to potentially avoid a repeated need determination in future batching cycles. Hospice admissions at Lifepath for the period of July 1, 2018, through June 30, 2019, were 6,195, and for Seasons were 601. The addition of Seasons to the service area was not successful in deterring the need for yet another new program in Hillsborough. The Application Proposals and CON Conditions Suncoast Suncoast recently applied for approval for a hospice program in neighboring Pasco County, but, after a DOAH hearing, that application was denied in favor of another applicant. From that experience, Suncoast determined to better identify local needs before applying for approval in Hillsborough. Upon learning that a fixed need pool would be announced for Hillsborough, Mr. Sciullo directed his team of executives and staff over a series of strategy meetings to conduct an independent community needs assessment of Hillsborough. Mr. Sciullo tasked Kathy Rabon to oversee the development of a community needs assessment of Hillsborough to identify potential needs of Hillsborough residents, based on key informant surveys and other assessment tools. Ms. Rabon has significant experience in conducting feasibility studies for capital projects funded by the Suncoast Hospice Foundation, which she leads. Ms. Rabon began by reviewing existing community needs assessments of the county. Those assessments identified the health needs of Hillsborough’s underserved patients, and identified community leaders that informed the assessments. Ms. Rabon then contacted many of those key informants. At hearing, Ms. Rabon described the process she used to develop a community needs assessment for Hillsborough as follows: Q. When tasked with doing an assessment for Hillsborough's hospice, where did you start? What documents did you first review? A. A community needs assessment can take quite a while when you engage focus groups and need to meet with stakeholders. We didn't have the luxury of a lot of time. We also had the luxury of knowledge that other hospitals in Hillsborough County that are not-for-profit have to periodically do a community needs assessment. So rather than start from a blank piece of paper, I turned to those community needs assessments and I began compiling and gathering as many as I could that I felt were relevant to, A, the geographic boundaries of the entire county, which some did not, but B, also were timely. And I found that the Department of Health had done a very comprehensive community needs assessment in 2015-16 that had been updated in March of 2019 that I felt would provide a lot of good information. * * * I was responsible for identifying need and, if possible, identifying perhaps solutions that could be developed as a result of a partnership or a relationship or an engagement or a future plan that we could put together that would help solve a need in Hillsborough County relative to chronic and advanced illness. In addition to the HCDOH needs assessment and update, Ms. Rabon also obtained quantitative information for her assessment from the following sources: Community Health Improvement Plan 2016- 2020, Florida Department of Health in Hillsborough County, Revised January, 2018; Moffitt Cancer Center Community Health Needs Assessment Report 2016; Florida Hospital Tampa Community Needs Assessment Report 2016; Florida Hospital Carrollwood Community Needs Assessment Report 2016; South Florida Baptist Hospital 2016 Community Needs Assessment Report; Tampa General Hospital; Community Health Needs Assessment 2016; and Community Needs Assessment St. Joseph’s Hospitals Service Area 2016. Ms. Rabon also developed a key informant survey tool to elicit qualitative information regarding the healthcare needs of Hillsborough residents. The survey specifically asked about the strengths and weaknesses of the community for treatment of persons with chronic or advanced illness, and other pressing issues relating to end of life care. Those survey questions included, among others: What is your role, and responsibilities within your organization? What do you consider to be the strengths and assets of the Hillsborough community that can help improve chronic and advanced illness? What do you believe are the three most pressing issues facing those with chronic or advanced illness in Hillsborough County? From your experience, what are the greatest barriers to care for those with chronic or advanced illness? What are the strategies that could be implemented to address these barriers? Once meetings with key informants were complete, and 25 key informant surveys were returned, Ms. Rabon summarized her findings in a final Community Needs Assessment Summary. Ms. Rabon’s findings were consistent with assessments conducted by other organizations, including HCDOH, and local hospitals. The results of the Community Health Needs Assessments, Suncoast Key Informant Surveys, and detailed letters of support, identified the following gaps in end-of-life care for residents of Hillsborough: Need for Disease-Specific Programming: High cardiovascular disease mortality rates (higher than the state average and the highest of the six most populous counties in Florida) and low percentage of patients served by existing hospice providers. Other areas where there appears to be a gap in specific end-of-life programming and a large need in terms of Hillsborough resident deaths include: Alzheimer's Disease and Chronic Lower Respiratory Disease, both of which are in the top 5 leading causes of death in the county. Need for Ethnic Community-Specific Programming Nearly 30 percent of the Hillsborough population is Hispanic, with 19 percent of the county's 65+ population falling into the Hispanic ethnic category. The concentration of 65+ Hispanic residents in Hillsborough is higher than the state average. Surveys and assessments indicate a lack of knowledge in the Hispanic/Latinx[4] community in Hillsborough regarding end-of-life care. Many of these residents speak Spanish at home and/or have limited English proficiency. Hillsborough Hispanic population has low utilization of hospice due to factors including lack of regular physician and medical care, lack of information and cultural barriers. Lack of Available Resources for Homeless and Low-lncome Populations With the 5th largest homeless population in the state, Hillsborough has 1,650 homeless residents as of a Point in Time Count conducted in February 2019. Nearly 60 percent of the area’s homeless population is considered ‘sheltered’, yet there are no resources for end-of-life care for these patients where they live, whether it be an emergency shelter, safe haven or transitional housing. Additionally, 17.2 percent of the Hillsborough population lives below the poverty level and has limited access to coordinated care, including end-of- life services. Largest Veteran Population in Florida Requires Special Programming and Large Number of Resources More than 93,000 veterans currently reside in Hillsborough, with more than one-third over the age of 65. 4 Latinx is a gender-neutral neologism, sometimes used to refer to people of Latin American cultural or ethnic identity in the United States. The ?-x? suffix replaces the ?-o/-a? ending of Latino and Latina that are typical of grammatical gender in Spanish. See “Latinx,” Wikipedia (last visited March 19, 2021). While most hospice programs provide special services for veterans, Suncoast Pinellas has obtained Partner Level 4 certification by We Honor Veterans, a program of the National Hospice and Palliative Care Organization (“NHPCO”) in collaboration with the Department of Veterans Affairs (“VA”). Lack of Specialized Pediatric Hospice Program in the Area Pediatric hospice programming in Hillsborough is limited, as there are no specialized pediatric hospice providers in the county. Hillsborough is home to approximately 338,000 residents ages 0-17 in 2020, and is projected to increase to more than 368,000 by 2025. The pediatric utilization rate of hospice services in Hillsborough is low compared to the general population. For the year ended March 31, 2019, there were only five pediatric patients discharged from the hospital setting to home hospice or an inpatient hospice facility, while 106 pediatric patients died in the hospital. Absence of Continuum of Care Navigation Navigation of the healthcare system was highlighted as a key driver that will bring positive improvements to overall continuum of care in Hillsborough. Hillsborough residents are not accessing hospice services at a rate consistent with the rest of the state, and either access hospice programs very late in the disease process, or not at all. Transportation Challenges for Rural Areas of the County Transportation challenges as a deterrent to seeking medical care, particularly in rural areas of Hillsborough. Approximately one-third of the Hillsborough population is considered “transportation disadvantaged” meaning they are unable to transport themselves due to disability, older age, low income or being a high-risk minor/child. Suncoast retained David Levitt and his firm as its healthcare consultant and primary drafter of its CON application. To develop Suncoast’s application, Mr. Levitt utilized numerous reliable data sources and worked with Suncoast Pinellas’s staff. Mr. Levitt credibly confirmed the need for an additional hospice program in Hillsborough based on reliable healthcare planning data. AHCA’s CON application form, adopted by rule, requires applicants to submit letters of support with their CON applications. Suncoast complied with this requirement and included numerous letters of support from the Hillsborough community. One of the key informants identified by Ms. Rabon was Dr. Douglas Holt of the HCDOH. Dr. Holt agreed to meet with Mr. Sciullo and ultimately agreed to provide a letter of support, which was included with the Suncoast application. Mr. Sciullo also personally met with Dr. Larry Fineman, the regional medical director of HCA West Florida, who provided a letter of support. HCA West Florida hospitals are key referral sources of Suncoast Pinellas’s current hospice admissions. In addition to HCA West Florida, Suncoast Pinellas has an existing relationship with other Hillsborough hospitals: St. Joseph’s, Moffitt Cancer Center and Tampa General Hospital. Suncoast received letters of support from St. Joseph’s and Tampa General. The Agency’s witness, James McLemore, testified that letters from such referral sources were highly persuasive to the Agency, as they indicate the likelihood of successful operations. Suncoast’s witness, Dr. Larry Kay, credibly testified that he obtained letters of support from Dr. Howard Tuch, Director of Palliative Medicine at Tampa General Hospital; Dr. Larry Feinman, Chief Medical Officer at HCA West Florida; and Dr. Harmatz, the Chief Medical Officer at Brandon Regional Hospital, an HCA hospital within HCA West Florida. Those letters were included with the Suncoast application. Suncoast Pinellas currently has working relationships with BayCare, HCA, AdventHealth West Florida, Tampa General, and Moffitt hospital systems. Suncoast submitted letters from BayCare and HCA, which were included with its application. Suncoast received letters specifically related to partnering with Suncoast for inpatient services from St. Joseph’s (BayCare) and Brandon Regional (HCA). Suncoast also received a letter of support related to partnering with Suncoast for inpatient services from the Inn at University Village, a long- term care facility in Hillsborough; and support from a pediatric hospitalist who provides care to terminally ill and medically fragile children at St. Joseph’s Children’s Hospital and Johns Hopkins All Children’s Hospital. Suncoast also received letters of support from numerous community organizations, including Balance Tampa Bay and The AIDS Institute. Also included with the Suncoast application were several letters of support from [Remainder of page intentionally blank] the veterans’ community, including one from the Military Order of the World Wars.5 After considering Ms. Rabon’s Community Needs Assessment, and input from key informants, Suncoast developed programs and plans to meet each of the needs identified above. Suncoast conditioned the approval of its CON on the provision of those services. In all, Suncoast offered 19 conditions in its CON application intended to meet the unique needs of Hillsborough. Condition 1: Development of Disease Specific Programing: Suncoast is committed to providing disease-specific programming in Hillsborough: Empath Cardiac CareConnections, Empath Alzheimer’s CareConnections, and Empath Pulmonary CareConnections. Dr. Larry Kay and Dr. Janet Roman credibly testified that Suncoast will fulfill Condition 1 for disease specific programming. To fulfill Condition 1, Suncoast will provide Empath Cardiac CareConnections in Hillsborough. Dr. Roman designed and currently runs the CardiacCare Connections program in Pinellas County. Dr. Roman is a national expert in developing programs across the continuum of care to assist heart failure patients. Although Suncoast Pinellas has always treated patients with heart failure, since Dr. Roman’s arrival, cardiologists have been referring patients to Suncoast Pinellas earlier than before. Dr. Roman has trained Suncoast Pinellas’s nurses in all advanced heart failure therapies, including IV inotropes, and mechanical circulatory 5 As correctly noted by Cornerstone in its Proposed Recommended Order, letters of support included in the three applications, unless adopted by the sponsoring author at hearing or in sworn deposition received in evidence, are uncorroborated hearsay, and the contents therein may not form the basis of a finding of fact. However, the letters are not being received for the truth of the matters set forth therein, but rather the number and types of support letters included in the applications are relevant generally as a gauge of the level of community support for the proposals. The Hospice of the Fla. Suncoast, Inc. v. AHCA and Seasons Hospice and Palliative Care of Pasco Cty., DOAH Case No. 18-4986 (Fla. DOAH Sept. 5, 2019; Fla. AHCA Oct. 15, 2019) (“In a broad sense, comparison of each applicant's letters of support illuminates the differences between each applicant's engagement with the community.” FOF No. 127.). supports such as left ventricular assist devices (“LVAD”) and artificial hearts. Dr. Roman’s program has been successful at reducing hospital readmissions. Suncoast’s application provided significantly more detail about the operations of its heart program than either Cornerstone or VITAS. Cornerstone and VITAS’s descriptions of their heart programs do not reach the level of specificity of operation as Suncoast’s and are not backed up with a measure of success such as a reduction in readmissions. In furtherance of Condition 1, Suncoast will also offer Empath Alzheimer’s CareConnections. Suncoast Pinellas has already created the foundation for Empath Alzheimer’s CareConnections in Pinellas County, but has not yet been marketing the program under the brand of CareConnections. As part of Empath Alzheimer’s CareConnections, Suncoast will deploy a Music in Caregiving program for Hillsborough hospice patients, including those suffering from Alzheimer’s Disease. Suncoast will also offer Empath Pulmonary CareConnections in Hillsborough. Suncoast Pinellas has already created the foundation for Empath Pulmonary CareConnections in Pinellas County, but has not yet been marketing the program under the brand of CareConnections. Suncoast Pinellas already has several respiratory therapists full time caring for COPD and asthma patients. In Hillsborough, Suncoast plans to engage a pulmonologist as a consultant and to hire dedicated respiratory therapists as volume increases in Hillsborough. Condition 2: Development of Ethnic Community-Specific Programming Suncoast conditioned its CON application on the purchase of a mobile van staffed by a full-time bilingual LPN and a full-time bilingual social worker to discuss advanced care planning and education, and increase access to care to diverse populations. The van will operate eight hours a day, five days a week, and drive to areas in Hillsborough that have a need for the services offered by Suncoast and Empath. This outreach is intended to enhance access to care to diverse communities. The van will spend time at the HCDOH and its satellite clinics, and use Metropolitan Ministries as a resource for identifying additional locations that could benefit. The van will also visit key Latinx community locations within Hillsborough and offer Spanish language assistance. The van will be equipped with telehealth technology capabilities to link the LPN and social worker to the care navigation office to further enhance the care navigation function of the mobile van. The purpose of the mobile outreach van is to build relationships with, and trust in, the community, enhance visibility, and bring care navigation to areas of Hillsborough that may not typically access it. Suncoast Pinellas’s EPIC program has significant experience operating a mobile outreach unit. EPIC currently operates a mobile outreach and testing unit that provides HIV testing and sexually transmitted infection testing in the community. Condition 3: Development of Resources for Homeless and Low-Income Populations Suncoast conditioned its application on the development of resources for homeless and low-income populations. Under this condition, Suncoast will provide up to $25,000 annually for five years to Metropolitan Ministries. Metropolitan Ministries is a leading community-based organization in Hillsborough that serves homeless and low-income individuals. Christine Long, Chief Programs Officer for Metropolitan Ministries, provided a letter of support which was included in Suncoast’s CON application. Condition 4: Development of Specialized Veterans Program Suncoast conditioned its CON application on the development of a specialized veterans program, which includes a dedicated Veterans Professional Relations Liaison to collaborate with the local VA hospital, outpatient clinics, and veterans organizations. Suncoast Pinellas provides a wide range of specialized care for veterans, through its Empath Honors program, including Honor Flight and pinning ceremonies. Additionally, Suncoast Pinellas holds a Level 4 Certification from We Honor Veterans, a national program through the National Hospice and Palliative Care Organization (“NHPCO”) whose mission is to honor military veterans in hospice care. The NHPCO recently added a new Level 5 Partnership, for which Suncoast Pinellas has already applied for its Pinellas hospice program. Suncoast will also pursue a Level 5 Certification in Hillsborough, if awarded the CON. Condition 5: Development of Specialized Pediatric Hospice Program in Hillsborough County Suncoast will also develop a specialized pediatric hospice program in Hillsborough. Dr. Stacy Orloff started the Children’s Hospice Program at Suncoast Pinellas in 1990 and has been with Suncoast Pinellas for 30 years. Dr. Orloff helped draft the first waiver that the State of Florida submitted to CMS for approval to operate a PIC/TFK program. Once the PIC/TFK waiver was approved, Ms. Orloff led Florida’s PIC/TFK steering committee for 12 years. PIC/TFK is a Medicaid waiver program that provides palliative care services for children with a risk of a death event by age 21, and also provides counseling support for family members who lived at the child’s home, such as parents, siblings, and grandparents. A PIC/TFK provider must be a licensed hospice provider in the service area. Suncoast Pinellas has operated a PIC/TFK program in Pinellas since 2004, utilizing a pediatric interdisciplinary team to provide its PIC/TFK services. Suncoast Pinellas’s PIC/TFK program averages a census of approximately 40 children. Combining the PIC/TFK patients with pediatric patients, Suncoast Pinellas’s census averages approximately 50 children. Suncoast Pinellas has already received acknowledgment from Children’s Medical Services to permit it to operate a PIC/TFK program in Hillsborough if awarded the hospice CON. Initially, pediatric patients will be serviced by the Suncoast Pinellas pediatric staff. Suncoast Pinellas currently has sufficient staff availability to service Hillsborough at the commencement of the program. Suncoast anticipates that by the second year, the Hillsborough pediatric program will have a sufficient census to have a staff that serves only Hillsborough. VITAS’s regional Medical Director, Dr. Leyva, acknowledged that a pediatric patient will receive better care from a care team with pediatric expertise than with an adults-only team. Of the three applicants, Suncoast has demonstrated the most experience providing care to pediatric patients.6 In addition, Suncoast Pinellas has longstanding relationships with the local children’s hospitals, St. Joseph’s Children’s Hospital, and Johns Hopkins All Children’s Hospital. Concurrent care is a benefit created as part of the Affordable Care Act that allows children admitted to hospice care to continue to receive their curative care. Although all applicants have proposed providing concurrent care, only Suncoast has proposed a PIC/TFK program. Suncoast is the only applicant currently operating a perinatal loss program and miscarriage at home program. Dr. Orloff credibly confirmed that Suncoast will implement the perinatal loss program if approved in Hillsborough. Condition 6: Development of Continuum of Care Navigation Program Suncoast’s Community Needs Assessment identified that Hillsborough lacks effective access to the full continuum of healthcare services. Suncoast 6 AHCA’s witness, James McLemore, credibly testified that this is an area where Suncoast enjoys an advantage over the other applicants because “Suncoast went with an entire pediatric program.” Pinellas operates an entire care navigation department that can address any inquiry or referral regarding hospice and Empath’s other services, in order to direct that patient to the right care at the right time. All services offered by Empath, including hospice, palliative care, home health, EPIC, and PACE are available to individuals who call the Care Navigation Center. Care Navigation staff can also assist existing patients with questions involving, for example, DME. Suncoast Pinellas’s care navigation center is available 24 hours a day, 7 days a week, 365 days a year. If its application is approved, Suncoast will also offer its Care Navigation Department in Hillsborough. Condition 7: Development of a Program to Address Transportation Challenges for Rural Areas Suncoast has conditioned its application on developing a program to address transportation challenges for rural areas in Hillsborough. As part of this condition, Suncoast will provide up to $25,000 annually in bus vouchers for the first five years to current hospice patients and their families, as well as non-hospice patients. Critics of Suncoast’s plans to offer bus vouchers claimed that Hillsborough’s bus system does not reach all areas within the county. However, Suncoast has also conditioned its application on the provision of funds that may be used to purchase transportation, including ridesharing providers such as Uber. Condition 8: Interdisciplinary Palliative Care Consult Partnerships Suncoast will implement interdisciplinary palliative care partnerships with hospitals, ALFs, and nursing homes located in Hillsborough. Suncoast has already identified potential partnerships, including with Dr. Harmatz at Brandon Regional Medical Center, to launch the program. Condition 9: Dedicated Quality-of-Life Funds for Patients and Families Suncoast is committed to providing quality of life funds as described in Condition 9 in Suncoast’s CON application. Suncoast Pinellas has extensive experience with providing each interdisciplinary team with $1,200 of quality of life funds to be used to facilitate a safe environment for its patients, such as paying rent, getting rid of bedbugs, paying utilities such as electricity for air conditioning, and to power specialized medical equipment. On occasion these funds are also used to provide meaningful patient experiences, similar to the Make-a-Wish programs. Conditions 10 – 13: Development of Advisory Committees and Councils Suncoast has committed to establishing care councils and advisory committees to learn firsthand the needs and concerns of the community. A care council is made up of members from a particular community who provide input regarding the needs of the community. Suncoast Pinellas offers similar councils and committees in Pinellas County. These groups are critical to the success of Suncoast Pinellas’s mission. Condition 14: Development of Open Access Model of Care Suncoast has committed to implementing an open access model of care in Hillsborough. This condition recognizes that while some patients may be receiving complex medical treatments that may lead some to question whether the patient is terminal, those treatments are actually required for palliation and the patient’s comfort. Under this condition, Suncoast promises to admit these patients and provide coverage for their treatments. Condition 15: SAGECare Platinum Level Certification Joy Winheim testified at the final hearing regarding the HIV positive community and the LGBTQ community. Over her many years working with the HIV/AIDS community, Ms. Winheim has built lasting relationships with community partners in the Tampa Bay area, including HCDOH and the Pinellas County Health Department. Empath’s EPIC program has a permanent staff member housed within the HCDOH, and the HCDOH has physicians housed in EPIC’s Tampa office to provide medical care to EPIC’s clients. Ms. Winheim has built lasting relationships with community partners in the Tampa Bay LGBTQ community, including Metropolitan Community Church, an LGBTQ friendly church; the Tampa Bay Gay and Lesbian Chamber of Commerce; and Balance Tampa Bay. SAGE is a national organization dedicated to improving the rights of LGBTQ seniors by providing education and training to businesses and non- profits. The platinum level of SAGECare certification is the highest level and indicates that 80% of an organization’s employees and 100% of its leadership have been trained by SAGE. Leadership training is in the form of a four-hour in-person training. Employee training is in the form of a one-hour training conducted either in person or web-based. All of Empath’s entities are SAGECare certified at the platinum level. Although the platinum level certification requires only 80% of its employees to receive training, Empath Health required that 100% of its employees attend the training. SAGECare certification makes a difference to members of the LGBTQ community choosing a healthcare provider. Suncoast is committed to fulfilling this condition. Condition 16: Jewish Hospice Certification Suncoast Pinellas has a specialized Jewish Hospice Program and holds a Jewish Hospice Certification from the National Institute of Jewish Hospices. Suncoast has conditioned its CON application on achieving this same certification in Hillsborough by the end of year one. Condition 17: Joint Commission Accreditation The Joint Commission on Accreditation of Healthcare Organizations (“Joint Commission”) accreditation is the “gold standard” for hospitals, nursing homes, hospices, and other healthcare providers. Suncoast is currently accredited by the Joint Commission, and if approved, is committed to achieving Joint Commission accreditation for its Hillsborough program. Condition 18: Provision of Value-Added Services Beyond Medicare Hospice Benefit Suncoast has committed to provide its integrative medicine program in Hillsborough. Suncoast Pinellas’s existing integrative medicine program is staffed by an APRN who is also certified in acupuncture. Suncoast Pinellas’s integrative medicine program is a holistic approach for helping patients manage their symptoms with such therapies as acupuncture, Reiki,7 and aromatherapy. Suncoast Pinellas recently established a Wound, Ostomy, and Continence Nurse Program in Pinellas County to provide expertise in end-of- life wounds and incontinence issues in long-term care settings, particularly smaller ALFs that may not have the necessary staffing. Suncoast will also offer this program in Hillsborough. [Remainder of page intentionally blank] 7 Reiki (??, /'re?ki/) is a Japanese form of alternative medicine called energy healing. Reiki practitioners use a technique called palm healing or hands-on healing through which a “universal energy” is said to be transferred through the palms of the practitioner to the patient in order to encourage emotional or physical healing. Condition 19 – Limited Fundraising in Hillsborough County Suncoast has committed to limiting fundraising activities in Hillsborough. Ms. Rabon credibly testified that Suncoast can, and will, fulfill this condition.8 Suncoast’s PACE Program In addition to its conditions, Suncoast’s proposal also includes several other non-hospice services that will be made available in Hillsborough. For example, Suncoast Pinellas operates a PACE program. The PACE program provides everything from medical care to transportation for medical needs and adult daycare services, as well as respite services for caregivers. The overall goal of the PACE program is to reduce unnecessary hospital visits and nursing home placement and keep elderly participants at home. Suncoast Pinellas’s PACE program currently operates at capacity, with 325 participants enrolled. Over the last four years, Suncoast Pinellas PACE has referred 175 people to Suncoast Pinellas. And although there are approximately 14,000 eligible PACE participants in Hillsborough, there is not a PACE provider in the county. In recognition of this unmet need, Suncoast Pinellas is currently in the process of expanding PACE services to residents of Hillsborough. Suncoast’s PACE program distinguishes Suncoast from Cornerstone and VITAS, neither of which currently operates a PACE program in any of their service areas. Suncoast’s Volunteer Program Under the Medicare Conditions of Participation, hospice programs must use volunteers “in an amount that, at a minimum, equals 5 percent of 8 Both Suncoast and Vitas condition their applications on eschewing fundraising activities in SA 6A, apparently in an effort to minimize adverse impact on the two existing providers in the service area. However, neither Lifepath nor Seasons participated as a party to this litigation, or presented evidence at hearing as to revenues received through their fundraising activities. Thus, it is impossible to determine whether the conditions proposed by Suncoast and VITAS would have a material impact on either of the existing providers. the total patient care hours of all paid hospice employees and contract staff.” 42 C.F.R. § 418.78(e). Suncoast Pinellas regularly exceeds that 5% requirement and, in fact, reached 12% in the last fiscal year. Suncoast Pinellas currently has over 1,000 volunteers who support the hospice program by assisting with palliative arts, including Reiki and aromatherapy, Lifetime Legacies, pediatric patients, and transportation. Suncoast Pinellas’s volunteers also assist with Suncoast’s Pet Peace of Mind Program, for which Suncoast Pinellas won the inaugural award for program of the year in 2019. Suncoast is the only applicant that operates a teen volunteer program. Suncoast Pinellas’s teen volunteer program was established in 1994 and was the first of its kind in the entire country. In 1998, it was awarded the Presidential Point of Light award. Suncoast Pinellas’s Volunteer Services Director, Melissa More, regularly consults with hospices across the country on the development of teen volunteer programs. Ninety of Suncoast Pinellas’s 1,000 volunteers currently live in Hillsborough, but travel to Pinellas to volunteer at Suncoast Pinellas. Nine of those volunteers submitted letters of support for Suncoast’s CON application to serve Hillsborough. Doctor Direct Program Suncoast Pinellas’s existing Doctor Direct Program enables physicians in the community and their ancillary referral partners to contact a Suncoast Pinellas physician 24/7, who can answer any questions about a patient they think might be eligible for hospice, and questions related to other Suncoast Pinellas programs. Suncoast will provide its Doctor Direct Program in Hillsborough. Plan for Inpatient Services Suncoast received letters of support from hospitals and a nursing home indicating a willingness to enter into a contract for inpatient services with Suncoast. Suncoast intends to offer both inpatient units and “scatter- bed” arrangements with these providers. Suncoast received letters specifically related to potential partnerships with St. Joseph’s (BayCare) and Brandon Regional (HCA) for the provision of inpatient hospice services. Suncoast also received a letter related to a potential partnership with the Inn at University Village, a long-term care facility in Hillsborough, for the provision of inpatient services. Telehealth Suncoast Pinellas offers telehealth services using CMS and HIPAA- approved software so that patients can keep meaningful connections with their family and friends, regardless of ability to travel. In Hillsborough, Suncoast will provide nurses, social workers, and chaplains with traveling technology for use in the patient’s home to connect with family and friends. Utilizing telehealth in this way will help to minimize emergency room visits and hospitalizations. Suncoast will be prepared to implement its telehealth program in Hillsborough on day one of operation if awarded the CON. Outreach Efforts to Diverse Communities Suncoast is committed to, and has a proven track record of, community outreach efforts to diverse communities. As part of its outreach efforts in Hillsborough, Empath’s Vice President of Access and Inclusion, Karen Davis-Pritchett, met with the Executive Director of the Hispanic Service Council, Maria Pinzon, to discuss the organization’s outreach efforts and gain insight into the Hispanic community in Hillsborough. Ms. Davis- Pritchett learned that the Hispanic community in Hillsborough differs from the Hispanic community in Pinellas, in that Hillsborough has a large and spread out migrant population. Ms. Davis-Pritchett and Ms. Pinzon also discussed the transportation issues facing residents of Hillsborough. To address these transportation issues, Suncoast conditioned its CON application on the purchase and use of a mobile outreach van with bilingual staff to conduct outreach to the Hispanic and other diverse communities. Suncoast also conditioned its application on the provision of vouchers that may be used for buses or ride-sharing services. Ultimately, Suncoast obtained a letter of support from Ms. Pinzon, which was submitted with its CON application. Additionally, Suncoast conditioned its application on recruiting four community partnership specialists, who will conduct outreach to the African American community, the Hispanic community, the Veterans community, and the Jewish community, and six professional liaisons who will conduct outreach to clinical partners in Hillsborough. All of these positions will be dedicated to Hillsborough and be filled by individuals who are connected to these communities, and understand the importance of access to hospice care. Suncoast’s proposal includes a bilingual medical director, Dr. Jerez- Marte, for its Hillsborough program. Dr. Jerez-Marte regularly speaks Spanish with patients and staff, which would be a benefit to Hispanic patients in Hillsborough. Mr. Sciullo credibly testified that Suncoast will offer high quality hospice services in SA 6A, and will fulfill the 19 conditions proposed in its application. Cornerstone Based on its review of data and analytics that Cornerstone relies upon and conducts as part of its ongoing operations in Florida, Cornerstone recognized in the second quarter of 2019, long before AHCA published its need projections, that there was need for an additional hospice program to enhance access to hospice services in Hillsborough. Regardless of the service area, Cornerstone offers quality hospice care through consistent policies, protocols, and programs to ensure that patients are getting the highest quality care possible. Cornerstone will bring all aspects of its existing hospice programs and services to Hillsborough, including all of the programs and services described throughout its application. However, Cornerstone recognizes each service area is different in terms of the needs and access issues patients face, whether based on demographics, geography, infrastructure, a lack of information about hospice, or other factors. When looking to enter a market, Cornerstone conducts a detailed community-oriented needs assessment to determine the specific needs of the community with regard to hospice to best understand how to enhance access to quality hospice services. Cornerstone explores each potential new area to identify the cultural, ethnic, and religious makeup of the community, the current providers of end- of-life care in the community, and the unmet needs and gaps in care, which is critical to understanding where issues may lie. This allows Cornerstone to build and develop an appropriate operational plan to meet the needs identified in a particular market. Cornerstone conducted this type of analysis for its recent successful expansion in Marietta, Georgia, and has had success expanding access to hospice in its existing markets through ongoing similar analyses. Cornerstone conducted an analysis of Hillsborough similar to those it conducts in its existing markets and in expansion efforts outside its existing markets. In its assessment of Hillsborough, Cornerstone relied, in part, on the extensive knowledge of its senior leaders and outreach personnel, many of whom live and previously worked in Hillsborough, with regard to the population characteristics and needs of the Hillsborough area. This experience in the target service area affords Cornerstone’s team a detailed knowledge of the hospice-related needs of the county. Mr. D’Auria, who conducted much of the analytics internally for Cornerstone, also oversaw a team of Cornerstone staff who spent several weeks canvassing Hillsborough at a grassroots level. The Cornerstone team spoke to residents, medical professionals, community leaders, SNFs, ALFs, and hospitals, among others, on the local experience of hospice care, to identify any areas of concern regarding unmet needs or perceived improvements necessary relative to the provision of hospice care by the current providers. Cornerstone’s retained health planning experts, Mr. Roy Brady and Mr. Gene Nelson, further undertook an extensive data-driven analysis of Hillsborough’s health-related needs to explore the access issues and service gaps identified in Cornerstone’s analytics, knowledge of and discussions in the local community, as well as the issues raised in community health needs assessments,9 letters of support, and other resources. Together, the team concluded that quality hospice services are available in Hillsborough County through existing providers LifePath and Seasons Hospice. That care is available to patients of all ages and demographic groups with virtually any end-stage disease process. Yet some patients simply are not accessing hospice services at the expected rate in Hillsborough. For example, Cornerstone’s analyses identified specific unmet community need among particular geographic areas, as well as among persons with a diagnosis other than cancer, particularly those under age 65, persons with end-stage respiratory disease, the Hispanic and African American communities, migrant communities, residents of smaller ALFs, and veterans. Based upon its analysis of the healthcare needs of Hillsborough, Cornerstone included multiple conditions intended to address those needs. In 9 Cornerstone considered the health needs assessments released by Tampa General Hospital and the Moffitt Cancer Center, both published in 2019. Cornerstone also considered the health needs assessment prepared by HCDOH issued on April 1, 2016, as updated, including the March 2019 update. all, Cornerstone proposed 10 conditions in its CON application targeted to meet the hospice needs of Hillsborough: Licensure of the Hospice Program: Cornerstone commits to apply for licensure within 5 days of receipt of the CON to ensure that its service delivery begins as soon as practicable to enhance and expand hospice and community education and bereavement services in SA 6A; Hispanic Outreach: Cornerstone commits to provide two full-time salaried positions for bilingual staff as part of its Community Education Team. These Community Education Team members will be responsible for the development, implementation, coordination and evaluation of programs to increase community knowledge and access to hospice services, particularly designed to reach the Hispanic community in Spanish. Bilingual Volunteers: Cornerstone commits to recruit bilingual volunteers. Patients’ demographic information, including other languages spoken, is already routinely collected so that the most compatible volunteer can be assigned to fill each patient’s visiting request. Offices: Cornerstone commits to establish its first program office in the Brandon area (zip code 33511 or 33584) during the first year of operation. Cornerstone commits to establish a satellite office in the Town & Country area (zip code 33615 or 33634) during the second year of operations. Complimentary Therapies: Cornerstone conditions its application on offering alternative therapies to patients that may include massage therapy, music therapy, play therapy, and holistic (non-drug) pain therapy. These complimentary therapies are not generally considered to be part of the hospice's core services, but are enhancements to the patient’s care which often have a marked impact on the quality of life during their last days. Veterans: Cornerstone commits to providing services tailored to the military veterans in the community. Cornerstone will immediately upon licensure expand its existing We Honor Veterans Level 4 program to serve Hillsborough and will provide the same broad range of programs and services to veterans in Hillsborough as it currently provides in its existing service areas. Bereavement Counseling for Parents: Cornerstone will implement a program in its second year of operation which will provide outreach for bereavement and anticipatory grief counseling for parents of infants who have died. The Tampa area has several hospitals which provide high-level newborn and infant services such as Level III NICU and other programs, consequently there is a higher than average infant mortality rate due to this concentration of high-level services. Cornerstone will work with the local hospitals which provide high-level neonatal intensive care to develop and carry out this program. Cooperation with Local Community Organizations: Cornerstone commits to donate at least $25,000.00 for four years to non-profit community organizations focused upon providing greater healthcare access, disease advocacy groups and professional associations located in SA 6A. These donations will be to assist with their core missions, which foster access to care, and in collaboration with Cornerstone to provide educational content on end-of-life care. Separate Foundation Account: Cornerstone will donate $25,000.00 to a segregated account for SA 6A maintained and controlled by the Cornerstone Hospice Foundation. Additionally, all donations made to Cornerstone or the Foundation from SA 6A, or identified as a gift in honor of a patient served in the 6A program, shall be maintained in this segregated account and only used for the benefit of patients and services in Hillsborough. This account will be used to meet the special needs of patients in Hillsborough which are not covered under the Medicare hospice benefit and cannot be met through insurance, private resources, or community organization services or programs. Continuing Education Programming (CEUs): Cornerstone will commit to extending free CEU in- services to the healthcare community in Hillsborough. Topics will cover a wide range of both required and pertinent subjects and will include information on appropriate conditions and diagnoses for hospice admission, particularly for non-cancer patients. A minimum of 10 in-services will be offered in a variety of healthcare settings during each of the first five years. Additional CEU will be provided on an ongoing basis. In addition to formulating CON conditions, Cornerstone used information gleaned from its community exploration to develop an operational plan detailing the number and type of staff to hire, which programs to offer, and how to tailor its outreach and education to best enhance access to hospice services in Hillsborough to meet the unmet need. Given Cornerstone’s existing outreach to area providers in Hillsborough, such as Moffitt, Tampa General Hospital, and the VA, which already discharge patients to Cornerstone in neighboring service areas, Cornerstone fully expects that it will receive referrals to its hospice from providers throughout Hillsborough upon the initiation of operations in the county. Cornerstone will provide hospice services to those and any other patients throughout Hillsborough from day one. However, when seeking to expand access in new or existing markets, Cornerstone focuses not on taking patients from existing providers but on enhancing access to groups and populations that have been overlooked, or whose needs are not otherwise being met by existing hospices. Cornerstone therefore developed a phased operational plan to focus its outreach and education efforts on areas where there are barriers to access, rather than simply scattering their efforts haphazardly or concentrating on areas that already have a heavy hospice presence. Phase One of Cornerstone’s operational plan will begin immediately upon licensure and continue through the first six months of operation. During this time, Cornerstone will focus outreach and education efforts heavily on the underserved southeast portion of Hillsborough, including Plant City, Valrico, Brandon, Riverview, Mango, and Sun City Center. Phase One includes 68 ALFs, six SNFs, and four hospitals. Almost one-third of the population of Hillsborough resides in this area, and an estimated 28 percent of the residents are Hispanic, and 14 percent are African American. There is also a large, underserved migrant population in this area. Cornerstone conditioned its application on opening an office in Brandon during this initial phase in the first year of operation. Phase Two will expand Cornerstone’s targeted outreach efforts into the southwest quadrant of Hillsborough, including the Apollo Beach, Ruskin, Gibsonton, Progress Village, and Palm River areas. While the population of this phase is smaller than Phase One, the two areas combined make up almost a third of the county’s Hispanic population, and a fourth of the county’s African American population. Phase Three will reach into the broader Tampa area, including towns such as Temple Terrace, Pebble Creek, University, Ybor City, and Carrollwood. This is the largest and most populated of the four phases; however, it is also currently the most hospice-penetrated area of the county as the two existing providers, LifePath and Seasons, each have offices in Phase Three. There is also a hospice house and two hospice inpatient units in the area as well. Because this area already has better hospice visibility and access, and to avoid siphoning patients from existing providers, Cornerstone will focus on this area after Phases One and Two. Cornerstone will ramp up its outreach staffing consistent with the increased area, facilities, and population added during Phase Three. Combined, the first three phases of the operational plan will offer enhanced outreach and education to 90% of the Hillsborough population starting at the beginning of year two operations. Phase Four will encompass the remainder of the county to the west of Tampa in the Town ‘n’ Country area. While this area represents only about 10% of the county’s population, Phase Four has no hospice visibility currently in the form of hospice offices, hospice houses, or hospice inpatient units. Cornerstone has conditioned its application on establishing an office in the Town ‘n’ Country area within project year two to enhance hospice visibility and access in this area of the county. Upon implementation of Phase Four, Cornerstone’s targeted outreach and education will be fully integrated throughout the county. Cornerstone’s application included more than 174 letters of support for its proposal. The letters of support are from a broad range of individuals and facilities located within and outside Hillsborough, including families, SNFs, ALFs, hospitals, vendors, and local charitable organizations, among others. Cornerstone presented testimony from three authors of letters of support, Andrea Kowalski, Eric Luetkemeyer, and Colonel (Ret.) Gary Clark. Ms. Kowalski is an employee benefits coordinator for USI Insurance Representatives in Tampa who works with Cornerstone to build benefits programs for its employees. In addition to authoring her own letter of support, Ms. Kowalski also assisted in gathering approximately 40 additional letters of support for Cornerstone from her colleagues in Hillsborough. Ms. Kowalski strongly supports Cornerstone’s approval and indicated the community would benefit not only from enhanced access to Cornerstone’s excellence and expertise in caring for those with advanced illness, but also from the addition of a highly-regarded employer, which will provide additional options for healthcare workers and financial benefits as Cornerstone reinvests in the community. Mr. Leutkemeyer is the COO for Spectrum Medical Partners (“Spectrum”), the largest privately-held hospitalist group in Florida. Spectrum manages roughly 400 providers across the state, the majority of which (85%) are medical doctors or doctors of osteopathic medicine, either in hospital or post-acute settings, and sees roughly 2,000 patients per day. Spectrum’s footprint includes coverage in Hillsborough for entities such as Simply or Humana with which Spectrum contracts statewide. Spectrum is looking to expand its footprint and services in Hillsborough in the near future. As detailed in his letter, Mr. Luetkemeyer supports Cornerstone’s efforts to establish a hospice program in Hillsborough, indicated a desire to work with Cornerstone in the county if awarded, and believes the community would benefit from the additional resources and quality care that Cornerstone would provide. Colonel Clark, who retired from the United States Air Force in 1993, is co-founder and current Chairman of the Polk County Veterans Council, a volunteer organization of individuals interested in assisting veterans. Colonel Clark is also affiliated with, and participates in, a number of veterans organizations in Hillsborough, including as an adviser to the Mission United Suncoast Chapter in Hillsborough, which primarily assists veterans in transitioning from service to the civilian world. He also serves on the management advisory committee of James A. Haley Veterans’ Hospital in Tampa, which provides a broad spectrum of hospital-based care to area veterans. Colonel Clark has significant experience with Cornerstone through its participation in the Polk County Veterans Council, including on the Council’s committee for the Flight to Honor program, which provides veterans a flight to Washington D.C. to visit war memorials. If a veteran is unable to make the flight, a virtual flight and tour, as well as ceremonies or presentations, are provided by Cornerstone to veterans enrolled in hospice. Cornerstone is heavily involved in the Council’s Flight to Honor program— participating on the committee, recruiting volunteers, working with local schools to gather letters for the veterans on the flights, arranging for orientation prior to the flights, and putting on the virtual flights for those Veterans unable to make the flight due to various disabilities. Colonel Clark is also familiar with Cornerstone’s efforts to support veterans at James A. Haley Veterans’ Hospital in Tampa. Colonel Clark described Cornerstone’s support not only for veterans but for the community overall as “magnificent,” and detailed his support for Cornerstone’s application in a letter of support that is included in Cornerstone’s application. Cornerstone is well-positioned to quickly establish a successful hospice program to enhance access in Hillsborough, and its proposal is a carefully considered, long range plan that would bring its established and proven processes, procedures, and programs to the residents of the county. Cornerstone also posits that its existing presence nearby in Lakeland will enhance its ability to topple barriers to care and serve patients in adjacent SA 6A immediately. For example, Cornerstone has existing relationships with veterans groups that serve both Polk and Hillsborough, and will utilize those relationships to enhance access to the large veteran population in Hillsborough, as highlighted through Cornerstone’s condition to provide services tailored to the veteran community. VITAS VITAS, which operates a hospice program in adjacent SA 6B, proposes to expand into SA 6A under its existing license. This will allow VITAS to begin serving patients quickly without creating an entirely new administrative infrastructure for the opening. Although VITAS provides many of the same core programs in each of its service areas, it also recognizes that each community is different. VITAS performed a qualitative and quantitative assessment that examined the specific needs of Hillsborough regarding hospice care and services. Through its consultants and internal team, VITAS identified several communities, patient types, and clinical settings that are underserved in SA 6A. These include: the African American, Hispanic, and migrant communities, particularly those age 65 and older; impoverished, food insecure and homeless communities; patients with non-cancer diagnoses such as pulmonary disease, cardiac disease, Alzheimer’s Disease, and patients with sepsis; cancer patients in need of palliative care; high acuity patients in need of complex services and those needing admissions during evenings and weekends; patients requiring admission after hours and on weekends; and patients who reside in nursing homes and small ALFs. To understand the hospice needs within Hillsborough, VITAS conducted a two-step review—(1) analyzing data from a wide variety of sources including Medicare, AHCA, Florida Department of Elder Affairs, Florida CHARTS, and demographic and socioeconomic data; and (2) meeting with some healthcare and social service providers in Hillsborough. Key members of VITAS’s leadership team, including Patty Husted, Mark Hayes, and Dr. Shega, conducted an assessment in Hillsborough to identify the unmet need within the community and underserved populations. VITAS’s needs assessment team physically went into Hillsborough to visit nursing homes, ALFs, hospitals, and physicians to determine the unmet need and how to achieve greater access to hospice services for the residents of Hillsborough. VITAS’s team spent a significant amount of time conducting hospice outreach and education in Hillsborough in furtherance of the needs assessment. Specifically, VITAS’s team met with hospitals including H. Lee Moffitt Cancer Center, Baptist Health, BayCare, St. Joseph’s, and Brandon Regional; nursing homes, such as Hudson Manor, Ybor Health and Rehabilitation Center; and physician and nurse practitioner groups. VITAS’s needs assessment team also participated in physician advisory council meetings as part of its needs assessment for Hillsborough. During these meetings, VITAS gained perspective from these local physicians regarding the challenges faced by patients in need of hospice services in SA 6A, as well as insight as to what VITAS could bring from its existing programs to fill the unmet needs. VITAS also drew on the knowledge of the 18 VITAS employees currently living in Hillsborough. To address the needs it identified in SA 6A, VITAS proposes a broad array of programs and services to be offered in Hillsborough which are specifically targeted to increase the availability and accessibility of hospice services for underserved groups and Hillsborough residents more broadly. To demonstrate its commitment, VITAS conditioned its CON application on providing the following 20 programs and services in SA 6A: VITAS Pulmonary Care Program. VITAS Cardiac Care Program. Clinical research and support for caregivers of patients with Alzheimer’s and dementia. VITAS Sepsis Care Program. Veterans programs, including achieving Level 4 commitment to the We Honor Veterans program within the first two years of operation in SA 6A. Bridging-the-Gap Program and Medical/Spiritual Toolkit, which is an outreach and end-of-life education tool for African American and other minority communities. ALF Outreach and CORE Training Program. Palliative care resources and access to complex and high acuity services, including engaging area residents with serious illness in advance care planning and goals of care conversations, as well as offering palliative chemotherapy, inotrope drips and radiation to optimize pain and symptom management as appropriate. Provider clinical education programs for physicians, nurses, chaplains, HHA’s and social workers. Quality and Patient Satisfaction Program, including hiring a full-time Performance Improvement Specialist within the first six months of operation dedicated to supporting quality and performance improvement programs for the 6A hospice program. VITAS staff training and qualification, ensuring the medical director covering SA 6A will be board-certified in hospice and palliative care medicine. Hospice office locations. Deployment of a mobile van to increase access and outreach to rural counties. VITAS will not solicit donations. Outreach and end-of-life education for 6A residents experiencing homelessness, food insecurity, and limited access to healthcare, including advanced care planning for area homeless shelter residents and a partnership to provide a grant for housing and food assistance with a community organization. $5,000 will be distributed during the first two years to the Hispanic Services Coalition or similar qualified organization for promoting academics, healthy communities and engagement of Latinos. Outreach program for underserved residents of SA 6A. Educational grant, to the University of South Florida Foundation including $250,000 for fellowships, scholarships, education and workforce development as well as $20,000 for diversity initiatives. Inpatient hospice house and shelter for natural disasters and hurricanes. Medicaid Managed Care education Services beyond the hospice benefit, including, among others: 24/7 Telecare Program and access to admission on evenings and weekends, including outreach and end-of-life education for residents experiencing poverty, food insecurity, homelessness and/or food insecurity, including nutrition services, advanced care planning for shelter residents, and housing assistance. Hospice Education and Low Literacy (HELLO) Program. Multilingual education materials in several languages including Spanish, Chinese, Korean, Portuguese, Russian, Vietnamese and Creole. CAHPS Ambassador Program to generate interest, awareness and encourage ownership by team members of their team’s performance on CAHPS survey results. Community outreach and education programs. Partnership with a local college for fellowships, scholarships, education and workforce development and diversity initiatives. VITAS’s application contains approximately 50 letters supporting its proposed program, the vast majority of which are from hospitals, nursing homes, ALFs, physicians, and community organizations in Hillsborough County with direct hospice experience. VITAS obtained these letters of support as part of its community-oriented needs assessment, and they attest to the community’s confidence in VITAS’s ability to meet hospice care needs in Hillsborough. Included are letters of support from Cynthia Chavez, Executive Director at Hudson Manor Assisted Living; Brian Pollett, Administrator at Ybor Health and Rehabilitation Center; and Dr. Jorge Alfonso, Regional Chief Medical Officer at Dedicated Senior Medical Center. All three providers expressed a local need to address high acuity patients, including greater access to continuous home care. Statutory and Rule Review Criteria The review criteria are found in sections 408.035, 408.037, and 408.039, and rules 59C-1.008 and 59C-1.0355. (Prehearing Stipulation). Section 408.035(1) - Need for the health care facilities being proposed There are currently two licensed hospice programs in hospice SA 6A, and a need for one additional hospice program, as calculated using the need methodology found in rule 59C-1.0355(4), and published by AHCA, without challenge. AHCA’s need calculation compares reported hospice admissions during the base year with projected admissions in the horizon year and finds need if the difference between base and horizon year admissions exceeds 350, assuming there are no recently-licensed or CON-approved hospice programs in the service area. In this case, AHCA’s calculation revealed a net need of 863 hospice admissions for the January 2021 planning horizon. Each Applicant has put forth a proposal to meet the calculated need for one additional hospice program in Hillsborough. None of the applicants are advocating the approval of more than one new program. Section 408.035(2) – Availability, quality of care, accessibility, and extent of utilization of existing health care facilities and health services in the service district. It is undisputed that quality hospice services are available in Hillsborough today through existing providers LifePath and Seasons, including for patients of all ages and with essentially all end-stage disease processes, as well as for patients of all demographic groups. Relevant data demonstrates discharges to hospice in Hillsborough for a wide range of diagnoses and demographic groups, including African American and Hispanic patients, non-cancer and cancer patients, both over and under age 65; patients with end-stage cardiac disease; end-stage pulmonary disease and dementia, including Alzheimer’s disease, among others. However, despite the availability of quality hospice services, some patients simply are not accessing hospice services at the rate expected in SA 6A, as reflected by low penetration rates and low discharge-to-hospice rates, particularly within certain major disease categories and demographic groups, including Hispanic and African American residents. All three applicants agreed that the underutilization is concentrated among certain patient populations, including demographic groups and disease groups. Generally, all three applicants agreed that the Hispanic, African- American, veteran, and homeless populations are currently underserved in Hillsborough. In addition, Suncoast points to the need for a specialized pediatric hospice program in SA 6A; Cornerstone argues that non-cancer patients younger than age 65 are in need of enhanced access, as are residents of smaller ALF’s; and VITAS asserts that patients with respiratory, sepsis, cardiac, and Alzheimer’s diseases are underserved, as are patients requiring continuous care and high acuity services, such as high-flow oxygen. VITAS’s argument is based largely on a claim that the existing providers are not providing “any measurable continuous care,” as well as hearsay reports from area hospitals indicating a lack of high-acuity services available through existing hospice providers. However, VITAS’s health planning expert conceded that, in fact, existing providers are offering continuous care, and she was unable to quantify any purported dearth of continuous care in Hillsborough as compared to other providers or the statewide average. The record establishes that continuous care is part-and- parcel of the hospice benefit, and there was no evidence presented at final hearing to support the claimed lack of availability of that service from existing providers. Based on the foregoing, the evidence tended to show quality hospice care is available in SA 6A, that it is underutilized, and that the underutilization is driven by accessibility challenges among particular patient groups, and supports AHCA’s determination that another hospice program is needed in Hillsborough. Section 408.035(3) - Ability of the applicant to provide quality ofcare and the applicant’s record of providing quality of care Cornerstone is the only applicant accredited by the Joint Commission, which is a national symbol of quality that reflects its commitment to meeting high quality performance standards. Cornerstone’s Joint Commission accreditation, which was just recertified in 2020, and the accompanying high standards of quality care, will carry over to its new SA 6A program. As a new entity, Suncoast is not Joint Commission accredited, but conditions its application on achieving such accreditation by the end of year two. Suncoast Pinellas is Joint Commission accredited, and indeed, is one of only a handful of hospices nationwide, along with Cornerstone, to hold Joint Commission accreditation and/or certification. While VITAS represents that some affiliated VITAS hospice programs are Joint Commission accredited, VITAS, the applicant here, is not accredited by the Joint Commission, and makes no representation that it will seek or attain such accreditation for its new hospice program in SA 6A. There are two universal metrics codified in federal law that are used as a proxy for assessing the quality of care offered by hospice programs— Hospice Item Set (“HIS”) scores and Consumer Assessment of Healthcare Providers and Systems (“CAHPS”) survey scores. See 42 C.F.R. § 418.312; see also § 400.60501, Fla. Stat. (2020). CAHPS surveys are a subjective metric sent to family members and other caregivers months after a patient's death. The survey asks respondents to provide ratings like: “would definitely recommend,” “would probably recommend,” “would probably not recommend,” and “would definitely not recommend.” It also seeks yes or no responses to statements like: the hospice team “always communicated well,” “always provided timely help,” “always treated the patient with respect,” and “provided the right amount of emotional and spiritual support.” It also asks if the patient always got the help they needed for pain and symptoms, and if “they” received the training they needed. The CAHPS survey was created by CMS in conjunction with the Agency for Healthcare Research and Quality to measure and assess the care experience provided by a hospice. The purpose of the Hospice Compare Website is to allow the public to compare quality scores for CAHPS among different hospice providers. CAHPS scores are one measure of quality that is intended to allow for comparison across hospice programs. Significant time at final hearing was dedicated, through multiple witnesses, to discussing the strengths and weaknesses of CAHPS scores as a measure of quality. Ultimately, the greater weight of the evidence supports that CAHPS scores are an indicator of quality, but are not the only consideration, and suffer from limitations that prohibit drawing distinctions from minor differences in scores. The three applicants’ CAHPS scores are summarized in this chart: (Suncoast Ex. 42, BS p. 12203) While it is true that Suncoast Pinellas’s scores on all CAHPS measures are higher than those of Cornerstone, the slight difference between Suncoast Pinellas and Cornerstone is not significant given the subjective nature of the survey instrument. However, both Suncoast Pinellas and Cornerstone do score significantly higher than VITAS on most measures. Cornerstone’s CAHPS scores meet or exceed state averages on six of the eight measures, are within one to three points of the state average on the remaining two measures, and its average CAHPS score exceeds the state average. As a new entity, Suncoast does not have CAHPS scores. Suncoast Pinellas’s CAHPS scores meet or exceed state averages on six of the eight measures, are within one to two points of the state average on the remaining two measures, and its average CAHPS score exceeds the state average. In contrast, VITAS’s CAHPS scores fall below the state average on all eight metrics, fall five to seven points below the state average on seven of the eight metrics, and its average CAHPS score for all measures combined falls five points below the state average. Cornerstone and Suncoast Pinellas are within one to three points of each other on every CAHPS metric. The difference in scores between Cornerstone and Suncoast Pinellas is not statistically significant or meaningful, particularly given the shortcomings of CAHPS scoring. VITAS’s CAHPS scores are below both Cornerstone and Suncoast Pinellas, falling six and eight points below Cornerstone and Suncoast Pinellas, respectively, on the average of all CAHPS metrics. This difference is meaningful, particularly when viewed in the context of VITAS’s history of substantiated complaints discussed below. HIS scores, which assess documentation of various items, are more a process or compliance measure than a quality measure. Suncoast Pinellas’s HIS scores exceed the state and national average on all metrics, albeit most scores are within two points of the state average. Cornerstone’s HIS scores are on par with state averages on most metrics and meet or exceed the national average on every metric, except Pain Assessment. Cornerstone has worked to substantially improve its Pain Assessment score through better documentation protocols, raising its score from 52.1 to 89.1 in the last few years, and is implementing a new Electronic Records Management system to further improve its scores. VITAS’s HIS scores are on par with state averages on most metrics, and meet or exceed the national average on all metrics except Visits When Death Imminent. VITAS scores 68.4 on Visits When Death Imminent compared to the state and national averages of 83.2 and 82.4, respectively. As measured by the HIS scores, there was no credible, persuasive testimony establishing a meaningful difference among the three applicants. In contrast to CAHPS and HIS scores, the number and substance of complaints substantiated against each applicant by AHCA is a more direct indicator of quality of care. Suncoast has no prior hospice operations history, and therefore no prior substantiated complaints. Suncoast Pinellas has had only three substantiated complaints since 2008, and none since 2013. Cornerstone has only two substantiated complaints since 2008, and only one since Mr. Lee took over as CEO of Cornerstone in late 2012. VITAS has 73 substantiated complaints since 2008, including 10 substantiated complaints in the three years ending November 20, 2019, just prior to submission of the CON application at issue here. Between November 20, 2019, and June 17, 2020, VITAS had five additional substantiated complaints. VITAS’s health planning expert, Ms. Platt, also considered all AHCA survey deficiencies, whether based upon a complaint, life safety survey, or otherwise. Ms. Platt’s analysis demonstrates that VITAS had 80 such surveys with deficiencies since 2012, including 26 between January 2018 and June 2020. VITAS argues that its greater number of substantiated complaints are the consequence of higher patient volumes than Suncoast and Cornerstone. However, even taking into consideration the greater number of patient days provided by VITAS, VITAS had infinitely more surveys with deficiencies in 2019 than Cornerstone, which had zero. And VITAS had five times as many surveys with deficiencies for 2018 and 2019 as Cornerstone. A comparison of VITAS to Suncoast Pinellas yields similar results, with VITAS having significantly more surveys with deficiencies than Suncoast Pinellas, even when taking into consideration the greater number of patient days provided by VITAS. Complaints substantiated against VITAS demonstrate failures in many areas of patient care, including some of the specific aspects of hospice care at which VITAS claims to excel beyond other providers, such as after- hours care, the provision of continuous care, and care to patients wherever they live, including smaller ALFs. For example, a substantiated complaint against VITAS in November 2019 included a finding of “immediate jeopardy”—the most severe level of deficiency possible—for a patient who failed to receive proper care after-hours at end-of-life, resulting in a particularly painful death for the patient, and an excruciating experience for the patient’s daughter who witnessed her mother’s painful death, unaccompanied by hospice personnel. Two additional substantiated complaints from January and February 2020 found deficiencies in VITAS’s care to patients on continuous care, including one where the VITAS nurse had headphones in and was not paying attention when the patient fell. Indeed, VITAS’s own internal review of the substantiated complaint involving the patient who fell confirmed an upward trend in falls among VITAS patients. And, as recently as June 2020, a separate substantiated complaint found that VITAS abandoned a patient on continuous care, requiring the patient to be transferred to the hospital rather than continue to receive care in the “small ALF” where the patient resided. VITAS acknowledged the patients at issue in the substantiated complaints discussed at final hearing did not receive quality hospice care. Those five examples are only a sampling of the complaints substantiated against VITAS, and the others demonstrate similar quality deficiencies. The number of substantiated complaints weighs in favor of Cornerstone and Suncoast, and heavily against VITAS with regard to record of providing quality of care. There is no meaningful difference between Cornerstone and Suncoast in regard to substantiated complaints, and neither is entitled to preference in this regard. On balance, among the three applicants, the quality of care provided by Suncoast and Cornerstone is on equal footing, with both having a distinct advantage over VITAS. Section 408.035(4) - Availability of resources, including health personnel, management personnel, and funds for capital and operating expenditures, for project accomplishment and operation; and Section 408.035(6): The immediate and long-term financial feasibility of the project The parties stipulated that each of the applicants have available funds for capital and operating expenditures in the short term for purposes of project accomplishment and operation. Suncoast demonstrated that it has the resources to accomplish its proposed project. Suncoast provided detailed descriptions of the personnel that would be required to successfully implement its proposed program. Suncoast has reasonably projected the types of staff necessary to operate Suncoast in year 1 and 2 of operation. At hearing, Suncoast witnesses credibly described the roles of the staff contained in Suncoast’s Schedule 6, including the roles of administrator, care team manager, administrative assistant, regional hospice scheduler, business development liaisons, physicians, program director, nurses, hospice aides, respiratory therapists, staff for the mobile van in Condition 2 of its application, community partnership specialists, social workers, patient social team lead, chaplain, volunteer coordinator, and senior staff nurse. Suncoast’s financial expert, Armand Balsano, testified that part of his role in preparing Suncoast’s CON application was working with Suncoast Pinellas’s Chief Financial Officer, Mitch Morel, to develop Suncoast’s financial projections that were included on Schedules 1 through 8 of the application. Mr. Balsano, in collaboration with Mr. Morel, utilized Suncoast Pinellas’s internal financial modeling system to develop the financial schedules and financial narrative for the application. Mr. Balsano credibly testified that financial Schedules 1 through 8 are accurate and reasonable. Suncoast projects admissions of 460 patients for project year one and 701 patients for project year two. Suncoast’s health planner, David Levitt, developed Suncoast’s projected admissions based on experience of other providers entering a market with two existing providers. Suncoast’s projected number of admissions for years one and two are reasonable projections of admissions for a new hospice program in Hillsborough. Suncoast was criticized as having a lackluster record for admissions in its existing Pinellas hospice. While it is true that Suncoast Pinellas’s admissions declined slightly from 2013 to 2014, the overall trend has been one of increasing admissions. For example, based on Medicare claims data, from 2005 to 2019, Suncoast Pinellas’s admissions grew from 4,679 to 6,534.10 Financial feasibility may be proven by demonstrating the expected revenues and expenses upon service initiation, and determining whether a shortfall or excess revenue results. The projection of revenue is not complicated for hospice services. The vast majority of hospice care, more than 90%, is funded by the Medicare Program which pays uniform rates to all hospice providers. Mr. Balsano testified that Suncoast’s projected revenues in Schedule 7 are based on the revenues that are currently realized for the various payer categories, including Medicare, Medicaid, Commercial, and self-pay. Mr. Balsano credibly testified that the assumptions reflected on Schedule 7 of Suncoast’s CON application are reasonable and appropriate. 10 Suggestions by VITAS and Cornerstone that Suncoast’s internal data indicate a history of low utilization or inaccurate reports to AHCA are without merit. Mr. Sciullo credibly testified that the data reported to AHCA is the most accurate admissions data. Mr. Sciullo further credibly testified that the Utilization Trend Reports contained in Cornerstone’s exhibits 82 through 88, relied on by VITAS and Cornerstone, contain duplicate hospice admissions and admissions from non-hospice programs such as Suncoast’s home health program. Mr. Sciullo also credibly testified that the most accurate admissions numbers reported to AHCA are not generated from the Utilization Trend Reports. Rather, the admissions numbers reported to AHCA are produced by Suncoast’s reimbursement department. Mr. Sciullo’s testimony under cross examination demonstrated a confident and credible understanding of the nuances of the Utilization Trend Reports. Additionally, the suggestion that Suncoast would intentionally under-report admissions to AHCA lacks credibility because hospice providers in Florida are incentivized to report higher numbers of admissions. In Year 2, Suncoast projects net operating revenue of $7,138,000, which breaks down to approximately $172 per day of overall net revenue per patient day. Mr. Balsano’s credibly testified that this is a reasonable forecast of net operating revenue. Projected expenses were also reasonably projected by Suncoast. Mr. Balsano testified that Suncoast’s projected income and expenses in Schedule 8A includes salaries and wages, fringe benefits, medical supplies and ancillary services, and approximately 1.5% of inpatient days. Suncoast also included a separate allowance for administrative and overhead cost. Suncoast also allocated $752,000 in management fees to account for “back office services” and other support services that would be provided to the Hillsborough program through the Empath home office. Mr. Balsano arrived at this number by determining that a reasonable assessment would be the cost per patient day of $18, as reflected on Schedule 8 for year two. Mr. Balsano credibly testified that, for a startup program, it is appropriate to include the costs associated with services provided by the corporate office because one must be cognizant of what services are provided locally, and what services will be provided through the corporate office. Mr. Balsano further testified that it would not be reasonable to assume that 100% of the costs associated with corporate services to a new hospice program would be fixed. As Mr. Balsano explained, the variable costs must be accounted for as well. Mr. Balsano credibly testified that Suncoast’s net profit in year two as reflected in Schedule 8A is $615,416. It is found that Suncoast has reasonably projected the revenues and expenses associated with its proposed hospice, and that Suncoast’s proposal is financially feasible in the long term. Cornerstone projected admissions of 448 patients in year one, and 819 patients in year two, for the highest year two admissions of the three applicants. In comparison, Suncoast projected admissions of 460 patients in year one and 701 in year two, while VITAS projected 491 patients in year one and just 593 in year two. Cornerstone’s projected admissions were developed by health planning experts Roy Brady and Gene Nelson based on the experience of recent new hospice programs in the state of Florida, were discussed and confirmed by Cornerstone personnel prior to being finalized, and are a reasonable projection of admissions for years one and two of operations in Hillsborough. Despite the highest anticipated year two admissions, Cornerstone’s projection still fell below the SA 6A service gap of 863 patients and therefore did not, standing alone, establish any greater adverse impact on area providers than Suncoast or VITAS. Cornerstone emphasized its mission as an organization, and intent for this proposal, to expand penetration by resolving unmet need as opposed to capturing patients already served by existing providers. The adverse impact analysis in Cornerstone’s application therefore represents a worst-case scenario by assuming all of its patients otherwise would be served by existing providers, a premise undercut by the substantial published need. Using this approach, Cornerstone anticipated that LifePath would bear the overwhelming burden of its entry into Hillsborough, with a projected adverse impact on LifePath of 408 patients in year one, and 747 in year two. Cornerstone anticipated adverse impact to Seasons of 39 patients for year one, and 72 patients for year two. Even in this worst-case scenario, existing [Remainder of page intentionally blank] providers’ volumes in Cornerstone project years one and two exceed their historical volumes.11 Cornerstone has available health personnel and management personnel for project accomplishment and operation. Cornerstone’s existing staff, as well as its projected incremental staff for the new program, is reflected in schedule 6A of its application. The projected incremental staff shown in schedule 6A is based on established ratios and methodologies Cornerstone uses in its existing hospice programs. The projected incremental staff is all the incremental staff Cornerstone will need to establish the new program in Hillsborough, and combined with its existing personnel, are sufficient to achieve program implementation as proposed in the application. Both Suncoast and VITAS criticized Cornerstone’s financial projections as flawed because they did not present the fully allocated costs of the project. According to Mr. Balsano, Cornerstone’s projected profit margin is unreasonable and, in fact, is “an extreme outlier.” As he explained, Cornerstone’s financial schedules make no allocation of shared service costs for critical services to be provided by the home office. According to Suncoast and VITAS, this omission is unreasonable when viewed in context with Cornerstone’s Schedule 6, which does not allocate any FTEs to back office support services. Not shown are the expenses Cornerstone will incur for finance, billing, revenue cycle, accounts receivable, payroll, human resources, 11 Relative adverse impact on existing hospice programs of competing applicants has been used as a dispositive factor for favoring one applicant over another. See, Hospice of Naples, Inc. v. Ag. for Health Care Admin., DOAH Case No. 07-1264, ¶ 274 (Fla. DOAH Mar. 3, 2008; Fla. AHCA Jan. 22, 2009) (“One factor outweighs all others, however, in favor of VITAS. VITAS's application will have much less impact on HON and its fundraising efforts and in turn on the high-quality services that HON presently provides in Service Area 8B.”). However, as noted here, neither of the existing providers presented evidence as to the relative impact that any of the applicants would potentially have on its existing operations, or whether such impacts would be material. Accordingly, there is no evidentiary basis for providing an advantage to one or another of the applicants based upon consideration of adverse impact. and contract negotiations, among others. Notably, hospice providers include home office costs as part of their Medicare cost reports filed with CMS.12 Because Cornerstone did not allocate home office costs in its application, its profit margins are substantially higher than all other applicants for the October 2019 Batching Cycle. While most applicants fall within the $100,000 – $500,000 range, Cornerstone projected a staggering $4.9 million profit margin. There is nothing in the CON application form or instructions that require that financial projections be presented on a “fully allocated” basis. Notably, in its review of the financial projections, AHCA determined that each applicant’s proposed program appeared to be financially feasible in the long-term. Cornerstone’s financial feasibility analysis included consideration of payer mix, level of service mix, admissions, average lengths of stay, patient days and incremental staffing needs, among others, and focused on the resulting incremental revenues and expenses generated by addition of the new program in Hillsborough. Cornerstone’s projected admissions are reasonable and appropriate for the proposed new program in Hillsborough. Cornerstone’s proposed incremental staff, combined with its existing staff, is sufficient for project accomplishment and operation. Cornerstone’s projected payer mix is based upon consideration of Cornerstone’s own historic experience, the demographics and recent hospice payer characteristics of Hillsborough, and consideration of Cornerstone’s goal to serve the non-cancer under-65 population, which may reduce Medicare 12 In terms of its budgeting process, Cornerstone has one “bucket” for its administrative overhead/home office expenses and then separate buckets for each of its hospice programs. Home office expenses include human resources, IT, compliance, and facility maintenance. Cornerstone does not allocate its home office expenses to each of its hospice programs within its internal books. However, when an audit is performed, the performances of each hospice program and the home office expenses are all included, and the home office expenses are allocated to each of its hospice programs. levels slightly from what they otherwise may be, and is reasonable and appropriate for its proposed hospice program in Hillsborough. Cornerstone’s projected level of service mix and average length of stay are based upon Cornerstone’s historical experience, and are reasonable and appropriate for the proposed hospice program in Hillsborough. Likewise, Cornerstone’s projected revenues as set forth in schedule 7A are based upon the projected volumes, service level mix, payer mix projections, and Medicare service level specific rates, and are a reasonable projection of revenues for the proposed project in Hillsborough. Cornerstone has established the long-term financial feasibility of its proposed SA 6A program. VITAS’s financial projections were prepared through the work of an internal team led by Lou Tamburro, Vice President of Development for VITAS. VITAS reasonably based these projections on the successful opening and ramp up of new hospice programs in Service Areas 1, 3E, 4A, 6B, 7A, 8B, and 9B, and other Florida communities. VITAS has a clear understanding of what startup costs will be, and it was appropriate for VITAS to rely on its past history of success in developing these projections. VITAS projects admissions of 492 patients for project year one and 593 patients for project year two. Mr. Tamburro developed the projected admissions using an internal model based upon VITAS’s prior experience. While Mr. Tamburro is an expert in health finance, not health planning, Ms. Platt reviewed VITAS’s projections and credibly concluded they are reasonable. VITAS proposes to dedicate more resources to SA 6A than the other two applicants in the second year of operations; 74% of that expense is focused on direct patient care, with only 23% associated with administrative and overhead, and 2% property costs. In contrast, Suncoast and Cornerstone only dedicate 54% and 56%, respectively, of their expenses on direct patient care and 41% and 42%, respectively, on administrative and overhead. However, VITAS’s higher direct patient care costs are at least partially explained by the larger number of clinical and ancillary FTE’s associated with the higher levels of continuous care projected by VITAS than either Suncoast or Cornerstone. As would be expected, VITAS also projects to admit a larger number of high acuity patients than Suncoast or Cornerstone. Given VITAS’s vast experience in the start-up and operation of hospice programs, including 16 within Florida, there is no reason to doubt that the VITAS Hillsborough program would be financially feasible in the long term. The following table summarizes the three applications’ financial metrics: Cornerstone Suncoast Vitas Total Project Costs $286,080 $703,005 $1,134,149 Operating Costs Yr.2 $6 million $5.7 million $8.6 million Net Profit Yr.2 $4,972,346[13] $615,416 $154,913 Proj. Admits Yr. 2 819 701 593 Routine Home Care 95.4% 97.5% 94% General Inpatient 3.5% 1.5% 2.5% Continuous Care 0.3% 0.5% 3.5% Respite 0.8% 0.5% 0% Section 408.035(5) The extent to which the proposed services will enhance access to health care for residents of the service district; and Section 408.035(7) The extent to which the proposal will foster competition that promotes quality and cost-effectiveness. Rule 59C-1.0355 and the criteria for determination of need for a new hospice program found within that rule, is predicated upon the notion that, 13 As noted, Cornerstone’s relatively large profit margin is a function of its incremental cost, versus fully allocated cost, financial projections. when need exists, approval of an additional program will foster competition beneficial to potential and prospective hospice patients in the service area. As between the three applicants, Suncoast did the most thorough and extensive analysis of the current needs of the Hillsborough population. This effort was driven by the fact that Suncoast had recently applied for a new hospice program in neighboring Pasco County, and was denied in favor of a competing applicant. In that case, Administrative Law Judge Newton specifically faulted Suncoast for failing to carefully evaluate the hospice needs of Pasco County residents: Suncoast, in effect, proposes a branch operation for Pasco County. Suncoast did not conduct the focused, individualized inquiry into the needs of Pasco County that Seasons did. Nor did it begin developing targeted ways to serve the needs or begin establishing relationships to further that service. The Hospice of the Fla. Suncoast v. Ag. For Health Care Admin., Case No. 18- 4986, ¶ 126 (Fla. DOAH Sept. 5, 2019; Fla. AHCA Oct. 16, 2019). As explained by Mr. Sciullo at hearing, Suncoast took the above criticism to heart, and determined to conduct an exhaustive evaluation of the hospice needs in SA 6A, and to formulate a strategy for addressing those needs. Specifically, Suncoast’s intent was to identify issues and gaps in services facing residents of Hillsborough, and to enable a dialogue with existing community partners and providers in order to create shared solutions. As part of this comprehensive effort, Suncoast met with more than 50 key individuals and organizations, representing a broad range of general and special populations within the county. This effort resulted in the development of collaborative strategies and action plans to fill the gaps and meet the unmet need for additional hospice services in Hillsborough, as reflected in the Suncoast application conditions. In contrast to Suncoast, Cornerstone did not conduct its own needs assessment, but rather relied on the community needs assessments prepared by the HCDOH and two area hospitals. Moreover, rather than reaching out to the Department of Health and to the area hospitals that prepared those assessments to conduct further research or seek their support of its CON application, Cornerstone simply “verified that their documentation was thorough enough.” Cornerstone’s limited outreach effort in Hillsborough is further demonstrated by the letters of support submitted with its CON application. While Suncoast obtained letters of support from the HCDOH and numerous hospitals and community organizations in Hillsborough, Cornerstone failed to obtain a single letter of support from any hospital in Hillsborough. Despite submitting approximately 150 letters of support (many of which were form letters, and letters from Cornerstone employees), Cornerstone failed to obtain any letters from the Hispanic community, the African American community, the HIV community, the migrant community, or organizations that assist the homeless, unlike Suncoast. As Mr. McLemore testified, “a large part” of the review criteria is “hav[ing] the commitment from the organizations in the service area. I think that’s where – a little bit where Cornerstone was a little off base. They did have a bunch of letters of support, but again, they were not specific to the service area.” Mr. McLemore further testified that, rather than a large pile of letters, he was looking for letters “that are definitely from hospitals, nursing homes and civic organizations, healthcare organizations in the area.” Cornerstone’s failure to conduct meaningful and thorough outreach efforts in Hillsborough is also demonstrated by its generic list of CON application conditions. As multiple Cornerstone witnesses acknowledged, the services Cornerstone is proposing to offer in Hillsborough are identical to the services Cornerstone already offers in its existing service areas. Specifically, Cornerstone conditions its application on Hispanic outreach, bilingual volunteers, multiple office locations within a service area, complementary therapies, veterans-specific programming, bereavement counseling for parents, cooperation with local community organizations, a separate foundation account for the specific service area, and continuing education programming, all of which are services that Cornerstone already offers in its existing service areas. Thus, unlike Suncoast, which used the existing community health needs assessments as a starting point for its own comprehensive needs assessment, and proposed conditions that are reflective of the unique needs of Hillsborough, the conditions proposed by Cornerstone are almost identical to the services Cornerstone currently provides elsewhere. Cornerstone’s plan to serve Hillsborough in phases does not immediately address the unmet need for hospice services countywide. Cornerstone will not send its marketing team to facilities and other referral sources in those phased areas until Cornerstone has completed each phase of its plan. Although Cornerstone’s witnesses testified that Cornerstone will not turn away referrals from parts of the county before Cornerstone begins operations in those areas, they also confirmed that Cornerstone will not actively seek referrals from other phased areas until it is ready to move into those areas. Unlike Suncoast, and to a lesser extent VITAS, there is no evidence that Cornerstone conducted a thorough needs assessment of SA 6A before developing its phased implementation plan. Cornerstone simply looked at a map of where existing providers have offices and decided to start elsewhere. Likewise, Cornerstone did not conduct any independent assessment of the needs of the four different geographic areas of its plan to determine whether Cornerstone will be capable of serving all of the county’s residents immediately upon CON approval. Further, Cornerstone did not conduct any review or analysis of comparable start-ups in Florida when preparing its SA 6A CON application. VITAS undertook an analysis of information from a variety of sources, including meetings with various individuals within Hillsborough regarding the perceived gaps in care. Based on this review, VITAS identified a number of patient groups with purported unmet needs: African American and Hispanic populations; migrant workers; patients residing in the eastern and southern parts of the county who are not accessing hospice at the same rate as other parts of the subdistrict; patients with respiratory, sepsis, cardiac, and Alzheimer’s diagnoses; patients requiring continuous care and high acuity services such as Hi-Flow oxygen; patients requiring admission in the evening or on weekends; and patients residing in small, less than 10-bed, ALFs. VITAS proposed a number of solutions to address the purported needs identified in Hillsborough, and largely included those proposed solutions as conditions of its application. However, VITAS failed to identify a specific operational plan for Hillsborough. The purported gaps in care and solutions identified in VITAS’s application for Hillsborough largely mirror those identified in its application for Service Area 2A that was submitted during the same cycle, despite significant differences between the makeups of those two service areas. VITAS’s application included 47 letters of support. Many of the letters are from persons and organizations outside Hillsborough, and even include a letter from one of VITAS’s employees, Kellie Newman, and two letters in support of its 2A application. At hearing, VITAS offered testimony from letter of support authors Mary Donovan and Margaret Duggar. Ms. Donovan lives in Miami and is VP for Caregiver Services, Inc., a nurse staffing agency that contracts with VITAS in other areas of the state and hopes to do so in Hillsborough. Ms. Duggar is the President of MLD & Associates, Inc., located in Tallahassee, which is a management firm that serves as executive staff for a number of entities. Neither of these letters is probative of VITAS’s ability to meet the hospice needs of Hillsborough residents. Ultimately, the applicants all agreed that the unmet need in SA 6A is not purely numeric: it is concentrated among certain patient populations, including Hispanic and migrant communities; non-cancer patients under age 65, including those with dementia, Alzheimer’s, respiratory, and cardiac disease; and lower income groups. Each applicant tailored their proposal to address the perceived, underlying access barriers accordingly. Two primary theories concerning the source of access barriers in Hillsborough developed at final hearing: (a) that access barriers, and hence, unmet need in the service area stem from a lack of access to relevant hospice services through existing providers once a patient has entered hospice care; and (b) that access barriers, and hence, unmet need in Hillsborough, stem from a lack of outreach and education necessary to bring awareness of hospice services to Hillsborough residents so that they access hospice services in the first place. All three applicants proposed to tailor their hospice services and programming to the particular residents of Hillsborough. But Suncoast’s proposal and conditions focused more heavily on outreach and education to bring geographically and culturally-driven awareness of the hospice benefit to patients appropriate for hospice. As noted, Suncoast also did a more comprehensive needs analysis, which allowed Suncoast to focus its CON conditions on those segments of the Hillsborough population most in need of improved access to hospice services. Among the applicants, Suncoast alone proposes to implement a dedicated pediatric hospice program, which is not currently offered in Hillsborough. Dr. Stacy Orloff, accepted as an expert in pediatric hospice care, confirmed in her testimony the following: Suncoast's pediatric hospice program includes a dedicated integrated care team comprised of a fulltime pediatric nurse with more than 25 years’ hospice experience, a pediatric medical director, a full-time licensed social worker, a team assistant, a volunteer coordinator and a pediatric team leader. Additionally, there are part-time staff members including LPNs and CNAs with dedicated pediatric hospice experience. This is an important distinction, as many hospice programs claim to provide pediatric hospice services, but oftentimes they utilize the same care teams that provide care for adult patients. Suncoast's longstanding expertise and network of community partners for its pediatric program will ensure that the proposed pediatric hospice program fits the specific needs of the pediatric patient and family. Suncoast will use a combination of existing staff and PRN assistance until the pediatric caseload is large enough to warrant addition of new team members in Hillsborough County. Suncoast's existing pediatric hospice team has a strong relationship with St. Joseph's Children's Hospital, which it will utilize to expand its network of pediatric providers to increase hospice awareness and utilization in Hillsborough. Suncoast conditions its application on purchasing a $350,000 mobile van, the “Empath Mobile Access to Care,” to conduct mobile outreach activities in Hillsborough for ethnic-specific programming and outreach to homeless. VITAS also conditioned its application on a “Mobile Hospice Education Unit” van, and included photos of similar vans that it operates in other service areas. The Suncoast van will be staffed by a full-time bilingual LPN and a full-time social worker prepared to discuss advanced care planning and education, and will be equipped with telehealth technology capable of linking with the Empath Care Navigation Office. In contrast, VITAS did not explain how its van will be staffed, or whether any of the staff will be clinicians. Indeed, from the photos included in the application, the van appears to be more of a mobile advertisement for VITAS, than it does a tool for hospice education and outreach. VITAS attempted to differentiate its proposal by pointing to disease- specific programming for patients with pulmonary and cardiac conditions, Alzheimer’s, and sepsis. But, Cornerstone and Suncoast are also capable of caring for patients with those conditions. And, specific to sepsis programming—a feature of VITAS’s presentation at final hearing— septicemia is not usually the primary reason a patient enrolls in hospice. Instead, sepsis is a complication of another terminal condition for which a patient is admitted to hospice, and therefore does not represent a need unto itself. VITAS further attempted to differentiate its program by pointing to its comparatively longer average length of stay, arguing that longer average lengths of stay are indicative of greater access and quality. However, this notion was countered by credible testimony that longer lengths of stay, along with a higher percentage of live discharges and higher 30-day readmission rate, may, alternatively, represent targeting of patients unlikely to experience the types of access barriers at which CON is aimed, and may be indicative of lower quality and higher costs. And VITAS’s healthcare planning expert did not conduct an analysis, and offered no opinion, as to the specific cause of VITAS’s comparatively longer length of stay. Taken together, the evidence was inconclusive as to whether longer lengths of stay reflect access enhancements generally, or as applied to VITAS’s proposal. Section 408.035(9) - The applicants’ past and proposed provision of health care services to Medicaid patients and the medically indigent. Rule 59C-1.0355(2)(f) provides that hospice services must be available “to all terminally ill persons and their families without regard to age, gender, . . . cost of therapy, ability to pay, or life circumstances.” Consistent with rule, hospice providers must provide care to Medicaid patients. Medicaid pays essentially the same for hospice care as does Medicare. As such, there is no financial disincentive to accept Medicaid hospice patients. VITAS and Cornerstone both have a history of providing Medicare, Medicaid, and medically-indigent care; Suncoast’s affiliated entity, Suncoast Pinellas, has a similar history, and all three applicants propose to provide care to Medicare, Medicaid, and the medically indigent. While the three applicants project that they will experience different payor mixes for Medicaid and indigent patients, there is no evidence in this record that any of the applicants have discriminated against such patients in the past, or would do so in their Hillsborough program. Cornerstone argues that it is entitled to preference over Suncoast because Cornerstone’s projected percentage of Medicaid and medically indigent admissions (6%) is almost double that of Suncoast (3.3%). However, Cornerstone’s projection is exactly that: a projection of the payor mix it may experience in its new program. Significantly, Cornerstone did not commit to a 6% Medicaid/indigent payor mix within its CON conditions, and therefore that level of Medicaid/indigent admissions is unenforceable. Rather than the applicants’ projected payor mixes, what is significant are plans to reach out to the Medicaid and charity care population to improve their knowledge about, and use of, hospice services. Suncoast’s application presents a specific plan for doing exactly that. All of the applicants have proposed programs for outreach to financially disadvantaged communities within Hillsborough, and none of the applicants are entitled to preference under this criterion. Rule 59C-1.0355(4)(e) – Preferences for a New Hospice Program.Preference shall be given to an applicant who has a commitment to serve populations with unmet needs. Each applicant expressed a commitment to provide hospice services to populations with unmet needs. And to a greater or lesser extent, each applicant conducted an analysis of the specific populations with unmet needs in Hillsborough. No evidence was presented to establish that care for hospice patients with the varying identified conditions or within the various demographic groups is not available in Hillsborough. Rather, the evidence demonstrates that patients are not accessing hospice services, despite their availability to residents of Hillsborough. Among the three applicants, Suncoast best demonstrated a plan for enhancing access to quality hospice care for these populations, as well as a track record of past experience with enhancing access to quality hospice services for these populations. Preference shall be given to an applicant who proposes to provide the inpatient care component of the Hospice program through contractual arrangements. Each of the applicants propose to provide the inpatient care component of the hospice program through contractual arrangements, and presented testimony regarding their ability to do so. Likewise, all three applicants presented letters from entities in Hillsborough regarding their purported willingness to contract for the inpatient care component of the hospice program. However, no applicant presented non-hearsay evidence from any entity within Hillsborough regarding a willingness to contract for the inpatient care component of the hospice program. The applicants are on equal footing in terms of the ability to contract for inpatient care. Notwithstanding its intention to provide the inpatient component of the hospice program through contractual arrangements, VITAS conditioned its application on applying for a CON to construct an inpatient hospice house within the first two years of operation. However, VITAS presented no evidence to establish the need for an additional inpatient hospice house in SA 6A, and no evidence was presented to demonstrate that an inpatient hospice house is a more cost-effective alternative to contracted beds. The proposals by Cornerstone and Suncoast to contract for the inpatient component of the hospice program represent a better use of existing resources than that of VITAS, which will incur the expense of a freestanding hospice house for its proposed program. On balance, this preference weighs equally in favor of Cornerstone and Suncoast, and against VITAS. Preference shall be given to an applicant who has a commitment to serve patients who do not have primary caregivers at home; the homeless; and patients with AIDS. Each applicant presented evidence of a commitment to serve patients who do not have primary caregivers at home; the homeless; and patients with AIDS. However, the programs proposed by Suncoast to address the needs of these populations are more precisely targeted than those of the other applicants, and Suncoast is therefore entitled to preference. Proposals for a Hospice service area comprised of three or more counties. SA 6A is comprised of a single county, Hillsborough. This preference is therefore not applicable in this case. Preference shall be given to an applicant who proposes to provide services that are not specifically covered by private insurance, Medicaid, or Medicare. All three applicants propose to provide services in Hillsborough that are not specifically required or paid for by private insurance, Medicaid, or Medicare. The added services beyond those covered by private insurance, Medicaid, or Medicare as proposed by the applicants differ slightly, but on balance, weigh equally in favor of approval of each applicant. Rule 59C-1.0355(5) – Consistency with Plans. Each of the applicants conducted an analysis of the needs of Hillsborough residents and included evidence within their applications and through testimony at final hearing regarding the consistency of their respective plans with the needs of the community. However, Suncoast’s evaluation of the needs specific to Hillsborough was more thorough, and its application is best targeted at meeting the identified needs. Rule 59C-1.0355(6) – Required Program Description. Each applicant provided a detailed program description in its CON application. The elements of the program descriptions are discussed above in the context of the various statutory and rule criteria. Ultimate Findings Regarding Comparative Review Suncoast conducted the most comprehensive evaluation of the end of life care needs of Hillsborough residents, and developed targeted programs and services to address those needs. Those programs and services are identified as CON conditions, and are enforceable by AHCA. The depth and breadth of Suncoast’s commitments to the residents of Hillsborough exceed those of Cornerstone and VITAS. Unlike the other applicants, Suncoast offers needed programs which are not currently available in Hillsborough, including a dedicated pediatric hospice program, and enhanced transportation options for persons living in rural areas of the county. Suncoast and Cornerstone are comparable in terms of history of providing quality care. VITAS is inferior in this regard, as evidenced by the numerous confirmed deficiencies in recent years. Undoubtedly, VITAS has redoubled its efforts to improve quality in response to the numerous confirmed deficiencies and complaints, but based upon the record in this case, Suncoast and Cornerstone have a better history of providing quality care. Suncoast would be able to commence operations in SA 6A more quickly than Cornerstone or VITAS. It has connections with other healthcare providers in Hillsborough and could easily transition to that adjacent geographic area. All three proposals would enhance access to hospice services in the county, but Suncoast’s program would be the most effective at enhancing access. A careful weighing and balancing of the statutory review criteria and rule preferences favors approval of the Suncoast application, and denial of the Cornerstone and VITAS applications. Upon consideration of all the facts in this case, Suncoast’s application, on balance, is the most appropriate for approval.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered approving Suncoast Hospice of Hillsborough, LLC’s, CON No. 10605 and denying Cornerstone Hospice and Palliative Care, Inc.’s, CON No. 10602 and VITAS Healthcare Corporation of Florida’s, CON No. 10606. DONE AND ENTERED this 26th day of March, 2021, in Tallahassee, Leon County, Florida. COPIES FURNISHED: D. Ty Jackson, Esquire GrayRobinson, P.A. 301 South Bronough Street, Suite 600 Post Office Box 11189 Tallahassee, Florida 32302 Seann M. Frazier, Esquire Parker, Hudson, Rainer & Dobbs, LLP Suite 750 215 South Monroe Street Tallahassee, Florida 32301 Kristen Bond Dobson, Esquire Suite 750 215 South Monroe Street Tallahassee, Florida 32301 Marc Ito, Esquire Parker Hudson Rainer & Dobbs, LLP 215 South Monroe Street, Suite 750 Tallahassee, Florida 32301 S W. DAVID WATKINS Administrative Law Judge 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 26th day of March, 2021. Julia Elizabeth Smith, Esquire Agency for Health Care Administration Mail Stop 3 2727 Mahan Drive Tallahassee, Florida 32308 Stephen A. Ecenia, Esquire Rutledge, Ecenia & Purnell, P.A. Suite 202 119 South Monroe Street Tallahassee, Florida 32301 Gabriel F.V. Warren, Esquire Rutledge Ecenia, P.A. 119 South Monroe Street, Suite 202 Post Office Box 551 Tallahassee, Florida 32301 Elina Gonikberg Valentine, Esquire Agency for Health Care Administration Mail Stop 7 2727 Mahan Drive Tallahassee, Florida 32308 Amanda Marci Hessein, Esquire Rutledge Ecenia, P.A. Suite 202 119 South Monroe Street Tallahassee, Florida 32301 Allison Goodson, Esquire GrayRobinson, P.A. Post Office Box 11189 Tallahassee, Florida 32302 Maurice Thomas Boetger, Esquire Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 3 Tallahassee, Florida 32308 Richard J. Shoop, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 3 Tallahassee, Florida 32308 James D. Varnado, General Counsel Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 3 Tallahassee, Florida 32308 Thomas M. Hoeler, Esquire Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 3 Tallahassee, Florida 32308 Jonathan L. Rue, Esquire Parker, Hudson, Rainer and Dobbs, LLC Suite 3600 303 Peachtree Street Northeast Atlanta, Georgia 30308 D. Carlton Enfinger, Esquire Agency for Health Care Administration Mail Stop 7 2727 Mahan Drive Tallahassee, Florida 32308 Simone Marstiller, Secretary Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 1 Tallahassee, Florida 32308 Shena L. Grantham, Esquire Agency for Health Care Administration Building 3, Room 3407B 2727 Mahan Drive Tallahassee, Florida 32308
The Issue The issues are whether Petitioner is entitled to recover Medicaid funds paid to Respondent pursuant to section 409.913(1), Florida Statutes, for hospice services Respondent provided during the audit period between September 1, 2009, and December 31, 2012; and the amount of sanctions, if any, that should be imposed pursuant to section 409.913(15), (17).
Findings Of Fact Based upon the stipulations of the parties and the evidence presented at hearing, the following relevant Findings of Fact are made. Parties Petitioner, AHCA, is the state agency responsible for administering the Florida Medicaid Program. § 409.902, Fla. Stat. (2016). Medicaid is a joint federal and state partnership to provide health care and related services to certain qualified individuals. Respondent, Halifax, is a provider of hospice and end- of-life services in Volusia and Flagler counties. During the audit period of September 1, 2009, through December 31, 2012, Halifax was enrolled as a Medicaid provider and had a valid Medicaid provider agreement with AHCA. Hospice Services Hospice is a form of palliative care. However, hospice care is focused upon patients at the end-of-life-stage while palliative care is for any patient with an advanced illness. Both hospice and palliative care patients are amongst the sickest patients, generally. Hospice is focused upon serving the patient and family to provide symptom management, supportive care, and emotional and spiritual support during this difficult period when the patient is approaching their end-of-life. Hospice care, as with Halifax, uses an inter-disciplinary team (IDT) to provide comfort, symptom management, and support to allow patients and their families to come to terms with the patient’s terminal condition, i.e., that the patient is expected to die. Each patient is reviewed in a meeting of the IDT no less than every two weeks. For hospice, a terminally-ill patient must choose to elect hospice and to give up seeking curative care and aggressive treatments. At all times relevant to this proceeding, Petitioner was authorized to provide hospice services to Medicaid recipients. AHCA Audit A Medicaid provider is a person or entity that has voluntarily chosen to provide and be reimbursed for goods or services provided to Medicaid recipients. As an enrolled Medicaid provider, Halifax was subject to federal and state statutes, regulations, rules, policy guidelines, and Medicaid handbooks incorporated by reference into rule, which were in effect during the audit period. AHCA is required to oversee the integrity of the Medicaid program. Among other duties, AHCA is required to conduct (or cause to be conducted) audits to determine possible fraud, abuse, overpayments, or recipient neglect in the Medicaid program. § 409.913(2), Fla. Stat. Under Florida law, “overpayment” is defined as “any amount that is not authorized to be paid by the Medicaid program whether paid as a result of inaccurate or improper cost reporting, improper claiming, unacceptable practices, fraud, abuse, or mistake.” § 409.913(1)(e), Fla. Stat. The federal Department of Health & Human Services, Centers for Medicare and Medicaid (“CMS”), contracted with Health Integrity, LLC (“HI”), a private vendor, to perform an audit of Halifax on behalf of AHCA. HI, in turn, retained a company called Advanced Medical Reviews (“AMR”) to provide physician reviews of claims during the audit process to determine whether an audited claim was eligible for payment. The audit in this matter was conducted to determine whether Medicaid recipients met eligibility for hospice services. To establish the scope of the audit, HI identified patients that had greater than six months of service, and then, excluded recipients with cancer diagnoses and patients who were dual eligible for Medicaid and Medicare. All the claims at issue, along with patient medical records, were first reviewed by a claims analyst, who is a nurse consultant, to determine whether the claims met the criteria for hospice services. The patient records and the nurse consultant's summary for each patient were then forwarded to a peer reviewer, a physician who used his or her medical expertise to determine the medical necessity of the hospice services provided. In this case, AHCA employed the services of two peer reviewers: Dr. Alan Heldman was the peer reviewer who specializes in internal medicine and cardiology, and Dr. Todd Eisner, who specializes in gastroenterology. The peer reviewers prepared reports that offered their opinion as to whether a patient was qualified for hospice services. A draft audit report (“DAR”) was prepared by HI, which initially identified overpayment of Medicaid claims totaling $694,250.75, relating to 12 patients. Halifax provided a response to the DAR, and contested the overpayments for each of the 12 patients. Halifax’s response was provided to the peer review physicians, who, after reviewing the response, maintained their original conclusions. HI then prepared the FAR, upholding the overpayments identified in the DAR, and submitted it to CMS. CMS provided the FAR to AHCA with instructions that AHCA was responsible for initiating the state recovery process and furnishing the FAR to the provider. The FAR contains the determinations of the peer review physicians, specifically, whether each of the 12 patients at issue had a terminal diagnosis with a life expectancy of six or less months if their disease progressed at its normal course. After the FAR had been issued, upon further review, of certain patient files at issue, AHCA determined that four of the original 12 patients were eligible for Medicaid hospice services, and revised the amount of overpayment it seeks to $529,906.88, with a reduction in the fine it seeks to $105,981.38. Halifax is challenging the eligibility determination, i.e., the medical necessity of services provided, regarding the following patients1/: Patient D; Patient H; Patient P; Patient Q; Patient S; Patient U; Patient V; and Patient O. The Florida Medicaid Hospice Services Coverage and Limitations Handbook, the January 2007 edition (“Handbook”), governs whether a service is medically necessary and meets certification criteria for hospice services. MPI instructs each peer reviewer to review the criteria set forth in the Handbook to determine whether services provided to a patient are eligible for Medicaid coverage. To qualify for the Medicaid hospice program, all recipients must: Be eligible for Medicaid hospice; Be certified by a physician as terminally ill with a life expectancy of six months or less if the disease runs its normal course; Voluntarily elect hospice care for the terminal illness; Sign and date a statement electing hospice care; Disenroll as a participant in a Medicaid or Medicare health maintenance organization (HMO), MediPass, Provider Service Network (PSN), Medicaid Exclusive Provider Organization, MediPass Pilot Programs or the Children’s Medical Services Network; Disenroll as a participant in Project AIDS Care; and Disenroll as a participant in the Nursing Home Diversion Waiver. The Handbook also provides certification of terminal illness requirements as follows: For each period of hospice coverage, the hospice must obtain written certification from a physician indicating that the recipient is terminally ill and has a life expectancy of six months or less if the terminal illness progresses at its normal course. The initial certification must be signed by the medical director of the hospice or a physician member of the hospice team and the recipient’s attending physician (if the recipient has an attending physician). For the second and subsequent election periods, the certification is required to be signed by either the hospice medical director or the physician member of the hospice team. Certification documentation requirements used by the peer review physicians are as follows: Documentation to support the terminal prognosis must accompany the initial certification of terminal illness. This documentation must be on file in the recipient’s hospice record. The documentation must include, where applicable, the following: Terminal diagnosis with life expectancy of six months or less if the terminal illness progresses at its normal course; Serial physician assessments, laboratory, radiological, or other studies; Clinical progression of the terminal disease; Recent impaired nutritional status related to the terminal process; Recent decline in functional status; and Specific documentation that indicates that the recipient has entered an end- stage of a chronic disease. The Medicaid hospice provider must provide written certification of eligibility for hospice services for each patient. The certification is also required for each election period. A patient may elect to receive hospice services for one or more of the election periods. The election periods include: an initial 90-day period; a subsequent 90-day period; and subsequent 60-day time periods. The Handbook further provides guidance regarding the election periods as follows: The first 90 days of hospice care is considered the initial hospice election period. For the initial period, the hospice must obtain written certification statements from a hospice physician and the recipient’s attending physician, if the recipient has an attending physician, no later than two calendar days after the period begins. An exception is if the hospice is unable to obtain written certification, the hospice must obtain verbal certification within two days following initiation of hospice care, with a written certification obtained before billing for hospice care. If these requirements are not met, Medicaid will not reimburse for the days prior to the certification. Instead, reimbursement will begin with the date verbal certification is obtained . . . . For the subsequent election periods, written certification from the hospice medical director or physician member of the interdisciplinary group is required. If written certification is not obtained before the new election period begins, the hospice must obtain a verbal certification statement no later than two calendar days after the first day of each period from the hospice medical director or physician member of the hospice’s interdisciplinary group. A written certification must be on file in the recipient’s record prior to billing hospice services. Supporting medical documentation must be maintained by the hospice in the recipient’s medical record. Peer Review Physicians The two peer reviewers assigned to review claims in this matter were Florida-licensed physicians, who were matched by specialty or subspecialty to the claims they were reviewing. Each physician testified as to his medical education, background, and training. Petitioner offered each physician as an expert, and the undersigned accepted each expert as such. Dr. Heldman has been licensed to practice medicine in the state of Florida for 10 years. While in Florida, he worked as a professor and practitioner within the University of Miami Medical School and Health System until 2015. Since 2015 he has maintained an independent private practice. Before practicing in Florida, Dr. Heldman practiced at Johns Hopkins Hospital in Baltimore, Maryland, for 19 years. Dr. Heldman received his training at Johns Hopkins in cardiology and interventional cardiology. He has been board-certified in cardiovascular disease since 1995, and board-certified in interventional cardiology since 1999. Both cardiology specialties are subspecialties of the board of internal medicine. Dr. Heldman was previously board-certified in internal medicine in 1992 but was not certified in that area when he reviewed the claims in this matter.2/ Dr. Heldman has referred patients to hospice. Dr. Eisner, who is board-certified in gastroenterology, has seen numerous patients with liver disease throughout his career and, based upon his experience, Dr. Eisner understands what factors are properly considered when estimating a patient’s life expectancy. He also refers patients to hospice on a regular basis, which routinely requires him to make the type of prognosis determination such as those at issue in this matter. Although Dr. Eisner has some experience dealing with patients who have Chronic Obstructive Pulmonary Disease (“COPD”), he does not have board-certification in pulmonary disease. Also, Dr. Eisner has never provided expert testimony regarding pulmonology conditions. Halifax Hospice Providers Dr. Zimmerman, Halifax’s medical director, authored the provider response to the eight patients at issue and testified at the final hearing in that regard. Although he is board-certified in hospice and palliative medicine, he is not and has never been certified in internal medicine, gastroenterology, or cardiology. Halifax did not elicit testimony from Dr. Zimmerman that he had any experience in examining and treating patients with liver disease, COPD, dementia, or end-stage lung disease. Likewise, none of the other Halifax physicians testified at hearing and there was no evidence of their respective experience in examining and treating patients with the illnesses involved in this case. Additionally, although Dr. Zimmerman initially certified the patients selected for the audit for hospice services, and attempted to support the other Halifax hospice physicians when they repeatedly recertified the patients as eligible, Dr. Zimmerman admitted he never examined any of these patients himself and was unable to attest that any of his in- house physicians ever personally examined any of the patients. In addition to Dr. Zimmerman, the hospice physicians involved in the certification of the eight patients at issue in this audit were as follows: Dr. Richard C. Weiss: board-certified in internal medicine, oncology, and hospice & palliative medicine Dr. John Bunnell: board-certified in family medicine and hospice & palliative medicine Dr. Arlen Stauffer: board-certified in family medicine and hospice & palliative medicine Dr. Susan Howard: board-certified in family medicine and hospice & palliative medicine Dr. Lyle E. Wadsworth: board-certified in internal medicine, geriatrics, and hospice & palliative medicine Dr. Gregory Favis: board-certified in internal medicine, with subspecialty certification in hematology and oncology; and Dr. Justin Chan: board-certified in family medicine Specific Patient Review At the time of the hearing, the hospice service claims related to eight patients remained at issue. The findings of fact regarding eligibility of each patient for hospice services are set forth below in the following order: D, H, P, Q, S, U, V, and O. Patient D Patient D, a 53-year-old male, was first admitted to Halifax Hospice on February 25, 2011, with a terminal diagnosis of hepatocellular cancer and cirrhosis secondary to hepatitis C. He was discharged on May 29, 2012, and then readmitted on June 13, 2012, through December 31, 2012 (audit period). He had previously been in various hospices for six to seven years. Dr. Eisner noted there was no recent decline in functional status. In June 2011, a nurse noted the patient was ambulating well and went fishing, but he experienced frequent falls. He continued to experience falls (from his couch and bicycle) and also had mild to moderate arm and hand tremors. His weight decreased from 176 to 162 over seven months. Thus, the patient records reflected some indication of functional decline. However, as Dr. Eisner credibly testified, even considering the alleged terminal diagnosis, the patient showed no evidence of having refractory ascites, hepatic encephalopathy nor gastrointestinal bleeding. Further, he indicated there was no documentation of variceal bleeding, hepatorenal syndrome, or spontaneous bacterial peritonitis, which he would expect to see if the patient truly had six or less months to live. The medical records support Dr. Eisner’s conclusion that the patient did not meet the standard of six or less months to live. Throughout the period of the hospice stay, nursing notes indicate that the patient was stable, ambulating well, felt good, and was observed by an ER doctor after a fall off his bike, as “well-nourished, well-developed patient, [and] in no apparent distress.” Even Dr. Weiss, the hospice physician who worked with Patient D, noted in recertification that “It is a difficult case as he clearly has a terminal illness and at the same time is manipulative with no overt progression of disease.” Dr. Eisner credibly testified that the patient was not eligible for hospice services and, thus, the services provided were not eligible for Medicaid reimbursement. The greater weight of the evidence proves that Patient D was not eligible for Medicaid hospice services and that Petitioner is entitled to recover an overpayment of $98,776.63 Patient H Patient H was admitted to Halifax on December 31, 2010, with a terminal diagnosis of end-stage liver disease secondary to chronic hepatitis C. Dr. Eisner determined that Patient H did not have a life expectancy of less than six months. Dr. Eisner opined that there was no clinical progression of the patient’s terminal disease. The patient did not have impaired nutritional or functional status related to the terminal illness. The patient had weight loss but experienced increased abdominal girth. The treating hospice physician was Dr. Wadsworth, who is board-certified in internal medicine. He noted that the patient had cirrhosis and variceal bleeding and hepatic encephalopathy. However, as correctly noted by Dr. Eisner, those conditions were the natural progression of the disease, but would not result in a life expectance of less than six months. Dr. Eisner also testified that patients with chronic liver disease can live up to 10 years and patients with hepatic encephalopathy can live up to 15 years. Patient H was ultimately discharged for drug diversion, and although her discharge note states: “Suspected drug diversion became evident over last 2 months when controlled medication was not available for nurses to check during visit,” the patient records reflect that Halifax was aware of this problem throughout her stay, but did not discharge her for an additional 12 months. The inconsistency of the medical records and Dr. Eisner’s opinions indicate that this patient did not have a terminal diagnosis with a life expectancy of six months or less if her terminal disease progressed at its normal course at initial certification or at any recertification throughout her stay with Halifax. The medical records contained in this patient’s file do not support a finding that the Medicaid hospice eligibility standard was met. Based upon the greater weight of the evidence in this case, it is determined that Patient H was not eligible for Medicaid hospice services and that Petitioner is entitled to recover an overpayment of $50,142.74. Patient P Patient P, a 48-year-old male, was admitted to Halifax on August 25, 2011, with a terminal diagnosis of end-stage liver disease. The first 11 months of his stay were denied, however, the last month was approved. Dr. Eisner testified that although the patient had ascites requiring frequent paracentesis, he did not see documentation indicating there was a progression of the terminal disease until July 2012. Dr. Eisner also determined there was no documentation in the patient records of impaired nutritional status related to the disease or a decline in functional status. However, when the patient did show a decline in functional status, Dr. Eisner agreed the patient was eligible. Further, because, during the denied period, there was no evidence of variceal bleeding, hepatorenal syndrome or recurrent spontaneous bacterial peritonitis, Dr. Eisner opined that the life expectancy of the patient would typically be one to two years, not six or less months. There is also a discrepancy in the medical records for this patient. In the narrative for the recertification for November 24, 2011, Dr. Wadsworth indicates this is a “48 yo ES Dementia, and multiple comorbidities. Has had [hallucinations] has improved.” Certainly this is in error and cannot be the basis for a valid recertification–-this patient did not have dementia nor were there reported hallucinations. This patient did not have a terminal diagnosis with a life expectancy of six months or less if his terminal disease progressed at its normal course at initial certification or at any recertification throughout the first 11 months of his stay with Halifax. The medical records contained in this patient’s file do not support a finding that the Medicaid hospice eligibility standard was met. Based upon the greater weight of the evidence in this case, it is determined that Patient P was not eligible for Medicaid hospice services and that Petitioner is entitled to recover an overpayment of $60,872.04. Patient Q Patient Q was a 56-year-old male admitted with end- stage lung disease. Per the FAR overpayment recalculations, he was deemed ineligible for the first three months of his hospice admission beginning on December 13, 2011, and was thereafter approved through the end of the audit period. As Dr. Eisner reasoned, the medical records did not support hospice eligibility for the first three months that were billed. The patient was stable, using a walker, and had reasonable palliative performance scale scores, and showed no decline in functional status and Transient Ischemic Attacks (“TIA), if any, were stable. However, as Dr. Eisner noted, after three months, the records did contain evidence supporting a progressive deterioration of the patient’s condition and functional status. Much of the issue with this patient appears to be whether the patient actually had ongoing TIA episodes prior to and during the initial certification period. The patient’s medical record from a hospital visit six months prior to hospice admission, where he was seen for chest pains, made no mention of TIAs. Further, Dr. Zimmerman admitted that none of his doctors or nurses had witnessed the patient having a TIA, and the records do not support that the patient had mini-strokes prior to the approved period. While Dr. Zimmerman also attempted to justify his concerns with TIAs based upon one episode during the denied period where the patient reported being dizzy and short of breath, he admitted that these could have been caused by the extensive amount of opiates and other drugs the patient had been given. For the denied period, the patient did not have a terminal diagnosis with a life expectancy of six months or less if his terminal disease progressed at its normal course at initial certification. The medical records do not support a finding that the Medicaid hospice eligibility standard was met. Based upon the greater weight of the evidence, it is determined that Patient P was not eligible for Medicaid hospice services and that Petitioner is entitled to recover an overpayment of $12,716.10. Patient S Patient S, a 51-year-old patient, was admitted to Halifax with a terminal diagnosis of end-stage liver disease. Dr. Eisner determined that hospice services were not appropriate for Patient S. Specifically, he determined that the patient’s disease, while terminal, did not result in a life expectancy of six months or less. In refuting Dr. Zimmerman’s response, Dr. Eisner stated, “In the absence of recurrent, untreated, variceal bleeding, hepatorenal syndrome or recurrent spontaneous bacterial peritonitis, the life expectancy of patients with cirrhosis, ascites, and hepatic encephalopathy is typically 1 to 2 years.” There was no clinical progression of the disease. The Halifax treating physician, Dr. Weiss, noted that the patient’s condition included cirrhosis and hepatic encephalopathy. However, as noted by Dr. Eisner, the condition was the natural progression of the disease. The greater weight of the evidence supports that Patient S was not eligible for hospice services for the period September 1, 2009, through December 1, 2010, and that Petitioner is entitled to recover an overpayment of $63,235.91. Patient U Patient U, a 61-year-old female, was admitted with a terminal diagnosis of dementia. She was first admitted to Halifax hospice in October 2010, however, the claims audit period for this patient did not begin until January 1, 2011. Dr. Heldman indicated that she was not eligible through the end of her initial stay in hospice on January 31, 2012. Dr. Heldman approved her second stay in hospice beginning on May 19, 2012. Dr. Heldman, who indicated he had dealt with dementia patients many times, testified that there were discrepancies throughout her medical records and that the file did not contain documentation showing serial physician assessments, clinical progression of the terminal disease, a decline in functional status, nor of the end stage of a terminal disease. Dr. Zimmerman, in his provider response after the DAR, focused on what he claimed was a significant weight loss with this patient over the period she remained in hospice care. As Dr. Zimmerman stated in the provider response: “when certifying physicians saw consistent weight gain/stabilization they became comfortable that the improvement was not a brief ‘honeymoon’ in her failing nutritional status and they no longer believed that her ‘normal course’ would result in a life expectancy of six months or less and they appropriately discharged her.” It is clear Dr. Zimmerman relied on the patient’s alleged dramatic weight loss to justify continued provision of hospice services to the patient. However, at the final hearing, Dr. Zimmerman conceded that the dramatic weight loss upon which he relied (and his physician who was recertifying the patient relied on) in evaluating this patient, was a mistake. The factor upon which Dr. Zimmerman relied upon to support the patient’s stay in hospice, including his initial certification and at least two recertifications, did not actually exist. Dr. Heldman likewise provided credible testimony regarding the inconsistencies in Halifax’s records for Patient U’s file and that the records did not contain sufficient documentation to support the initial certification and recertifications. The preponderance of the evidence proves that Patient U was not eligible for Medicaid hospice services and that Petitioner is entitled to recover an overpayment of $47,159.40. Patient V Patient V, a 56-year-old male, was initially admitted to Halifax on May 22, 2012, with a terminal diagnosis of end- stage liver disease. Dr. Eisner testified that although this patient did have ascites, they are part of the normal progression of the disease and the condition was appropriately treated with paracentesis. Further, he indicated that throughout the course of the patient’s stay, there was no documentation to show a clinical progression of the terminal disease. Dr. Eisner also noted there was no evidence of impaired nutritional status related to the terminal disease or any decline in functional status. More importantly, Dr. Eisner opined that there was no evidence that the patient had entered the end stage of a chronic disease. Finally, he saw no evidence that the patient had variceal bleeding, hepatorenal syndrome, or recurrent spontaneous bacterial peritonitis, which would have indicated six months or less to live. Dr. Zimmerman testified that his team was extremely worried about the patient’s prior episode of ventricular tachycardia and the chance of another episode that would be fatal, and that this chance supported keeping him in hospice. Dr. Zimmerman highlighted this grave concern repeatedly through his written response to the DAR. However, on cross-examination, he admitted that the patient did not have a history of the tachycardia but rather had one episode that lasted 20 beats or less and that Halifax did not send the patient to be further evaluated by a cardiologist. He also admitted that the opiates Halifax treatment providers were giving Patient V could have caused the dizziness that prompted their concern and allegedly supported the prognostication of limited life expectancy. Patient V did not have a terminal diagnosis with a life expectancy of six months or less if his terminal disease progressed at its normal course at initial certification or at any recertification throughout his stay with Halifax during the audit period. The medical records contained in this patient’s file do not support a finding that the Medicaid hospice eligibility standard was met. Based upon the greater weight of the evidence in this case, it is determined that Patient V was not eligible for Medicaid hospice services and that Petitioner is entitled to recover an overpayment of $38,769.20. Patient O Patient O, a 57-year-old female, was first admitted to Halifax on October 16, 2009, with a terminal diagnosis of COPD, a common breathing disorder. She was discharged November 9, 2012, because Halifax determined she did not meet the criteria for hospice. Although Patient O had COPD, Halifax never presented her for a FEV1 test which would have been a good indicator of the degree of COPD and would have assisted in properly obtaining a prognosis of life expectancy. Patient O was recertified for hospice 16 times, with little or no narrative from the recertifying Halifax physician present in the medical records. Patient O also regularly showed oxygen saturation levels within the normal range for a COPD patient. In May 2010, seven months into her hospice stay, there was no evidence of impaired nutritional status, no signs or symptoms of respiratory distress, no change in chest pain, residual weakness, fair appetite, no swallowing difficulties and her pain was well controlled. Additionally, in September 2010, there were notes that the patient’s lungs were clear, she had been removed from oxygen for activities, and had showered without difficulty. Between December 2010 through September 2012, the nurse’s notes reflect that patient O stated that she was doing better and had not experienced shortness of breath. It appears from the medical records that while the patient may have had COPD, it was not progressing. Dr. Eisner testified that other than intermittent upper respiratory infections, the patient’s pulmonary status remained stable and showed no progression over the course of time. Further, he saw no proof that her coronary heart disease or diabetes deteriorated over the three years and that, although she had some weight loss, there was no documentation of a decline in her functional status. However, Dr. Eisner provided an opinion regarding this patient outside his expertise. That a COPD terminal diagnosis was beyond his experience was made clear when Dr. Eisner could not identify the specific indicators for when a COPD patient was decompensating. Although Dr. Eisner may have treated patients with COPD, his primary practice treating patients was related to gastroenterological conditions. He was not board-certified in pulmonology and was not trained in the specialty. Therefore, AHCA has not met its burden by the greater weight of the evidence that Patient O was not eligible for Medicaid hospice services, and Petitioner is not entitled to recover an overpayment of $158,234.66. Fine Calculation When calculating the appropriate fine to impose against a provider, MPI uses a formula based on the number of claims that are in violation of rule 59G-9.070(7)(e). Specifically, the formula involves multiplying the number of claims in violation of the rule by $1,000 to calculate the total fine.3/ The final total may not exceed 20 percent of the total overpayment, which resulted in a fine of $64,981.38. Summary of Findings of Fact At the time of the hearing, AHCA sought from Respondent overpayments in the amount of $529,906.88 for eight patients who received hospice services at Halifax during the audit period. The findings of fact above upheld AHCA's denial of hospice services for patients: D, H, P, Q, S, U, and V. The Respondent rebutted the evidence regarding eligibility of Patient O. Therefore, AHCA is entitled to recover overpayment of $371,672.22. Each expert credibly testified as to when each patient was admitted and the certification for each patient. The experts provided the requisite support to both the DAR and FAR for the patients where there was a finding of ineligibility for hospice services.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that that the Agency for Health Care Administration enter a final order directing Halifax to pay $371,672.22 for the claims found to be overpayments and a fine of $67,981.38. The undersigned reserves jurisdiction to award costs to the prevailing party. DONE AND ENTERED this 30th day of June, 2017, in Tallahassee, Leon County, Florida. S YOLONDA Y. GREEN Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 30th day of June, 2017.
The Issue The issue is whether Respondent properly determined that there is a numeric need for one additional hospice program in health planning Service Area 2B for the January 2003 planning horizon pursuant to a revised fixed need pool projection.
Findings Of Fact AHCA is the state agency that is responsible for administering the CON program and laws in Florida. In conjunction with these duties, AHCA determines, on a semi-annual basis, the net numeric need for new hospice programs pursuant to Rule 59C-1.0355(4), Florida Administrative Code (the Rule). AHCA then publishes such need in the Florida Administrative Weekly. Community volunteers began organizing BBH in 1981. After its incorporation in 1983 as a not-for-profit community organization, BBH commenced operation under a license that authorized it to provide hospice services only in SA 2B, consisting of the following eight counties: Franklin, Gadsden, Jefferson, Leon, Liberty, Madison, Taylor, and Wakulla. On average, BBH serves 162 patients per day. Its main office is located in Tallahassee, Florida, but it operates the following branch offices and/or community centers: Franklin County at Carrabelle, Florida; Gadsden County at Quincy, Florida; Jefferson County at Monticello, Florida; Madison County at Madison, Florida; and Taylor County at Perry, Florida. BBH also operates a twelve-bed inpatient facility, The Hospice House, located in Tallahassee, Florida. Covenant, formerly known as Hospice of Northwest Florida, is a not-for-profit community organization that was founded by a committee in 1982. Covenant began treating its first patients in 1984 and is currently licensed to provide hospice services in SA 1 and SA 2A. The following counties are located in SA 1: Escambia, Santa Rosa, Okaloosa, and Walton. The following counties are located in SA 2A: Holmes, Washington, Jackson, Calhoun, Bay and Gulf. Covenant also is licensed to provide hospice services in 26 southern Alabama counties. On average, Covenant serves 429 Florida hospice patients per day. Its main office and its eight-bed inpatient facility are located in Pensacola, Florida. Covenant operates the following Florida branch offices: Okaloosa County at Niceville, Florida; Jackson County at Marianna, Florida, and Bay County at Panama City, Florida. Covenant operates Florida community centers in Okaloosa County at Crestview, Florida, and in Walton County at Destin, Florida. The Hospice CON Rule and Need Methodology The Rule establishes criteria and standards for assessing the need for new hospice programs. The Rule includes a numeric need formula for determining whether a new hospice is needed in a particular SA. In this case, AHCA used the following data sources to produce need projections: (a) population projections from the Executive Office of the Governor; (b) mortality data as reported in the applicable Florida Vital Statistics Annual Report from the Department of Health's Office of Vital Statistics; and (c) utilization data based on the number of hospice patients served by all licensed hospice programs in the SA as reported by licensed hospice programs. Under the Rule, numeric need is demonstrated if the projected number of unserved patients who would elect a hospice program is 350 or greater. The Rule targets 350 as the minimum number of patients that should be admitted to a hospice program in a 12-month period. Pursuant to the Rule, AHCA calculates need for additional facilities and services every six months or twice annually. The numeric need formula contained in the Rule is a conditional formula, which works as follows: If HPH minus HP is equal to or greater than 350, then a net numeric need exists. HPH is the projected number of patients who will elect hospice services in a particular SA during the 12-month period beginning in the planning horizon. Specifically, HPH is the sum of (U65C X P1) + (65C X P2) + (U65NC X P3) + (65NC X P4). U65C is the projected number of SA resident cancer deaths under age 65. U65C is calculated by dividing the current annual number of cancer deaths under age 65 by the current annual total of resident deaths, and multiplying the result by the SA's projected annual total of resident deaths at the planning horizon. P1 is the projected proportion of U65C who will be hospice patients. P1 is calculated by dividing the current 12-month statewide total of hospice admissions under age 65 with cancer by the current statewide total of deaths under age 65 from cancer. 65C is the projected number of SA resident cancer deaths age 65 and over. 65C is calculated by dividing the current annual number of cancer deaths age 65 and over by the current annual total of resident deaths, and multiplying the result by the SA's projected annual total of resident deaths at the planning horizon. P2 is the projected proportion of 65C who will be hospice patients. P2 is calculated by dividing the current 12-month statewide total of hospice admissions age 65 and over with cancer by the current statewide total of deaths age 65 and over from cancer. U65NC is the projected number of SA resident deaths under age 65 from all causes except cancer. U65NC is calculated by dividing the current annual number of deaths under age 65 from all causes except cancer by the current annual total of resident deaths, and multiplying the result by the SA's projected annual total of resident deaths at the planning horizon. P3 is the projected proportion of U65NC who will be hospice patients. P3 is calculated by dividing the current 12-month total of hospice admissions under age 65 with diagnoses other than cancer by the current statewide total of deaths under age 65 from causes other than cancer. 65NC is the projected number of SA resident deaths age 65 and over from all causes except cancer. 65NC is calculated by dividing the current annual number of deaths age 65 and over from all causes except cancer by the current annual total of resident deaths, and multiplying the result by the SA's projected annual total of resident deaths at the planning horizon. P4 is the projected proportion of 65NC who will be hospice patients. P4 is calculated by dividing the current 12-month statewide total of hospice admissions age 65 and over with diagnoses other than cancer by the current statewide total of deaths age 65 and over from causes other than cancer. In other words, HPH is a projection of the number of persons who will elect hospice care in a particular SA, irrespective of their normal place of residence. It is a compilation of projected hospice usage for four age and diagnostic classes. Thus, the need methodology and need projection is specific to the particular demographics and diagnostic experiences of a SA. HP represents the number of admissions to hospice programs serving a SA during the most recent 12-month period ending on June 30 or December 31. The number is derived from reports on standardized forms submitted to AHCA by licensed hospice programs every six months. The Rule uses a statewide use rate as a normative standard for each age and diagnostic category. The use rate is a ratio of the hospice admissions in a particular age and diagnostic class to deaths in the same age and diagnostic class for the state as a whole. When applied to any particular hospice SA, the use rate projects what the hospice admissions should be in that SA, based upon the performance of the state as a whole, rather than the actual historical penetration rate in the SA. The need methodology thus provides that the hospice penetration rate in a SA should equal the state average penetration rate. The need methodology does not assume that the level of hospice services being provided in a particular area is sufficient to meet the needs of the area. This is appropriate because hospice is a fast-growing and relatively new service that has been widely available only since the early 1980s. Not only has there been a rapid increase in hospice penetration rates but also there is a wide variation in hospice penetration from SA to SA. The numeric need formula set forth in the Rule provides a reasonable and appropriate methodology to project need for additional hospice services. In this case, AHCA's procedures for collecting and analyzing data and for calculating numeric need were consistent with the Rule. Publication of the Fixed Need Pools AHCA initially published the "Florida Need Projections for Hospice Programs: Background for Use in Conjunction with the July 2001 Batching Cycle for the January 2003 Hospice Planning Horizon." The initial publication resulted a numeric need in SA 2B of 340. In other words, there was no net numeric need for an additional hospice program in SA 2B. AHCA subsequently published a revision to the fixed need pool after it was notified of some errors in the data used in the numeric need calculation. The errors principally involved AHCA's failure to update the population data from a previous batching cycle. The necessity of a revised publication created an opportunity for hospices to submit revised admissions data, which was then incorporated into the second computations of the need methodology. Several hospices took advantage of this opportunity. Using the revised data, AHCA determined that the projected number of hospice admissions in SA 2B would be 1209 patients (HPH = 1209). AHCA also determined that the number of patients served by SA 2B's licensed provider, BBH, for the relevant period was 858 patients (HP = 858). The difference between these calculations was 351, indicating a need for an additional hospice program in SA 2B. AHCA published the revised fixed need pool determination on August 17, 2001. Counting Admissions At issue here is the definition and use of the term "admissions" on AHCA's semiannual utilization report form (report form). Item 1 on the report form indicates that hospice providers should show the "[n]umber of patients admitted to your program (unduplicated) for the following categories " The reporting block also indicates that the data to be included are "New Patients Admitted." The term "unduplicated" means admissions in the reporting period, exclusive of those from a prior reporting period. In other words, the same admission is not counted and reported twice. For example, a patient initially admitted in one reporting period, subsequently discharged, and readmitted in the following reporting period should be reported as an admission in the prior reporting period and as an admission in the following reporting period. Likewise, a patient who initially is admitted, discharged, and subsequently readmitted in the same reporting period is counted as two admissions. This is true whether the second admission occurs in the same SA or in a different SA and whether the second admission is to the same or a different hospice provider. The second admission relates to the same patient but is counted as a "new patient admitted" each time the patient is admitted as long as the same admission is not counted twice on a report form. The counting of unduplicated admissions is consistent with the language of the Rule, which requires hospice providers to "indicate the number of new patients admitted during the six- month period . . . ." It also is consistent with the language of the Rule that requires the report form to show "[t]he number of admissions during each of the six months covered by the report by service area of residence." The "service area of residence" is not defined by the Rule. AHCA interprets the term to mean the location of patients when they are admitted regardless of the place that they consider their permanent residence. AHCA's interpretation of the term "service area of residence" is reasonable and appropriate. The fact that admissions are counted for each SA regardless of a patient's normal place of residence, while resident death data is derived from information contained in death certificates showing the deceased person's permanent residence (no matter where the death occurred) does not change this result or improperly skew the hospice use rates. In the course of treatment, a hospice patient may account for two or more admissions to the same or another hospice, in the same or another service area, during a period of time that covers two reporting periods. This could happen for a number of reasons, including but not limited to the following: (a) a patient may temporarily decide that he or she no longer desires hospice services resulting in an admission, a discharge, and second admission to the same or another hospice in the same or another SA; (b) a patient may decide to relocate and receive services in another SA with the same or another hospice resulting in separate admissions in both SAs; and (c) a patient may elect to transfer from one hospice to another hospice in the same SA resulting in a separate admission for each hospice. All Florida hospices, including BBH, count a patient as having generated two admissions when the patient is admitted, discharged, and readmitted to the same hospice in the same SA. They also count a patient as having generated a second admission when the patient transfers or relocates to their hospice from another hospice in the same or another SA. AHCA's report form requires hospices that serve multiple SAs to separate their admissions by SA to enhance the verisimilitude of the counts. Twelve hospice providers, including Covenant, serve multiple SAs in Florida. Under the Rule, multiple SA providers, like Covenant and unlike BBH, count admissions when a patient transfers from the provider's program in one SA to the same provider's program in another SA. The ability to count an admission in both SAs when a patient transfers from one SA to another SA but continues to receive services from the same hospice, does not result in impermissible "double counting" or give multiple SA providers a competitive edge. To the contrary, it is consistent with AHCA's interpretation of an unduplicated admission. More importantly, AHCA's methodology of counting of such admissions is consistent with the method that Medicare uses to count admissions and with the way AHCA counts admissions in determining numeric need for nursing homes, hospitals, and open-heart programs. For the reporting period at issue here, Covenant reported zero admissions based on transfers of its patients between SA 1 and SA 2A. Moreover, there is no persuasive evidence that allowing any multiple SA provider to count transfers of its patients from one of its SAs to another of its SAs as two separate admissions has adversely impacted the fixed need pool determination in this case. Covenant is not the only hospice provider in SA 1 and SA 2A. No doubt, some patients in one of Covenant's SAs transferred to and from Covenant and the alternate providers in SA 1 and SA 2A or other Florida SAs with no corresponding death being recorded in one of Covenant's SAs. Covenant surely served some Alabama patients who sought hospice care in Florida but whose deaths were not counted as resident deaths in any Florida SA. At least for the calendar years 1999 and 2000, Covenant experienced a net in-migration of patients while BBH experienced a net out-migration of patients for the same periods. Even so, there is no persuasive evidence that in- migration and out-migration of patients has affected the validity of the numeric need at issue in this proceeding. AHCA consistently has counted admissions in this manner since the Rule was adopted and implemented. Counting admissions by "service area of residence" as interpreted by AHCA ensures that all patients served are counted, even those who are homeless or have a permanent residence in another state. AHCA's interpretation of an admission based on "service area of residence" also is consistent with Section 400.601(6), Florida Statutes, which provides that hospice services may be provided in "a place of temporary or permanent residence used as the patient's home . . . ." Thus, a patient's residence could be a private home, an assisted living facility, a nursing home, or a hospital regardless of the location of the patient's legal or permanent residence. The State of Florida has an interest in knowing how much hospice care is provided in each SA. The application of the Rule promotes that interest because HPH projects the number of patients in a particular SA who will choose hospice care in the applicable time frame. HP is the number of patients admitted to hospice programs during the most recent 12-month period. HPH and HP measure the utilization of hospice care in a SA and not the number of residents of an SA who will elect hospice care or who are admitted to hospice care. In calculating the numeric need in this case, the number of admissions was based on data for the year ending June 2001. The resident deaths were based on data for the period ending December 2000. The time periods do not match because the Rule requires AHCA to use the most recent mortality data from the Department of Health's Office of Vital Statistics. The time periods are never the same and can differ from six months to one year. Thus, there is no intent under the Rule to have a one-to-one correspondence between the deaths that are used in determining the P factors and the admissions that are multiplied by the factors. Every SA in the state is treated consistently. No SA is disadvantaged by this characteristic of the Rule's need methodology. The batching cycle at issue here is the only one since the Rule was implemented that showed a fixed need for another hospice program in SA 2B. Until now, AHCA has never preliminarily approved any applicant where the net numeric need was only 351. The numeric need projection made in April 2002 showed no fixed need in SA 2B for another hospice program. None of these facts serve to undermine the validity of AHCA's determination of numeric need in this case. The Revised Fixed Need Pool Determination The initial fixed need pool projection published by AHCA did not indicate that there was a numeric need for an additional hospice in SA 2B. However, the initial publication was based on incorrect population projections. AHCA published a revised fixed need pool projection based, in part, on the updated and most current population data. That revision alone would have resulted in a numeric need for an additional hospice program in SA 2B, i.e. HPH - HP equaled 350. However, other corrections also were made based on revisions to semiannual utilization reports of several hospices. BBH's revised report form increased its HP number by four. Another hospice, Hospice of Southwest Florida, reported a substantial revision. The total revisions resulted in a numeric need for one additional hospice program in SA 2B because HPH - HP equaled 351. The revised fixed need pool determination was correctly calculated in accordance with AHCA's application and interpretation of all rules relating to fixed need pool determination. AHCA's interpretation and application of the rules is reasonable and appropriate. Therefore, the fixed need pool projection at issue here is valid and correct. As discussed below, there is no persuasive evidence that BBH over-reported its admissions. BBH's Reported Admissions An admission consists of several components: (a) a physician's diagnosis and prognosis of a terminal illness; (b) a patient's expressed request for hospice care; (c) the informed consent of the patient; (d) the provision of information regarding advance directives to the patient; and (e) performance of an initial professional assessment of the patient. At that point, the patient is considered admitted. A patient does not have to sign an election of Medicare benefits form for hospice care prior to being deemed admitted. BBH reported 858 admissions for the July 2000 through June 2001 reporting period. These admissions included patients who had completed the admission process outlined above. For accounting and billing purposes only, BBH separates its admissions into patients who have authorized the election of Medicare benefits and those who have not made that election. For the latter group, BBH uses the acronym WAP as a billing code. BBH provides WAP patients with services but does not bill them for those services because BBH is unable to report them to Medicare for reimbursement. BBH does not bill patients for services that it has no intention of collecting. In fact, BBH's billing department initially logs all patients in as WAPs. BBH's admission policy states that patients who will not be accepting services immediately should be entered as a WAP with reasons and follow-up dates to initiate regular services. The admission specialist at BBH enters a patient as a WAP then gets the attending physician's signature on the interdisciplinary care plan and certification of terminal illness. The admission specialist also requests the patient's medical record and completes the other admission steps. The WAP designation is not removed until the admission process is complete and the patient has elected the Medicare benefit. The WAP patient is not counted as an admission for purposes of reporting to AHCA until the admission process is complete. Occasionally, a WAP patient dies before the admission process is complete. In that case, the patient is not counted as an admission. Sometimes a WAP patient dies after completing the admissions process but before electing the Medicare benefit or receiving any additional hospice services. It is not necessary for a hospice to develop a plan of care in order for a patient to be considered admitted. An admitted patient has a right to choose or refuse additional services. In such a case, the patient is still counted as an admission for purposes of reporting to AHCA. BBH's practice of including WAP patients who have completed the admission process in its count of admissions is consistent with AHCA's interpretation of the Rule. AHCA's interpretation of the Rule is reasonable and appropriate in this regard. The fact that 10 percent of BBH's admissions are WAP patients while Covenant has no such patients does not change this result. BBH's financial department also is responsible for submitting reports to the Department of Elder Affairs (DEA). Therefore, BBH has filed reports with DEA consistent with its Medicare reports and has not included the WAP patients.
Recommendation Based on the foregoing Findings of Facts and Conclusions of Law, it is RECOMMENDED: That AHCA enter a final order determining the fixed need pool for SA 2B for the January 2003 planning horizon to be one. DONE AND ENTERED this 7th day of November, 2002, in Tallahassee, Leon County, Florida. SUZANNE F. HOOD Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 7th day of November, 2002. COPIES FURNISHED: J. Robert Griffin, Esquire J. Robert Griffin, P.A. 2559 Shiloh Way Tallahassee, Florida 32308 Michael O. Mathis, Esquire Agency for Health Care Administration 2727 Mahan Drive Fort Knox Building Three, Suite 3431 Tallahassee, Florida 32308-5403 W. David Watkins, Esquire R. L. Caleen, Jr., Esquire Watkins & Caleen, P.A. 1725 Mahan Drive, Suite 201 Post Office Box 15828 Tallahassee, Florida 32317-5828 Lealand McCharen, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 3 Tallahassee, Florida 32308 Valda Clark Christian, General Counsel Agency for Health Care Administration 2727 Mahan Drive Fort Knox Building, Suite 3431 Tallahassee, Florida 32308
The Issue In the first batching cycle of 2006, Hospice of the Palm Coast, Inc. ("Palm Coast") and Catholic Hospice, Inc. ("Catholic Hospice"), applied to the Agency for Health Care Administration ("AHCA" or the "Agency") for a certificate of need to establish a new hospice program in Broward County. Palm Coast's application number is CON 9931; Catholic Hospice's is CON 9928. The issues in this case are whether either, both or neither of the applications should be approved.
Findings Of Fact The Parties AHCA "[D]esignated as the state health planning agency for purposes of federal law," Section 408.034(1), Florida Statutes, AHCA is responsible for the administration of the CON program and laws in Florida. See § 408.031, Fla. Stat., et seq. As such, it is also designated as "the single state agency to issue, revoke, or deny certificates of need . . . in accordance with present and future federal and state statutes." § 408.034(1), Fla. Stat. Catholic Hospice Catholic Hospice, Inc., has been a licensed provider of hospice services in Miami-Dade and Monroe Counties (Hospice Service Area 11 which adjoins Service Area 10 along the Broward/Miami-Dade County line) since 1988. It is faith-based and mission-driven; in keeping with its nature as such, it is a section 501(c)(3) not-for-profit corporation. Catholic Hospice has two corporate members: the Archdiocese of Miami and Mercy Hospital, a part of Catholic Health East. Neither of its two members provide it with funding. Catholic Hospice is governed by a board of directors with autonomous authority to govern its activities. The members of its board live and work in the local community. Palm Coast Palm Coast is a not-for-profit Florida corporation currently licensed to operate hospice programs in Hospice Service Area 4B and, like Catholic Hospice, in Hospice Service Area 11 (Miami-Dade and Monroe Counties). Palm Coast's provision of hospice services in Service Area 11 is new relative to Catholic Hospice's service for nearly 20 years in the service area. Palm Coast has been licensed as a hospice in Service Area 11 since March 2006. Palm Coast is a wholly-owned subsidiary of a its management affiliate and parent organization, Odyssey HealthCare, Inc. ("Odyssey"), which is a for-profit national chain of hospices. The sole member of Palm Coast is Odyssey HealthCare Holding Company, Inc., a wholly-owned subsidiary of Odyssey. Palm Coast's Board of Directors are managers of Odyssey all of whom live and work in or near Dallas, Texas. Numeric Need for a Service Area 10 Hospice Program Hospice Service Area 10 Hospice Service Area 10 consists of Broward County. Referred interchangeably by the parties at hearing as either Service Area 10 or Broward County, Hospice Service Area 10 will also be referred to in this Order as either Service Area 10 or Broward County. AHCA's Determination of Numeric Need To determine need in Service Area 10 in the "Other Beds and Programs" First Batching Cycle 2006, AHCA employed the numeric need methodology found in Florida Administrative Code Rule 59C-1.0355 (the "Hospice Programs Rule"). The Agency's methodology calculates need using a number of factors. Among the factors are four categories of deaths in the service area: U65C, 65C, U65NC, and 65NC, described by the rule as follows: (a) Numeric Need for a New Hospice Program * * * U65C is the projected number of service are resident cancer deaths under 65 . . . 65C is the projected number of service area resident cancer deaths age 65 and over . . . U65NC is the projected number of service area resident deaths under age 65 from all causes except cancer . . . 65NC is the projected number of service area resident deaths age 65 and over from all causes except cancer . . . Fla. Admin. Code R. 59C-1.0355(4). (Consistent with these four factors, data was introduced at hearing that is discussed further in this order that relates to four categories of patients grouped by diagnosis and age in much the same way: "65 and Over Cancer," "65 and Over Non-cancer," "Under 65 Cancer," and "Under 65 Non-cancer." See paragraph 16, below.) According to the Hospice Programs Rule, "[n]umeric need for an additional hospice program is demonstrated if the projected number of unserved patients who would elect a hospice program is 350 or greater." Id. Application of the Agency's methodology to the factors relative to Service Area 10 yielded more than 400 projected unserved patients who would elect a hospice program ("Net Need"). Palm Coast presented a hybrid methodology that yielded a Net Need of 1,340. In Palm Coast's view, the Net Need produced by its hybrid methodology demonstrated need for at least two new hospice programs. The Agency, however, interprets the Hospice Programs Rule to allow only one new hospice program to be added in any one batching cycle no matter what number is yielded by its methodology. True to its calculation of numeric need and its interpretation of the rule, the Agency duly published its fixed need pool of one. The fixed need pool was not challenged. In response to the published need, Catholic Hospice and Palm Coast submitted timely applications for approval of a new hospice in Broward County. In its State Agency Action Report ("SAAR"), AHCA approved Catholic Hospice's application and denied Palm Coast's. Overview and Approaches of the Applications The applications of Catholic Hospice and Palm Coast comply with the application content and review requirements in statute and rule. Both applications include information related to "special circumstances" that would justify approval of a hospice program in the absence of numeric need. Catholic Hospice, however, did not attempt to demonstrate the existence of "special circumstances" at hearing. Palm Coast, on the other hand, attempted to show that more than one new hospice program could be approved in Broward County. Palm Coast's case for approval of more than one hospice program has two bases. The first is justification under the Special Circumstances provisions art of the Hospice Programs Rule found in Subsection (4)(d) of the rule. The special circumstances advanced by Palm Coast are discussed below in paragraphs 138 to 140. The second base is the "hybrid need methodology" discussed above and developed by its expert health planner. Palm Coast's Hybrid Need Methodology Palm Coast's hybrid methodology follows the assumptions of AHCA's methodology in three categories based on age and diagnosis: "Under 65 Cancer," "Under 65 Non-cancer," and "65 and Older Cancer." It differs from AHCA's methodology in that it assumes that penetration in the "65 and Older Non- cancer" population will remain stable. Palm Coast's "hybrid" need methodology suggests that the need in Service Area 10 is greater than the need forecast by AHCA's approved methodology. The hybrid methodology yields a net need of 1,320 admissions rather than the 441 projected by the Agency's methodology. Stipulated Facts Prior to hearing, the parties filed a joint pre- hearing stipulation.1 In Section E.,2 of the document, entitled "Statement of Facts Which Require No Proof," the parties stipulated to following facts: [a.] Section 408.035, Florida Statutes (2005) sets forth the statutory CON review criteria at issue in these proceedings. The parties agree that the following subparagraphs of Section 408.035, Florida Statutes (2005) are either not applicable or not at issue to consideration of the application: (8) and (10); [b.] The Parties agree that the CON review criteria and standards applicable in this proceeding are set forth in Section 408.035, Florida Statutes (2005), and Rules 59C- 1.0355 and 59C-1.030, Florida Administrative Code. The parties agree that the following criteria in Rule 59C-1.0355, Florida Administrative Code, are either not applicable or not at issue to consideration of the application: (7), (8), (9), and (10); [c.] The parties agree that CATHOLIC HOSPICE and PALM COAST's Letter of Intent (hereinafter referred to as "LOI") and CON applications were timely filed with the Agency. [d.] The CON Applications filed by CATHOLIC HOSPICE and PALM COAST comply with the Application content and review process requirements of Sections 408.037 and 408.039, Florida Statutes (2005) and Rule 59C-1.0355, Florida Administrative Code, and the Agency's review of the Application complied with the review process requirements of the above-referenced Statutes and Rule. [e.] A FNP of one (1) was projected and published for Hospice Service Area 10 for the 2006 - 1st Batching Cycle in the Florida Administrative Weekly, Volume 32, No. 14. [f.] The FNP publication of one (1) was not challenged. [g.] The parties agree that Schedules 1 through 10, contained in each of the two CON applications (Nos. 9928 and 9931), may be admitted into evidence as reasonable projections without a sponsoring witness. [h.] The parties agree that the audited financial statements of the two applicants and parent entities, presented in the CON applications are true and accurate copies of the respective entity's audited financial statements and may be admitted into evidence without a sponsoring witness. [i.] As to Schedule 5, the parties agree that the figures presented by both Applicants are reasonable, and each applicant is likely to meet their respective utilization projections presented in Schedule 5. * * * [j.] As to Schedule 6, the parties agree that each applicant can provide hospice services with the staffing positions and volumes presented in Schedule 6, and that the staffing and salaries proposed are reasonable for the services proposed by each applicant. [k.] The stipulations, referenced in paragraphs 8 through 11 above, shall not preclude the parties from presenting comparative evidence about any aspect of the information presented or assumptions contained in Schedules 1 through 10 of either of the two remaining applications. [l.] Section 408.035(1), Florida Statutes (2005) provides in pertinent part as follows: "The need for the healthcare facilities and health services being proposed." Pursuant to AHCA's Florida Need Projections for the hospice program, background information for use in conjunction with the April 2006 Batching Cycle for the July 2007 Hospice Planning Horizon, a need was identified for one (1) additional hospice program in AHCA Service Area 10. Thus, CATHOLIC HOSPICE, PALM COAST, and the Agency agree there is a need for one (1) program. * * * [m.] Section 408.035(3) provides in pertinent part as follows: "The ability of the applicant to provide quality of care and the applicant's record of providing quality of care." Section 408.035 is not at issue with respect to either CATHOLIC HOSPICE or PALM COAST's compliance with the above-referenced statutory criteria. The parties agree that both of the proposed programs can provide quality care and satisfy the criterion in Section 408.035(3), Florida Statutes. [n.] Section 408.035(4) provides in pertinent part as follows: "The availability of resources, including health personnel, management personnel, and funds for capital and operating expenditures, for project accomplishment and operation." [o.] Section 408.035(5), Florida Statutes (2005) provides in pertinent part as follows: "The extent to which the proposed services will enhance access to healthcare for residents of the service district." The parties agree, that to the extent there is a published need, approval of either CATHOLIC HOSPICE or PALM COAST would enhance access to healthcare for residents of the Service Area. Notwithstanding the fact that both CATHOLIC HOSPICE and PALM COAST believe that approval of either program will enhance access to healthcare for residents of the Service Area, nothing herein shall preclude the parties from presenting comparative evidence as to which program would provide better access. [p.] Section 408.035(6) provides in pertinent part as follows: "The immediate and long-term financial feasibility of the proposal." Section 408.035(6) is not at issue in these proceedings. The parties agree that both proposed hospice programs are financially feasible in the short- and long-term, and satisfy the criteria in Section 408.035(6), Florida Statutes. [q.] Section 408.035(8), Florida Statutes (2005), provides in pertinent part as follows: "The costs and methods of the proposed construction, including the costs and methods of energy provision and the availability of alternative, less costly, or more effective methods of construction." Section 408.035(8) is not at issue with respect to a review of the CON applications filed by CATHOLIC HOSPICE or PALM COAST. [r.] AHCA is the state agency responsible for issuance of licenses to hospice providers, and is the sole state agency authorized to make Certificate of Need ("CON") determinations. [s.] North Broward Hospital District is a special hospital taxing district created by Special Act of the Florida Legislature, chapter 27438, Laws of Florida (1951), and operates in the northern geographical area of Broward County. GOLD COAST is an operating unit of North Broward Hospital District. [t.] CATHOLIC HOSPICE is a not-for-profit Florida corporation and existing provider of hospice services in Florida. [u.] PALM COAST is a not-for-profit Florida corporation and existing provider of hospice services in Florida. [v.] CATHOLIC HOSPICE and PALM COAST are each currently providing services through licensed hospice programs in Hospice Service Area 11 (Miami - Dade and Monroe Counties). [w.] Hospice Service Area 10 is Broward County, Florida. [x.] The current hospice providers in Hospice Service Area 10 are VITAS Healthcare Corporation of Florida, Hospice By the Sea, Inc., HospiceCare of Southeast Florida, Inc., and GOLD COAST. Joint Prehearing Stipulation, filed May 9, 2007. The Applicants in Other Service Areas; Existing Providers in Service Area 10 Catholic Hospice is currently licensed and operating in Service Area 11, Dade and Monroe Counties. Palm Coast has programs that are currently licensed and operating in Service Area 4B, comprising of Flagler and Volusia Counties and, like Catholic Hospice, in Service Area 11. Service Area 10 has four existing providers of hospice services. Vitas Healthcare Corporation of Florida (Vitas) is a for-profit hospice. The other three, Hospice By the Sea, Inc., HospiceCare of Southeast Florida, Inc., and Gold Coast, are all community-based not-for-profit hospices. Of the four existing providers, Vitas is by far the dominant provider of hospice services in the service area. Affiliations and Sponsors Palm Coast Affiliation with Odyssey Palm Coast is affiliated with Odyssey Healthcare, Inc., a for-profit corporation. Despite the affiliation, Palm Coast is a distinct entity in accordance with Florida law. It has its own Articles of Incorporation and By-Laws, its own audited financial statements and its own local governing board. It complies, moreover, with all state and federal requirements for AHCA and Medicare licensure and certification. Additionally, each of the individual Palm Coast programs has its own bank account into which all of its revenues are deposited and out of which all of its expenses are paid. If the proposed Palm Coast hospice program in Broward County exhibits a positive cash flow from its operations, those fund will remain with the program to be used for patient care and operations. This is the practice followed by Palm Coast at its existing programs in Service Areas 4B and 11. The Palm Coast model, therefore, which Palm Coast will follow should it be approved in Broward County, will be to act and operate as a community-based hospice. While it will "act locally," it will also benefit from its affiliation with Odyssey. It will be able to take advantage of Odyssey's resources, experience and successful management tactics. These benefits include economies of scale based on Odyssey's buying power and operation of 80 programs in 26 states, Odyssey's experience with a multitude of startup programs, identification and treatment of minority population and non-cancer patients, treatment of cancer patients (traditionally served by hospices), extensive educational tools developed over 10 years of operation, continuing education for all staff members, accessibility to a large clinical database, and access to centralized services such as billing and foundation funds. Through its affiliation with Odyssey and with the assistance Odyssey is reasonably expected to provide, Palm Coast possesses the necessary management and clinical experience, operational systems and corporate resources to efficiently, effectively and successfully implement a new hospice program in Service Area 10. Indeed, the benefit of combining local resources and knowledge with Odyssey's nationwide experience, assets, buying power and success has been demonstrated with the successful establishment of Palm Coast programs in Service Area 4B and Service Area 11, the service area in which Palm Coast's rival in this proceeding gathers its own support and sponsorship. b. Catholic Hospice's Corporate Sponsors in Service Area 11 Catholic Hospice has two corporate sponsors in Service Area 11: the Archdiocese of Miami and Mercy Hospital. The Archdiocese consists of Broward, Dade and Monroe Counties. It places a priority on health care as a large part of its mission. The Archdiocese is the sole corporate sponsor of a substantial network of post-acute health care facilities in Dade and Broward Counties, including rehabilitation hospitals, nursing homes, assisted living facilities, HUD elderly housing facilities and cemeteries. This health care network is managed from its headquarters in Broward County by Catholic Health Services (“CHS”), and extends throughout the geographic boundaries of the Archdiocese. Founded in 1988, Catholic Hospice is the realization of the aspirations of the Archdiocese's Monsignor Walsh. At the time, the hope was for Catholic Hospice to serve the entire geographic area of the Archdiocese; a CON, however, could only be secured for Service Area 11. Hospice services in Broward County is missing from the continuum of care in which the Archdiocese is engaged. There will be a benefit to the patients in the CHS network of care because continuum of care increases continuity of care and is better for patients. The gap in the Archdiocese's continuum of care is therefore significant to the patients it serves. Mercy Hospital, the second corporate sponsor of Catholic Hospice in Dade County, is an acute care hospital managed by Catholic Health East. Catholic Health East is a Catholic network of over 35 acute care hospitals that extends along the east coast of the United States from Maine to Florida. The network includes Holy Cross Hospital in Broward County. Support for Catholic Hospice by Catholic Health and Elder Care Entities The Archdiocese of Miami, Mercy Hospital, Holy Cross Hospital in Broward County and Catholic Health East all share a common identity as faith-based, not-for-profit organizations with the mission of demonstrating reverence for the human body and spirit by bringing the healing and comfort of the Lord to those in need throughout their respective communities. The common mission and identity that Catholic Hospice and the related Catholic health care entities share naturally cultivates collaboration among them. These collaborations within an extended network of health and elder care services are significant. They will allow Catholic Hospice to expand into Broward County quickly and efficiently. Palm Coast's Benefits from Affiliation with Odyssey Palm Coast has available to it through its management agreement with Odyssey, all the resources of the two existing Palm Coast programs as well as the nationwide resources of Odyssey. Due to its experience with new market development, Odyssey has the ability to enter the market rapidly; programs, policies, and operations are already in place, and the strong support resources provide the wherewithal for Hospice Palm Coast to do their job of rapidly, efficiently, and appropriately upon entering the Broward County marketplace. Odyssey has started over thirty hospice programs since 1995, with five new programs established in the 2006 calendar year, evidence of experience in development of new hospice programs, in addition to their experience with hospice acquisitions. The proof of likely success in Broward County as the result of Palm Coast's affiliation with Odyssey can be seen, moreover, in the success of Palm Coast's programs in District 4A and 11, implemented under the guidance and direction of Odyssey. In the marketplaces where Odyssey and Palm Coast have historically initiated new hospice programs, they have become proficient at determining the traditional or existing core of business for the existing providers, and utilized their experience and success to come in and fill the gaps, otherwise known as providing "Hospice Services Beyond the Traditional Model." The addition of Hospice of the Palm Coast in Broward County will allow for the expansion of the Odyssey way of life, through its not-for-profit affiliate, utilizing its successful operational philosophy and Fourteen Service Standards. Odyssey has a dedicated start-up team that, upon CON approval, plans to work with the local providers and other individuals or entities within the local market, to guide the Palm Coast's Broward program from the CON approval, up through Medicare certification. Operationally, based on its size in terms of programs and economies of scale, there are significant benefits to Palm Coast's proposed program in Broward; the ability to contract on a national level for corporate wide benefits including a variety of medical equipment, medical supplies, and pharmacy supplies, due to the operation of over 80 hospice programs nationwide, which yields significant economies of scale. The Odyssey Support Center provides the Palm Coast start-up programs with policies and procedures, forms, educational materials, and training, in addition to centralized services efficiently operated for all the Odyssey programs from the Dallas corporate headquarters. Specifically, Odyssey supports each individual hospice location by providing coordination, centralized resources, and corporate services, including, but not limited to: Financial accounting systems, including billing, accounts receivable, accounts payable, and payroll; Information and telecommunications systems; Clinical support services; Human resource administration; Regulatory compliance and quality assurance; Marketing and educational materials; Training and development; and Start-up licensure and certification. In return for these services provided by Odyssey, the Palm Coast programs pay a management fee, which is calculated as seven percent of the local hospice's net revenue. The same arrangement will be implemented upon Palm Coast's approval for the CON in Broward. These resources allow each local office to focus on Odyssey's primary mission to provide responsive, quality care to patients and their families. Once the Palm Coast entities, including the proposed Broward program, become "cash positive," a separate and distinct bank account will be opened to ensure the funds of the not-for- profit Palm Coast entities are not co-mingled with that of its management affiliate Odyssey. Broward County Diversity and Need The population of Broward County is becoming increasingly diverse. The population that is dying is also becoming more diverse. For example, from 1996 to 2004, Hispanic deaths in Broward County increased by 50 percent whereas deaths of the non-Hispanic population declined. At the same time, African-Americans and non-Caucasians had significant increases in deaths while Caucasian deaths declined. Since 2000, existing providers have not met the needs of all of the age and diagnosis groups in the District. "[P]art of the reason for that is that the underlying nature of the service area has been changing, becoming more diverse … [and] younger, with a growing ethnic population." Tr. 620. While Service Area 10 has been changing, the existing providers have not been able to adapt to the changes in the population. Catholic Hospice's History of Dealing with Diversity For almost 20 years, Catholic Hospice has refined its expertise in ascertaining and meeting the needs of the diverse, multi-cultural population within Dade County, including Hispanics, Haitians, Caribbeans, Jamaicans and African Americans. This history demonstrates Catholic Hospice's ability to ascertain and meet the needs of the diverse population in Broward County if approved. One of the strengths of Catholic Hospice is its culturally and ethnically diverse staff, many of whom are bilingual. Having bilingual staff is significant. For example, Catholic Hospice’s Medical Director, Dr. Kiedrowski speaks Spanish fluently and has seen only one patient whose primary language was English in the year and a half he has been on staff. In fact, seventy to eighty percent of Catholic Hospice’s patients in Service Area 11 are Hispanic. Catholic Hospice is particularly sensitive and responsive to the needs of the Hispanic community – the majority of which identify themselves as Catholic. Palm Coast's History of Dealing with Diversity Palm Coast does not have Catholic Hospice's multi- decade experience of dealing with diversity in Service Area 11 that will be of such benefit in Service Area 10. In contrast to Catholic Hospice in Service Area 11, Palm Coast is a start up that has only been in existence for about a year. Palm Coast is not lacking in the ability to deal with diverse populations, however, because of its affiliation with Odyssey and experience in Service Areas 4B and 11. This ability is demonstrated by Palm Coast's practice while its programs have been in a start-up phase in these service areas. Upon entering a new community, Palm Coast hires caregivers and administrative personnel for the hospice office from the community. These new employees reflect different local cultures, whether Hispanic, African American or other. In Service Area 11, for example, Palm Coast's new employees include Haitian employees to reflect the Haitian component of the diverse local culture in the area. In addition to diversity in hiring practices, cultural diversity training is offered to Palm Coast employees by Odyssey. The training involves education with regard to local cultures, religions, and customs unique to the area. Palm Coast's intent, therefore, is to hire and train a diverse group of individual from the same locale as the patients in order to facilitate the service to patients and increase the patients' comfort levels. Palm Coast makes an effort to recruit a staff that mirrors the racial and ethnic make-up of the community it serves. The effort and experience that Palm Coast has had in Service Area 11 in particular will serve Palm Coast well in Service Area 10 should its application be approved. But Catholic Hospice’s long history with serving the multicultural needs in Dade County is predictive of better capability to deal with Broward County's diversity than Palm Coast's one-year experience in the County and its intent to follow in the footsteps of that experience in Broward County should its application be approved. Hospice Services and Programs Hospice is both a philosophy and method of care for terminally ill patients, their families and loved ones. Hospice services provide palliative care for pain and management of symptoms of a terminal disease process or processes, as well as supportive care to ease the psychological and social strains of a patient and his or her family confronting mortality. Palliative medicine focuses on relieving suffering and symptoms, not curing a patient. Usually provided in the home, hospice services are required to be capable of being tailored based on individual need and are required to be available twenty-four hours a day, seven days a week, including holidays. Catholic Hospice meets these requirements. Palm Coast meets the requirements as well. Palm Coast's Program Palm Coast's program is reflective of a spirit and idea of caring that emphasizes comfort and dignity for the dying, making it possible for them to remain independent for as long as possible and in familiar surroundings. Palm Coast utilizes an interdisciplinary team approach of physicians, nurses, social workers, and others to provide services including palliative care in the home, short-term inpatient services, mobilization and coordination of ancillary services and bereavement support. The patient's plan of care is developed and regularly modified by the interdisciplinary team: a physician, nurse, social worker, chaplain, and bereavement coordinator. The team may include a volunteer coordinator, volunteers, nursing assistants and home health aides. The Palm Coast interdisciplinary team meets on a specific timetable. Paula Toole, an Odyssey Healthcare regional vice president who covers Odyssey's south region described the timetable at hearing and the content of the meetings: "Generally its every two weeks. If [the patient] is on a higher level of care, it may be every week or . . . day." Tr. 962. The interdisciplinary team discusses the patient and the family to determine what services are being provided and whether they are appropriate to provide the patient and the family with the best hospice care. Catholic Hospice’s Continuum of Quality Services There are four levels of hospice care: continuous care, general inpatient care, routine home care, and inpatient respite care. Continuous care and general inpatient care are considered “intensive” services as they involve the most complex, medically unstable patients and a higher level of services. Continuous care is often used when a patient is in crisis and requires more frequent physician visits. A key factor that has improved availability of hospice care is the Medicare Hospice benefit. To be eligible for the Medicare hospice benefit, a patient must be certified by two physicians to have a life expectancy of less than six months if the patient’s disease process runs its normal course. Statutory standards require that a hospice implement home care within three months after licensure and inpatient care within twelve months. Catholic Hospice will be able to make routine and continuous home care visits immediately upon licensure in Broward County. Catholic Hospice can manage operations from its existing office in Miami Lakes and a new office to be almost immediately established in Lauderdale Lakes through a lease with CHS. Catholic Hospice reasonably expects to enter contracts for the provision of inpatient hospice care with existing hospitals and nursing homes immediately upon licensure –- making inpatient hospice immediately available. In addition, Broward residents may choose to access a freestanding inpatient hospice unit in northwest Dade County for which Catholic Hospice has been approved and plans to open in 2008. Upon approval and licensure of Catholic Hospice’s proposed Broward County program, CHS will contract with Catholic Hospice to provide hospice services to persons in its Broward facilities as it does currently for its Dade County facilities. The plans for Broward County will not be the first collaboration between Catholic Hospice and CHS. Catholic Hospice has an approved CON for a 13-bed free-standing inpatient hospice facility in Dade County. The inpatient hospice facility will be on the third floor of a building that will also house a rehabilitation hospital for CHS. That facility is located so that it will be accessible to persons in southern Broward County that require an inpatient level of care, or lack a caregiver or are homeless and require residential care. Catholic Hospice will employ existing policies and procedures to administer its offices and direct patient care. Hospice services are typically provided through the use of an interdisciplinary team that provides, at a minimum, core services, including physician services, nursing services, nutrition services, social services, pastoral care or chaplain services, volunteer services, and bereavement services. In addition, services such as physical therapy, occupational therapy, speech therapy, home health aide services, infusion therapy, medical supplies and equipment, and homemaker services should be provided as needed. Catholic Hospice complies and provides core services as well as additional services such as radiation therapy and chemotherapy as each patient requires. Catholic Hospice has divided its current service area into four sections and provides a full spectrum of hospice services through four interdisciplinary teams that provide high quality care. Each team is responsible for one section of the county. The number of visits a patient receives from members of the interdisciplinary team is determined by the plan of care. Once a patient enters the program, they are admitted by an admissions nurse who collaborates with the physician and family to develop the plan of care. As a patient’s health declines, the patient will receive visits by the interdisciplinary team members, including nurses and physicians as needed. Catholic Hospice has no limitation or hard rules on the number of visits -– it is based on patient need. The interdisciplinary teams have regular meetings to re-evaluate patients’ plans of care. Physician Services Physician services are a strength of Catholic Hospice -– ensuring that any patient that needs to see a physician does, and promptly. Catholic Hospice has four staff physicians who work in the community making house calls and seeing patients at nursing homes and assisted living facilities. In addition, Catholic hospice has contracted physicians at hospitals within its service area to cover patients in its contract hospitals. Patient care and particularly physician services at Catholic Hospice are overseen by Dr. Brian Kiedrowski, a Certified Medical Director, board-certified in geriatric medicine and a diplomat of the American Board of Hospice and Palliative Medicine. Catholic Hospice has policies for the credentialing of its physicians to verify education and experience, ensuring the continued quality of Catholic Hospices’ physician services. A physician is assigned to each interdisciplinary team at Catholic Hospice, including Dr. Kiedrowski, the Medical Director. This has added to his credibility with the facilities in Service Area 11 and improved collaboration with community providers. At a minimum, each Catholic Hospice patient is seen by a physician within three days of coming into the program because hospice is urgent. Following that, patients are seen at least once a month, but it depends on the needs of the patient and may be more often. Nothing substitutes for a physician’s presence with the patient while performing an examination to determine appropriate treatment. For example, if a patient is short of breath, the physician needs to see the patient to determine what is happening and appropriate treatment. Catholic Hospice also has protocols for the communication among its physicians and between its physicians and attending physicians, should an attending physician want to continue to follow the patient. This improves quality of care by increasing communication and ensuring that patients are not in limbo if an attending physician cannot be reached at a time of crisis. Physicians, like other Catholic Hospice employees, participate in orientation which facilitates team-building and increases physicians’ sensitivity to the various cultures and religions in South Florida. In addition, Dr. Kiedrowski will go into the field with nurses or other staff physicians to exchange training and provide monitoring or proctoring of clinical skills. In contrast, most of Palm Coast’s clinical education is performed through standardized self-directed online training modules through its parent corporation in Dallas, Texas. Nursing Services Catholic Hospice provides high quality nursing services and has policies in place to ensure that quality continues, including such clinical details as the care of central venous access (“CVA”) devices and subcutaneous infusions. Catholic Hospice can immediately implement its comprehensive nursing policies in Broward County upon approval. Nutrition Services Catholic Hospice provides nutrition services to its patients through two pooled dieticians, one for the northern part of Service Area 11 and one for the southern portion. The dieticians perform nutritional risk assessments on all non- cancer patients and patients under eighteen who are having total parenteral nutrition -- meaning they are being fed intravenously. The dieticians are a great asset and comfort to patients and families. Catholic Hospice cares about nutrition for its patients eating. It provides patients and their families with nutrition education and prepares them for what to expect as the patient’s disease progresses. Nutrition, as with many areas within hospice services, requires particular sensitivity to cultures, including Hispanics and others. Catholic Hospice has successfully accommodated the nutritional needs of the various cultures it serves. Catholic Hospice will implement these same policies for providing nutrition services in Broward County upon approval. Social Services Social Services at Catholic Hospice are provided by a group of graduate level social workers which is a requirement of Catholic Hospice. The services are broad in scope, including everything from family counseling to coordinating for caregivers and facilitating the securing of other resource needs of the patient and family. Catholic Hospice has policies in place for the provision of these services that can be immediately implemented in Broward County. Catholic Hospice has written and received a caregiver grant in the amount of one hundred thousand dollars that is renewed annually and administered locally through Dade County. The grant targets individuals and families that are facing the choice of having to place a loved one in a nursing home to be able to hold a job or attend appointments because they cannot financially afford a private caregiver and, in part counteracts caregiver fatigue. Volunteers can provide respite for caregivers as well. Catholic Hospice will seek similar opportunities in Broward County if approved. State and local regulations require hospices have emergency management plans. These plans are submitted to the Agency and local government. The plans are required to have certain elements to ensure that patients and families will not experience interruptions in hospice service in the event of a natural disaster or other emergency. Catholic Hospice is capable of successfully developing and implementing a similarly comprehensive plan in Broward County if approved. Serving All Faiths -- Pastoral Care or Chaplain Services Catholic Hospice serves persons regardless of religion or lack thereof. Patients include those who are Catholics (as expected), Buddhists, Seventh-day Adventists, Santerians, Jewish, Baptists, and Pentecostals. The staff of Catholic Hospice reflects a diversity of religious beliefs as well. Ms. Murray, for example, the Vice President for Nursing Services is of the Jewish faith. All of the staff are comfortable, however, with the Catholic identity and mission of Catholic hospice as a faith-based organization. Catholic Hospice has six chaplains who take care of persons of all faiths or no faith according to each patient’s needs and desires. In fact, the very first patient ever cared for by Catholic Hospice was Jewish. The chaplains are not all Roman Catholic. Chaplains are required to complete Clinical Pastoral Education (“CPE”) training, which is chaplaincy training. CPE training assists clergy with providing spiritual direction to persons of all faiths, independent of that clergy member’s own religious identity or affiliation. It helps them view spirituality from a universal standpoint to provide pastoral care and spiritual direction. At Catholic Hospice, chaplains also provide a connection to patients’ own faith communities -– mobilizing those relationships for the benefit of the patient and family. Additionally, each orientation includes a component of general spiritual care training to enable employees to reach out and connect with patients and families whatever their religious beliefs may be. One of Catholic Hospice’s chaplains is a Rabbi who provides particular assistance with Catholic Hospice’s L’Chaim program. The L’Chaim Program is a Jewish Hospice program emphasizing sensitivity to Jewish beliefs, customs and holiday traditions. Developed in response to community need, the L’Chaim program has its own mission statement and brochures geared to persons of the Jewish faith. Catholic Hospice’s orientation similarly includes a segment on L’Chaim. Catholic Hospice can successfully implement its current chaplain services policies upon approval of its proposed Broward program. Volunteer Services Catholic Hospice has a comprehensive program for the recruitment and training of volunteers. Volunteers provide respite services within the home setting –- often allowing a caregiver the opportunity to go to appointments and uphold other obligations they otherwise could not do. Catholic Hospice also has an “Angel Program” of volunteers that accompany patients during their final hours of life. These volunteers provide companionship to patients without family, and comfort to patients and families who are together in those final hours. Volunteers undergo comprehensive training similar to an employee orientation. Training is 16 hours long and is provided over two consecutive Saturdays. The training provides an overview of the organizational structure, the culture of Catholic Hospice and provides a breakdown of each volunteer’s role in the interdisciplinary team to ensure a complete understanding of the volunteer’s function and the limits that each works within. Catholic Hospice has developed training manuals for volunteers and because Catholic Hospice has volunteers fluent in both English and Spanish, training can be presented in either language, including the training manuals. Catholic Hospice has volunteers in its Dade program that are residents of Broward County. A condition of participation in the Medicare program for hospices requires that volunteer service match at least five percent of the overall care hours provided by hospice employees. Catholic Hospice surpassed that last fiscal year as ten percent of direct care hours were matched by volunteer hours. Catholic Hospice can adopt the same strategy and policies to successfully implement its volunteer program in Broward County. Bereavement Services Medicare guidelines require that some form of contact be maintained with families of hospice patients for up to 13 months following the death of their loved one. Catholic Hospice far surpasses that minimum. Catholic Hospice has a corps of graduate level clinicians specializing in grief work and each is assigned to a team. All of Catholic Hospice’s bereavement counselors are affiliated with the Association of Death Education and Counseling. Bereavement counselors preside over all bereavement activities and all family members are invited to establish a clinical relationship with that counselor to address his or her grief. Many hospice families experience what is called “complicated grief” -- grief that is particularly emotionally or spiritually complex due to the relationship with the patient, and much of the counseling work addresses those issues so that a survivor is not carrying regrets or guilt. Often a family member experiencing complicated grief will continue to work with the clinician over the course of several months. Catholic Hospice also provides bereavement services and support groups to the community. Such support groups are in parishes, nursing homes, and various community and institutional settings. The groups are open to members of the community as well as family members of patients and meet for a set period of time, usually 10 to 12 weeks. This allows Catholic Hospice to spread its resources throughout the community for maximum accessibility and responsiveness. On other occasions, bereavement counselors have visited local schools following student suicide. There the counselors not only intervened with the children trying to understand that loss, but provided education to school staff on responding to the children’s needs. A memorable example involved a group of accountants at the Loews Hotel in Miami Beach who were attending a workshop during the 911 attacks and lost many of their colleagues. Counselors were rotated to provide blocks of time over a two-day period to help those accountants with their grief. Catholic Hospice has conditioned its CON on providing community bereavement support groups at senior housing facilities in Broward county and is prepared to successfully provide those programs. CHS and Holy Cross have already volunteered its facilities for such programs. Catholic Hospice provides “Camp Hope” an annual bereavement camp for children who have experienced the loss of a family member, usually a parent. Camp Hope is volunteer-driven and provided free of charge to children throughout the community, not just children of hospice patients. The camp receives many referrals through the Dade County School system. The children are taken to a local camping facility and are provided a variety of therapeutic activities and recreation –- all presided over by professionals in their respective specialization. In the past, people from Broward have participated in the camp as a result of requests from within the community. Catholic Hospice has bereavement services policies that can be implemented in Broward County upon approval. Education Education is a strength of Catholic Hospice, including education of its own employees, its contract facilities, physicians and other health care providers, as well as the community at large. Catholic Hospice has a full-time nurse educator who is certified in hospice and palliative care nursing. Each employee participates in a week-long orientation familiarizing himself or herself with Catholic Hospice and the diverse ethnic and religious community he or she is about to serve. Clinical staff may be oriented for an additional week or more. Following orientation, there is a new employee follow-up and periodic additional training. As part of the orientation process and thereafter in continuing education presentations, the employees demonstrate competency with various skills. The competency packet also contains a post-test and, if an individual has a particularly low post-test score, a copy is sent to that person’s supervisor for follow-up. The goal is for employees to feel comfortable training patients and families about hospice. During the orientation, employees are trained on how to perform a cultural assessment for any patient who chooses Catholic Hospice’s Services. This includes general information on tendencies within certain ethnic groups and leaving one’s assumptions and beliefs “at the door” so that each individual patient may express his or her beliefs. The goal of Catholic Hospice is for each employee to be able to engage in active listening to help differentiate the needs of individuals within the Hispanic population or any other population. The education manager is also responsible for two hours of continuing education for the interdisciplinary staff every month. The education manager holds a provider number issued through the Board of Health, Division of Medical Quality Assurance for providing education for nurses, social workers and mental health workers; accordingly, all presentations at Catholic Hospice are geared toward allowing professional staff to accumulate medical education credit. Medical education is likewise offered to contract and non-contract facilities in the community for their staff. The nurse educator oversees university students who come to Catholic Hospice as part of their medical education training. Catholic Hospice has enjoyed long-standing relationships with various universities, including the University of Miami, Florida International University, and Barry University. Catholic Hospice has contracts with each university for nursing students and other health and counseling program interns for rotations with Catholic Hospice as part of the students’ community experience and training in end-of-life care. Working with the students provides Catholic Hospice valuable information on how it is perceived within the community it serves. Outreach Catholic Hospice recognizes that cultural factors can prevent access to hospice care and is organizationally sensitive to those factors providing employee education to counteract them -– such as the cultural assessments described earlier, through facility education with its contracted facilities and insurance providers, and through community outreach to the general population. Catholic Hospice’s goal is to reduce barriers to hospice care overall. For example, Catholic Hospice is part of a pilot program, “Partners in Care,” to provide palliative care services for children with life-limiting illnesses. Catholic Hospice has two community liaisons who conduct community outreach with hospitals, nursing homes, physicians and various civic organizations to provide presentations on hospice. As a condition to its CON, Catholic Hospice has agreed to provide outreach to Hispanics and persons under 65 and to provide bereavement support groups and has a proven ability to do so. Much of Catholic Hospice’s outreach includes persons under 65 years old and Hispanics. The composition of participants in facility education, insurance provider in- services, caregiver education initiatives, support groups, community health fairs, parish and community bereavement groups are attended by persons under 65. Catholic Hospice has also provided care outreach and training for lay ministers within the parishes to increase sensitivity to specific needs of patients facing illness. Brochures and other materials are available in English and Spanish. Providing outreach in existing community facilities increases Catholic Hospice’s visibility in the community. Most of Catholic Hospice’s patients are Hispanic and the majority of those persons are Roman Catholic. As an organization of the Archdiocese, the individual parishes throughout Dade County have been opened for Catholic Hospice to visit Mass or smaller groups to provide education on end of life care and hospice. Catholic Hospice has a radio show on Radio Paz, the Archdiocese’ radio station. Called “Caminando Contigo” or “Walking with You,” the show is presented in Spanish each Monday from 2:30 p.m. to 3:00 p.m. The program is an educational presentation on hospice services broadcast throughout Miami-Dade and Broward County into West Palm Beach. In addition, Catholic Hospice’s community relations manager regularly appears on public television shows to speak about hospice services. Catholic Hospice engages in modest fundraising to supplement its mission of caring for all those in need. Catholic Hospice’s two main fundraisers are an annual golf tournament and the Tree of Hope where people contribute by purchasing or sponsoring memorial holiday ornaments. Catholic Hospice can successfully duplicate its outreach and fundraising programs in Broward County upon approval. Different Orientations Catholic Hospice's organization is "faith based." “Faith based” is not just providing chaplain services. All hospices are required to do so. Rather, "faith based" is the spirit of mission that drives every decision at Catholic Hospice from the top of the organization down. Catholic Hospice’s stakeholders are the community it serves and its employees. Palm Coast's affiliation with Odyssey gives it different orientation from Catholic Hospice's. A for-profit company such as Odyssey Health Care has a fiduciary duty to increase profits for its shareholders and will be motivated by that fiduciary duty or “mission” of profitability. Although organized as a not-for-profit, Palm Coast nevertheless shares that mission of profitability acting like a for-profit company. For example, Palm Coast offers stock options to its employees. Palm Coast’s billing and banking are done at the Dallas headquarters, consolidated with the ledger for Odyssey Healthcare. Palm Coast pays a management fee to Odyssey because that is the only way for the cash to flow upstream under Florida law and Palm Coast’s assets, along with those of other Odyssey programs, secures a 20-million dollar line of credit for Odyssey. Odyssey assesses a management fee of seven percent of net revenue monthly therefore the higher net revenue to Palm Coast the greater the contribution to Odyssey's profitability. Currently, the profits from Palm Coast are used to develop additional hospices in Florida. In contrast, Catholic Hospice is likely to spend more on patient care and provide the choice of faith-based hospice services that currently do not exist in Service Area 10. Palm Coast's Community and Employee Education When entering a community, Palm Coast hires a team of community education representatives ("CERs"), along with the program's general manager, their function is to primarily provide day-to-day education to the community at large. It is not unusual to find people in the community who are completely unfamiliar with hospice and its benefits. The CERs concentrate on educating referral sources, not just on the availability of hospice services, but also patient eligibility and provide information not only on cancer but the numerous non-cancer terminal diseases for which hospice care is potentially appropriate. The Palm Coast CERs seek to educate the members of the medical profession at hospitals, nursing homes, and assisted living facilities, doctors offices, professional buildings, as well as educating those within the community, by speaking at churches, community organizations, Kiwanis clubs, rotary clubs, Chambers of Commerce and other community activities. The CERs utilize any opportunity to educate about hospice in general (not necessarily regarding Odyssey or Palm Coast), because as evidenced by the increasing number of patients accessing hospice care and current penetration rates, the service is still underutilized and to some degree misunderstood. Palm Coast - Broward plans to initially hire a minimum of three CERs to concentrate its efforts on community education in Broward before it serves its first patient. The CERs travel throughout the community and evaluate the areas in which the existing providers are providing sufficient hospice education, and where they may be lacking, seeking to find the holes in the system or gaps in the network, in which to offer their services. Palm Coast provides education to employees of nursing homes, hospitals, and assisted living those facilities, many of whom require bereavement counseling following the death of patients. The CERs have also proven to be a resource to grief stricken individuals seeking hospice care; if a patient or family calls and inquiries, the CERs help walk them through the process of how one is admitted to hospice care. The Palm Coast educational team is comprised of an array of individuals, including the receptionist, nurse, social worker, chaplain, home health aides, and volunteers, along with the CERs; everybody involved talks about hospice and educates those in the community. With respect to Palm Coast's interdisciplinary team members, there is ongoing follow-up training in each office by the Quality Improvement Manager, in addition to monthly educational sessions company-wide. As one educational tool, Odyssey and Palm Coast have developed pocket-sized "Slim Jims," which are clinical indicators or educational reference material that detail various disease processes and the criteria that would make an individual hospice appropriate. The front of each individual "Slim Jim" details the clinical indicators for each terminal disease, and the flip slide illustrates the benefits hospice care through Odyssey or Palm Coast could provide. These clinical indicators, incorporating CMS guidelines, have been successful in determining when hospice is appropriate for patients. The clinical indicators are regularly updated, along with any new guidelines published through CMS. Palm Coast in Miami has used the "Slip Jims" in helping to educate families on disease progression, what to expect, and the general characteristics of hospice care. In order to meet the cultural needs of the community, the laminated cards are currently being translated into Spanish, for use with Hispanic patients and families in Miami-Dade, Broward, and any other Palm Coast or Odyssey location with a significant Hispanic population. All hospice disciplines, including the members of the interdisciplinary team and the CERs utilize the "Slim Jims" to educate the community on various levels. As an educational tool to assist in the orientation and continual education of its employees, Palm Coast has access to "Odyssey University," as online program created by Odyssey that allows employees to participate in various educational courses and nursing modules, specifically tailored to each individual hospice professional (i.e., nursing manager, chaplain, social worker, etc.). There are a multitude of different modules, spanning the realm of topics from clinical to management. Palm Coast's Affiliation with Nova Southeastern University Palm Coast has executed a memorandum of understanding with Nova Southeastern University ("NSU"), by which it will be a partner with NSU's college of osteopathic medicine, geriatric program, dental program, and law program. The purpose of the partnership will be to develop ways for NSU's students to rotate through or to work with Palm Coast's patients and families. As the largest independent institution of higher education in Florida, and the seventh largest nationally, NSU educates its students using non-traditional methods, including, but not limited to utilizing external clinical settings to supplement what is taught in the classroom with real life settings and situations. The affiliation will create clinical settings for NSU's students that will afford benefits to Palm Coast, NSU, and the community at large. The program will offer the College of Osteopathic Medicine student clinical rotations with Palm Coast's patients; it will offer a Mental Health Counseling Program with NSU's Center for Psychological Studies; it will provide College of Pharmacy students experience with elderly patients; it will provide College of Dental Medicine with the opportunity to ease oral pain of a patient exacerbated by tooth decay, gum disease, or other "ortho-ailments;" and it will allow the Shepard Broad Law Center student to work with Palm Coast patients, reviewing forms and policies for legal sufficiency and accuracy. Patient benefits from the affiliation between Palm Coast and NSU include, but are not limited to: relief of symptom distress, understanding of the plan of care, assistance in coordination and control of care options, simultaneous palliation of suffering along with continued disease modifying treatments, ease of transition to hospice, and providing practical and emotional support for exhausted family caregivers. Odyssey, and specifically Ms. Toole, Odyssey Regional Vice President of the Southeastern Region, has established similar beneficial relationships with universities such as University of Alabama Birmingham, working together and involving them in certain aspects of the patient's care; a similar arrangement will be developed in Broward County upon approval. Ms. Toole, the expert witness in the fields of hospice operations and hospice administration, has observed a significant benefit to not just the hospice program, but to the students as well, providing an experience of dealing with patients with terminal illness and dying in the hospice setting. Odyssey and Palm Coast Charity Funds and Foundations As hospice staff cares for their patients, non- hospice needs are frequently identified; Odyssey has established the "Special Needs Fund" to assist their patients or families with extraordinary requests and needs. As an affiliate of Odyssey, Palm Coast has access to Odyssey's Special Needs Fund, from which it can request money for use to benefit patients in each local program. The fund is designed to provide assistance situations, for example, when it is cold and a patient is unable to pay his/her heating bill, or when the patient has no money available to purchase groceries. In those situations, Palm Coast request funds from the company, along with the justification, and that money will be provided, as needed. In 2005, over $60,000 in Special Needs Funding was use to meet the needs of 278 families. Palm Coast Bereavement Groups The Palm Coast team continues to care for the family even after the patient's death. In actuality, this program begins with an assessment upon admission of the patients into hospice. During the initial assessment, the registered nurse assess the grief of the family, and provides anticipatory "pre- bereavement" services based on need. Palm Coast seeks to identify people early on who are likely going to have a more difficult time in grieving the inevitable loss, so a plan for the family unit is initiated and included in the patient's plan of care. A bereavement plan of care is initiated within 72 hours of a patient's death. The bereavement coordinators offer support groups and memorial services for those who have had a loss, regardless of whether their loved ones were on hospice with Palm Coast, or never admitted to hospice at all. Support groups and memorial services offered by Palm Coast are held in nursing homes and ALFs, both for the facility as a whole and anyone who has had a loss, including staff members or residents, regardless of whether they were on hospice; it is not only those involved in hospice but for people in the community as a whole who may benefit from bereavement. Odyssey operates, "SKY Camp," a weekend camp in Amarillo for children who have experienced a loss, and is open to families of all Odyssey patients, as well as any other individuals who may inquire. Funded by the Odyssey Healthcare Foundation, SKY Camp is a free weekend camp for children ages seven to seventeen grieving the death of a loved one. The camp provides the children an opportunity to feel safe, nurtured, and most importantly, not alone, as many do in their time of grieving. Three Offices vs. One CHS will contract with Catholic Hospice for office space in Broward County at a fair market rate allowing Catholic Hospice to rapidly and efficiently establish an office centrally located within Broward County. This contrasts with Palm Coast’s plans for three offices. "[H]ospice care is primarily a home-based service, so the number of offices is not of particular importance[;] . . . [the number of] offices can be as many or as few as the provider would like . . . as long as they have at least one." Tr. 1409. The number of offices may play a part in rural areas in a multi- county service area. But Broward County is densely populated making more than one office an insignificant factor. Furthermore, because hospice services are provided in the home and hospice education can occur in any community facility, additional offices are not only not necessarily beneficial, they may be inefficient. For example, Palm Coast proposes to spend substantially more on rent and administrative costs than on patient care, whereas Catholic hospice spends on patient care and has low rent and administrative costs –- providing more benefit to the community consistent with its mission. Access: A Difference in Emphasis Catholic Hospice fulfills its mission to all patients regardless of age, sex, ethnicity, religious belief or lack of belief, ability to pay or level of need for care. While Catholic Hospice has an undeniable appeal to the Hispanic population that is predominantly Roman Catholic and an appeal to other Roman Catholics eligible for hospice services in Service Area 10, on the bases of age and diagnosis, Catholic Hospice does not emphasize service to "65 and over non-cancer" patients as does Palm Coast. In contrast to Palm Coast, Catholic Hospice outreach efforts are directed at persons under 65 and Hispanics. Consistent with conditions of Medicare participation that require hospice providers to accept all patients who meet eligibility requirements regardless of disease or ability to pay, Palm Coast also treats all patients. But Palm Coast emphasizes serving non-cancer patients 65 and older and seeks to emphasize penetration of the market segment represented by the population seeing it as underserved. Many non-cancer patients 65 and older in need of hospice service are recipients of care in long-term care settings such as assisted living facilities, supportive housing type programs and nursing homes. Odyssey has had great success in developing these programs. Such development as a goal for Palm Coast is consistent with Palm Coast's belief that non- cancer patients 65 and older are underserved. Yet, patients in Broward who are non-cancer patients 65 and older appear to be served as well as patients in other hospice-typical groups based on age and diagnosis. It is apparent that Vitas Healthcare-Broward, an existing hospice provider in Broward County, for example, already places an emphasis on serving the "65 and over non-cancer" patient that Palm Coast targets as underserved. Furthermore, Vitas has had greater success in serving this population relative to other hospice-typical groups than the three other existing providers in Broward County. This is illustrated by the chart at page 37 (Bate-stamped 00038) of Catholic's application proved up by the testimony at hearing of Mr. Cushman. The 2005 data on the chart shows Vitas Healthcare- Broward, a for-profit hospice organization like Palm Coast's parent, to be the dominant hospice provider in Service Area 10. Its market share for calendar year 2005 is 74 percent, dwarfing the market shares of the three other providers led by Hospice by the Sea at 13 percent with less than one-fifth of total market share enjoyed by Vitas. Dividing market share by age ("Under 65" and "65 and Over") and diagnosis (Cancer and Non-cancer), as is done by the Hospice Programs Rule, the highest market share for Vitas is in the "Non-cancer 65 and Over" category" at 77 percent. As Mr. Cushman explained: [Market share]'s nine percentage points less for those who have diagnoses other than cancer who are under 65; it's seven percentage points less for cancer diagnosis for elderly patients; and again, nine percentage points less for the patients with cancer under 65. . . . [T]he significance … is that the patients who are … the least costly to care for are the noncancer patients who are elderly. And that is the area where the for-profit program in Broward County [Vitas] Tr. 647. has sought and obtained the highest market share. Palm Coast's Claim of Special Circumstances Palm Coast claims that the "65 and Over Non-cancer" population in Service Area 10 is underserved. With regard to Special Circumstances to support approval of hospices, AHCA's rule provides: (4) Criteria for Determination of Need for a New Hospice Program. * * * (d) Approval Under Special Circumstances. In the absences of numeric need identified in paragraph (4)(a), the applicant must demonstrate that circumstances exist to justify approval of a new hospice. Evidence submitted by the applicant must document one or more of the following: 1. That a specific terminally ill population is not being served. Fla. Admin. Code R. 59C-1.0355. Palm Coast did not demonstrate that the "65 and Over Non-cancer" population in Service Area 10 is not being served. To the contrary, Catholic Hospice showed that it is being served by existing providers. Palm Coast's Affiliation with a For-profit Parent Palm Coast's emphasis on the "65 and Over Non-cancer" population in Broward County is consistent with the nature of its affiliation with its for-profit parent, Odyssey. If a hospice can spend less per patient day on patient care, it can be more profitable. Non-cancer patients tend to be less costly. Further, hospice care is generally more expensive at the beginning of care -– when the patient is being set up on a plan of care including medications, equipment and the like, and at the end of care when the patient and family may require additional visits and medications. Therefore, a hospice can increase its profits by increasing the number of patients with longer lengths of stay. Non-cancer patients over 65 tend to have longer lengths of stay. Thus, by heavily marketing to non-cancer patients over 65, Palm Coast can maximize its profitability. It will do so, however, to the detriment of other providers in its service area at the same time that the dominant provider in the service area is already doing so. Since Medicare reimbursement for hospice services is based on the assumption that all hospices will accept all patients, hospice programs will be able to redistribute costs from costly patients by having a balance between the more costly and less costly patients. When a hospice takes a disproportionate number of profitable patients, however, it leaves only the more costly patients for other providers who are not able to distribute costs over a full spectrum of expensive and less expensive patients. The effect is magnified because for-profits tend to be larger than not for profits. Indeed, Palm Coast’s new Dade program has ramped up quickly and doubled its budget projections. Palm Coast’s focus on profitability will negatively impact existing providers within the service areas it operates. Catholic Hospice, on the other hand, is likely to serve populations in the four categories of "under 65 non- cancer," "under 65 cancer," "65 and over non-cancer," and "65 and over cancer" without an emphasis on the more profitable "65 and over non-cancer" population segment, the group that Palm Coast will emphasize serving in order to maximize profits for its parent, a for-profit organization. Community Support for Catholic Hospice Letters of support demonstrates deep support for Catholic Hospice' application. One hundred twenty-five of them were received, a "high number . . . for a hospice program." Tr. 1406. Five were from physicians who indicated a willingness to refer patients to Catholic Hospice; two were from hospitals and one from a skilled nursing facility. In addition, Vitas recommended that if an additional hospice program for Broward County were to be approved that it should be Catholic Hospice, an "unusual" letter of support in Mr. Gregg's view. See id. CHS, itself, has received numerous requests for Catholic Hospice in its Broward facilities and has had to make other arrangements for those in its nursing homes, ALFs, and other facilities in Broward County since Catholic Hospice is not available in Broward County. Due to this recognized need, CHS has openly supported Catholic Hospice’s application and, through administrators of its various Broward health and elder care facilities, has provided letters of support, including letters from the administrator of St. John’s Nursing Center, the administrator of St. Joseph’s Residence, an ALF, the administrator of St. Anthony’s Rehabilitation Hospital, and an administrator at the HUD elderly housing facilities for CHS, including the five in Broward County. Similarly, Holy Cross Hospital is highly supportive of Catholic Hospice’s application and the need for a faith-based option for hospice in Broward County. Like CHS, Holy Cross intends to contract with Catholic hospice for inpatient hospice beds if Catholic Hospice’s Broward program is approved. Holy Cross has the capacity to provide more hospice inpatient beds without having to disrupt contracts and relationships it currently has for hospice beds; thus, relationships with existing providers will not be impacted. Physicians at Holy Cross support Catholic Hospice’s application, noting in particular Catholic Hospice’s sensitivity to the needs of Hispanic patients,--a growing segment of the population in Broward County-- and will refer patients to Catholic Hospice if it is approved. Memorial Healthcare System, a group of five hospitals that comprise the South Broward Hospital District, supports Catholic Hospice’s application noting that it will provide patients with a choice for a faith-based provider and emphasizing Catholic Hospice’s sensitivity to the needs of the Hispanic community and the growing Hispanic population in southern Broward County. Of the existing hospice providers in Broward County, one supports Catholic Hospice’s application and two others prefer Catholic Hospice if a new program is approved. In sum, Catholic Hospice is a diverse, long-term provider with a proven record of quality services and community responsiveness that fits within a continuum of care offered through the Archdiocese. Accordingly, Catholic Hospice can quickly move into Broward County with outstanding community support and improve the situation for residents of Service Area 10 with minimal impact to existing providers.
Recommendation Based on the foregoing Findings of Fact and Conclusion of Law it is RECOMMENDED that the Agency for Health Care Administration issue a final order that approves Catholic Hospice's CON application for a new hospice program in Service Area 10 and denies Palm Coast's CON application for a new hospice program in Service Area 10. DONE AND ENTERED this 26th day of October, 2007, in Tallahassee, Leon County, Florida. S DAVID M. MALONEY Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 26th day of October, 2007.
The Issue The issue in this proceeding is whether the application of Catholic Hospice, Inc., to establish a hospice program in District 10 meets the statutory and rule criteria for approval.
Findings Of Fact 1. Catholic Hospice, Inc. (Catholic Hospice) is the preliminarily approved applicant for Certificate of Need (CON) Number 9333, to expand hospice services, currently provided in Dade County, into adjacent Broward County, Florida. 2. The Agency for Health Care Administration (AHCA) is the department authorized to administer the Florida CON program for health care facilities and services. 3. Catholic Hospice applied for CON Number 9333 to initiate services in Eroward County, which is designated AHCA, District 10, for the July 2001, planning horizon. As the parties stipulated prior to the final hearing, AHCA published zero as the numeric need for an additional hospice program in Broward County. At the time the CON application was submitted, Catholic Hospice asserted that its proposal would meet an unmet need for hospice care for the Hispanic and Haitian populations, in particular, and the growing multi-ethnic population in Broward County, in general. Catholic Hospice also initially indicated that its program would increase access to hospice care by eliminating financial, language, religious, and cultural barriers. At the hearing, Catholic Hospice presented evidence to support its intention to improve access for the Hispanic population by overcoming language and cultural barriers, and its assertion that the existing hospice programs are not consistently and aggressively reaching Hispanics. 4. Catholic Hospice is a partnership established in 1988 by the Archdiocese of Miami, St. Francis Medical and Health Care Services, and Mercy Hospital. The governing body is a 15-member Board of Directors with five directors from each of the three member organizations. The Board is ethnically diverse and includes three directors who are native Spanish language speakers. Catholic Hospice serves people of various religions, having, within the last year and a half, established the L'Chaim Jewish Hospice Program. 5. Catholic Hospice has steadily increased the proportion of care it gives to Hispanics in Dade County. In 1989, approximately 30% of Catholic Hospice patients were Hispanic. By 1999, Catholic Hospice served 740 Hispanic patients out of a total of 1157. By 2000, the number and proportion of Hispanic patients increased to 841 out of a total of 1228. Currently, over 60% of Catholic Hospice's patients are Hispanics, while 55% of the total populaticn of Dade County is Hispanic. Existing Hospice Programs and Services 6. The existing hospice providers in Broward County are vitas Healthcare Corporation (Vitas), Hospice Care of Broward County, Inc. (Hospice Care of Broward), Hospice by the Sea, Inc. (HBTS), and Hospice of the Gold Coast. All of the existing hospices have elected to qualify for and to obtain accreditation from the Joint Commission for Accreditation of Health Care Organizations. 7. Vitas is the successor to the organization known as Hospice of Miami, established in 1978. Vitas is a for-profit organization, having been established prior to the enactment of the Florida law which currently requires hospices to be not-for- profit corporations. ‘Currently, Vitas operates twenty separately licensed programs in seven states with an average daily census of 5,400 patients. In 1999, Vitas admitted 5,921 patients in Broward County and 4,382 in Dade County. It is the largest provider of hospice care in the United States, and in Broward and Dade Counties. In Broward County, Vitas cared for 180 Hispanic patients in 1998, 238 in 1999, and 206 through November 15, 2000. Approximately 3.3 to 4% of its total number of Broward County patients are Hispanic. 8. Hospice Care of Broward operates in both Dade and Broward Counties, with offices in both Fort Lauderdale and Miami. The main business office is the one in Fort Lauderdale with close to 180 employees as compared to a staff of 50 in the Miami office. The Miami and Fort Lauderdale operations share the same board of directors, executive director, development director, finance director, and clinical director of operations. 9. Hospice Care of Broward cares for patients in their homes, in hospitals or nursing homes, and in its own 5-bed residence in Fort Lauderdale. Approximately half of their Dade County patients and 2% of their Broward County patients are Hispanic. In 1999, Hospice Care of Broward admitted a total of 999 patients in Broward County and 172 in Dade County. 10. HBTS, established in 1979, is a not-for-profit corporation, which serves both AHCA District 9, for Palm Beach County and AHCA District 10, for Broward County. It operates a 30-bed inpatient center in Palm Beach and, by contract, provides care at various hospitals, including Hollywood Medical Center, Holy Cross Hospital, Cleveland Clinic Hospital and North Ridge Hospital. 11. In Broward County, HBTS served five Hispanic patients out of a total of 287, in 1998; 7 out of 415 in 1999; and 15 out of 641 in 2000, or almost 2.4%. 12. Hospice of the Gold Coast is a relatively small operation, serving approximately 200 patients a year, primarily at the North Broward Hospital District facilities. Its office located in the northeastern area of the County, which has a relatively small Hispanic population. As a result, Hispanic utilization of Hospice of the Gold Coast was estimated at 2% by one expert. 13. In general, hospice care is provided to terminally ill patients who are certified by a medical doctor as having a prognosis of death within six months. The care is, therefore, palliative, that is, to provide comfort to the dying patient, not curative. The patient and family members are treated as a unit by an interdisciplinary team which includes doctors, nurses, home health aides, chaplains, social workers, and counselors. Hospice services are gaining in acceptance and utilization in the United States. It is considered cost effective and is, therefore, subject to reimbursement by Medicare, Medicaid and private insurances. Many hospice services to relatives and the community, however, including camps for bereaved children, are funded by charitable donations to the programs. 14. In its CON application, Catholic Hospice describe two cases in which hospice patients in Broward expressed a preference for its care. One doctor who testified by deposition for Catholic Hospice said he supports the application because there is no real advocate for Hispanics in Broward County. He complained of discriminatory practices in county hospital emergency rooms. He also expressed frustration that the existing hospices are not supporting his clinic, but admitted that he is not familiar with referrals to hospices. When his hospital patients need hospice, the social service departments handle referrals. He refers his other potential hospice patients to their churches. See Catholic Hospice Exhibit 20. Demographic Data 15. Approximately 80% of all hospice patients are over 65 years old. Hospice patients, obviously, are those whose deaths 10 are not unexpected, that is, not the victims of homicides, suicides or fatal motor vehicle accidents. Hospice services were traditionally provided largely to terminally-ill cancer patients, who still make-up the majority of patients statewide. 16. Catholic Hospice's expert noted that, particularly after some Dade County communities were destroyed by Hurricane Andrew, the trend of Hispanic migration into Broward County has been increasing. The projected increase in the Broward Hispanic population, from 2000 to 2005, is 45,900 for people under age 65 and 7,000 for people 65 and over. 17. The total Hispanic population of Broward County, is approximately 205,000 people out of a total of 1.5 million, or an estimated 12.6 to 13.4%. It is projected to increase to 15.6% by 2005. By comparison, Hispanics are approximately 55% of the population in Dade County. In Broward, Hispanics are more heavily concentrated in south central and southwestern areas of the County. One of Catholic Hospice’s offices is located in the northern Dade County area of Miami Lakes, conveniently near the southern areas of Broward County. Broward County residents are included in the staff and volunteers working in that office. The other office is in Kendall. Consistent with the concentration of the population, the largest number of Hispanics discharged from a Broward County hospital come from Memorial Hospital West. il 18. Catholic Hospice took the position that hospice care for Hispanics in Broward County should be provided within two or three percentage points of that which the group represents in the total population. The fact that the Broward providers serve from two to 4% Hispanic patients is, according to Catholic Hospice, indicative of underservice to the group. 19. Catholic Hospice's health planning expert conceded, however, that a better analysis than Hispanic population as a percentage of the total, would take into consideration more specific demographic data, including age, death rates by ethnicity, and causes of death. 20. Hispanics over 65 were 8.7% of the total Hispanic population in Broward County, 3.4% were over 75 years old. By comparison, over 20% of the total Broward County population is over 65, and over 10% over 75. Catholic Hospice offered its Dade County service, where 60% of its patients are Hispanics, as an example of its ability to achieve better results serving Hispanics in Broward County. In Dade County, however, the pool of potential patients is larger, with smaller differences between ethnic groups. Hispanics over 65 are 14.4% of the total population, almost identical to the 14.6% the non-Hispanic and total Dade populations over age 65. 21. Differences in age cohorts in the population are, as expected, reflected in differences in death rates. In 1998, 12 there were 641 Hispanic deaths in Broward County. of these, 383 were in the 65 and over age group, and 258 were under 65 years old. For 1999, there were 718 Hispanic deaths, of which 455 were 65 and over, and 261 were under 65. In the larger and older Hispanic population of Dade County, there were 9,220 Hispanic deaths, in 1999. 22. Hispanics in Broward County have a lower number of deaths per thousand, which is consistent with the relative youth of the group, as compared to the total population. In 1998, Hispanics accounted for 3.64 deaths per thousand, while there were 10.71 deaths per thousand in the total population of Broward County. In 1999, the Hispanic rate was 3.83 per thousand, as compared to 10.89 per thousand for the total population. When death rates are adjusted to exclude as causes accidents, suicides, and homicides, the Broward Hispanic death rates for 1998 and 1999 were 3.8 and 4%, respectively. 23. The analysis of the Hispanic population by age, death rates, and causes of death indicates that the current level hospice services, ranging between 2% for lower volume providers to 4% for Vitas, is the appropriate, expected level. 24. The level of hospice care which Catholic Hospice deemed appropriate is virtually impossible to reach considering the reality of the causes of death. Using Catholic Hospice's expert health planner's expectation that nine percent of all 13 Hispanics who died in Broward County should have hospice care, then 680 of 718 deaths in 1999, would have had to have been admitted to hospice. Numeric Need 25. Due to the demographic make-up and the level of care provided by the existing four hospice programs in District 10, AHCA published a zero numeric need for additional programs. AHCA publishes a need for a new hospice program when its formula demonstrates that the number of additional patients who would elect hospice care equals or exceeds 350 patients over and above the current volume of hospice admissions. 26. The formula, in Rule 59C-1.0355(4) (a), Florida Administrative Code, for projecting additional hospice deaths, uses actual three-year resident deaths in four groups of people, those with and without cancer, who are both over and under age 65. 27. When the formula was applied to the Broward County data, the result was 5,947 projected hospice patients for the July 2001, planning horizon. When compared to the actual volume, in 1999, of 7,550 patients served by the four existing hospice programs, the number of projected additional patients is a negative 1,603. The negative number is based on the statewide hospice experience and indicates that the hospices in Broward 14 County, in 1999, served 1,603 more people than they were expected to serve two years later. Penetration Rate, Accessibility and Availability 28. Although not used in the formula, the negative need calculation is, in part, a function of what the health planners described as the hospice use rate or hospice penetration rate. All of the expert health planners who testified agreed that the hospice penetration rate is the single most significant factor in determining the extent of the existing hospice utilization. The total number of hospice deaths divided by the total number of deaths during the same time period in the same planning area gives that planning area's penetration rate. 29. In Florida, the statewide hospice penetration rate for is 33.5%. In Broward County, District 10, the rate is 46.6%, the highest in the State. By contrast, the national average is approximately 29%. For adjacent District 11, which includes Dade County, the penetration rate is 30.7%. 30. For Hispanics in Broward County, the hospice penetration rate was 37.3% in 1999. In Dade County, the Hispanic hospice penetration rate was 28.2% in 1999, indicating greater opportunities for growth in Dade. In general, the data indicates that Hispanics in Broward are utilizing hospice care more than Hispanics in Dade County, and more than the total population of Florida. 15 31. The adequacy of access to hospice care in terms of geographical coverage has been considered. In Broward, with a total of 1,211 square miles and four hospices, each one averages 303 square miles. The smallest geographical area for hospices in Florida was 280 square miles for the one hospice operating in Pinellas County. The statewide average, however, is 1,083 square miles for each hospice in Florida. There are no apparent geographical limitations on access to hospice care in Broward County. 32. As the parties stipulated, accessibility in terms of timeliness is not at issue. There is no indication that hospice referrals do not get a response within 48 hours, a special circumstance, specified in Rule 59C-1.0355(4) (d)3., Florida Administrative Code. Spanish Language Material and Spanish-Speaking Staff 33. Catholic Hospice conceded that the existing Broward County hospices provide appropriate printed material, forms, and promotional information in Spanish. But, Catholic Hospice argued that it has the ability to reach out to and serve Hispanic patients better than any of the other existing providers based on its experience and staff. Catholic Hospice noted that the percentages of Hispanics to total Dade County patients it serves is higher, ranging between 61 to 67% than Vitas' to 35 to 40%, even though in absolute numbers Vitas 16 served twice as many Hispanics, in Dade County in 1999, as did Catholic Hospice. 34. Spanish-speaking staff is inadequate to serve Spanish- speaking patients, according to Catholic Hospice, unless every member of the hospice interdisciplinary team speaks Spanish. In response to discovery requesting numbers of fluent Spanish speakers on staff in Broward County, HBTS reported three full- time equivalent (FTE) employees. Each FTE represents a 40-hour work week. 35. Hospice Care of Broward reported that it employs, in Broward, three nurses, one home health aide, two chaplains, but no social workers or bereavement counselors who speak Spanish. Although that was considered inadequate by Catholic Hospice's expert, Hospice Care of Broward noted its ability to use Spanish-speaking staff from its Dade office. Catholic Hospice also indicated its intention to use its staff from Dade, if needed, as well as some of its current staff members and volunteers in Dade who actually reside in Broward County. 36. Vitas employed three chaplains, six registered nurses, three doctors, three home health aides, a secretary, a case worker, six pool staff and various others, for a total of 42 Spanish speakers in Broward County. Vitas was considered inadequately staffed by Catholic Hospice's expert for not having a Spanish-speaking social worker, although its chaplains and not 17 just social workers provide bereavement counseling. At the time, Vitas' census of Hispanic patients included seven in three different nursing homes, and 29 patients at home. 37. Catholic Hospice listed the names of 69 Spanish- speaking employees, who staff Catholic Hospices current operations in Dade County. Catholic Hospice's expert testified that, with 69 Spanish-speaking staff members, it adequately met the needs of 840 Hispanic patients. It must be concluded, logically, that Vitas, with 42 Spanish-speaking staff members, also had an adequate number to serve 238 Broward County Hispanic admissions in 1999. Including all of Catholic Hospice's administrators and excluding all but apparently fluent Spanish- speaking staff, the ratio of staff to Hispanic admissions is 9.9 to one for Catholic and 5.7 to one for Vitas. 38. All of the hospices rely on volunteers to help provide care to patients and their relatives. They also rely on relatives to serve as translators, if necessary. In addition, some hospice employees who are not fluent in the language do speak and understand some Spanish. Staffing 39. The staffing and related expenses, included in Catholic Hospice's financial projections, were criticized as inadequate. An expert for Vitas testified that $80,000 rather than $50,000 is appropriate for an hospice administrator; that 18 $18.99 an hour, Catholic Hospice's second year projection, is more appropriate for the first year than the first year projection of $17.78 an hour, or $37,000 a year, which was proposed for the first year for a registered nurse; that, although starting salaries are $16,000, or $7.69 an hour for nurses' aides, Catholic Hospice should expect to pay a minimum of $8.50 an hour in Broward County; that $35,000 a year is unreasonable for a patient care manager, a position typically filled by a registered nurse; and that $37,000 rather than $32,000 is more reasonable for a licensed clinical social worker. 40. The Vitas' expert also testified that 7.6 not 6 FTEs for registered nurses are needed, and more than one FTE for a social worker for the entire County for the first year. The proposal to hire one bereavement counselor, and one volunteer coordinator in the second year, but none in the first was also criticized as an underestimate of staffing needs, considering an average daily census of 30 patients in the first year, and 50 patients in the second. 41. Catholic Hospice used its experience and ratios established by national associations to project staffing needs. The projections are reasonable in providing, for example, one nurse for every ten patients and one home health aide for every eight patients. The nursing shortage, which all parties concede 19 exists in South Florida will likely increase the time and expense for Catholic Hospice to recruit its staff. Some health care facilities also find it necessary to provide signing bonuses, which Catholic Hospice has not proposed to do. At the time of the hearing, Catholic Hospice needed more staff and was participating in a jobs fair in Dade County. 42. In terms of its own operations, Catholic Hospice could also use and benefit from economies of scale, by using some of its existing staff and volunteers in Broward County. Its per unit costs would decrease primarily from sharing administrative staff, in much the sawe way as Hospice Care of Broward operates in both counties. For this reason, the criticism of Catholic Hospice that its propesed staffing and salaries are adequate is rejected, even though its work papers showed more staff than its CON application. Financial Feasibility 43. Catholic Hospice expects to serve 220 patients in the first year and 400 in the second. The average length of stay for each hospice patient in Broward County was around 40 days For Catholic Hospice, in Dade County, it was 48.9 days in 1999. When patient days are calculated from admissions with an average of 48.9 days, the results are 10,219 for the first year, and 19,574 for the second year. Catholic Hospice's application uses 10,905 patient days for the first year, and 25,520 for the 20 second year. It appears that utilization is overestimated by 700 admission in the first year and 6000 in the second year. To reach the second year projection of 400 admissions, the average length of stay would have to be 63.8 days. 44. One expert quantified the effect on projected revenues as a result of Catholic Hospice's overstatement of utilization by patient days. The conclusion was that projected revenues would decrease by $136,000 in the first year, and $1,063.881, in the second year. When Medicare rate increases approved by Congress are considered, the projected revenue decreases are approximately $65,000 in the first year, and that adds back $123,000, to the expected decrease of $1,063,881, increasing it to about a $900,000 reduction in revenues for the second year. 45. The analysis of revenues as compared to patient days was flawed having not reflected a proportionate reduction in variable expenses. Vita's expert's assumed that expenses should not be reduced because: Catholic Hospice had underestimated staffing and salaries. The finding that staffing and salaries are adequate means that, although Catholic Hospice overestimated revenues, the exact amount cannot be determined. The evidence that revenues and utilization are overestimated means that Catholic Hospice failed to prove that its proposal is financially feasible. The assumption is made that revenues are sufficient to‘cover projected start-up costs of $69,493. 21 46. Catholic Hospice's expert criticized the use of average length of stay to determine patient days. That approach is more reasonable than that used by Catholic Hospice which relied on its start-up experience in Dade County in 1989, to guess what Broward patient days might be in 2002 and 2003. When Catholic Hospice started, its average lengths of stay were 21.17 days in 1989, and 32.1 days in 1990. 47. Additional factors which cast doubt on the likelihood of Catholic Hospice achieving its projected utilization and revenues are the pattern of referral sources in Broward County and the level of charity care. Physicians referred approximately 43% of all hospice patients in Broward County, while approximately 24% came from hospitals in 1999. It will take Catholic Hospice longer to establish referral relationships with a number of different physicians. Lower revenues are also reasonably expected with higher percentages of charity care. Historically, in Dade County, charity care has accounted for -23% of Catholic Hospice's services, but it projected 3.5% for Broward County. 48. The CON application submitted to AHCA was incomplete, having omitted key information necessary for AHCA to determine financial feasibility, including the following: (1) failure to distinguish between Broward and Dade operations in sufficient detail for an evaluation of Broward separately, 22 although payer mix assumptions for each were different ; (2) inadequate breakdown of admission by payer type; (3) no provision for dietetic and nutritional counseling; (4) no specific allocation of FTEs for a medical director; (S) no details of a staff recruitment and retention plan; and (6) a material discrepancy of $3 million, given the projected year two net profit of $39,100, between revenues on one schedule as compared to the notes to the same schedule. Impact on Existing Providers 49. The existing providers presented evidence related to the potential impact on their admissions, revenues, and staffing, if Catholic Hospice begins operating in the Broward County market. They need to maintain or increase their censuses to have some leverage for contract negotiations, and to provide charity care and unreimbursed services, such as bereavement services. Catholic Hospice maintained that it would not adversely affect existing providers, citing the experience in Dade County when Hospice Care of Broward began operations in 1998. The situations are distinguishable. From 1997 to 1999, for example, hospice admissions increased 16.7% in Broward and 35.3% in Dade County. Dade County started with a lower-than- average hospice penetration rate in 1998. Most importantly, 23 AHCA published a numeric need for an additional hospice which led to the approval of the Hospice Care of Broward CON. 50. Although Vitas' market share in Dade County increased during the time that Hospice Care of Broward began operations there, the smaller hospices, Hospice Care of South Florida and Catholic Hospice lost market shares. Similarly, recent increases in the market share of HBTS in Broward County have adversely affected Hospice Care of Broward, but not Hospice of the Gold Coast, which has the affiliation with a hospital district, or Vitas. Based on these experiences, it is reasonable to expect that the smaller providers will experience a disproportionately greater adverse impact from the entry of Catholic Hospice into the Broward County market. 51. Assuming that: Catholic Hospice achieves it projection of 220 patients in its first year of operations in Broward County and 400 in the second year, then it will adversely affect all of the existing providers, at least to the extent of limiting their potential growth. 52. Using the total number of projected hospice patients for 2002 and 2003, and allocating all incremental admissions to Catholic Hospice first, the result is that 61 cases for 2002, and 120 for 2003, are available for Catholic Hospice. That leaves an additional 159 admissions for the first year and 280 24 for the second year, waich must come from patients who would have otherwise used the existing hospices. 53. When proportional losses of cases to Catholic Hospice are assumed with static market shares, the expected impact in terms of lost admissions are 5 and 8 from Hospice of the Gold Coast, 11 and 20 from HBTS, 21 and 37 from Hospice Care of Broward, and 121 and 215 from Vitas, in years one and two, respectively. 54. If the assumption is made that the market shares will change, following established trends, then projected losses will increase most (to 16 in 2002 and 29 in 2003) for the hospice which has been expanding most rapidly, HBTS. More consistent providers, in terms of volume, would have lower projected losses, for example, 15 and 26 admissions in years one and two, respectively, for Hospice Care of Broward County. 55. Of the three scenarios presented, the most reasonable assumptions are that proportional losses of the type which occurred in Dade County would also occur in Broward, and that market share trends would continue. If that happens, then the smaller providers would lose more potential patients, up to 91 and 165 from HBTS, 87 and 158 from Hospice Care of Broward, and 27 and 49 from Hospice of the Gold Coast, in years one and two, respectively. For Hospice Care of Broward, the loss of 158 is 25 significant when compared to total volume of approximately 1000 patients. 56. The market share analyses could be criticized for relying on projected population growth, but not factoring in an increase in the penetration rate. In fact, the penetration rate in Broward, as high as it is, has been increasing, but in relatively small increments, from 45.8% in 1993 to 46.6% in 1999. The .8% increase is considered approximately flat, particularly having followed a 7% decline in the Broward hospice penetration rate from 45.8% in 1993 to 38.6% in 1994. The fluctuations in the penetration rate and the decline in deaths from cancer and AIDs support the reasonableness of the assumption of a static penetration rate in the market share analysis. 57. Only HBTS presented evidence on the financial impact of the projected losses, ranging from a low of $61,554 for 20 lost admissions to a high of $507,464 for the more reasonable assumption of 165 lost admissions. The magnitude of the detrimental impact, put in context, is significant given HBTS' losses from operations of $1.8 million in 1999, and $1 million in 2000, which had to be offset by charitable contributions and income from investments. 58. In addition to lower operating revenues from patient care reimbursements, HBTS also projected losses from charitable 26 contributions. In 1993, HBTS received $629 in charitable donation for each hospice patient admitted, from bequests, memorials, tributes, holiday remembrances from families and friends. Contributions from these sources are directly related to the care given to individual patients and, therefore, to the total number of patients. At HBTS, over 64% of its total charitable contributions are in the combined categories of tributes and bequests. The adverse financial impact on HBTS including reduced charitable contributions, is $74,149 for 20 cases and up to $611,301 for 165 cases. 59. WVitas received referrals from Holy Cross Hospital, a Catholic facility in Broward County which would be expected to enter an agreement with Catholic Hospice. Vitas also runs a bereavement group for Spanish speakers at Holy Cross Hospital. Holy Cross Hospital is listed, in the CON application, as the likely source of a contract for services with Catholic Hospice. In a three-month period, Vitas received 30 referrals resulting in 25 hospice admissions from Holy Cross Hospital. In Dade County, Vitas receives virtually no referrals from Mercy Hospital, which is also a Catholic institution and one of the Catholic Hospice partners. Therefore, despite the projected disproportionate impact in the market, to Vitas' advantage, if all other things were comparable to the Dade County experience, because of the institutional relationships between Catholic 27 Hospice and Holy Cross Hospital, Vitas' is reasonably expected to be adversely affected. It is impossible to determine if projected losses are significant in terms of the total Vitas operation, since it provides over three-fourths of all hospice care in Broward and returned approximately $10 million in revenues in 1999, to its corporate operations. There is also no evidence that more competition with Vitas will enhance services or reduce costs. 60. Expert witnesses acknowledged a severe nursing shortage in South Florida, approaching crisis proportions. The existing providers are always recruiting and never fully staffed. The kind of care required of hospice nurses, the pressure of dealing with dying patients, the need for them to be on call rather than working only on scheduled shifts, the preference for oncology nurses, and the need for bilingual nurses further limits the available pool. The shortage has increased since 1998, when Hospice Care of Broward expanded into Dade County. Hospices are also not free to attract nurses by raising rates to pay increasingly higher salaries, but must resort to other incentives which increase recruiting costs. Hospice patient care is usually reimbursed on a per diem basis, regardless of actual costs, at rates set by the Medicaid and Medicare programs. The existing hospices reasonably expect an adverse impact on their staffing, recruiting time and costs, 28 particularly for nurses and home health aides, if Catholic Hospice enters the market in Broward County and succeeds in staffing its project as proposed. Agency Action and Rules 61. The Chief of the Bureau of Health Facility Regulation for AHCA, who is also an expert in health planning, testified that the review process in this case was the same as for most CONs. Within AHCA, however, the initial recommendation was to deny the application because of insufficient data to support the allegation of a lack of access for the Hispanic population. 62. The decision to approve CON Number 9333 was made because AHCA Secretary, "Ruben King-Shaw indicated that he felt that it was a policy priority at the highest level of the current administration, both within the Agency and I would say at the level of the Governor, to promote culturally sensitive access to end of life care. And that he referenced a presentation that I believe that he had heard Secretary Brookes (phonetic) of the Department of Health make a day or two prior to our meeting where he said that Dr. Brookes was one of the best speakers that he had ever seen on the issue of culturally sensitive health care and barriers to -- cultural barriers to health care." Transcript, p. 955-956. 63. In addition to the statutory review criteria for CONs, AHCA relied on Rule 59C-1.030, Florida Administrative Code, which lists general criteria for evaluation of CON applications, 29 and Rule programs. there is included 64. follows: 59C-1.0355, which applies specifically to hospice The need to serve a particular ethnic minority, if evidence that their access to a service is limited, is in the criteria. The most relevant provisions of Rule 59C-1.030 are as (2) Health Care Access Criteria. (a) The need that the population served or to be served has for the health or hospice services proposed to be offered or changed, and the extent to which all residents of the district, and in particular low income persons, racial and ethnic minorities, women, handicapped persons, other underserved groups and the elderly, are likely to have access to those services. (b) The extent to which that need will be met adequately under a proposed reduction, elimination or relocation of a service, under a proposed substantial change in admissions policies or practices, or by alternative arrangements, and the effect of the proposed change on the ability of members of medically underserved groups which have traditionally experienced difficulties in obtaining equal access to health services to obtain needed health care. (c) The contribution of the proposed service in meeting the health needs of members of such medically underserved groups, particularly those needs identified in the applicable local health plan and State health plan as deserving of priority. (d) In determining the extent to which a proposed service will be accessible, the following will be considered: 30 1. The extent to which medically underserved individuals currently use the applicant's services, as a proportion of the medically underserved population in the applicant's proposed service area(s), and the extent to which medically underserved individuals are expected to use the proposed services, if approved; 65. In the absence of numeric need, the special circumstances subsection in Rule 59C-1.0355(4) (d)1., Florida Administrative Code, on which Catholic Hospice relied is as follows: Evidence submitted by the applicant must document one of the following: 1. That a specific terminally ill population is not being served. 66. One expert testified that the provision should be narrowly construed to require a proposal to care for a specific terminal diagnosis, such as AIDS, but AHCA reasonably rejected that interpretation as applied to this case. Care fora particular ethnic group is specifically recognized as a valid consideration in Rule 59C-1.030. 67. AHCA's expert also noted, that under its rules, there is no reason to approve the application of Catholic Hospice if it fails to show that there is an underserved population, in this case, Hispanics in Broward County. The CON was prepared based on a belief that Hispanics are underserved, but without any data on Hispanic utilization. That data is not routinely 31 collected by AHCA and only became available in this case as a result of discovery. AHCA also determined that Catholic Hospice needed to show evidence that the existing providers are not meeting the area's needs. Catholic Hospice failed to show any need for its services in Broward County. In fact, there is affirmative evidence that the Hispanic hospice penetration rate should be what it is, which is approximately the same as the Hispanic death rate, adjusted to exclude unexpected causes of death. Therefore, the application of Catholic Hospice should be denied.
Conclusions For Petitioner Hospice by the Sea, Inc.: Robert A. Weiss, Esquire Karen A. Putnal, Esquire Parker, Hudson, Rainer & Dobbs, LLP 118 North Gadsden Street The Perkins House, Suite 200 Tallahassee, Florida 32301 For Petitioner Vitas Healthcare Corporation: Geoffrey D. Smith, Esquire Steven E. Oole, Esquire Blank, Meenan & Smith, P.A. 204 South Monroe Street Post Office Box 11068 Tallahassee, Florida 32302-3068 For Petitioner Hospice Care of Broward County, Inc.: Stephen A. Ecenia, Esquire R. David Prescott, Esquire Thomas W. Konrad, Esquire Rutledge, Ecenia, Purnell and Hoffman, P.A. 215 South Monroe Street, Suite 420 Post Office Box 551 Tallahassee, Florida 32302-0551 For Respondent Catholic Hospice, Inc.: Theodore E. Mack, Esquire Powell & Mack 803 North Calhoun Street Tallahassee, Florida 32303 For Respondent Agency for Health Care Administration: Richard A. Patterson, Esquire Agency for Health Care Administration 2727 Mahan Drive Fort Knox Building Three, Suite 3431 Tallahassee, Florida 32308-5403
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 denying the application of Catholic Hospice for Certificate of Need Number 9333 to establish a hospice program in District lo. DONE AND ENTERED this [3% day of July, 2001, in Tallahassee, Leon County, Florida. Ahicamae rn Yt. ELEANOR M. HUNTER 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 /.3r* day of July, 2001. COPIES FURNISHED: Sam Power, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive Fort Knox Building Three, Suite 3431 Tallahassee, Florida 32308-5403 38 Julie Gallagher, General Counsel Agency for Health Care Administration 2727 Mahan Drive Fort Knox Building Three, Suite 3431 Tallahassee, Florida 32308-5403 Robert A. Weiss, Esquite Karen A. Putnal, Esquire Parker, Hudson, Rainer & Dobbs, LLP 118 North Gadsden Street The Perkins House, Suite 200 Tallahassee, Florida 32301 Geoffrey D. Smith, Esquire Steven E. Oole, Esquire Blank, Meenan & Smith, P.A. 204 South Monroe Street Post Office Box 11068 Tallahassee, Florida 32302-3068 Stephen A. Ecenia, Esquire R. David Prescott, Esquire Thomas W. Konrad, Esquire Rutledge, Ecenia, Purnell and Hoffman, P.A. 215 South Monroe Street, Suite 420 Post Office Box 551 Tallahassee, Florida 22302-0551 Theodore E. Mack, Esquire Powell & Mack 803 North Calhoun Street Tallahassee, Florida 32303 Richard A. Patterson, Esquire Agency for Health Care Administration 2727 Mahan Drive Fort Knox Building Three, Suite 3431 Tallahassee, Florida 32308-5403
