The Issue The issue in this proceeding is whether DHRS should approve the application for certificate of need of any one or more of the January, 1987, applicants for community nursing home beds in Hillsborough County. STIPULATIONS The parties stipulated to the following facts: All applicants timely filed their respective letters of intent, applications and omission responses with DHRS and the appropriate local health council for the January, 1987, batching cycle. The petitioners each timely filed a petition requesting a Section 120.57(1) hearing and have standing in this proceeding. The parties agree the Division of Administrative Hearings has jurisdiction over this matter and the parties. The CON application content requirements of Section 381.494, Florida Statutes (1985), apply as that was the statute in effect at the time the applications were filed. The review criteria in Section 381.705(1) and (2), Florida Statutes (1987), apply to this proceeding. The following statutory criteria have been met orare not applicable in this proceeding: Section 381.705(1)(d), (f), (g), (j) and (k) and all of Section 381.705(2), Florida Statutes (1987). Except for the effects the project will have on clinical needs of health professional training programs, the extent to which services will be accessible to schools for health professionals and the availability of alternative uses of such resources for the provision of other health services, Section 381.705(1)(h) is in dispute and remains to be litigated.
Findings Of Fact SUMMARY DESCRIPTION OF THE PARTIES. HCR's application (CON Action No. 5000) is to construct a 120-bed nursing home consisting of 40,000 square feet at a cost of $3,964,000.00, or $33,033 per bed (including adult day care; $32,1127 when the cost for day care is excluded.) The HCR application describes special programs and services for Alzheimer's Disease and related disorder patients in a distinct special care unit and an Alzheimer's day care center, both Identified in the plans submitted by HCR showing special design elements. HCR also proposes to offer sub-acute care and respite care. The HCR nursing home will have 2.08 (120/57.6) patients per staff, which includes the assistant director of nursing and occupational therapy and recreational therapy aides listed by HCR in its application. FCP submitted an application for 30 nursing home beds to be constructed as a part of a retirement facility (CON Action NO. 4993). The 30 beds will comprise approximately 17,558 square feet at a cost of $1,549,599.00, or $51,653 per bed. The Florida Country Place application proposes a patient staff ratio of approximately 2.3 (30/13). Palm Court submitted an application for a 60-bed addition to its existing 120-bed facility (CON Action No. 4987). The 60-bed addition would consist of 15,260 square feet at a cost of $1,472,435.00, or $24,571 per bed. The Palm Court facility is located in Plant City in the far eastern portion of Hillsborough County, near the Polk County line. Palm Court proposed a ratio of 2.31 (60/26) patients per nursing staff. Manor Care submitted an application (CON Action No. 5006) to add 60 beds to an approved certificate of need for 60-beds for which construction has not yet begun. The area to be added would consist of 19,000 square feet at a cost of $2,187,045.00, or $36,451 per bed. The Manor Care addition would include a distinct special care unit for Alzheimer's Disease and related disorder victims and the 60-bed addition would provide a patient staff ratio of 1.98 (60/30.3), which includes a half-time physical therapy aide, a half-time recreational therapy assistant and an assistant director of nursing. Forum submitted an application (CON Action No. 4999) to construct a 120-bed nursing home as a part of a retirement complex. The nursing home element will consist of 49,283 square feet at a cost of $5,053,301.00, or $42,111 per bed. Forum proposes a staffing ratio of 3.0 patients per staff FTE. Forum proposed to provide respite care and hospice care, and adult day care and meals on wheels during or after the second year of operation. HHL submitted an application (CON Action No. 4978) for 120-bed nursing home consisting of 37,700 square feet at a cost of $3,900,000.00, or $32,500 per bed. The HHL facility proposes 2.27 (120/52.8) patients per staff, which includes the rehabilitation assistants and the assistant director of nursing listed by HHL. HHL proposes sub-acute care, respite care, programs for Alzheimer's Disease victims (but not a distinct special care unit) and an Alzheimer's adult day care program of from four to six patients. Cypress submitted an application (CON Action No. 5004) to construct a 60-bed nursing home in Sun City Center in southeastern Hillsborough County. The nursing home described in the application would contain 24,069 square feet at a cost of $2,125,000.00, or $35,419 per bed. But Cypress' estimated construction cost per square foot of $49.81 does not account for inflation and is unreasonably low. Median cost of nursing home construction in Florida is $55 per square foot. It is estimated that Cypress' construction cost estimate is 10-15 percent too low. Assuming that the cost estimate is 12.5 percent too low, the cost of construction would increase to approximately $2,274.485 or $37,914 per bed. Cypress did not detail any special programs in its application and proposed 2.45 (60/24.5) patients per staff. However, this ratio is questionable in view of the confusion surrounding Cypress' evidence regarding staffing and the apparent inaccuracy of the staffing presented by the application. DHRS is the state agency that preliminarily reviewed and passed on the applications and is responsible for final agency action on them. DHRS PRELIMINARY REVIEW AND ACTION. HCR, FCP, Palm Court, Manor Care, Forum, HHL, Cypress, and others filed their applications for community nursing home bed certificates of need for Hillsborough County in the January, 1987, batching cycle. On June 18, 1987, DHRS issued its State Agency Action Report (SAAR), in which it denied all of the applications except HCR's, FCP's and VHA/Oxford's (for 120 beds). Review of the SAAR in light of the evidence introduced at the final hearing indicates that DHRS erred in reviewing the applications in at least the following respects: Manor Care. -- The SAAR indicates that DHRS was not cognizant that Manor Care had a final approval for a 60-bed nursing home CON (No. 4155) to which to add the 60 beds applied for in this case, CON Action No. 5006. The SAAR was somewhat critical of the Manor Care proposal for being a two-story structure. It appears that DHRS confused the proposal to add 60-beds (CON Action No. 5006) with a parallel contingent proposal to build a new 120-bed facility (CON Action No. 5005), which Manor Care eventually withdrew during the final hearing. Actually, CON Action No. 5006, added to the approved CON No. 4155 for a new 60-bed nursing home, would result in a one-story 120-bed nursing home. On page 7 of the SAAR, DHRS indicated its understanding that Manor Care had not specified a location for its proposal. Later, on page 11, the SAAR acknowledges the true fact that Manor Care's proposed nursIng home would be located in the Northwest Hillsborough County subdistrict, which is the Local Health Plan's first priority for location of additional nursing home beds in DHRS District 6. HHL. The SAAR (p. 13) states that Convalescent Services, Inc. (CSI), the management corporation HHL and other limited partnerships for which the Kellett Brothers are the general partners, has no other nursing homes in Florida. While technically correct, Kellett limited partnerships do have other nursing homes in Florida. Staffing tables on page 17 of the SAAR are incorrect, attributing no LPNs to the HHL proposal instead of 6 and only 36 aides instead of 38. On page 18 of the SAAR, the table of patient privileges incorrectly states that the HHL applications had no patients' bill of rights. Also on page 18 of the SAAR, DHRS incorrectly omitted adult day care and community outreach from the table of programs provided by HHL. On page 26 of the SAkR, it gives HHL's private pay private room rate ($101) as its semi-private room rate (actually $69.92) The SAAR Review Matrix incorrectly omits adult day care, community outreach and sub-acute care from HHL's proposed programs and omits HHL's patients' bill of rights. Forum. -- The SAAR starts out on page 3 by misidentifying Forum as being affiliated with Hospital Corporation of America. On pages 4, 6 and 15, the SAAR incorrectly fails to recognize that a retirement living center (apartments) is part of the overall development Forum proposes. The semi-private room rate of $110 attributed to Forum's application on page 26 of the SAAR is wrong; it should have been $85. Cypress. -- The Review Matrix in the SAAR failed to identify several services and programs Cypress stated in its application that it would offer. The matrix did not recognize that Cypress would offer social activity functions within the community, would offer rehabilitation, would provide some Alzheimer's type services, (which Cypress called supportive care and mentally frail services) and physically frail services. Cypress also spoke of hospice care and respite care in its application, as well as specialized rehabilitation, physical therapy, and speech therapy. Cypress also spoke of community outreach programs, psychiatric services, home health agencies, and numerous other areas that were not recognized by DHRS in its matrix. However, there are valid reasons for some of these omissions. On May 9, 1988, the first day of the final hearing, VHA/Oxford withdrew its application. On the afternoon of May 17, 1988, DHRS announced it was supporting the grant of Palm Court's application since VHA/Oxford had withdrawn. But the only evidence to support the new DHRS position was through the testimony of Reid Jaffe, DHRS Health Services and Facilities Consultants Supervisor, who did not express a personal opinion but acted as a messsenger to relay the positions taken by others at DHRS who did not testify. NUMERIC NEED. Rule 10.5.011(1)(k), Florida Administrative Code, is a methodology for calculating net numeric need for nursing home beds. Under the methodology, gross numeric need is calculated essentially by multiplying the population of two age cohorts projected on the planning horizon by a use rate. The use rate is calculated by divIding current population by the current number of licensed beds. To obtain net need in a health planning sub-district, the methodology first prorates the gross need in the entire district, using the proportion of current licensed beds in the subdistrict to the current licensed beds in the district, and adjusts the resultant by a current occupancy rate factor (occupancy rate /0.90); then, the number of licensed beds, plus 90 percent of the number of approved beds in the subdistrict, are subtracted from the adjusted gross need in the subdistrict. With three exceptions, the parties agree on how net numeric need is calculated under the rule methodology. The parties disagree only on the current licensed bed count, the current approved bed count, and the occupancy rate at one facility that has both community nursing home beds and sheltered nursing home beds. (Sheltered nursing home beds generally are not factored into the formula.) As for the licensed bed count, the issue is whether The Home Association, a 96-bed facility in Hillsborough County, should be included as a licensed community nursing home facility or excluded as a sheltered facility. At hearing, all of the parties presenting evidence on the issue except Forum counted The Home Association's 96 beds as licensed community beds. Forum excluded The Home Association from the licensed bed count because it was not listed on the Department's Community Nursing Home Report for January 1, 1988. This same report reflects three other facilities in Hillsborough County in which the beds were formerly sheltered but as of August 1, 1987, began to be counted by the Department as community beds. Forum conceded, however, that if the Department recognizes The Home Association as a community facility, then it would be appropriate to include those beds in the licensed bed count under the rule formula. In its proposed recommended order, even Forum agrees that The Home Association beds are included in the licensed bed count. Two issues are presented relating to the inventory of approved beds under the rule formula: the date at which approved beds are to be counted; and whether the 120 beds under Careage CON #4714 and Manor Care's 60 beds under CON #4155 were approved at the pertinent time. On the first question, Forum again stands alone. In the face of a rule which is silent as to the date on which approved beds are to be counted, Forum suggests that they be counted cn the same day licensed beds are counted, December 1, 1986, for this batch. All other interested parties follow the Department's general practice of counting approved beds as of the date the State Agency Action Report for this batch was executed, June 18, 1987. Forum supports its position on the ground that use of the same date for both licensed and approved beds avoids the prospect that beds may be "lost" from the calculation if they are not licensed as of December 1, 1986, but become licensed before June 18, 1987, and therefore are no longer approved beds on that latter date. The argument is meritless. There is no evidence of any "lost" beds under this policy for this batch. Indeed, the evidence is that such beds are not lost: 120 beds at Carrollwood were licensed on December 15, 1986, after the December 1 licensed bed cut-off and before the June 18, 1987, SAAR date. These beds were included in the approved bed inventory on June 18, 1987. The Department's policy under its numeric need rule is to count approved beds as of the execution date of the SAAR. Under this policy, the need for beds in the future is predicated on the number of beds currently or soon to be available to meet the need. When more than seven months can elapse after licensed beds are counted but before the agency decision is formulated, it makes sense to count beds approved during this intervening period. A 120-bed award to Careage in the prior batch was published by DHRS in the Florida Administrative Weekly of January 23, 1987, reflecting approval on January 7, 1987. However, DHRS then received criticism.of the approval, and a new supervisor in charge initiated a second review of the circumstances and of the Careage approval. The second review did not conclude until after June 18, 1987. When it did, DHRS re- affirmed its decision to approve Careage and issued a CON for 120 beds on August 18, 1987. Although the Careage CON was issued after June 18, 1987, DHRS proved that there is a rational basis for including it in the approved bed count under these unusual circumstances. The Careage CON represents 120 beds approved in the batching cycle preceding the one at issue in this case. Counting the 120 beds as approved promotes sound health planning. The projection of net need on the planning horizon is predicated on the most accurate count of approved beds from prior batching cycles that can be anticipated to come on line in the near future. As of June 18, 1987, there were 308 other beds approved but not yet licensed in Hillsborough County. Included among these 308 approved beds are 60 beds awarded to Manor Care under CON 4155 by Stipulation dated March 30, 1987. By mistake, DHRS did not count Manor Care's 60-bed CON in the SAAR. This mistake was not discovered, and DHRS served discovery responses and took a final position on need, as required by prehearing orders, that did not count the Manor Care CON. But this mistake f fact should now be corrected, even if it could have been discovered earlier through the use of due diligence, so that the health planning decision resulting from these de novo proceedings will be predicated on the correct facts. See Gulf Court Nursing Center v. HRS, 483 So.2d 700, 712 (Fla. 1st DCA 1986). It is appropriate to include Manor Care's finally approved 60 beds in the rule formula. Adding Careage's 120 beds, the total approved bed count is 428. The final variation accounting for the differences in the parties' calculations under the formula is the manner in which the occupancy rate should be computed at John Knox Village, a facility containing both community and sheltered beds. The issue is whether the patient days in this mixed facility should be prorated between the two types of beds or whether the full patient days for both types of beds should be used in calculating the occupancy rate in the facility. There is no separate report of occupancy by bed type for this mixed facility. The number of patient days delivered in the community beds at John Knox is not known. If the patient days for the entire facility are prorated according to the percentage the community beds bear to the total number of beds, there is a necessary but wholly unsupported and speculative assumption that the proportion of patient days delivered in community beds is identical to the proportion of community beds. DHRS historically has been unwilling to make this assumption and has always included the total number of beds and patient days in mixed facilities to determine the occupancy rate under the community bed rule. The rationale supporting this policy has been appropriately explicated on the record. The use of prorated patient days to determine occupancy in mixed facilities, as suggested by DHRS for the first time at final hearing, also is a change from the position the Department took when exhibits were exchanged and the prehearing stipulation was executed and then relied on by the parties. Because the Department, as a party litigant, did not prorate in its prehearing submissions, it cannot do so at hearing in the absence of fraud, mistake of fact, or newly discovered evidence. No evidence of any such extenuating circumstances was presented. The only explanation DHRS gave for changing its treatment of the John Knox occupancy data was that more accurate recent data (using daily census data instead of first day of the month census data) furnished by the Local Health Council was prorated. But DHRS just as easily could have prorated the older, less accurate data if it had chosen to take that position at the time the parties were required to take final positions in prehearing procedures. The Department, therefore, is precluded from adopting a posture at hearing relating to the treatment of patient days in mixed facilities which is different from that reflected in the Department's prehearing stipulation and exchanged exhibits. In summary, the appropriate numeric need calculation must include The Home Association in licensed beds, count both Careage's 120-bed CON and Manor Care's 60-bed CON in the approved bed count, and use the full John Knox bed complement and patient days in determining the Hillsborough County occupancy rate. Using these factors in the rule methodology, the net need for community nursing home beds in Hillsborough County for the January, 1990, planning horizon is 231, as reflected in the calculation included in the attached Appendix To Recommended Order, Case Nos. 87-3409, etc. Rule 10-5.011(1)(k), Florida Administrative Code, provides that DHRS normally may not approve more beds than the numeric net need calculated under rule methodology. In this case, none of the circumstances specified in the rule that would justify exceeding the numeric net need were proven by the evidence. At the same time, the rule does not require DHRS to fill all, or as much as possible, of the numeric net need by attempting to "mix and match" applications to come as close as possible to the calculated number. LOCAL GEOGRAPHIC NEED PRIORITIES. The current, 1985 District VI Local Health Plan provides that, after consideration of numeric bed need under the rule need methodology, its "priority need rankings" should be considered in the competitive review for new nursing homes. Hil1sborough County, Northwest, is priority rank number one. HCR, FCP, Manor Care, Forum and HHL all propose to locate their nursing homes there. Cypress proposes to locate in Sun City Center and Palm Court is in Plant City, both in Hillsborough County, Southeast, an area ranked fifth in priority in District VI. Plant City is close to Polk County, which the Local Health Plan designates as the fourth ranked area in priority. Cypress proposes its 60-bed nursing home approximately 1/4 mile down the road from an existing nursing home called Sun Terrace, operated by CSI. Quality of care concerns have arisen due to rapid fill-up of 60 additional beds recently licensed at Sun Terrace and opened in September, 1987. See Findings of Fact 83-87, below. As a result, Sun Terrace has imposed on itself a moratorium on new admissions until quality of care concerns can be addressed. In part as a result of the moratorium, Sun Terrace's occupancy rate at the time of the final hearing was only approximately 65 percent, leaving 42 empty beds. MEDICAID NEED. One of the three major considerations for competitive review of nursing home CON applications in the Longterm Care section of the 1985-1987 State Health Plan is "resource access." Except as reflected in the priority rankings, geographic access is not an issue in this proceeding. (Priority/Policy 7 of the Local Health Plan, setting a goal of providing for nursing home services within 30 minutes travel time of 90 percent of urban residents and within 45 minutes travel time of 90 percent of rural residents, already has been achieved in District VI.) But, to address concern for financial access, Priority/Policy 2 of the Local Health Plan provides that applicants "should commit, at a minimum, to serve Medicaid eligible patients in proportion to the representation of elderly poor in the subdistrict." In Hillsborough County, Northwest, where all but two of the applicants propose to locate, the elderly poverty rate is 18.6; in Hillsborough County, Southeast, where Cypress and Pal:n Court would be located, the elderly poverty rate is 15.6 percent. The applicants propose to commit the following percentages of their nursing home beds to the care of Medicaid- 4 eligible patients: HCR, 70 percent; FCP, 70 percent; Manor Care, 30 percent; HHL, 45 percent; Palm Court, 70 percent; and Cypress, approximately 10 percent. Cypress proposed in its application to commit 10 percent of its beds for Medicaid use. It attempted to update its application to provide for a 15 percent Medicaid commitment. The update was said to have been the result of a decrease in the average age of the residents of Sun City Center, Cypress' proposed primary service area, from 73 to 70. But the percentage was calculated by first estimating 60 percent private pay and "backing down" to a Medicare percentage of 25 percent, leaving 15 percent Medicaid. The evidence was persuasive that this attempted update was not due to extrinsic factors. See Conclusions of Law 20 to 25, below. Forum has committed only to have 50 percent of its beds Medicaid- certified and to meet the requirements of Priority/Policy 2. Although Priority/Policy 2 is written as a minimum Medicaid percentage, no evidence was presented from which to determine how high a percentage of Medicaid commitment is desirable. There was, e.g., no evidence on which to find that a Medicaid percentage as high as four times the elderly poverty rate is more desirable than a percentage approximately equal to or perhaps just a bit higher than the elderly poverty rate. To the contrary, the only evidence on the subject was that DHRS does not now consider the Medicaid percentage to be as important as it was considered to be in the past and that DHRS now just checks to see that the percentage approximates the elderly poor rate in the County. NEED FOR ALZHEIMER'S DISEASE PROGRAMS. Description Of The Disease And The Need. There is a need in Hillsborough County for additional nursing home beds and services for Alzheimer's Disease and related disorder victims. There is no known nursing home in Hillsborough County which provides a distinct care unit for Alzheimer's Disease and related disorder victims. There is an estimated unmet need by Alzheimer's patients for nursing home care in Hillsborough County of approximately 1,271 by July, 1989. DHRS has recommended that "preference should be given to applicants for new nursing home beds which propose the development of special Alzheimer's units" and "greater preference should be given to units that will also provide adult day care and/or respite care." Alzheimer's Disease is a brain disorder that was discovered at the turn of the century. It primarily affects persons over the age of 60. The term "related disorders" is used because some non-Alzheimer's disorders mimic Alzheimer's Disease symptoms and create many of the same needs for specialized care. Typically, Alzheimer's Disease results in gradual memory loss and, as memory loss progresses, results in the need for ever- increasing personal care. In the earlier stages, the victim is often in reasonably good physical condition and simply exhibits signs of recent memory loss. However, as memory loss increases, various activities of daily living are disrupted. Victims encounter more serious physical problems and exhibit symptoms such as wandering, significant weight loss, clumsiness, incontinence and antisocial behavior. In the last stages of the disease, the victim requires increasingly intense medical attention, becomes totally dependent on others, and may eventually require total skilled nursing care. The intensity of care required for the Alzheimer's Disease and related disorder victim increases as the disease progresses. In early stages, the victims are typically cared for at home by a family member. The nature of care required for an Alzheimer's Disease or related disorders victim is very exhausting for the care giver. Toward the end of the first stage of the disease when the victim requires increasing supervision, the victim can be maintained longer in the home if there is available to the care giver some form of occasional rest, such as adult day care or respite care. Adult day care and respite care provide opportunities for the primary care giver to "take a break". See Findings of Fact 133 to 135, below. An Alzheimer's Disease patient usually requires inpatient nursing home care late in the second stage of the disease. If the patient is ambulatory, he often exhibits a wandering behavior. Approximately 50 percent of the Alzheimer's victims admitted to a nursing home have the potential to wander. Ultimately, Alzheimer's victims become bed-ridden and require skilled or sub- acute nursing home care, including tube feedings, cathethers, and artificial life support. Historically, ambulatory Alzheimer's patients in nursing homes have been mixed with other patients. The Alzheimer's victim has often disrupted life in the nursing home because of the victim's wandering, incontinence, confusion, and socially unacceptable behavior. Because of these characteristics, some nursing homes avoid admitting Alzheimer's patients and others control problem behavior with sedation and physical restraint. A separate Alzheimer's care unit enables the nursing home to utilize special techniques to manage the Alzheimer's disease victim and allows the victim to maintain his cognitive capabilities for as long as possible, without restraint and sedation. Nursing home patients who do not suffer from Alzheimer's and related diseases are often agitated and disrupted by the Alzheimer's patients' unacceptable social behavior. A separate unit for Alzheimer's Disease victims accommodates the needs of the non-Alzheimer's patient by eliminating unpleasant, often violent encounters between dementia victims and other patients. Distinct Alzheimer's special care units provide better care for Alzheimer's disease and related disorder victims for several reasons. A separate unit eliminates the tendency of the Alzheimer's disease patient to disrupt the remainder of the nursing home. A separate unit provides a smaller, safer, specially designed area with specially trained staff to address the unique needs of the Alzheimer's disease victim. A separate unit is preferable to mixing Alzheimer's patients with non- Alzheimer's patients. Traditional nursing home programs and activities are often inappropriate and counterproductive for the Alzheimer's patient. HCR's Proposal. The 120-bed nursing home proposed by HCR will help meet the needs in Hillsborough County for adult day care, respite care, sub-acute care and a special care unit for Alzheimer's Disease and related disorder victims. The programs and services will enable the HCR nursing home to provide at one location a complete continuum of care from the least intense level of care in adult day care to total (sub-acute) care. HCR's Alzheimer's special care unit will incorporate special design features, special patient activities and programs and higher staffing levels to meet the unique needs cf Alzheimer's disease victims. These features are intended to compensate for memory loss and provide a safe environment where cognitive capabilities can be maintained for as long as possible while patients enjoy personal freedom without the use of restraints and sedation which have typified the treatment of unmanageable Alzheimer's and dementia patients. The architectural design of the HCR nursing home will accommodate the tendency of Alzheimer's victims to wander by allowing the victims to ambulate in circular patterns through the facility and the adjacent court yard and by providing an electronic warning system to prevent inadvertent exit from the nursing home. Patient bathrooms are specially designed to avoid fright and confusion through the use of automatic lighting fixtures, appropriate coloring and distinctly shaped fixtures and waste baskets. Calming colors, color coding, carefully selected art work, special floor coverings and labeling are provided. Separate dining and activities areas enable the nursing home to provide programs and activities for Alzheimer's disease victims in a more effective and efficient manner than would be possible if the same areas also had to be used for non- Alzheimer's Disease victims. The proposed HCR nursing home includes a discreet area designed for an adult day care center, which will share some resources with the nursing home. The program will accommodate 12 persons and be operated in accordance with adult day care regulations. The physical spaces include an entry separate from the main nursing home entry, a lobby, an office, a therapeutic kitchen for use by the patients, toilet facilities, an activities center, and a lounge with an adjacent covered porch. The adult day care program will be staffed by a nurse director, an assistant and volunteers. The participants in this program will be provided with various activities of daily living in an environment developed for Alzheimer's Disease victiMs. This program is intended to provide placement for persons not yet in need of in-patient care and will provide an alternative to premature nursing home admission. Manor Care's Proposal. Manor Care proposes a dedicated 30-bed specialized unit for persons suffering from Alzheimer's disease and related disorders. In 1985, Manor Care perceived the need to treat Alzheimer's patients in a manner different than patients in the general nursing home population. Manor Care's task force of nurses, administrators, architects, and designers developed an Alzheimer's program which recognizes the special needs of the patient. Manor Care now operates 21 special dedicated Alzheimer's units throughout the country and is planning 16 additional Alzheimer's units. Manor Care's comprehensive Alzheimer's program encompasses five components: (1) environment, (2) staffing and training, (3) programming, (4) specialized medical services, and (5) family support. Environment. The proposed 30-bed Alzheimer's unit will be separate from the rest of the facility and self-contained, with its own dining room, activities room, lounge, quiet/privacy room, nurses sub-station, director's office, and outdoor courtyard. A separate dining room for Alzheimer's residents enables staff to provide individualized attention and special assistance. By providing a simple and separate dining environment, residents are no longer embarrassed by confusion and agitation displayed in the presence of non-Alzheimer's residents during mealtime. A separate lounge area is provided for families to visit with residents. In a typical nursing center, the family must visit a confused resident in the presence of other families; families of Alzheimer's residents can find this embarrassing. A separate lounge makes visitation more desirable for Alzheimer's residents and families. The quiet/privacy room can be used by families as a quiet area to visit with a family member, by residents who want to spend time alone, or by staff persons and residents for individualized programming away from the activity on the unit. The outdoor courtyard, which is enclosed and accessible to the unit through the activities room and hallway door, allows Alzheimer's residents to walk outside freely without wandering off. The Manor Care Alzheimer's unit is specially designed with features which reduce environmental stress by minimizing glare (using parabolic lenses), noise and bold patterns which increase agitation in Alzheimer's residents. Throughout the unit, a residential, uncluttered atmosphere is emphasized, using soft, contrasting colors and textures. The unit also contains visual cues to increase orientation. Furnishings are functional, durable and easy to maintain. Staffing and Training. The Alzheimer's unit has its own specialized staff including a Unit Director, Activities Director, and nursing staff. The unit is staffed at a higher "nurse to resident" ratio than the rest of the facility. Staffing patterns emphasizu continuity to ensure that residents receive individualized care. The nurses become f;i1iar with the behavior and abilities of each resident and are able to render care appropriately. Programming. The goal of programming and activities in the Alzheimer's unit is to improve the quality of life of the Alzheimer's resident. This specialized programming results in reducing the use of medications and restraints necessary to manage the Alzheimer's resident. The Manor Care Alzheimer's activity program is success-oriented; staff provide activities designed to allow Alzheimer's residents to succeed more frequently. (They usually fail when mixed in with the general nursing home population.) specialized Medical Services. The use of consultant medical specialists is an integral part of Manor Care's Alzheimer's Program. Specialists provide diagnostic and treatment services for Alzheimer's residents upon admission to the unit, and thereafter when deemed medically appropriate. Family support. Family support is another important aspect of the Manor Care Alzheimer's program. Families are very supportive of the unit's programming and have benef itted from the understanding and support available to them. The Others' Proposals. None of the other applicants propose specialized units for the care of patients with Alzheimer's disease and related disorders. Alzheimer's sufferers will be treated in an "open unit" at the HHL facility and will be placed as compatibly as possible with other residents. Although these residents will be able to intermingle with other residents, their movements will be monitored by the "wander guard" system and all doors will be equipped with buzzers connected to the nurse's stations. The HHL facility will be designed to incorporate secure courtyards and other areas where residents will be free to wander safely throughout the living areas. The facility's nursing personnel will be specially trained to provide services to Alzheimer's sufferers. The proposed HHL facility will also offer an adult Alzheimer's day care program. Although the program will be small (accommodating between four to six individuals) it will interface with the Alzheimer's program offered to the in-house residents. As with the respite program, the Alzheimer's adult day care program will give the families of Alzheimer's disease sufferers an opportunity to take a breather during the day, and the participants will benefit from the special Alzheimer's programs and activities offered. With its proposed 60-bed addition, Palm Court plans to add a program directed specifically at persons suffering from Alzheimers and related brain disorders. Currently, it does not have one. Neither FCP nor Forum make any particular provision for the care of Alzheimer's patients. FCP points out that its facilities in other states historically have cared for this special category of patient, primarily through use of high quality, thereapy-oriented programs, especially at the earlier stages of the disease. Cypress proposes to locate off of a central core: a 60-bed nursing home, offering both intermediate and skilled care, with its own recreation area and dining, serviced from the central kitchen; (2) a 20-bed assisted living unit (which Cypress also calls "supportive care") for mentally frail and physically strong individuals which has its own outdoor recreation area and dining area; and (3) another 40 assisted living beds broken into two 20-unit wings for mentally strong and physically frail individuals, with their own dining and recreation area, including outdoor recreation. The various levels of care are separate since each of the levels have different needs and methods of treatment. However, Cypress will only accept in the mentally frail, physically strong wing, Alzheimer's-type patients who are in the earlier stages of the disease. QUALITY OF CARE. Priority/Policy 9 of the 1985 Local Health Plan states: "Applicants should be evaluated as to their achievement of superior quality ratings by DHRS and other indications of quality as available." Track Record. At the time of application, three of the nursing homes operated by HCR in Florida had superior licenses and the remaining homes had standard licenses. FCP has one nursing home in Florida. It is rated standard by DHRS. None of the facilities operated by FCP's principals, the Phillipses, has ever been in receivership or had a Medicaid or Medicare certification revoked. The Phillipses have an excellent reputation in Ohio for their operation and management of nursing homes and have remained in positive standing with federal and state certification agencies. Manor Care's proposed 60-bed addition will be owned by Manor Care of Florida, Inc., a wholly-owned subsidiary of Manor HealthCare Corporation. Manor HealthCare Corporation is a publicly-held corporation which owns and operates about 130 nursing homes in various states. Manor Care owns and operates nine nursing homes and three adult congregate living facilities (ACLFs) in Florida. All nine Florida nursing homes exceed DHRS licensure standards; the majority of Manor Care's Florida facilities hold a superior license rating. Manor Care has never had a license denied, revoked, or suspended in Florida. Manor Care has opened three nursing homes in Florida in recent years. All three are superior rated. Palm Court Nursing Home has a superior license, with zero deficiencies, from DHRS' Office of Licensure and Certification with the most recent inspection having occurred between May 2 and May 4 immediately preceding the beginning of the final hearing. It is managed by National Health Corp., Murpheesboro, Tennessee. National Health Corp is an owner-operator of other facilities and either owns or operates some 19 facilities in Florida. It has managed Palm Court Nursing Home since its inception and, if the 60 bed addition is approved, will manage the addition. Forum has never had a license denied, revoked or suspended, nor had a facility placed in receivership. Forum has never had any nursing home placed in receivership at any time during its ownership, management or leasing. Forum has a history of providing quality of care and owns and operates facilities in other states which hold superior ratings. Forum has a corporate policy of seeking to attain a superior rating in those states which have such a system. Forum presently owns and operates one facility in Florida. That facility is rated standard and was acquired by Forum within the past two years. That facility, which only has 35 nursing beds, is not a prototype of what Forum proposes in this case. Seventeen (17) of the twenty-one (21) nursing homes currently managed by CSI are located in states which utilize a superior rating system. Of the facilities that are eligible to receive superior licenses, CSI maintains superior ratings in over 80 percent of its beds. CSI's Sun Terrace in Sun City Center was the subject of an extensive survey issued by the Office of Licensure and Certification, an arm of DHRS, in April, 1988, that cited numerous deficiencies in the areas of quality of care, staffing, and programs at the Sun Terrace facility. The licensure survey also cited violations of state and federal laws in the handling of controlled substances and problems with resident care plans at the facility. The findings of DHRS in its licensure survey of Sun Terrace appear to be serious matters, the resolution of which is clearly within the control of CSI. Following the opening of the second 60 beds at Sun Terrace in September, 1987, the facility experienced a shortage of nursing personnel which necessitated a greater use of agency personnel to staff the facility. The problems cited by DHRS at Sun Terrace were largely the result of the increased use of agency personnel, lack of documentation, a newly licensed administrator, and the unexpected resignation of the director of nursing. Even before the DHRS licensure survey, CSI had taken affirmative action to address the problems at Sun Terrace, including a voluntary moratorium on new admissions. In response to the recent problems at Sun Terrac, CSI has moved toward more centralized management of its facilities. CSI now requires administrators to adhere very closely to the corporate policies and procedures. Further, the addition of a second full-time nurse/consultant will double the frequency of quality of care monitoring visits at CSI facilities. The problems experienced at Sun Terrace are atypical of CSI-managed facilities. When CSI's policies and procedures are properly followed, the result is excellent nursing care and services. But the problems at Sun Terrace are examples of what can happen when an organization attempts to expand operations more rapidly than it should. In this connection, CSI has received seven CONs since July 1984. Two of the seven are preliminary approvals that have been challenged and have not yet gone to hearing. One was the 60-bed addition to Sun Terrace which is now licensed. Another is a 73-bed nursing home in Brevard County which is expected to open within the next several months, and another is a 21-bed addition project in Collier County. Cypress has never operated a nursing home and has no track record. Staffing. Staffing arrangments are important considerations in assessing the quality of care to be expected from a proposal, but there is not necessarily a proportional correlation between staffing and quality. How staffing affects quality also depends on the breadth and types of programs to be offered. For example, Alzheimer's programs and sub-acute care will require higher staffing ratios. HCR, FCP, Manor Care, Palm Court and Forum all propose staffing arrangments that meet or exceed state requirements. See Findings Of Fact 1-5, above. Cypress' application, on the other hand, leaves much to be desired in its proposed staffing. The staffing plan presented by Cypress on its Updated Table 11 fails to meet the requirements of Rule 10D-29, F.A.C. Specifically, no provision has been made for an activity director (10D-29.116), a medical director (10D-29.107), a pharmacy consultant (10D-29.112), or a medical records consultant (10D-29.118), all of which are required by rule. (Cypress attempted to explain that it would have a pharmacy consultant on contract who would bill patients separately.) Further, no provision has been made for utilization review to monitor the appropriateness of the placement of residents, as required by Rule 10D-29. Cypress' Updated Table 11 provides for LPNs of 1.5 FTEs on the first shift and night shift and 6.0 FTEs on the second shift. The second shift LPN coverage is over-staffed by 4 1/2 FTEs which will result in inefficiency. Rule 10D-29.108, F.A.C., requires staffing of nursing assistants on all shifts. The Cypress staffing plan makes no provision for nursing assistants on the second shift. In testimony, Cypress attempted to explain that Table 11 was wrong and that the second shift LPNs should have been aides. The proposes Cypress nursing home will not offer 24-hour RN coverage. The third shift has no RN coverage. Based upon the proposed staffing pattern appearing in Cypress' Updated Table 11, its proposed facililty would not qualify for licensure under Florida regulations, much less qualify for a superior rating. Cypress has not secured or identified the day-to-day management of the proposed nursing home. No medical director has been secured or identified. Quality Assurance programs. All of the applicants except Cypress have existing quality assurance (QA) programs that are adequate to assL're quality of care. From the evidence HCR's, Manor Care's, HHL's and Forum's QA programs are comparable and are the best among the applicants. Palm Court has had results comparable to or better than the others , which is itself evidence of an adequate QA program. Meanwhile, CSI, despite an evidently superior QA program, has experienced quality programs due to rapid fill-up of its 60 additiional beds at Sun Terrace. Cypress has no experience operating a nursing home. Not surprisingly, it professes to desire quality and to plan to implement stringent QA programs. But its plans at this stage are not as developed and detailed as the existing QA programs being used by the other applicants at other facilities. Other Factors. Whether Therapies Are In-House or Contracted. Assuming a need for it, and reasonable cost of providing it, provision of therapies--e.g., physical therapy, occupational therapy and speech therapy-- in-house generally is preferable to providing them by contracts with third parties. From an operational and administrative perspective, there are advantages to providing physical therapy services (PT) on an in- house basis. Contracted physical therapy staff tend to be available only for scheduled treatments; in-house staff are always available to assist staff and perform unscheduled maintenance therapy. In-house physical therapy staff work regularly with the nursing home staff. They are present within the facility anc learn the operation of the nursing home facility better than outside agencies. Manor Care proposes to provide in-house physical therapy staff, as opposed to employing outside physical therapy staff on a contract basis. The evidence was that the other applicants plan to provide all of these therapies through third- party contracts. Palm Court has one full-time PT assistant who works under the direction of a licensed physical therapist who now divides time among three 120- bed nursing homes managed by National Health Corp. The service of this licensed physical therapist is provided as part of National Health Corp's management services. Having to cover another 60 beds at Palm Court will spread the service even thinner. In addition, Palm Court's administrator conceded that the single PT assistant in Palm Court's application will not be enough once 60-beds are added to the facility; two will be required. Of course, the trade-off (implied in Finding of Fact 102, above) for providing in-house therapy is that it is less efficient if full use of the services is not required. De-institutionalization. FCP, Forum and Cypress have made special efforts to "de- institutionalize" nursing home care at their proposed facilities. All three proposals emphasize the provision of nursing care within aresidential development--a combination of retirement apartments, assisted living accommodations and nursing home. (See also this concept's impact on Continuum of Care concerns, Findings of Fact 114-127, below.) FCP's proposed facility is designed with a residential appearance to facilitate and implement the philosophy of de-institutionalization co:tained in its application. It reflects FCP's modular approach to care with residential units in wings tied to a common area of support services. The support services are extensive. There are activities areas, craft areas, exercise rooms, therapy areas, a beauty salon and barber shop, men's and women's recreational areas, private dining rooms, a community dining room, screened patios and porches, a newsstand, a bank, a post office, a library, a chapel, a screened-in gazebo, and a swimming pool. The exterior amenities of the design include a pond, an exercise course, a sitting deck, and a putting green. The center core and its recreation and therapy programs are designed to encourage interact ion among the residents in all the different levels of care. Although the third floor, where the nursing home is located, also has a secondary lounge and supplemental dining area, the primary dining area, as well as all of the other amenities, are on the first floor to enhance the interaction. The 30-bed size of FCP's proposed nursing home unit is a part of the original Phillips concept of a de- institutionalized setting, enabling the provision of more personalized care. Where there are fewer residents to care for, a better rapport between the residents and the care givers and a more family-type, personal atmosphere are achieved. This 30-bed concept previously has been approved by the Department in Lee and Polk Counties. Those projects are operationally, structurally, and physically identical to this proposed project. The symmetrical, 3-story design minimizes the amount of travel distance for the resident at the farthest unit to the amenities of the center core and its services. The nursing unit is on the third and smallest floor so that the distance by elevator to the central core for the nursing home iesidents is at a minimum'while still providing those residents with the greatest opportunity for quiet time. Privacy is an essential element in achieving high quality of care. The semi-private room plan utilized in this proposal is a unique approach to maximizing privacy for each resident. A permanent partial partition separating the two beds in each room effectively creates two private rooms. This provides a private space for each resident with his or her own thermostat, window, storage space, television, and telephone accommodation, and heightened auditory privacy. There will be equal access to and control of the vestibule and bathroom for each resident. The 585 gross square feet per bed in the FCP proposal is approximately one-third greater than standard nursing home room configuration. Forum's proposal's chief effort in furtherance of the goal of deinstitutiona1izationother than the continuum of care concept and overall residential appearance--is in the relatively large and "up-scale" living areas. The Cypress facility will include a central core dividing the two 60- bed portions of the project. The central core will include an administrative area, a chapel, a beauty and barber shop, enclosed courtyard, physical and occupational therapy, dining, a central kitchen, and a laundry area. One trade-off for de-institutionalization is cost. Both FCP and Forum generally cost more than the others. Cypress claims not to, but its projected construction cost of $49 per square foot is unrealistically low. See Findings of Fact 147 and 149, below. PROGRAMS (OTHER THAN ALZHEIMER'S). Continnum of Care. As just alluded to, several of the proposals emphasize the placement of their nursing home within a larger community of persons needing different levels of care. FCP. FCP proposes the construction of a 30-bed nursing unit as part of a family owned and operated, 120-unit, full continuum of care facility for the elderly. The facility also contains 60 independent living apartments and 30 adult congregate living units. The full continuum of care is proposed in a uniquely designed, de-institutionalized, home-like atmosphere. FCP offers a therapeutic community offering individualized, personalIzed care in small self- contained units, each specializing in various levels of care ranging from day care and respite care, through apartments for the elderly and assisted living, to skilled, post-hospital rehabilitation. The continuum of care will provide a homogeneous environment through which residents can move as their medical and personal needs change. Forum. Forum Group, Inc., is a national company which owns, develops and operates retirement living centers in a number of states. Forum's proposed nursing home will be part of a total retirement living center containing two other levels of care, assisted living (or ACLF units) and independent apartment units. Forum's proposal calls for provision of a continuum of care, from independent living to assisted living to nursing care, all on the same campus. Cypress. Cypress Total Care would be part of an overall medical project known as Cypress Park. The corporation was formed and a master plan was created, to be developed in two phases. Phase I is a 120-bed nursing facility consisting of 60 skilled and intermediate nursing beds, the subject of these proceedings, and 60 personal care units. Phase II would consist of a 290-unit adult congregate living facility (ACLF) and 143 units of independent villa housing on a golf course with nature trails and other amenities. Also proposed in Phase II would be units of medical offices and commercial health-related facilities to support the community. The area selected by Cypress is adjacent to the Sun Hill Medical Arts Building and the Community Arts Building, as well as a hospital owned by Hospital Corporation of America known as Sun City Hospital. These components would be worked into the overall master plan proposed by Cypress. Cypress proposes a multi-level assessment program. The 120-bed Cypress Park Community facility will have an independent level one facility in Sun City Center which will admit healthy elderly residents. These elderly may have canes, but no walkers or wheelchairs, and they will function normally in their activities of daily living. These individuals may prepare two meals a day in their apartments, or have them in the dining room. The main meal will be in the dining room. Social services and activities will be provided and recommended to the independent living residents to enhance their lifestyles. A home health agency is planned as a part of the center so that house calls can be made to insure that any necessary medications are taken and that residents receive the services they might need from time to time. (Cypress has not yet applied for a CON for its home health agency.) The next level of living is for patients who need more assistance. These are residents who require 24-hour companion service. These patients do not require skilled nursing care and do not require the institutional environment of a nursing home. Some of these paients may be in the first stage of Alzheimer's, or they may be physically frail, but not enough to require skilled nursing care. This level is primarily for those individuals who are physically frail and mentally strong or mentally frail and physically strong. The physically frail and mentally strong may have limited ambulatory capabilities, need assistance in activities of daily living, need medication, or need all their meals prepared. As noted above, this level of services also will be provided to individuals who are physically strong but mentally frail. The majority of these people will be Alzheimer's residents, they must be carefully monitored 24 hours a day and receive strong psychological support. The next level of care offered is for individuals who require some nursing care and no longer qualify for the level two care described above. This will be intermediate nursing care and will consist of care from certified nursing aides and licensed practical nurses. These individuals do not require skilled nursing care. Rehabilitation is the key to this portion of the plan, and the rehabilitative center will be involved to constantly push these individuals to the point of rehabilitation where they can reenter an independent lifestyle. If individuals progress further, they can move into the skilled nursing care center in which they will receive care not only from nursing aides and licensed practical nurses, but also from registered nurses. The final level would be acute hospital care which would be provided by the existing Sun City Hospital. The medical staff who are involved in the Cypress project also are on the medical staff of the Sun City Hospital and will be working and consulting with individuals both in the acute hospital care and the nursing home setting to provide appropriate levels of care to the individuals who need it. The nursing home will share IV teams, work with tracheotomy patients, A.D.A. dieticians, accounting services, and other services with the existing hospital in Sun City Center. Palm Court. Palm Court, while currently a free-standing 120- bed nursing home, is located on property where construction of a 360-bed adult congregate living facility (ACLF) is now starting. In addition, Palm Court has transfer agreements with area hospitals including Plant City Hospital, South Florida Baptist Hospital, Brandon Humana Hospital and Lakeland Regional Medical Center. It also has formal working relationships with home health agencies and with elderly programs in the area. The Others. The other applicants--HCR, Manor Care and HHL-- propose free-standing nursing homes. But all can be expected to make efforts to achieve transfer and other agreements with local hospitals, home health agencies and providers of care for the elderly where reasonable and appropriate. Sub-Acute Care. The HCR nursing home will be staffed and equipped to provide sub- acute care. The sub-acute care services provided by HCR will include high tech services such as ventilator care, IV therapy, pulmonary aids, tube feeding, hyperalimentation, and short and long term rehabilitation. HCR currently provides a wide variety of these sub-acute services in its existing nursing homes. CSI currently provides sub-acute nursing services at its existing Florida facilities. Those services include ventilators, hyperalimentation, intravenous therapy, Clinitron beds, heparin pumps, nosogastric and Jejunoscopy tube feedings, subclavian lines, and Hickman catheters. These service will be provided at HHL's proposed facility. Forum will provide skilled and intermediate care, and the following services will be offered at the proposed facility: Sterile dressing changes for decubitus care. Brittle diabetics on sliding scale insulin. Continuous administration of oxygen. Sterile case of tracheotomies. Ventilators. Continuous bladder irrigation. Hyper-alimentation or N-G feeding. IV treatment. Special medication monitoring (e.g. heparin, comadin). New post-operative cases facing hospital discharge as a result of D.R.G. reimbursement. The skilled nursing services to be provided by FCP include parenteral nutrition, internal nutrition, tracheostomy care, respirator care, skin wound decubitus care, ostomy care, and head trauma care. Palm Court also will provide sub-acute care. Adult Day Care Adult day care is a part of the specialized Azfleimer's program HCR proposes. In addition, HHL, FCP and Forum offer adult day care. Respite Care. HCR and Manor Care offer respite care as part of their Alzheimer's programs. Both will have no minimum length of stay and no extra charge over the regular daily rate for nursing home care. All the others except Palm Court also offer respite care, but Cypress' proposal for respite care is sketchy. HHL says it will offer respite care at no extra charge. D. Hospice. Only HCR, Forum and HHL offer hospice care as part of their nursing home programs. F. Rehabilitation and Community Outreach. All of the applicants propose rehabilitative (or restorative) care and some kind of community outreach programs. The distinctions among the ideas expressed by the applicants are not particularly competitively significant. However, the manner in which the therapies are delivered can be significant. See Finding of Facts 102 to 105, above. HOW SOON THE PROJECT BECOMES OPERATIONAL. Because there is a shortage of nursing home beds in Hillsborough County, there is a valid concern how long it would take for the holder of a CON to get its facility operational. Priority/Policy 3 of the 1985 Local Health Plan gives expression to this concern as follows: In competitive reviews, preference should be given to applicants with a documented history of implementing certificates of need within the statutory time frames. Of the applicants who have developed nursing homes in the past (i.e., excluding Cypress), all but Palm Court have a history of timely implementing their CONs. Palm Court had to request an extension of time in implementing its existing 120-bed facility. But Palm Court bought the CON for that project from the original owners in 1982 or 1983. Palm Court then had to secure another, more suitable location, re-design the facility, get construction financing and enter into a construction contract before construction could begin. This delayed the project and resulted in administrative litigation to decide whether Palm Court should lose the CON for failure to timely implement it or be given an extension of time. Palm Court prevailed, and the facility opened in September, 1985. HHL, through CSI, also has a history of timely implementing CONs but recent expansion in Florida raises some question whether it can continue to be as timely in implementing this CON, along with the others. See Findings of Fact 82-87,98, and 100, above. Generally, an addition of beds to an existing nursing home can be constructed more quickly than a new facility, giving Palm Court an advantage in potential speed of implementation. similarly, Manor Care, which is prepared to begin construction on its finally approved 60-bed CON, has an advantage over the others, as well as a potential construction cost savings over Palm Court. See Findings of Fact 146, below. COST OF CARE. Cost of Construction And Development. Advantage of Additions. Within limits placed on recovery of capital costs under the Medicaid and Medicare reimbursement programs now in place (which, to some extent, are emulated by private health care insurers and employers' health benefit plans), construction and development costs generally are reflected in the charges patients pay for nursing home care. Additions, such as Palm Court's and Manor Care's proposals, have a cost advantage over the other proposals. Construction sites already have been prepared, and it is not ncessary to duplicate some features already incorporated in the original structure, such as the kitchen, laundry and building plant. Due to delays in finalization of its approved CON for 60 beds, Manor Care has the fortuitous additional potential cost advantage of being able to construct both the "original facility" and the 60-bed "addition" at the same time. Quality vs. Cost Trade-Off. Other than the cost advantage of adding on, and of saving the contractor's fee by using an in-house construction team (as HCR does), reduced cost of construction generally will reflect reduced quality. For example, some of the quality features incorporated in the proposals of Forum, FCP and Cypress will cost more. See Finding of Fact 113, above. Put another way, lower costs may result in lower patient charges but also may result in lower quality, everything else being equal. The costs of construction of the various proposals may be found in Findings of Fact 1 to 7, above. It should also be noted at this point that Cypress' facility design has features--primarily unusual wall and roof angles and one water heater requiring larger pipe sizing-- which make its construction costs appear lower than they should be. Cost Overruns. The applicants' respective records for cost overruns in implementing CONs mirror their records for timeliness. See Findings of Fact 138-143, above. Cypress has no track record; all the others except Palm Court have experienced no cost overruns; Palm Court's $1.3 million cost overrun was precipitated by the need to secure another site and re-design the facility after it acquired the CON for 120 beds; and CSI, which would be responsible for implementing HHL's proposal, is involved in recent expansion which could affect its ability to bring all of its' CONs on line within budget. Cost of Operations. Economies of Scale--Size of Facility. In addition to construction and development costs, cost of operations are reflected in patient charges. It generally is accepted that a 120-bed nursing home is the optimal size for operational efficiencies. In this respect, the proposals by HCR, Forum and HHL have an advantage over the others. Manor Care has the advantage of proposing to expand a less efficient 60-bed nursing home to an optimally efficient 120-bed facility. To some extent, the generally accepted principle that 120-bed nursing homes are more desirable may have become dated. Two of the proposals--FCP's and Cypress'--combine some of the operating efficiencies of a 120-bed nursing home with the continuum of care and quality of care that can be achieved in a 120-bed living complex that incorporates a smaller nursing unit with other living units of different levels of care. By c(Jmparison, these type facilities are less institutionalized than a 120-bed nursing home, whether free-standing or incorporated within a larger complex with other living units. See Findings of Fact 106 to 113, above. Economies of Scale--Size of Organization. Economies of scale also can be realized from the size of the organization that owns or manages a nursing home. The proposals of all of the applicants except Cypress benefit from this principle, Palm Court to a lesser extent than the others, including in the area of quality assurance, nurse training and nurse recruiting. At the time of hearing, HCR operated nine nursing homes in Florida. HCR has approximately twelve nursing homes scheduled to begin construction in Florida within the next year. Nationwide, HCR operates more than 125 facilities containing approximately 16,000 beds. HCR has designed and built over 200 nursing homes and related health care facilities. HCR realizes substantial savings by using national contracts for the purchase of furniture, equipment, hardware and other operating supplies. Forum, as a national company, has the experience and purchasing power to cut operational costs through national purchase contracts and through economies and improvements experienced at the local level with a total retirement facility all on one campus. The Manor Care Florida Regional Office offers the services of a Regional Director, a Regional Nurse, a Nurse Recruiter, and a Comptroller to work with the corresponding departments of the Manor Care Florida nursing homes. FCP's long term plans are to develop homes in clusters, currently concentrating on the central west coast area of Florida. FCP has previously been granted certificates of need in Lee County and Polk County and has been recommended by the Department for a certificate of need in Hillsborough County. This cluster will operate under a unified local administration and share rehabilitative, medical, social, dietary and transportation personnel, enhancing economies of operation. CSI was formed in 1978 for the purpose of operating extended care facilities, including nursing homes and retirement centers. Since that time, the company has grown to its current operations of twenty-one (21) nursing homes, two (2) retirement centers and one (1) home for the aged located in seven states. Historically, much of this growth has occurred through the acquisition of existing facilities, although more recently the focus has shifted to the development of new facilities. Because CSI has established "national accounts" for the acquisition of movable equipment CSI can purchase nursing home equipment and furnishings and other operating supplies for HHL at reduced prices. (3) Patient Charges. The applicants propose the following room charges for semi-private rooms. Applicant Medicaid Medicare Private Pay HCR 60.94 76.00 75.00 FCP 60.00 65.00 80.00 Manor Care 1/ 69.37 ---- 72.57 HHL 66.30 109.33 2/ 72.76 Forum 67.18 80.67 79.50 Palm Court 77.00 100.00 77.00 Cypress 58.00 65.00 69.00 However, Cypress' charges are suspect; they probably are unrealistically low. Palm Court's charges also are suspect. It is difficult to understand from the evidence whether they are charges or Medicaid reimbursements. It also is difficult to tell if they are current or projected. In any event, they do not relate to the information in Palm Court's pro forma. As previously alluded to, patient charges do not necessarily proportionately reflect construction and development and operating efficiencies. They also are affected by programs and quality. BUILDING DESIGN AND ENERGY FEATURES. Patient Care and Safety. Overall, HCR's design is excellent. Functional elements are effectively inter-related, the building is designed to be open to landscaping, sunlight and court yards, and there is a wide range of amenities. Cypress' patient rooms are smaller than allowed under state requirments. The state minimum in Chapter 10D-29, Florida Administrative Code, is 80 net square feet per bed for multi-bed and 100 net square feet in a single room. Cypress' proposal only has approximately 65.58 gross square feet per bed. Cypress' building design also has rooms that are approximately 130 feet from the nurses' stations and clean utility and soiled utility rooms, 10 feet over the state maximum under Rule 10D-29.121(24), Florida Administrative Code. Forum's :4 floor plan also violates this standard. Rule 10D-29.121(6), Florida Administrative Code, requires a 20 foot clear view out room windows. Cypress' design also violates this standard. Manor Care's floorplan is the most compact one- story design. It has four compact wings off a central core. Forum proposes a two-story structure, creating a potential increased hazard for patients with reduced mobility. But DHRS rules provide for nursing homes of more than one floor, and required safety features, which Forum will provide, keep the potential to an insignificant minimum. FCP proposes a three-story facility with the nursing home on the third floor adjacent to the elevators connecting it to the first floor central core and amenities. FCP, too, adequately addresses DHRS safety concerns and actually could be more convenient to more nursing home patients than a one-story structure. Energy Conservation Features. All of the applicants propose to insulate their facilities for energy efficiency, some, e.q., HHL, somewhat better than others. Building design itself also affects energy consumption. Cypress' high exterior building surface area makes it a less energy-efficient design; Manor Care's compact design aces it a more energy-efficient design. FCP's three-story design also is a more energy-efficient design. Cypress' design incorporates only one water heater. This will produce line loss and lower energy efficiency, as well as potential total loss of hot water. (Cypress also has only one electrical plant.) Other Unique Design Features. Several unique features in FCP's room design helps "de- institutionalize" the facility and contributes to overall quality of care. Similarly, residents at FCP will be able to offer their guests refreshments from the kitchen at any time of the day or nights and children, spouses, and entire families will be encouraged to join residents for meals as often as they wish, assisting in the maintenance of ties with the community. Dining may be either communal or in the several lounge areas and private dining rooms. One of Cypress' unique design features is of the bizarre and morbid variety--a room designed to store deceased residents. FINANCIAL FEASIBILITY. The short-term and long-term feasibility of the proposals of HCR, FCP, Manor Care, Forum and HHL was never seriously questioned and was easily proven. Not so with Palm Court and Cypress. Palm Court. The duty to defend the immediate and long term financial feasibility of Palm Court's project rested with Steve Jones. Mr. Jones, who was not involved in the preparation of the application, offered his opinion that the Palm Court 60-bed addition would be feasible in the immediate and long terms. In giving his opinion of the project's financial feasibility, Mr. Jones stated he believed the pro forma in years 1 and 2 relate back to the corresponding tables in the application; but acknowledged he performed no analysis of his own, but rather he took the information provided him at face value. The pro forma is one of the key components of an application, as literally the heart of the application ties directly or indirectly into developing the pro forma, including Tables 1, 2, 3, 7, 8, 10, 11 and 25, as well as the amortization schedule. It is a required component of the application. Section 381.494(4)(e), F.S. (1985). Mr. Jones was asked to render an opinion on the reasonableness of Tables 8, 10, 11 and 25, which he did. On cross examination, however, Mr. Jones acknowledged he did not evaluate existing staff at Palm Court to determine the reasonableness of the pro forma. He did not verify the projected management fee and, in fact, stated he didn't know if it was included as a line item under "administration and general" on the pro forma nor how the management fee was computed. Mr. Jones, who has never prepared all the financial information in a CON application, also admitted he didn't know what current nursing salaries were in Hillsborough County, or any other salaries for that matter. He further acknowledged that he could not testify that the application's hourly wage times the number of working hours in a year would give you the stated nursing salaries. In sum, Mr. Jones admitted his opinion of the project's feasibility was based solely on his review of Tables 8, 11, 20 and 25 and his firm's involvement in the preparation of Palm Court's two most recent cost reports and not on the pro forma filed with Palm Court's application. Mr. Jones' accounting firm, in preparing Palm Court's cost reports, does not conduct an audit or express any opinion relating to the reasonableness of the statement of revenues and expenses. Joseph Lennartz, an expert in financial feasibility analysis, gave persuasive testimony outlining the inconsistencies in Palm Court's application. Palm Court's total revenue projections appearing in Table 7 for years 1 and 2 do correspond to the daily room and board revenues appearing in the pro forma, yet none of the Table 7 revenue projections correspond to the projected charges on Table 8. Assuming the salaries on Table 11 do not include fringe benefits, all FTE's and salaries on Table 11 are not accounted for in the pro forma. The pro forma salaries are significantly lower than on Table 11: RNs ,- understated by $12,426 LPNs - understated by $30,518 CNAS -understated by $239,541 Social Worker - understated by $2,983 Dietary - understated by $3,009 Maintenance - understated by $10,165 Activities - understated by $4,486 Housekeeping - understated by $6,365 Laundry & Linen - understated by $6,498 Admin & General - understated by $2,560 Palm Court's salary information on Table 11 is in 1987 dollars and needs to be inflated forward at least two to three years. Palm Court's current average salaries exceeded the proposed salaries on Table 11--including the administrator's salary, proposed at an annual salary of just over $31,000 when it actually was over $50,000 in 1987. Based on Palm Court's answers to interrogatories, Palm Court's management fee is not accurately reflected in the pro forma and is $44,559 too low in year 2; the projected dietary expense is understated by $112,386 in year 2; the projected housekeeping expense is understated by $46,609 in year 2; the projected laundry expense is understated by $35,308 in year 2; and plant expenses are understated by $100,116 in year 2. The terms of debt financing appearing on Table 2 of Palm Court's application do not conform to the amortization table, causing the interest expense line item on the pro forma to be understated. Cypress. As previously alluded to, the reasonableness of Cypress' projected Medicaid and Medicare rates appearing on its Updated Table 8 has not been established by competent substantial evidence. The Cypress pro forma fails to make provision for interest expense, depreciation, and property tax expense. These omissions represent an understatement of expenses as follows: YEAR ONE YEAR TWO INTEREST $177,818 $176,186 DEPRECIATION $110,000 $100,000 PROPERTY TAXES 2,200 25,000 (at assessed value 75 percent of market) TOTAL $290,018 $301,186 When interest, depreciation, and property taxes are included in the Cypress pro forma, the result is a loss of $90,000 in year one and $80,000 in year two. Furthermore, from a cash flow perspective, Cypress will incur a cash loss of $2,037 in year one and a cash gain of just $6,342 in year two. If property taxes are based on an assessed value at 100 percent of fair market value, there would be a $2,000 cash loss even in year two. It is not unusual for a nursing home to experience a negative cash flow in its first year of operation due to its low occupancy. However, it is unusual for a nursing home to experience a negative cash flow, as the Cypress facility will, while operating at optimal occupancy (95 percent). Cypress' owner/investors are willing to proceed with the project because they expect to be able to use some of the approximately $90,000 per year tax loss in years one and two to offset personal income, resulting in a cash on cash return of approximately $23,000 or 5.4 percent. Cypress' Table 1, "source of funds" states that the applicant has $425,000 "in hand". In fact, Cypress does not have those funds in hand. They are in the hands of the Cypress owner/investors. So far they have contributed $90,000 to the venture and will have to contribute not only an additional $425,000 to fund the nursing home but also an unspecified larger sum to fund Cypress planned ACLF and other projects. The evidence suggests that at least $425,000 more of equity contribution would be required for the rest of the project. Cypress did not prove that its proposed facility is financially feasible, either in the immediate or long term. BALANCED CONSIDERATION. Giving a balanced consideration to all of the statutory and rule factors addressed in the preceding findings, it is found that there is a net need for 231 community nursing home beds in Hillsborough County, that the applications of HCR, FCP and Manor Care should be granted and that the other applications should be denied.
Recommendation Based on the foregoing Findings Of Fact and Conclusions Of Law, it is recommended that the Department of Health and Rehabilitative Services enter a final order granting the applications of HCR (CON Action No. 5000), FCP (CON Action No. 4993) and Manor Care (CON Action No. 5006) and denying the applications of Forum (CON Action No. 4999), HHL (CON Action No. 4978) Palm Court (CON Action No. 4987) and Cypress (CON Action No. 5004). RECOMMENDED this 14th day of November, 1988, in Tallahassee, Florida. J. LAWRENCE JOHNSTON Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 14th day of November, 1988.
The Issue The issues for determination are: (1) whether the noncompliance as alleged during the August 30, 2001, survey and identified as Tags F324 and F242, were Class II deficiencies; (2) whether the "Conditional" licensure status, effective August 30, 2001, to September 30, 2001, based upon noncompliance is appropriate; and (3) whether a fine in the amount of $5,000 is appropriate for the cited noncompliance
Findings Of Fact Charlotte is a nursing home located at 5405 Babcock Street, Northeast, Fort Myers, Florida, with 180 residents and is duly licensed under Chapter 400, Part II, Florida Statutes. AHCA is the state agency responsible for evaluating nursing homes in Florida pursuant to Section 400.23(7), Florida Statutes. As such, in the instant case it is required to evaluate nursing homes in Florida in accordance with Section 400.23(8), Florida Statutes (2000). AHCA evaluates all Florida nursing homes at least every 15 months and assigns a rating of standard or conditional to each licensee. In addition to its regulatory duties under Florida law, AHCA is the state "survey agency," which, on behalf of the federal government, monitors nursing homes that receive Medicaid or Medicare funds. On August 27 through 30, 2001, AHCA conducted an annual survey of Charlotte's facility and alleged that there were deficiencies. These deficiencies were organized and described in a survey report by "Tags," numbered Tag F242 and Tag F324. The results of the survey were noted on an AHCA form entitled "Statement of Deficiencies and Plan of Correction." The parties refer to this form as the HCFA 2567-L or the "2567." The 2567 is the document used to charge nursing homes with deficiencies that violate applicable law. The 2567 identified each alleged deficiency by reference to a Tag number. Each Tag on the 2567 includes a narrative description of the allegations against Charlotte and cites a provision of the relevant rule or rules in the Florida Administrative Code violated by the alleged deficiency. To protect the privacy of nursing home residents, the 2567 and this Recommended Order refer to each resident by a number (i.e., Resident 24) rather than by the name of the resident. AHCA must assign a class rating of I, II or III to any deficiency that it identifies during a survey. The ratings reflect the severity of the identified deficiency, with Class I being the most severe and Class III being the least severe deficiency. There are two Tags, F242 and F324 at issue in the instant case, and, as a result of the August 2001 survey, AHCA assigned each Tag a Class II deficiency rating and issued Charlotte a "Conditional" license effective August 30, 2001. Tag F242 Tag F242 generally alleged that Charlotte failed to meet certain quality of life requirements for the residents, based on record review, group interviews, and staff interviews, and that Charlotte failed to adequately ensure that the residents have a right to choose activities that allow them to interact with members of the community outside the facility. On or about August 24, 2001, AHCA's surveyors conducted group interviews. During these interviews, 10 of 16 residents in attendance disclosed that they had previously been permitted to participate in various activities and interact with members of the community outside the facility. They were permitted to go shopping at malls, go to the movies, and go to restaurants. Amtrans transportation vans were used to transport the residents to and from their destinations. The cost of transportation was paid by Charlotte. An average of 17 to 20 residents participated in those weekly trips to dine out with other community members at the Olive Garden and other restaurants. During those trips, Charlotte would send one activity staff member for every four to six residents. The record contains no evidence that staff nurses accompanied those select few residents on their weekly outings. The outings were enjoyed by those participants; however, not every resident desired or was able to participate in this particular activity. Since 1985, outside-the-facility activities had been the facility's written policy. However, in August 2000, one year prior to the survey, Matthew Logue became Administrator of the facility and directed his newly appointed Activities Director, Debbie Francis, to discontinue facility sponsored activities outside the facility and in its stead to institute alternative activities which are all on-site functions. Those residents who requested continuation of the opportunity to go shopping at the mall or dine out with members of the community were denied their request and given the option to have food from a restaurant brought to the facility and served in-house. The alternative provided by the facility to those residents desiring to "interact with members of the community outside the facility" was for each resident to contact the social worker, activity staff member, friends or family who would agree to take them off the facility's premises. Otherwise, the facility would assist each resident to contact Dial-A-Ride, a transportation service, for their transportation. The facility's alternative resulted in a discontinuation of all its involvement in "scheduling group activities" beyond facility premises and a discontinuation of any "facility staff members" accompanying residents on any outing beyond the facility's premises. As described by its Activities Director, Charlotte's current activities policy is designed to provide for residents' "interaction with the community members outside the facility," by having facility chosen and facility scheduled activities such as: Hospice, yard sales, barbershop groups for men and beautician's day for women, musical entertainment, antique car shows, and Brownie and Girl Guides visits. These, and other similar activities, are conducted by "community residents" who are brought onto the facility premises. According to the Activities Director, Charlotte's outside activities with transportation provided by Amtrans buses were discontinued in October of 2000 because "two to three residents had been hurt while on the out trip, or on out-trips."1 Mr. Logue's stated reason for discontinuing outside activities was, "I no longer wanted to take every member of the activities department and send them with the resident group on an outing, thereby leaving the facility understaffed with activities department employees." The evidence of record does not support Mr. Logue's assumption that "every member of the facility's activities department accompanied the residents on any weekly group outings," as argued by Charlotte in its Proposed Recommended Order. Charlotte's Administrator further disclosed that financial savings for the facility was among the factors he considered when he instructed discontinuation of trips outside the facility. "The facility does not sponsor field trips and use facility money to take people outside and too many staff members were required to facilitate the outings." During a group meeting conducted by the Survey team, residents voiced their feelings and opinions about Charlotte's no longer sponsoring the field trips on a regular basis in terms of: "feels like you're in jail," "you look forward to going out," and being "hemmed in." AHCA's survey team determined, based upon the harm noted in the Federal noncompliance, that the noncompliance should be a State deficiency because the collective harm compromised resident's ability to reach or maintain their highest level of psychosocial well being, i.e. how the residents feel about themselves and their social relationships with members of the community. Charlotte's change in its activities policy in October of 2000 failed to afford each resident "self- determination and participation" and does not afford the residents the "right to choose activities and schedules" nor to "interact with members of the community outside the facility." AHCA has proved the allegations contained in Tag F242, that Charlotte failed to meet certain quality of life requirements for the residents' self-determination and participation. By the testimonies of witnesses for AHCA and Charlotte and the documentary evidence admitted, AHCA has proven by clear and convincing evidence that Charlotte denied residents the right to choose activities and schedules consistent with their interests and has failed to permit residents to interact with members of the community outside the facility. Tag F324 As to the Federal compliance requirements, AHCA alleged that Charlotte was not in compliance with certain of those requirements regarding Tag F324, for failing to ensure that each resident receives adequate supervision and assistance devices to prevent accidents. As to State licensure requirements of Sections 400.23(7) and (8), Florida Statutes (2000), and by operation of Florida Administrative Code, Rule 59A-4.1288, AHCA determined that Charlotte had failed to comply with State established rules, and under the Florida classification system, classified Tag F324 noncompliance as a Class II deficiency. Based upon Charlotte's patient record reviews and staff interviews, AHCA concluded that Charlotte had failed to adequately assess, develop and implement a plan of care to prevent Resident 24 from repeated falls and injuries. Resident 24 was admitted to Charlotte on April 10, 2001, at age 93, and died August 6, 2001, before AHCA's survey. He had a history of falls while living with his son before his admission. Resident 24's initial diagnoses upon admission included, among other findings, Coronary Artery Disease and generalized weakness, senile dementia, and contusion of the right hip. On April 11, 2001, Charlotte staff had Resident 24 evaluated by its occupational therapist. The evaluation included a basic standing assessment and a lower body assessment. Resident 24, at that time, was in a wheelchair due to his pre-admission right hip contusion injury. On April 12, 2001, two days after his admission, Resident 24 was found by staff on the floor, the result of an unobserved fall, and thus, no details of the fall are available. On April 23, 2001, Resident 24 was transferred to the "secured unit" of the facility. The Survey Team's review of Resident 24's Minimum Data Set, completed April 23, 2001, revealed that Resident 24 required limited assistance to transfer and to ambulate and its review of Resident 24's Resident Assessment Protocols (RAPs), completed on April 23, 2001, revealed that Resident 24 was "triggered" for falls. Charlotte's RAP stated that his risk for falls was primarily due to: (1) a history of falls within the past 30 days prior to his admission; (2) his unsteady gait; (3) his highly impaired vision; and (4) his senile dementia. On April 26, 2001, Charlotte developed a care plan for Resident 24 with the stated goal that the "[r]esident will have no falls with significant injury thru [sic] July 25, 2001," and identified those approaches Charlotte would take to ensure that Resident 24 would not continue falling. Resident 24's care plan included: (1) place a call light within his reach; (2) do a falls risk assessment; (3) monitor for hazards such as clutter and furniture in his path; (4) use of a "Merry Walker" for independent ambulation; (5) placing personal items within easy reach; (6) assistance with all transfers; and (7) give Resident 24 short and simple instructions. Charlotte's approach to achieving its goal was to use tab monitors at all times, to monitor him for unsafe behavior, to obtain physical and occupational therapy for strengthening, and to keep his room free from clutter. All factors considered, Charlotte's care plan was reasonable and comprehensive and contained those standard fall prevention measures normally employed for residents who have a history of falling. However, Resident 24's medical history and his repeated episodes of falling imposed upon Charlotte a requirement to document his records and to offer other assistance or assistive devices in an attempt to prevent future falls by this 93-year-old, senile resident who was known to be "triggered" for falls. Charlotte's care plan for Resident 24, considering the knowledge and experience they had with Resident 24's several falling episodes, failed to meet its stated goal. Charlotte's documentation revealed that Resident 24 did not use the call light provided to him, and he frequently refused to use the "Merry Walker" in his attempts of unaided ambulation. On June 28, 2001, his physician, Dr. Janick, ordered discontinuation of the "Merry Walker" due to his refusal to use it and the cost involved. A mobility monitor was ordered by his physician to assist in monitoring his movements. Charlotte's documentation did not indicate whether the monitor was actually placed on Resident 24 at any time or whether it had been discontinued. Notwithstanding Resident 24's refusal to cooperatively participate in his care plan activities, Charlotte conducted separate fall risk assessments after each of the three falls, which occurred on April 12, May 12, and June 17, 2001. In each of the three risk assessments conducted by Charlotte, Resident 24 scored above 17, which placed him in a Level II, high risk for falls category. After AHCA's surveyors reviewed the risk assessment form instruction requiring Charlotte to "[d]etermine risk category and initiate the appropriate care plan immediately," and considered that Resident 24's clinical record contained no notations that his initial care plan of April 23, 2001, had been revised, AHCA concluded that Charlotte was deficient. On May 13, 2001, Dr. Janick visited with Resident 24 and determined that "there was no reason for staff to change their approach to the care of Resident 24." Notwithstanding the motion monitors, on June 17, 2001, Resident 24 fell while walking unaided down a corridor. A staff member observed this incident and reported that while Resident 24 was walking (unaided by staff) he simply tripped over his own feet, fell and broke his hip. Charlotte should have provided "other assistance devices," or "one-on-one supervision," or "other (nonspecific) aids to prevent further falls," for a 93-year-old resident who had a residential history of falls and suffered with senile dementia. Charlotte did not document other assistive alternatives that could have been utilized for a person in the condition of Resident 24. AHCA has carried its burden of proof by clear and convincing evidence regarding the allegations contained in Tag F324.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that: The Agency enter a final order upholding the assignment of the Conditional licensure status for the period of August 30, 2001 through September 30, 2001, and impose an administrative fine in the amount of $2,500 for each of the two Class II deficiencies for a total administrative fine in the amount of $5,000. DONE AND ENTERED this 13th day of February, 2003, in Tallahassee, Leon County, Florida. FRED L. BUCKINE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 13th day of February, 2003.
The Issue Which of three competing applicants best meets the need for 114 additional community nursing home beds in Lee County, Florida.
Findings Of Fact The Agency For Health Care Administration (AHCA) is the state agency responsible for the administration of the certificate of need (CON) program in Florida. In October 1995, AHCA published a fixed need pool for an additional 114 community nursing home beds needed for the planning horizon beginning July 1998, in District 8, Subdistrict 5, for Lee County. AHCA also reviewed the CON applications received in response to the published need and preliminarily approved that of Manor Care of Boynton Beach, Inc. (Manor Care). Manor Care, Life Care Centers of America, Inc. (Life Care), and Health Care and Retirement Corporation of America (HCR) are the competing applicants for a CON to construct a new 114-bed nursing home in Lee County. The parties filed a Prehearing Stipulation and a Supplement to Prehearing Stipulation which included the following issues: LIFE CARE The letters of intent, the corporate resolutions, and the newspaper publications of each applicant in this proceeding were timely filed and legally adequate as to required content and accuracy, and are not at issue in this proceeding. The CON applications and omissions responses of each CON applicant in this proceeding were timely filed with the Agency for Health Care Administration and the District 8 Local Health Council, and meet the statutory minimum content requirements. The Audited Financial Statements contained in the CON applications at issue in this proceeding are complete and accurate. The criteria which are not applicable or not in dispute are in Subsections 408.035(1)(e), (f), (g), (h), (j), (k), and (2)(c) and (e), Florida Statutes. Life Care, founded in 1976, now operates 190 facilities, assisted living or long term nursing homes, in 28 states. It is the sixth largest and the largest privately-owned operator of long term care beds in the United States. Approximately one- third of the facilities it operates are also owned by Life Care. More than 50 nursing facilities have been built by Life Care, which has never sold a facility. Life Care owns and operates 5 seven nursing homes in Florida, most recently opening a facility in 1996, in Orange Park, near Jacksonville. If issued CON No. 8338, Life Care proposes to construct a 114-bed nursing home in southern Lee County. Life Care’s CON will be conditioned on the provision of 55 percent of total patient days to Medicaid patients. Life Care also proposes conditions to establish a 20-bed unit for patients suffering from Alzheimer's and related dementia (ARD), a minimum of 4 subacute care beds within a 31-bed Medicare certified unit, and an area to accommodate 10 adult day care clients at stabilized occupancy. Life Care plans to provide respite care, hospice services, and care to AIDS/HIV+ residents. Life Care will construct a 50,000 gross square foot building, with 102 semi-private and 12 private rooms for approximately $7.5 million. The plan includes 9 swing beds for additional ARD or hospice residents, if needed. The building will be located in the greater Fort Myers area of southern Lee County. HCR HCR operates nursing homes in over 16 states, 19 in Florida, including Heartland-Fort Myers, in northern Lee County, and Heartland of Boynton Beach, in which all 120 residents suffer from some form of dementia. With the approval of CON No. 8331, HCR plans to construct a 114-bed nursing home with a commitment to provide a minimum of 30 percent of total resident days for Medicaid, 57 beds for ARD residents, and respite care. HCR also plans to offer hospice, skilled nursing, subacute and rehabilitative care, and to serve AIDS/HIV+ residents. HCR proposes to construct a 56,000 gross square foot nursing home on approximately 8 acres for $8.8 million. The design connects two sides of the facility, each with 3 pods of 19 beds, to a central core of administrative offices, kitchen and dining facilities, lounges, and personal care rooms. HCR would build in an area of Lee County, that is “well-removed” from its existing facility, Heartland of Fort Myers, probably south of the Caloosahatchee River. MANOR CARE Manor Care is a subsidiary of Manor Health Care Corporation, a wholly owned subsidiary of Manor Care, Inc., which is publicly traded and is the third largest nursing home company in the United States. In Florida, the parent corporation owns and operates 12 nursing homes and 6 assisted living facilities, having opened its most recent nursing home in West Palm Beach in 1996. Two more Florida facilities are under construction, one of those in Sarasota, which is also in AHCA District 8. The parent also owns and operates nursing homes in Collier and Sarasota Counties, both in District 8. The applicant subsidiary, Manor 7 Care owns and operates two nursing homes in Florida, one in Naples and one in Boynton Beach. If its application for CON No. 8335 is approved, Manor Care proposes to construct a 114-bed nursing home in southern Lee County, conditioned on providing annually a minimum of 49 percent of total resident days to Medicaid, a minimum of 5 percent to hospice patients, a minimum of 3 percent to HIV positive patients, and a minimum of 1100 resident days of respite care. Manor Care’s proposed CON conditions also include the establishment of a 30-bed Alzheimer's unit, a 20-bed Medicare subacute unit, and an adult day care program for a minimum of 2 persons for one-half day each. Manor Care's total project cost is estimated to be approximately $7.5 million for 49,000 gross square feet. Comparisons Of Applications Using Review Criteria Subsection 408.035(1)(a) - The need for the health care facilities and services and hospices being proposed in relation to the applicable district plan and state health plan, except in emergency circumstances which pose a threat to the public health. The 1994 Certificate of Need Allocation Factors Report for District 8 is the applicable local health plan which includes the preferences for determining the need for nursing home services. Factor one favors applicants willing to dedicate 55 percent of total resident days to Medicaid residents, based on the District average occupancy rate of 55.85 percent from July through December 1993. Life Care meets the preference by proposing 55 percent Medicaid, in contrast to HCR's proposed 30 percent Medicaid and Manor Care's proposed 49 percent Medicaid. Life Care presented testimony demonstrating that the Medicaid weighted average for Manor Care’s Florida facilities is 33.4 percent in nursing homes located in subdistricts in which the weighted averages are 50 percent or over, including some subdistricts with higher average Medicaid utilizations than Lee County. Manor Care, in each of its facilities, however, has met the Con Medicaid conditions. See, also subsection 408.035(1)(n). HCR noted that the demographics of southern Lee County are different from those of the district as a whole, with a wealthier population in some areas in the south. Life Care’s proposed location is south of Daniels Parkway and southeast of MacGregor Boulevard. The two existing nursing homes in the area, the Pavilion at Shell Point Village and Health Park, which is on the same site as Lee Memorial Hospital, serve zero and 34 percent Medicaid, respectively. Factor two favors applicants proposing to meet community or district need for nursing home care for AID/HIV+ patients. Life Care and HCR made no specific quantitative commitment to serve AIDS/HIV+ residents, although Life Care has experience with AIDS/HIV+ care at its Orange Grove (California) Rehabilitation Hospital. Manor Care’s commitment of 3 percent of 9 total resident days is preferred. The commitment also indicates Manor Care’s willingness to serve AIDS/HIV+ residents in the proposed facility. Life Care asserted that the need for additional AIDS/HIV+ services is not significant in Lee County, due to the effectiveness of the County AIDS Task Force referral system. The task force rotates referrals so that the fifteen nursing homes in the county share the responsibility for care to AIDS/HIV+ patients. At the time the CON applications were filed, ten AIDs patients were in the fifteen County nursing homes. Consequently, while Manor Care’s willingness to serve AIDS/HIV+ residents is preferred, its commitment of 3 percent is an overstatement of need. Allocation Factor three is given to applicants offering a continuum of care including, but not limited to respite and adult day care. Life Care’s proposal to serve respite and 10 adult day care clients is superior to HCR's application, which fails to propose adult day care, and to Manor Care’s measurable, but limited commitment to two half-day clients. However, Manor Care’s commitment to 1100 annual days of respite care is superior to the proposals of Life Care and HCR, both of which would also provide respite care, if and when beds are available. It is the nature of respite care to give short-term relief to a care-giver by temporarily housing a resident. A measurable commitment to a level of respite care provides assurance that a bed will be available for a short term in an otherwise long term care setting. Manor Care included a condition to serve hospice patients, which Life Care and HCR will also do. HCR’s Heartland - Fort Myers contracts with Hope Hospice and, on average, has a census of three hospice patients at any one time. See, also, subsection 408.035(1)(f). Factor four favors applicants constructing at least 60- bed facilities. Preference five favors expansion of existing facilities to 120 beds. All of the applicants meet preference four, and preference five is inapplicable given the fixed numeric need for 114 beds. Allocation factor six gives preference to providers of high technology nursing services for higher acuity patients, such as those needing ventilator services. Manor Care is committed to serve all examples of high technology services listed in the factor, except pediatric patients in a 20-bed Medicare subacute unit, as compared to the 4-bed minimum proposed by Life Care, and limited subacute services and therapies proposed by HCR. In general, allocation factors in the District 8 health plan favor the applications of Manor Care, then Life Care, but not that of HCR. The 1993 State Health Plan preferences are also applicable to determining the need for nursing home services. The first preference favors applicants locating in areas of a subdistrict with existing nursing homes exceeding 90 11 percent occupancy. Life Care, Manor Care, and HCR generally propose locations in southern Lee County and meet the preference. In southern Lee County, occupancy rates exceed 94 percent. Two of the existing 15 nursing homes in the county are located in the southern area, generally identified as south of Daniels Parkway. The second state health plan preference is given to applicants offering Medicaid service in proportion to the subdistrict average. The Lee County subdistrict average is 49 percent. Both Manor Care and Life Care meet the state health plan preference for Medicaid service, but HCR does not. HCR notes that both the district and county Medicaid averages declined to 48.01 and 46.81, respectively, for the first six months of 1996. Manor Care and Life Care include some wealthier areas of Lee County within their proposed locations. HCR raised the probability that a nursing home built in the more affluent areas, is reasonably expected to attract fewer Medicaid and more private pay residents. See, also, subsection 408.035(1)(n). The third state health plan preference is given for service to special care residents, including those with AIDS, ARD, and the mentally ill. The fourth state health plan preference favors a continuum of care. The state health plan preferences are the same as allocation factors two and three of the local health plan, except for the additional consideration of services for persons with ARD and the mentally ill. Although there was varying expert testimony about the ideal size of an ARD unit, the more persuasive testimony, that of HCR’s expert, is that the appropriateness of a unit’s size has to be determined by design and staffing. HCR, by proposing to devote 57 beds to ARD residents, with the related design, programs, and fourteen-hour- a-day activities for seven days a week, best responds to the need for ARD care. Manor Care also has substantial experience in care for ARD residents, from operating over 115 ARD units in its long- term care facilities. On balance, when ARD is considered in conjunction with the needs of other special care residents and the need for a continuum of care, Manor Care best meets the preference by proposing a broader range of special care services. These include more ARD services than Life Care, but less than HCR, measurable respite care, and more adult day care than HCR, but less than Life Care. See, also, Subsection 408.035(1)(o). The fifth state preference applies to construction of facilities providing maximum resident-like comfort and amenities. Life Care’s expert in nursing home design criticized the Manor Care plan as functional, but outdated and stereotyped, particularly in a group bathing area and in not totally meeting ADA standards in every room. The Manor Care prototype has been in use over ten years and is essentially linear, but complies with the ADA and state licensure requirements. Corridor lengths are limited by rule to 120 feet. The longest Manor Care corridor is 80 to 90 feet. Modifications to the prototype include enlarged therapy spaces to accommodate subacute care. Other 13 features include skylights, a mini-lounge, and an exit to the Alzheimer’s courtyard at the end of the longest corridor. Manor Care has a “heritage wing” in which finishes are upgraded and, carpeting, drapes, and a television armoire are provided in private rooms, for residents who can afford to pay for them. Life Care’s plan is better designed than Manor Care’s for the services proposed. For example, Life Care has separate entrance for adult day care clients. Life Care criticized HCR’s pod design for limited visibility from the nurses’ station, and for encouraging residents to cluster in the atrium of each pod. However, HCR plans to use a call light panel system installed at the nurse’s stations which identifies the room number of residents calling for assistance. The system will compensate, in part, for the loss of some visual monitoring. The HCR plan also has activity rooms, day rooms, and quiet rooms, for use as alternatives to residents congregating in the pod atrium. HCR’s pod design is less typical, more creative, and more residential than those of Life Care or Manor Care, although it is more costly. See, also, Subsection 408.035(1)(m). The sixth state preference favors programs using innovative therapeutic programs and restorative care. All of the applicants propose to provide some therapeutic and restorative services, but Manor Care will treat more medically complex residents. Preference seven is given for applicants proposing charges not exceeding the highest Medicaid per diem rate in the subdistrict. The highest subdistrict Medicaid rate, inflated forward at five percent to 1999, is $132.94 Projected rates at the end of the second year are $90.354 for HCR, $105.33 for Manor Care, and $115.80 for Life Care. However, charges for semiprivate rooms will exceed the highest Medicaid rate at HCR, but not Life Care. In the applicants’ existing District 8 nursing home, Life Care has the lowest Medicaid per diem rate, which is $82.41 at Life Care Center of Punta Gorda as compared to $92.82 at HCR’s Heartland-Fort Myers, and $95.61 at Manor Care of Sarasota. The preference fails to adequately distinguish between applicants. The parties stipulated that the three companies involved meet the preference given for a history of operating superior facilities. See, also, Subsection 408.035(1)(c). Life Care meets preference nine by proposing a nursing staff to resident ratio which exceeds the minimum required and those proposed by the other applicants. Life Care nurses per patient day ratio is 1.24, Manor Care’s is 1.11, and HCR’s is .83. The staffing differences reflect, in large part, the differences in proposed programs. The parties stipulated that each applicant’s staffing requirements could be met at the projected salaries. Preference ten, for the use of multi-disciplinary 15 health care professionals, and preference eleven, for ensuring residents’ rights and privacy are met by all of the applicants. Preference twelve favors the nursing home with the lowest administrative cost and highest resident care cost compared to the average in the district. Using the historical inflation rate of 7.3 percent, patient-care costs will be $78.75 in 1999. The historical inflation rate for administrative costs, 6.5 percent, yields 1999 District average administrative cost of $36.39. Life Care proposes lower resident care costs, $73.88, and lower administrative costs $26.16, than the projected district averages, as inflated. Manor Care’s resident care costs ($61) and administrative costs ($33.84) are lower than the average. HCR projected lower resident care costs ($57) and lower administrative costs ($19) than the average. In comparing the two, Life Care is preferred for having higher resident care costs and lower administrative costs than Manor Care. Costs reflect programs, including higher costs to care for subacute than for ARD residents. Costs are also affected by projected average occupancy levels for the second year, which vary from 88 percent for Manor Care, to 93 percent for Life Care, and 80 percent for HCR. In general, Life Care is the preferred applicant based on state health preferences related to Medicaid commitment, staffing ratios, and resident care costs. Life Care is also the second applicant preferred considering the scope of special care services proposed and its physical plant design. HCR is preferable considering design and administrative costs. Manor Care is superior based on special care services, therapeutic services, equal on the state Medicaid preference, and second considering staffing ratios, and resident care costs. The District 8 plan supports the approval of the applications of Life Care and Manor Care, but not HCR. Subsections 408.035(1)(b) - The availability, quality of care, efficiency, appropriateness, accessibility, extent of utilization, and adequacy of like and existing health care services and hospices in the service district . . .; (1)(d) - The availability and adequacy of . . . alternatives . . .; (2)(b) - That existing inpatient facilities . . . are being used in an appropriate and efficient manner; and (2)(d) - That patients will experience serious problems in obtaining inpatient care . . . in the absence of the proposed new service. There is no evidence of quality of care, efficiency, or access problems in existing nursing homes. The undisputed numeric need for 114 more community nursing home beds in July 1998, is the basis for a determination that accessibility and availability will be problems if the supply is not increased. The applications of Manor Care, Life Care, and HCR are primarily distinguishable by the differences in the proposed services. Each attempted to support its proposal as offering the type and quantity of services which it contends will be needed to supplement existing nursing home services in the District. 17 Financial access is best enhanced by Life Care’s 55 percent Medicaid commitment, followed by Manor Care’s 49 percent Medicaid commitment, and least enhanced by HCR’s 30 percent Medicaid proposal. Accessibility for Medicaid residents is also enhanced by the proposed southern Lee County location, in which the two existing nursing homes in the area provided only 5,000 of the total of 145,000 Medicaid patient days in Lee County in the six months before the applications were filed. In general, relatively high occupancy rates result in more difficulty for Medicaid residents seeking nursing home beds. Manor Care offers the broadest range of services. Life Care notes, however, that Manor Care will be underutilized to the extent that it understates existing inventory, overstates bed need, and conditions its CON on beds designated for services which are not needed. For example, Manor Care’s AIDS/HIV+ commitment of three percent at a time when there are ten AIDS/HIV+ patients in the fifteen nursing homes is overstated. HCR contends that the need for subacute care is also overstated, particularly by Manor Care. Subsequent to the needs analysis for subacute beds, included in the Manor Care application, a subacute care unit was approved at a new Beverly facility in the district. Within the area in which Life Care and Manor Care propose to locate, Doctor’s Hospital, sometimes called Gulf Coast Hospital, has received a CON to operate a 10-bed skilled nursing unit. In addition, East Point Hospital and Southwest Regional Hospital, both in Lee County, have hospital- based skilled nursing units. There is no established definition of subacute services and no separately licensed category of beds from which existing inventory can be determined. In a survey of fourteen of the existing nineteen nursing homes in the County, HCR’s expert determined that one-half provide tube feeding, gastrointestinal feeding, and wound care, which are generally understood to be subacute services. Most, but not all, subacute services are provided in Medicare-certified beds. Using Medicare days reported as a proxy for subacute days, which are not reported, Manor Care confirmed statistically a growing use of nursing home beds in Lee County to provide Medicare services. From 1992 to 1996, the proportion of Medicare nursing home days increased from 10 to 16 percent. From 1994 to 1995, the number of Medicare beds increased from 350 to 500, which reflects rising demand, since nursing homes can designate Medicare beds without prior regulatory approval. Another measure of the need for subacute care is the percentage of persons with major or extreme categories of illnesses in certain diagnostic related groups (DRGs) which typically require additional nursing care after hospitalization. However, that approach cannot be solely relied upon, because the post-hospital care can be provided in settings other than the nursing homes. Life Care’s expert expects twenty-five percent of its Medicare and private pay admissions to require subacute care. 19 By contrast, statewide, fifty-six percent of admissions are major or extreme DRGs, as compared to sixty-six percent in Lee County. In 1993, the average daily census for Medicare residents in Lee County nursing homes was 13.6 residents. The average daily Medicare census projected by Manor Care, 13.5, is reasonable. Therefore, the demand in Lee County, as reflected by Medicare utilization and the higher than statewide subacute DRGs, indicates that Manor Care’s 20-bed subacute unit does not overstate need. Life Care’s 4-bed minimum understates the need for subacute care, but is not a serious detriment to its proposal given its ability to expand the unit. The parties disagree over the magnitude of the need for ARD residents’ care in separate or secured units. As demonstrated by Life Care and Manor Care, fewer than half of nursing home residents need to be in a special ARD unit. The severity of ARD is measured, ranging from 1 to 7 on the Reisburg Scale. Life Care and Manor Care would have 20 and 30 bed units, respectively. Life Care’s ARD unit is designed to serve early and middle stages (stages 1-4) of the disease, when residents are ambulatory. An outdoor wandering space with a seven-foot high fence, color and picture cues to rooms and activity areas are incorporated in the plans. Life Care also expects some clients with ARD to use its adult day care. HCR proposes to designate half of its nursing home for ARD residents and the other half for general long-term care, based on its determination of the need for ARD services. Nationally, half of all nursing home patients suffer from some degree of dementia. HCR has substantial experience with ARD, and operates Heartland of Boynton Beach, a 120-bed all dementia facility. HCR’s pod design is especially suited to allowing ARD residents to wander inside the facility and in adjacent courtyards with locked gates. HCR uses a wander-guard alarm system rather than locked doors and non-confrontational sight and sound cues to direct residents’ movements and behavior. In northern Lee County, Heartland-Fort Myers has a 20-bed ARD unit. Residents with early and late (non-ambulatory) stages of ARD are appropriate for placement in long-term beds outside an ARD unit. ARD residents, who have a loss of cognition, but who are still ambulatory in stages 5-7, are appropriate for placement in separate units, as proposed by HCR and Manor Care. Manor Care’s analysis of overall need for a separate ARD unit, fewer than half of the total beds, and its analysis of the ARD stages appropriate for placement in a separate unit (stages 5-7) was best documented and most persuasive. Considering financial and geographic access, and programmatic needs for subacute patients and ARD residents, Manor Care’s proposal best supplements existing nursing home services in Lee County. Manor Care’s AIDS/HIV+ commitment, however, may result in up to three underutilized beds. 21 The immediate and long-term financial feasibility of the proposal. The parties stipulated to the immediate or short term financial feasibility of the proposals. Manor Care’s proposal is financially feasible in the long term, based on a reasonable projection of net income of $473,300 at the end of the second year of operation. Similarly HCR’s proposal is financially feasible and reasonable, with projected net income in year two of $441,873. Life Care’s proposal overestimates utilization by projecting 93 percent occupancy at the end of the first and second years. The subdistrict average is 91 percent, although the other two nursing homes in southern Lee County exceed the subdistrict average with 94 percent occupancy. Life Care agrees that its fill-up rate is aggressive. The rate is unreasonable, when comparing mature nursing homes to the experience of other new providers in Lee County. The projection of an average daily census of 17 Medicare and HMO/Insurance patients, with a 31-bed designated subacute case unit is also inconsistent with achieving 93 percent overall occupancy. While the exact correlation between Medicare and HMO/Insurance patients to subacute care beds cannot be established, those payor categories are the best indicators of subacute care utilization. Considering projected utilization levels by payor, occupancy at Life Care cannot mathematically reach 93 percent, even if the remaining 83 beds are full. In forecasting revenues, Life Care used 5 percent, the maximum possible inflation for Medicaid rates. The ceiling set by the State for south Florida nursing homes over 100 beds has increased an average 4.8 percent. Manor Care’s use of 3.8 percent inflation, representing only the patient care not the property component of Medicaid is not justified. Nevertheless, Life Care’s use of 5 percent for financial forecasting is not fiscally conservative and results in an overstatement of Medicaid revenue. As a result of the overstatement of utilization and the reliance on overstated Medicaid revenues for 55 percent of total occupancy at stabilized occupancy, Life Care failed to demonstrate that its proposal is financially feasible in the long term. (l) The probable impact . . . on the costs of providing health services . . . , which foster competition . . ., promote quality assurance and cost-effectiveness. HCR currently operates a nursing home in Lee County, and its proposed capital cost for a new facility is higher than those for Manor Care or Life Care. Manor Care and Life Care have facilities in District 8, but not in Lee County. Unlike Life Care, Manor Care and HCR will not have any debt as a result of their proposed construction. Without debt, property costs and Medicare reimbursements per patient day for the property component will be lower. Capital costs are also built into the 23 Medicaid per diem rate. Therefore, Medicare and Medicaid reimbursements, all other things being equal, will be higher for Life Care. Manor Care will foster competition with greater cost effectiveness.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency For Health Care Administration issue Certificate of Need No. 8335 to Manor Care of Boynton Beach to construct a 114-bed community nursing home conditioned on the provision of services to (1) a minimum of 49 percent of total annual resident days to Medicaid residents, (2) a minimum of 5 percent of total annual resident days to hospice patients, (3) a minimum of 2 adult day care clients, (4) a minimum of 1100 total annual resident days to respite, (5) participation in the Lee County AIDS Task Force referral process, (6) the establishment of a 30-bed Alzheimer’s unit and (7) the establishment of a 20-bed subacute care unit. DONE AND ENTERED this 5th day of March, 1997, in Tallahassee, Leon County, Florida. 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 5th day of March, 1997. COPIES FURNISHED: Richard Patterson, Esquire Agency for Health Care Administration 2727 Mahan Drive Fort Knox Building 3, Suite 3431 Tallahassee, Florida 32308-5403 James C. Hauser, Esquire Skelding, Labasky, Corry Eastman, Hauser and Jolly, P.A. Post Office Box 669 Tallahassee, Florida 32302 Alfred W. Clark, Esquire Post Office Box 623 Tallahassee, Florida 32302 R. Bruce McKibben, Jr., Esquire Holland and Knight Post Office Box 810 Tallahassee, Florida 32302-0810 R. S. 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
Conclusions Having reviewed the Administrative Complaint, and all other matters of record, the Agency for Health Care Administration finds and concludes as follows: 1. The Agency has jurisdiction over the above-named Respondent pursuant to Chapter 408, Part II, Florida Statutes, and the applicable authorizing statutes and administrative code provisions. 2. The Agency issued the attached Administrative Complaints and Election of Rights forms to the Respondent. (Ex. 1 and Ex. 2) The Election of Rights form advised of the right to an administrative hearing. The Respondent returned the Election of Rights forms selecting “Option 3.” (Ex. 3 and Ex. 4) On October 17, 2011, the Administrative Law Judge entered an Order consolidating both cases (Ex. 5). On February 6, 2012, the Administrative Law Judge entered an Order granting the Agency’s Motion to Relinquish Jurisdiction and Closing Files. (Ex. 6). On April 2, 2012, Richard J. Saliba, the Informal Hearing Officer, entered an Order Relinquishing Jurisdiction and Closing File based on Briarwood’s decision that it was abandoning its request for a hearing (Ex. 7). Based upon the foregoing, it is ORDERED: 1. The findings of fact and conclusions of law set forth in the Administrative Complaints are adopted and incorporated by reference into this Final Order. 2. The assisted living facility license of Briarwood Manor is REVOKED. The Respondent shall pay the Agency $35,500.00. If full payment has been made, the cancelled check acts as receipt of payment and no further payment is required. If full payment has not been made, payment is due within 30 days of the Final Order. Overdue amounts are subject to statutory interest and may be referred to collections. A check made payable to the “Agency for Health Care Administration” and containing the AHCA ten-digit case number should be sent to: Filed June 26, 2012 11:00 AM Division of Administrative Hearings Office of Finance and Accounting Revenue Management Unit Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 14 Tallahassee, Florida 32308 ORDERED at Tallahassee, Florida, on this_A*e*-day of C Ste AL , 2012.
Other Judicial Opinions A party who is adversely affected by this Final Order is entitled to judicial review, which shall be instituted by filing one copy of a notice of appeal with the Agency Clerk of AHCA, and a second copy, along with filing fee as prescribed by law, with the District Court of Appeal in the appellate district where the Agency maintains its headquarters or where a party resides. Review of proceedings shall be conducted in accordance with the Florida appellate rules. The Notice of Appeal must be filed within 30 days of rendition of the order to be reviewed. CERTIFICATE OF SERVICE I CERTIFY that a true and correct cpey otis Final Order was served on the below-named persons by the method designated on this 7S “day of , 2012. Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 3 Tallahassee, Florida 32308-5403 Telephone: (850) 412-3630 Jan Mills Finance & Accounting Facilities Intake Unit Revenue Management Unit (Electronic Mail) (Electronic Mail) Lourdes A. Naranjo, Senior Attorney Cindy Dookeran Office of the General Counsel Administrator Agency for Health Care Administration Briarwood Manor (Electronic Mail) 5721-5631 N. W. 28" Street Lauderhill, Florida 33313 (U.S. Mail) Katrina Derico-Harris Arlene Mayo-Davis Medicaid Accounts Receivable Field Office Manager Agency for Health Care Administration Agency for Health Care Administration (Electronic Mail) (Electronic Mail) Shawn McCauley Errol H Powell Medicaid Contract Management Agency for Health Care Administration (Electronic Mail) Administrative Law Judge Division of Administration Hearings (Electronic Mail) Richard Saliba, Esq. Informal! Hearing Officer Agency for Health Care Administration (Electronic Mail) STATE OF FLORIDA AGENCY FOR HEALTH CARE ADMINISTRATION STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION, Petitioner, AHCA No.: 2011005869 Return Receipt Requested: v. 7009 0080 0000 0586 1985 DDJJ LLC d/b/a BRIARWOOD MANOR, Respondent. ADMINISTRATIVE COMPLAINT COMES NOW State of Florida, Agency for Health Care Administration (“AHCA”’), by and through the undersigned counsel, and files this administrative complaint against DDJJ LLC d/b/a Briarwood Manor (hereinafter “Briarwood Manor”), pursuant to Chapter 429, Part I, and Section 120.60, Florida Statutes (2010), and alleges: NATURE OF THE ACTION 1. This is an action to revoke the assisted living facility license of Respondent [License No.: 7478], pursuant to Section 408.815(1) (c) &(d), Florida Statutes, and Section 429.14(1) (e), Florida Statutes, and to impose an administrative fine of $14,500.00, pursuant to Sections 429.14 and 429.19, Florida Statutes (2010), for the protection of public health, EXHIBIT 1 safety and welfare. Section 429.14(1)(e), Florida Statutes, provides that the Agency may revoke an assisted living facility license if the facility is cited with three or more Class II deficiencies. The Agency has considered the factors outlined in Section 419.19(3), Florida Statutes, in imposing the penalty and in fixing the amount of the fine. JURISDICTION AND VENUE 2. This Court has jurisdiction pursuant to Sections 120.569 and 120.57, Florida Statutes (2010), and Chapter 28-106, Florida Administrative Code (2010). 3. Venue lies pursuant to Rule 28-106.207, Florida Administrative Code (2010). PARTIES 4. AHCA is the regulatory authority responsible for licensure and enforcement of all applicable statutes and rules governing assisted living facilities pursuant to Chapter 429, Part I, Florida Statutes (2010), and Chapter 58A-5 Florida Administrative Code (2010). 5. Briarwood Manor operates a 34-bed assisted living facility located at 5621-5631 N. W. 28" Street, Lauderhill, Florida 33313. Briarwood Manor is licensed as an assisted living facility under license number 7478. Briarwood Manor was at all times material hereto a licensed facility under the licensing authority of AHCA and was required to comply with all applicable rules and statutes. COUNT I BRIARWOOD MANOR FAILED TO KEEP RESIDENTS’ MEDICATIONS LOCKED IN THE REFRIGERATOR. RULE 58A-5.0185(6) (b)1, FLORIDA ADMINISTRATIVE CODE (MEDICATION STANDARDS) CLASS II VIOLATION 6. AHCA re-alleges and incorporates paragraphs (1) through (5) as if fully set forth herein. 7. Briarwood Manor was cited with five (5) Class II deficiencies as a result of an Operation Spot Check Appraisal visit that was conducted on May 20, 2011. 8. An Operation Spot check appraisal visit was conducted on May 20, 2011. Based on observation and interview, it was determined that the facility did not keep residents' #1 and #4's medications locked within the refrigerator in the kitchen to ensure residents did not ingest potentially harmful medications. The findings include the following. 9. In an observation on 5-20-11 at 9:30 AM in the main kitchen, inside a non-lockable refrigerator and not in a lockable container, there were 2 boxes containing Risperdal 5O0mcg suspension, each marked for intramuscular administration for residents #1 and resident #4. 10. During this observation, it was determined the area where this refrigerator was located could not be locked and it was accessible by the general facility population of residents without encumbrances. ll. Based on the foregoing facts, Briarwood Manor violated Rule 58A-5.0185(6)(b)1, Florida Administrative Code, herein classified as a Class II violation, which warrants an assessed fine of $1,000.00 and gives rise to the revocation of the assisted living facility license. COUNT II BRIARWOOD MANOR FAILED TO MAINTAIN A SAFE AND SANITARY FOOD SERVICE AND KITCHEN AREA. RULE 58A-5.020(1) (b), FLORIDA ADMINISTRATIVE CODE (NUTRITION AND DIETARY STANDARDS) CLASS II VIOLATION 12. AHCA re-alleges and incorporates paragraphs (1) through (5) as if fully set forth herein. 13. An Operation Spot check appraisal visit was conducted on May 20, 2011. Based on observations, it was determined the facility failed to maintain a safe and sanitary food service and kitchen area. The findings include the following. 14. Observations on 5/20/11 at approximately 9:15 AM revealed the following concerns in the kitchen area: a. The kitchen floor was dirty throughout, with a heavy layer of soil built up behind the three compartment sink area, equipment, and food storage area. b. The kitchen stovetop, cabinet under sink, food equipment shelving, potholders, utensil drawers, switch plates, walls and window sills were dirty. c. Cutting boards were blackened and deeply scored. d. Several kitchen refrigerators were missing thermometers. The microwave oven door was rust laden and the microwave was soiled in the interior. e. The deep chest freezer, which was full of frozen food, had a large build-up of ice, needed defrosting, and had no thermometer in the interior. f. The dirty window sill directly about the 3 compartment sink continued uncovered single serve plastic utensils, dirty scrub pads, brushes, measuring cups and a ladle. g. The kitchen back door was not vermin-proof as the door did not fit in the frame tightly. Live roaches were observed in the kitchen. h. There were paints and chemicals stored within the food storage room. i. Approximately 10 lbs. of ground beef was left in a sheet pan defrosting on a kitchen table. 15. There was a bucket of dirty dishes on the table alongside the ground meat. Various clean cooking vessels were stored on a shelf underneath this table. 16. Note: A representative from the Department of Health was on the premises on 5/20/11 and issued an unsatisfactory food service inspection report to the facility. 17. Based on the foregoing facts, Briarwood Manor violated Rule 58A-5.020(1) (b), Florida Administrative Code, herein classified as a Class II violation, widespread, which warrants an assessed fine of $5,000.00 and gives rise to the revocation of the assisted living facility license. COUNT III BRIARWOOD MANOR FAILED TO MAINTAIN A RESIDENTIAL AREA WHICH PROMOTED A RESIDENTIAL, HOMELIKE, AND SAFE CARING ENVIRONMENT FOR RESIDENTS; FAILED TO PROVIDE A SAFE AND DECENT ENVIRONMENT WITH RESPECT TO PERSONAL DIGNITY AND PRIVACY; AND FAILED TO ENSURE THAT FURNITURE AND FURNISHINGS WERE CLEAN AND IN GOOD REPAIR SECTION 429.28(1) (a), FLORIDA STATUTES RULE 58A-5.023(3) (a)1. & 2., FLORIDA ADMINISTRATIVE CODE (PHYSICAL PLANT STANDARDS) CLASS II VIOLATION 18. AHCA re-alleges and incorporates paragraphs (1) through (5) as if fully set forth herein. 19. An Operation Spot check appraisal visit was conducted on May 20, 2011. Based on observations and interviews, it was determined that the facility failed to maintain a residential area which promoted a residential, homelike, and safe care environment for the census of 27 residents, and failed to provide a safe an decent environment with respect to dignity and privacy as required by the Residents’ Bill of Rights. The facility also failed to ensure that furniture and furnishings were clean, functional, and in good repair. The findings include the following. 20. During the tour of the facility on 05/21/11 at 9:30 a.m. in the resident bathroom located in Building A adjacent to room 5, the bathroom door was observed to be open. There were residents observed in the vicinity. Inside the bathroom was a large hole in the tile wall where the sink used to be. There was a pipe coming out of the hole in the wall and a large bucket positioned under the pipe as the pipe was leaking water. The bucket was observed to be full of dirty water. The hole in the wall had jagged edges, was approximately two to three feet wide, about two feet high and at least a foot or more deep, exposing bare blackened dirt and debris. 21. The area also was moisture laden from the leaking pipe. There were broken tiles littering the area, exposed metal piping and water valves from the missing sink. The floor under the bucket was also missing several tiles (a square area of approximately two feet by two feet) and exposing the brown sub floor. The brown sub floor was noted to be blackened with biogrowth. The bathroom door was observed open with no barrier or signage to alert residents, staff and visitors to the hazard. 22. Adjacent to the bathroom in Building A by room 5 was a storage closet that was easily opened, and not locked. Inside the closet there were construction materials, a green garden hose, buckets, and 2 containers of pesticides. 23. The maintenance staff member was interviewed on 05/20/11 at 9:45 a.m. He said that he is in the process of working on the sink and confirmed that the bathroom door was open. In addition, he confirmed that there was no lock on the storage closet adjacent to the bathroom and said he would find a way to lock it. The facility has a Limited Mental Health license and the census on the day of the survey was 27. 24. During observations on 05/20/11 at 10:30 a.m. in the laundry room in Building B there was a ladder and construction materials observed stored behind the door. There was a silver air conditioning (a/c) duct running along the wall just below the ceiling that was noted to have a large hole, exposing the insulation. The edges were blackened. There was a large shelving unit with folded blankets and comforters stored right below the a/c duct and next to the ladder and construction materials. In addition, the a/c vent just above the clean linens was observed to be dirty, and blowing directly onto the folded linens. The laundry room floor was filthy. This was brought to the attention of the maintenance staff member. 25. During observations on 05/20/11 at approximately 10:45 a.m. in the resident bathroom in Building A on the North side of the building the tub was observed to have no faucet. Instead there was just a bare metal thin spout with a sharp metal end coming out of the tub. In addition, the tub was very dirty. This was brought to the attention of the maintenance staff member. 26. On 05/20/11 at approximately 10:00 a.m. in Building B the bathroom outside room 11 was observed to be very dirty with a dried brownish substance smeared in places on the floor. On 05/20/11 at 11:00 a.m., about an hour later, the substance was noted to still be there. 27. Observations of Room 3 and 4 at approximately 10:30 AM on 5/20/11 revealed the rooms were adjoined together through the closet opening of room 3. A torn plastic shower curtain was hung at the opening in room 3 and the resident's bed in room 3 was placed in front of the shower curtain blocking access between rooms 3 and 4. 28. Room 4 had no window to the outside and was occupied Observations of room 4 on 5/20/11 revealed the by resident #4. room was dark, dreary, dimly lit, musty, warm, and difficult to maneuver around in. There was no closet either in room 3 and 4. 29. A referral was made to the City of Lauderhill Code Enforcement officer, who was present during the survey. The Code Enforcement Unit issued the facility a "Notice of Violation" on 5/20/11 with numerous violations. 30. A referral was made to the Broward County Health Department. Their representative arrived at the facility during the survey and issued an unsatisfactory inspection report to the facility. 31. During the tour of the facility on 05/20/11 at 9:30 a.m. the following was observed with the maintenance staff 32. In Building A room 4, there was a lamp with no shade and the bare bulb was exposed. 33. In Building A's day room, the window curtains were observed to be soiled and not hanging properly as many of the curtain hooks were not attached to the rod and hanging loosely. In the bathroom on the North side of Building A the vanity cabinet was observed to be in disrepair as it was separating from the wall. 34. In Building B, the bathroom off the day room was observed to have window blinds that were in disrepair. The sink vanity was in disrepair as the veneer was peeling off and worn. The toilet tank lid had a large crack in the middle. The shower 10 curtain was torn and the floor was very dirty with black scuff marks and a large puddle of water. 35. In Building B, the bathroom adjacent to room 11 was very dirty including old feces on the floor. 36. A leather sofa in the common area in Building B had a large tear in the cushion. 37. The bathroom outside room 13 was observed to have a very dirty floor, a hole behind the toilet, and a rusty opened can of food was found stored inside the mirrored vanity door. 38. The administrator was interviewed on 05/20/11 at 11:30 a.m. and no additional information was provided. 39. Based on the foregoing facts, Briarwood Manor violated Rule 58A-5.023(3)(a)l. & 2., Florida Administrative Code, and Section 429.28(1) (a), Florida Statutes, herein classified as a Class II violation, widespread, which warrants an assessed fine of $5,000.00 and gives rise to the revocation of the assisted living facility license. 11 COUNT IV BRIARWOOD MANOR FAILED TO ENSURE THAT THE DOORS WERE FUNCTIONAL AND IN GOOD WORKING ORDER, AND THAT PEELING PAINT WAS REPAIRED OR REPLACED. RULE 58A-5.023(3) (a)3, FLORIDA ADMINISTRATIVE CODE (PHYSICAL PLANT STANDARDS) CLASS II VIOLATION 40. AHCA re-alleges and incorporates paragraphs (1) through (5) as if fully set forth herein. 41. An Operation Spot check appraisal visit was conducted on May 20, 2011. Based on observations and interviews, it was determined that the facility failed to ensure that doors were functional and in good working order, and that peeling paint was repaired or replaced. The findings include the following. 42. During the tour of the facility on 05/20/11 at 9:30 a.m. the following was observed: a. In Building A room 4, observations revealed the room had a door to the outside of the facility. The door was observed to be ill fitting, so that a large gap was between the door and the door jamb. b. In Building B room 10, there was a door to the outside that had a large gap between the door and the door jamb, allowing the potential for insect infestations. 12 c. In Building B room 14, there was a door to the outside that did not fit the door jamb so that there was a large gap. d. In Building B, the bathroom by the large paint storage closet was labeled with a sign that said the bathroom was out of order due to the bathtub leaking. 43. During the tour of the facility on 05/20/11 at 09:30 a.m. in Building A room 4, there was peeling paint on the walls. In addition, throughout Building B the walls were observed to be patched and not painted over in several places throughout the building. The maintenance staff member was present and confirmed the findings. 44, The maintenance staff person was present during the observations on 05/20/11 and confirmed the findings. 45. Based on the foregoing facts, Briarwood Manor violated Rule 58A~5.023(3) (a)3, Florida Administrative Code, herein classified as a Class II violation, patterned, which warrants an assessed fine of $2,500.00 and gives rise to the revocation of the assisted living facility license. 13 COUNT V BRIARWOOD MANOR FAILED TO HAVE A SATISFACTORY HEALTH DEPARTMENT INSPECTION. RULE 58A-5.016(6), FLORIDA ADMINISTRATIVE CODE RULE 58A-5.0161(1), FLORIDA ADMINISTRATIVE CODE (PHYSICAL PLANT STANDARDS) CLASS II VIOLATION 46. AHCA re-alleges and incorporates paragraphs (1) through (5) as if fully set forth herein. 47. An Operation Spot check appraisal visit was conducted on May 20, 2011. Based on record reviews and interviews, it was determined that the facility failed to have a satisfactory health department inspection. The findings include the following. 48. During observations of multiple physical plant issues at the facility, a referral was made to the Broward County on 05/20/11 at approximately 9:45 a.m. The Health Department representative arrived at the facility and was apprised of all of the findings of the survey team. At the conclusion of their visit the facility was issued an unsatisfactory Group Care and Food Service inspection on 05/20/11. 49. Based on the foregoing facts, Briarwood Manor violated Rule 58A-5.016(6), Florida Administrative Code, and Rule 58A- 5.0161(1), Florida Administrative Code herein classified as a Class II violation, which warrants an assessed fine of $1,000.00 14 and gives rise to the revocation of the assisted living facility license. CLAIM FOR RELIEF WHEREFORE, the Agency requests the Court to order the following relief: 1. Enter a judgment in favor of the Agency for Health Care Administration against Briarwood Manor on Counts I through vi. 2. Revoke the assisted living facility license [License No.: 7478] of Briarwood Manor on Counts I through V for the violations cited above. 3. Assess an administrative fine of $14,500.00 against Briarwood Manor on Counts I through V for the violations cited above. 4. Assess costs related to the investigation and prosecution of this matter, if the Court finds costs applicable. 5. Grant such other relief as this Court deems is just and proper. Respondent is notified that it has a right to request an administrative hearing pursuant to Sections 120.569 and 120.57, Florida Statutes (2010). Specific options for administrative action are set out in the attached Election of Rights. All 15 requests for hearing shall be made to the Agency for Health Care Administration, and delivered to the Agency Clerk, Agency for Health Care Administration, 2727 Mahan Drive, MS #3, Tallahassee, Florida 32308. RESPONDENT IS FURTHER NOTIFIED THAT THE FAILURE TO RECEIVE A REQUEST FOR A HEARING WITHIN TWENTY-ONE (21) DAYS OF RECEIPT OF THIS COMPLAINT WILL RESULT IN AN ADMISSION OF THE FACTS ALLEGED IN THE COMPLAINT AND THE ENTRY OF A FINAL ORDER BY THE AGENCY. IF YOU WANT TO HIRE AN ATTORNEY, YOU HAVE THE RIGHT TO BE REPRESENTED BY AN ATTORNEY IN THIS MATTER Komen @ koe an td Lourdes A. Naranjo, Esq. Fla. Bar No.: 997315 Assistant General Counsel Agency for Health Care Administration 8333 N.W. 537? Street Suite 300 Miami, Florida 33166 305-718-5906 Copies furnished to: Arlene Mayo-Davis Field Office Manager Agency for Health Care Administration 5150 Linton Blvd. - Suite 500 Delray Beach, Florida 33484 (U.S. Mail) 16 CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing has been furnished by U.S. Certified Mail, Return Receipt Requested to Cindy Dookeran, Administrator, Briarwood Manor, 5621-5631 N. W. 28th Street, Lauderhill, Florida 33313 on a \ this2Z@ "day of , 2011. Dr lie, Glew orf Ourdes A. Naranjo, Esq. 17 STATE OF FLORIDA AGENCY FOR HEALTH CARE ADMINISTRATION RE: DDJJ LLC d/b/a Briarwood Manor AHCA No.: 2011005869 ELECTION OF RIGHTS This Election of Rights form is attached to a proposed action by the Agency for Health Care Administration (AHCA). The title may be Notice of Intent to Impose a Late Fee, Notice of Intent to Impose a Late Fine or Administrative Complaint. Your Election of Rights must be returned by mail or by fax within 21 days of the day you receive the attached Notice of Intent to Impose a Late Fee, Notice of Intent to Impose a Late Fine or Administrative Complaint. If your Election of Rights with your selected option is not received by AHCA within twenty- one (21) days from the date you received this notice of proposed action by AHCA, you will have given up your right to contest the Agency’s proposed action and a final order will be issued. (Please use this form unless you, your attorney or your representative prefer to reply according to Chapter 120, Florida Statutes (2006) and Rule 28, Florida Administrative Code.) PLEASE RETURN YOUR ELECTION OF RIGHTS TO THIS ADDRESS: Agency for Health Care Administration Attention: Agency Clerk 2727 Mahan Drive, Mail Stop #3 Tallahassee, Florida 32308. Phone: 850-412-3630 Fax: 850-921-0158. PLEASE SELECT ONLY 1 OF THESE 3 OPTIONS OPTION ONE (1) I admit to the allegations of facts and law contained in the Notice of Intent to Impose a Late Fine or Fee, or Administrative Complaint and I waive my right to object and to have a hearing. I understand that by giving up my right to a hearing, a final order will be issued that adopts the proposed agency action and imposes the penalty, fine or action. OPTION TWO (2) I admit to the allegations of facts contained in the Notice of Intent to Impose a Late Fee, the Notice of Intent to Impose a Late Fine, or Administrative Complaint, but I wish to be heard at an informal proceeding (pursuant to Section 120.57(2), Florida Statutes) where I may submit testimony and written evidence to the Agency to show that the proposed administrative action is too severe or that the fine should be reduced. OPTION THREE (3)____—sid dispute the allegations of fact contained in the Notice of Intent to Impose a Late Fee, the Notice of Intent to Impose a Late Fine, or Administrative Complaint, and I request a formal hearing (pursuant to Subsection 120.57(1), Florida Statutes) before an Administrative Law Judge appointed by the Division of Administrative Hearings. PLEASE NOTE: Choosing OPTION THREE (3), by itself, is NOT sufficient to obtain a formal hearing. You also must file a written petition in order to obtain a formal hearing before the Division of Administrative Hearings under Section 120.57(1), Florida Statutes. It must be received by the Agency Clerk at the address above within 21 days of your receipt of this proposed administrative action. The request for formal hearing must conform to the requirements of Rule 28- 106.2015, Florida Administrative Code, which requires that it contain: 1. Your name, address, and telephone number, and the name, address, and telephone number of your representative or lawyer, if any. 2. The file number of the proposed action. 3. A statement of when you received notice of the Agency’s proposed action. 4. A statement of all disputed issues of material fact. If there are none, you must state that there are none. Mediation under Section 120.573, Florida Statutes, may be available in this matter if the Agency agrees. License type: (ALF? nursing home? medical equipment? Other type?) Licensee Name: License number: Contact person: Name Title Address: Street and number City Zip Code Telephone No. Fax No. Email(optional) I hereby certify that I am duly authorized to submit this Notice of Election of Rights to the Agency for Health Care Administration on behalf of the licensee referred to above. Signed: 0 Dates Print Name: Title: Late fee/fine/AC STATE OF FLORIDA AGENCY FOR HEALTH CARE ADMINISTRATION STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION, Petitioner, AHCA No.: 2011009335 Return Receipt Requested: v. 7009 0080 0000 0586 2180 DDJJ LLC d/b/a BRIARWOOD MANOR, Respondent. ADMINISTRATIVE COMPLAINT COMES NOW State of Florida, Agency for Health Care Administration (“AHCA”’), by and through the undersigned counsel, and files this administrative complaint against DDJJ d/b/a Briarwood (hereinafter “Briarwood Manor”), pursuant to Chapter 429, Part I, and Section 120.60, Florida Statutes (2010), and alleges: NATURE OF THE ACTION 1. This is an action to revoke the assisted living facility license of Respondent [License No.: 7478], pursuant to Section 408.815(1) (c)&(d), Florida Statutes, and Section 429.14(1) (e), Florida Statutes, and to impose an administrative fine of $21,000.00 pursuant to Sections 429.14 and 429.19, Florida Statutes (2010), for the protection of public health, EXHIBIT 2 safety and welfare. Section 429.14(1)(e), Florida Statutes, provides that the Agency may revoke an assisted living facility license if the facility is cited with one or more Class I deficiencies. Section 408.815(1) (c)&(d), Florida Statutes, provides that the Agency may revoke a license for a violation of “this part, authorizing statues, or applicable rules” or “for a demonstrated pattern of deficient practice”. The Agency has considered the factors outlined in Section 419.19(3), Florida Statues, in imposing the penalty and fixing the amount of the fine. JURISDICTION AND VENUE 2. This Court has jurisdiction pursuant to Sections 120.569 and 120.57, Florida Statutes (2010), and Chapter 28-106, Florida Administrative Code (2010). 3. Venue lies pursuant to Rule = 28-106.207, Florida Administrative Code (2010). PARTIES 4. AHCA is the regulatory authority responsible for licensure and enforcement of all applicable statutes and rules governing assisted living facilities pursuant to Chapter 429, Part I, Florida Statutes (2010), and Chapter 58A-5 Florida Administrative Code (2010). 5. Briarwood Manor operates a 34-bed assisted living facility located at 5621-5631 N. WwW. 28° Street, Lauderhill, Florida 33313. Briarwood Manor is licensed as an assisted living facility under license number 7478. Briarwood Manor was at all times material hereto a licensed facility under the licensing authority of AHCA and was required to comply with all applicable rules and statutes. 6. On August 17, 2011, the Agency entered an Immediate Moratorium on Admissions (AHCA No.: 20110090890) on the basis that the Agency determined that the current practices and conditions at Briarwood Manor present a threat to the health, safety, or welfare of the residents of the facility; present an immediate serious danger to the public, health, safety, or welfare; and present an immediate or direct threat to the health, safety, or welfare of the Residents who reside at Briarwood Manor. COUNT I BRIARWOOD MANOR FAILED TO PROVIDE APPROPRIATE SUPERVISION FOR EACH RESIDENT INCLUDING GENERAL AWARENESS OF THE RESIDENT’S WHEREABOUTS, AND A WRITTEN RECORD AFTER A MAJOR INCIDENT. RULE 58A-5.0182(1), FLORIDA ADMINISTRATIVE CODE (RESIDENT CARE - SUPERVISION STANDARDS) CLASS I VIOLATION 7. AHCA re-alleges and incorporates paragraphs (1) through (6) as if fully set forth herein. 8. Briarwood Manor was cited with two (2) Class I deficiencies and one (1) Class II deficiency as a result of a survey conducted on August 11, 2011. On August 17, 2011, an Immediate Moratorium on Admissions was served on Briarwood Manor 9. A survey was conducted on August 11, 2011. Based on Based on interview and record review, it was determined that the facility failed to provide appropriate supervision for each resident including: General awareness of the resident's whereabouts and a written record, updated after a major incident for 1 of 3 sampled residents reviewed (Resident #1). The findings include the following: 10. Record review on 8/11/11 revealed Resident #1 was admitted to the facility on 1/22/09 with a diagnosis to include schizophrenia and renal cell cancer. A facility note on 7/20/11 documented the resident did not return to the facility until 2:00 AM. Note on 7/23/11 documented the resident did not return to the facility until 11:30 PM. On 7/28/11 the resident left the facility. A Resident Elopement Prevention Drill Form dated 7/29/11 at 7:00AM did not identify the employees who noticed the resident missing, the time she was last seen, employees who assisted in the search or a description of the resident. Further review of the record did not contain an incident report. 11. During an interview with the administrator on 8/11/11 at 10:45 AM, she stated the facility has not identified any residents who may be at risk for elopement. She also stated the residents are not required to sign in or out when they leave the property as it is all done verbally. The surveyor was unable to determine the last time Resident #1 was seen at the facility. 12. A review with the administrator of the facility staffing schedule identifies one staff member working the 11:00 PM-7:00 AM shift. Two days a week the staff member working the overnight shift works a 16 hour double shift. During the review the administrator stated this is the facility's permanent schedule. 13. A review with the administrator of the policy and procedure manual did not identify a policy regarding resident supervision. A review of the elopement policy revealed the facility will: "conduct elopement drills with all the staff twice a year to protect our residents from elopement." "Any elopement will be documented in the resident file along with a copy of the adverse incident report. “A review of the elopement drills did not identify a drill in 2011 and only one drill in 2010. 14. During an interview on 8/11/11 at 11:46 AM with several unsampled residents, they were asked if they had to notify anyone when they leave the facility's property. All the residents interviewed stated they did not need to notify anyone, and they just needed to be back by 11:00 PM. As of 8/11/11 at 3:00 PM Resident #1 has not been found. 15. Based on the foregoing facts, Briarwood Manor violated Rule 58A-5.0182(1), Florida Administrative Code, herein classified as a Class I violation, which warrants an assessed fine of $10,000.00. COUNT IT BRIARWOOD MANOR FAILED TO HAVE MEDICATIONS AVAILABLE TO ADMINISTER IN ACCORDANCE WITH HEALTH CARE PROVIDER’S ORDER OR PRESCRIPTION LABEL. RULE 58A-5.0185(4)&(5), FLORIDA ADMINISTRATIVE CODE (MEDICATION ADMINISTRATION STANDARDS) CLASS II VIOLATION 16. AHCA re-alleges and incorporates paragraphs (1) through (6) as if fully set forth herein. 17. A survey was conducted on August 11, 2011. Based on record review and interview, it was determined that the facility failed to have medications available to administer in accordance with a health care provider's order or prescription label, for 1 of 3 sampled residents reviewed (Resident #3). The findings include the following. 18. Resident #3 was admitted to the facility on 6/3/11 with a diagnosis to include Psychosis and COPD. An 1823 health assessment form completed by the physician on 6/14/11 identified the residents medications to include Simvastin 40 mg 1 tab daily and Risperidone 4 mg 1 tablet HS. A review of the medication observation record (MOR) did not list the medications. 19. During an interview on 8/11/11 at 2:30 PM with the med tech, it was confirmed the MOR did not include Simvastin 40 mg 1 tab daily or Risperidone 4 mg 1 tablet HS. She acknowledged the facility did not have the medications and stated they were probably discontinued. The facility was not able to provide evidence the physician discontinued any of the resident's medications. The facility must maintain a daily medication evaluation record (MOR) for each resident who receives assistance with self-administration of medication or medication administration. The MOR must include a chart recording each time the medication is taken, any missed dosages, refusals to take medication, or medication errors. The MOR must be immediately updated each time the medication is offered or administered. 20. Based on the foregoing facts, Briarwood Manor violated Rule 58A-5.0185(4)&(5}, Florida Administrative Code, herein classified as a Class II violation, which warrants an assessed fine of $1,000.00. COUNT III BRIARWOOD MANOR FAILED TO ESTABLISH A RISK MANAGEMENT AND QUALITY ASSURANCE PROGRAM. SECTION 429.23, FLORIDA STATUTES RULE 58A-5.0241, FLORIDA ADMINISTRATIVE CODE (RISK MANAGEMENT AND QUALITY ASSURANCE STANDARDS) CLASS I VIOLATION 21. AHCA re-alleges and incorporates paragraphs (1) through (6) as if fully set forth herein. 22. A survey was conducted on August 11, 2011. Based on record review and interview, it was determined that the facility failed to establish a risk management and quality assurance program, the purpose of “which is to assess resident care practices, facility incident reports, and adverse incident reports, for 2 of 3 records reviewed (Resident #1 and #2). The findings include the following. 23. Record review on 8/11/11 revealed Resident #1 was admitted to the facility on 1/22/09 with a diagnosis to include schizophrenia and renal cell cancer. A facility note on 7/20/11 documented the resident did not return to the facility until 2:00 AM. Note on 7/23/11 documented the resident did not return to the facility until 11:30 PM. On 7/28/11 the resident left the facility. A Resident Elopement Prevention Drill Form dated 7/29/11 at 7:00 AM did not identify the employees who noticed the resident missing, the time she was last seen, employees who assisted in the search or a description of the resident. Further review of the record did not contain an incident report. 24. During an interview with the administrator on 8/11/11 at 10:45AM, she stated the facility has not identified any residents who may be at risk for elopement. She also stated she faxed an adverse incident report to the agency on 7/29/11 but could not provide confirmation. At 10:55 AM the AHCA complaint unit was contacted and confirmed the agency had not received the required notification regarding the elopement. 25. The surveyor was unable to determine the last time Resident #1 was seen at the facility. As of 8/11/11 at 3:00 PM Resident #1 has not been found. 26. Resident #2 was admitted to the facility on 11/16/93 with a diagnosis to include Diabetes, COPD, and Neuropathy. A note dated 3/27/11 documents the resident was dizzy and fell. The resident was transferred to the hospital and returned to the facility on 3/30/11. During an interview on 8/8/11 at 1:45 PM with the administrator and med tech, it was revealed the med tech stated 911 was contacted and the resident was transported by ambulance to the local hospital. She could not remember what happened to the resident and did not complete an incident report. 27. Based on the foregoing facts, Briarwood Manor violated Section 429.23, Florida Statutes, and Rule 58A-5.0241, Florida Administrative Code, herein classified as a Class I violation, which warrants an assessed fine of $10,000.00. CLAIM FOR RELIEF WHEREFORE, the Agency requests the Court to order the following relief: 1. Enter a judgment in favor of the Agency for Health Care Administration against Briarwood Manor on Counts I through IIl. 2. Revoke the assisted living facility license [License No.: 7478] of Briarwood Manor for the citations cited in counts I through III. 3. Assess an administrative fine of $21,000.00 against Briarwood Manor on Counts I through III for the violations cited above. 4. Assess costs related to the investigation and prosecution of this matter, if the Court finds costs applicable. 5. Grant such other relief as this Court deems is just and proper. Respondent is notified that it has a right to request an administrative hearing pursuant to Sections 120.569 and 120.57, Florida Statutes (2010). Specific options for administrative action are set out in the attached Election of Rights. All 10 requests for hearing shall be made to the Agency for Health Care Administration, and delivered to the Agency Clerk, Agency for Health Care Administration, 2727 Mahan Drive, MS ~= 4#3, Tallahassee, Florida 32308. RESPONDENT IS FURTHER NOTIFIED THAT THE FAILURE TO RECEIVE A REQUEST FOR A HEARING WITHIN TWENTY-ONE (21) DAYS OF RECEIPT OF THIS COMPLAINT WILL RESULT IN AN ADMISSION OF THE FACTS ALLEGED IN THE COMPLAINT AND THE ENTRY OF A FINAL ORDER BY THE AGENCY. IF YOU WANT TO HIRE AN ATTORNEY, YOU HAVE THE RIGHT TO BE REPRESENTED BY AN ATTORNEY IN THIS MATTER vo Ve vile, blwraus.) Lourdes A. Naranjo, Esq. Fla. Bar No.: 997315 Assistant General Counsel Agency for Health Care Administration 8333 N.W. 53°? Street Suite 300 Miami, Florida 33166 Copies furnished to: Arlene Mayo-Davis Field Office Manager Agency for Health Care Administration 5150 Linton Blvd. - Suite 500 Delray Beach, Florida 33484 (U.S. Mail) 11 CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing has been furnished by U.S. Certified Mail, Return Receipt Requested to Cindy Dookeran, Administrator, Briarwood Manor, 5621-5631 N. W. 28° Street, Lauderhill, Florida 33313 on this [7 aay of ih. , 2011. Lourdes A. Naranjo, Esq. 12 STATE OF FLORIDA AGENCY FOR HEALTH CARE ADMINISTRATION RE: DDJJ LLC d/b/a Briarwood Manor AHCA No.: 2011009335 ELECTION OF RIGHTS This Election of Rights form is attached to a proposed action by the Agency for Health Care Administration (AHCA). The title may be Notice of Intent to Impose a Late Fee, Notice of Intent to Impose a Late Fine or Administrative Complaint. Your Election of Rights must be returned by mail or by fax within 21 days of the day you receive the attached Notice of Intent to Impose a Late Fee, Notice of Intent to Impose a Late Fine or Administrative Complaint. If your Election of Rights with your selected option is not received by AHCA within twenty- one (21) days from the date you received this notice of proposed action by AHCA, you will have given up your right to contest the Agency’s proposed action and a final order will be issued. (Please use this form unless you, your attorney or your representative prefer to reply according to Chapter 120, Florida Statutes (2006) and Rule 28, Florida Administrative Code.) PLEASE RETURN YOUR ELECTION OF RIGHTS TO THIS ADDRESS: Agency for Health Care Administration Attention: Agency Clerk 2727 Mahan Drive, Mail Stop #3 Tallahassee, Florida 32308. Phone: 850-412-3630 Fax: 850-921-0158. PLEASE SELECT ONLY 1 OF THESE 3 OPTIONS OPTION ONE (1) _ I admit to the allegations of facts and law contained in the Notice of Intent to Impose a Late Fine or Fee, or Administrative Complaint and I waive my right to object and to have a hearing. I understand that by giving up my right to a hearing, a final order will be issued.that adopts the proposed agency action and imposes the penalty, fine or action. OPTION TWO (2) I admit to the allegations of facts contained in the Notice of Intent to Impose a Late Fee, the Notice of Intent to Impose a Late Fine, or Administrative Complaint, but I wish to be heard at an informal proceeding (pursuant to Section 120.57(2), Florida Statutes) where I may submit testimony and written evidence to the Agency to show that the proposed administrative action is too severe or that the fine should be reduced. OPTION THREE (3)___I dispute the allegations of fact contained in the Notice of Intent to Impose a Late Fee, the Notice of Intent to Impose a Late Fine, or Administrative Complaint, and I request a formal hearing (pursuant to Subsection 120.57(1), Florida Statutes) before an Administrative Law Judge appointed by the Division of Administrative Hearings. PLEASE NOTE: Choosing OPTION THREE (3), by itself, is NOT sufficient to obtain a formal hearing. You also must file a written petition in order to obtain a formal hearing before the Division of Administrative Hearings under Section 120.57(1), Florida Statutes. It must be received by the Agency Clerk at the address above within 21 days of your receipt of this proposed administrative action. The request for formal hearing must conform to the requirements of Rule 28- 106.2015, Florida Administrative Code, which requires that it contain: 1. Your name, address, and telephone number, and the name, address, and telephone number of your representative or lawyer, if any. 2. The file number of the proposed action. 3. A statement of when you received notice of the Agency’s proposed action. 4. A statement of all disputed issues of material fact. If there are none, you must state that there are none. Mediation under Section 120.573, Florida Statutes, may be available in this matter if the Agency agrees. License type: (ALF? nursing home? medical equipment? Other type?) Licensee Name: License number: Contact person: Name Title Address: Street and number City Zip Code Telephone No. Fax No. Email(optional) I hereby certify that ] am duly authorized to submit this Notice of Election of Rights to the Agency for Health Care Administration on behalf of the licensee referred to above. Signed: Date: Print Name: Title: Late fee/fine/AC 000 p.1 Jan170106:28p STATE OF FLORIDA ; to. AGENCY FOR HEALTH CARE ADMINISTRATION Fr | 1 rE D RE: DDJJ LLC d/bfa Briarwood Manor AHCA No.: 2011005869 _ AGE eva, ERK ; 20H AUG Te ECTION OF RIGHTS BPI) This Election of Rights form is attached to a proposed action by the Agency for Health Care Administration (AHCA). The title may be Notice jof Entent to Impose a Late Fee, Notice of Intent to Impose a Late Fine or Administrative Cd maplaint. pour Election of Rights must be returned by mgit or by fax within 22 days of the dav you receive the attached Notice of Intent to Impose a Lite /Fes. Notice of Intent to Impose a Late Fin Administrative Complat Hf your Election of Rights with your selected optjon is not received by AHCA within twenty- one (21) days from the date you received this noticd of proposed action by AHCA, you will have given up your right to contest the Agency's proposed < and a fial order will be issued. (Please use this form unless you, your attomey or yo feprescntative prefer to reply according to Chapter 120, Florida Statutes (2006) and Rule 28, Fk rida Administrative Code.) PLEASE RETURN YOUR CTION OF RIGHTS TO THIS ADDRESS: Agency for Health Care Administration j Attention: Agency Clerk ; 2727 Mahan Drive, Mail Stop #3 Tallahassee, Florida 32308. Phone: 850-412-3630 Fax: 850-921-0158. PLEASE SELECT Q GF THESE 3 OPTIONS OPTION ONE (1). I admit to the allegatipns of facts and law contained in the Notice of Intent to Impose a Late Fine or Fee, or Administrative Complaint and | waive my right to object and to have a hearing, | understand that by}giving up my right to a hearing, a final order will be issued that adopts the proposed agency actionjand imposes the penalty, fine or action. OPTION TWO (2) L adunit to the allegati$ns of facts contained in the Notice of Intent to Impose a Late Fee, the Notice of Intent td Impose a Late Fine, or Administrative Complaint, but J wish to be heard at an informal proceeding (pursuant to Section 120.57(2), Flocida Statutes) where I may submit testimony and written evidence to the Agoncy to show that -the proposed admuinistrative action is too severe or that the fine should be reduced. ; OPTION THREE (3)_X 1 dispute the allegatiqas of fact contained in the Notice of Intent to Impose a Late Fee, the Notice of Intent td Impose a Late Fine, or Administrative Complaint, and 1 request a formal hearing (pursupnt to Subsection 120.57(1), Florida Statutes) before an Administrative Law Judge appointed by thd Division of Administrative Hearings. PLEASE NOTE: Choosing OPTION THREE (4), by itself, is NOT sufficient te obtain a forma! hearing. You also must file a written petition in order to obtain a formal hearing before the Division of Administrative Hearings under Se¢tion 120.57(1), Florida Statutes. It must be + 1 srg CeLbt Le ezine EXHIBIT 3 000 p2 Jan 1704 06:28» received by the Agency Clerk at the address above Within 21 days of your receipt of this proposed administrative action. The request for formal hearing must conform to tbe requirements of Rule 28- 106.2015, Florida Administrative Code, which requifes that it contain: 1. Your name, address, and telephone number, ang the name, address, and telephone number of your representative or Lawyer, if any. 2. The file number of the proposed action. 3. A statement of when you received notice of the Agency’s proposed action. 4, A statement of all disputed issues of material fapt. If there are none, you soust state that there are none. Mediation under Section 120.573, Florida Statutes, may be available in this matter if the Agency agrees. License type: ALF (ALF? nursing hoche? medical equipment? Other type?) Licensee Name: BATARWoAD MANOR | License number: Contact person: SNE DookFA AN ‘DUN Name Title Address; °°71 maw? 2aty S71 name pL 33313 Street and number City Zip Code Telephone No. 784-135: #179 Pax No, 44 -486-30}) |Email(optional) [hereby certify that I am duly authorized to submit tliis Notice of Election of Rights to the Agency for Health Care Administration on behalf of the licengee referred to above. Sign od: Cu ws, Date: “At ‘ PrintName:_ Cand) —_Dot/tep.An/ Title:_Abran Late fee/fine/AC 6rd Bebb bE BZ ine 99/22/2011 3:26PM FAX 905919 PHARHCO {21000170008 - Ye \. . STATE OF FLORIDA AGENCY FOR HEALTH CARE ADMINISTRATION RE: DDIJ LLC d/b/a Briarwood Manor AHCA No.: 2011009436 ae wa) ty _ ELECTION OF RIGHTS 2 By, ee Co ceeeecee ee OP, This form is attached to a proposed action ‘by the “Agency for Health Care Administration en, ‘The title may be Notice of Intent to Impose a Late Fee, Notice of Intent to Impose a Late Fine or Administrative Complaint, vecelve ve attached Notice of inte ‘ent ty Impose 2 Late 2 Fee, Notice of ‘Tatent ‘0 Impose a Late Fine or Adminisirative Complaint, jf tf If your Election of Rights with your selected option Is not received od By AHCA within twenty. _ one ys trom the date you received this notice of propos lion Dy , you will have given up your right to contest the Agency's proposed action and a final order will be issued. - (Please use this form unless you, your attorney or your representative prefer to reply according to Chapter 120, Florida Statutes (2006) and Rule 28, Florida Administrative Code.) PLEASE RETURN YOUR ELECTION OF RIGHTS TO THIS ADDRESS: Agency for ilealth Care Administration Attention: Agency Clerk 2727 Mahan Drive, Mail Stop #3 ° Tallahassee, Florida 32308, Phone: 850-412-3630 Fax: 850-921-0158, PLEASE SELECT ONLY 1 OF THESE 3 OPTIONS OPTION ONF (i) T admit to the allegations of factsjand law contained in the Notice of Intent to Ympose a Late Fine or Fee, or Administrative Complaint and I waive my right to object and to have a hearing, T understand that by giving up my right to a hearing, a final order will be issued that adopts the proposed agency action and imposes the nally, fine or action. OPTION TWO (2) _ lL admit to the allegations of facts contained i in the Notice of Intent to, Impose a Late Fee, the Notice of Intent to Impose a Late Fine, or Administrative Complaint, but I wish to be heard at an Informal proceeding (pursuant to Section 120.57(2), Florida Statutes) where I may submit testimony and written evidence to the Agency to show that the proposed administrative action is too severe or that the fine should be reduced. OPTION THREE (3)_ 46 J dispute the allegations of fact contained in the Notice of Intent to. Impose a Late Fee, the Notice of Intent to Impose a Late Fine, or Administrative Complaini, and I request a formal hearing (pursuant to Subsection 120.57(1), Florida Statutes) before an Administrative Law Judge appointed by the Division of Administrative Hearings. : Choosing OPTION THREE (3), by itself, is NOT sufficient to obtain » formal hearing. You also must file a written petition in order to obtain a formal hearing bofore the Division of Administrative Hearings under Section 120.57(1), Florida Statutes. It must be EXHIBIT 4 VOefeVll S.cOrM FAA suOMIET PHARMUU (g0902/0008 received by the Agency Clerk at the address above within 21 days of your recoipt of this proposed + administrative action, The request for formal hearing must conform to the roquirements of Rule 28- 106.2015, Florida Administrative Code, which requires that it contain: L. Your name, address, and telephone number, and the name, address, and telephone number of your representative or lawyer, if arty. : - ; Mediation under Section 120.573, Florida Statutes, may be available in this matter if the Agency agrees, a Ligense type: ALE (ALF? nursing home? medical equipment? Other type?) ? Contact person: cxeupy DoockErans ADAENE SRA TDR. . Name - Title Address S62! NW gerd Sr Lauber aril AL 333) Street and number : City Zip Code Telephone No, 98V - 735" Pax No. 8Y~ ¥95_ Rmail(optional) FPF BEY) : I hereby certify that [ am duly authorized to submit this Notice of Election of Rights to the Agency for Health Cure Administration on behalf of the licensee referred to above. Signed: Grip). Date; ahs) : i Print Name:_G2N0 nokeRan rite Abu, Late fee/fine/AC STATE OF FLORIDA DIVISION OF ADMINISTRATIVE HEARINGS AGENCY FOR HEALTH CARE ) ADMINISTRATION, ) ) Petitioner, ) ) vs. ) Case Nos. 11-4432 ) 11-5103 DDJJ, LLC d/b/a BRIARWOOD ) MANOR, ) ) Respondent. ) ) ORDER OF CONSOLIDATION These cases having come before the undersigned on the Agreed Motion to Consolidate, filed October 14 and 17, 2011, and the undersigned having reviewed the records in these cases, it is, therefore, ORDERED that: 1. DOAH Case Nos. 11-4432 and 11-5103 are consolidated pursuant to Florida Administrative Code Rule 28-106.108. 2. The style of this cause is amended as reflected above. DONE AND ORDERED this 17th day of October, 2011, in Tallahassee, Leon County, Florida. Erol A Verb ERROL H. POWELL 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 EXHIBIT 5_ Filed with the Clerk of the Division of Administrative Hearings this 17th day of October, 2011. COPIES FURNISHED: Lourdes A. Naranjo, Esquire Agency for Health Care Administration 8333 NW 53rd Street, Suite 300 Miami, Florida 33166 Cindy Dookeran Briarwood Manor 5631 Northwest 28th Street Lauderhill, Florida 33313 Cindy Dookeran DDJJ, LLC d/b/a Briarwood Manor 5621 Northwest 28th Street Lauderhill, Florida 33313 STATE OF FLORIDA DIVISION OF ADMINISTRATIVE HEARINGS AGENCY FOR HEALTH CARE ) ADMINISTRATION, ) ) Petitioner, ) ) vs. ) Case Nos. 11-4432 ) 11-5103 DDJJ, LLC d/b/a BRIARWOOD ) MANOR, ) ) Respondent. ) ) ORDER CLOSING FILES AND RELINQUISHING JURISDICTION These causes having come before the undersigned on Petitioner's Motion to Relinquish Jurisdiction, filed January 25, 2012, to which Respondent did not file a response, having been provided an opportunity to do so, and the undersigned being fully advised, it is, therefore, ORDERED that: 1. The final hearing scheduled for February 27 and 28, 2012, is canceled. 2. The files of the Division of Administrative Hearings are closed. Jurisdiction is relinquished to the agency. EXHIBIT G_ DONE AND ORDERED this 6th day of February, 2012, in Tallahassee, Leon County, Florida. COPIES FURNISHED: Lourdes A. Naranjo, Esquire Euol A Veurll ERROL H. POWELL 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 6th day of February, 2012. Agency for Health Care Administration 8333 NW 53rd Street, Suite 300 Miami, Florida 33166 Cindy Dookeran Briarwood Manor 5631 Northwest 28th Street Lauderhill, Florida 33313 STATE OF FLORIDA AGENCY FOR HEALTH CARE ADMINISTRATION STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION, Petitioner, AHCA NO.: 2011009335:2011005869 CASE NO.: 12-106PH vs. DDJJ LLC d/b/a BRIARWOOD MANOR, Respondent. / ORDER CLOSING FILE AND RELINQUISHING JURISDICTION This cause came before the undersigned upon receipt from the Respondent informing of the withdrawal of the request for a hearing. Based upon this notice from the Respondent informing that the facility is closed the Respondent specifically informs that the Respondent no longer requests a hearing. A copy of this writing from the Respondent is attached hereto as Exhibit ‘A’ and by reference made a part hereof. The undersigned being fully advised, it is, therefore, ORDERED that: 1. This informal hearing file is closed and jurisdiction is relinquished to the Agency for Health Care Administration for entry of final order. DONE AND ORDERED at Tallahassee, Leon County, Florida, this and day of April, 2012. Agency for Health Care Administration Rickard. Joseph. ‘Sahiba Richard Joseph Saliba Informa! Hearing Officer EXHIBIT 7_ Copies furnished to: Lourdes Naranjo, Esquire Agency for Health Care Administration (Electronic Mail) Ms. Cindy Dookeran DDJJ LLC d/b/a BRIARWOOD MANOR 5621 NW 28" Street Lauderdale Hill Fl 33313 rwood Manor Phone: 954-735-8989 Fax: 954-485-3641 Reference to case #: 12-106PH. AHCA Nos. 20110056869 & 2011009335. Formerly DOAH Nos. 41-4432 & 11-5103. ATTN: Mr. Saliba rm you that Briarwood Manor was officially closed and is as of 3/21/12. Briarwood Manor is no longer interested in This letter is to inf no longer in operatio defending this case. Thank you a dobg Cindy Dookeran
Findings Of Fact Manor Care, on June 18, 1987, filed with DHRS, its Petition for Formal Administrative Proceeding, to protest the agency's denial of its application for a CON to construct a 120 bed nursing facility in Lee County, Florida for the January, 1990 planning horizon. On July 6, 1987, Bon Secours filed with DHRS its Petition for Formal Administrative Hearing to protest the agency's denial of its application for a CON to construct a 120 bed nursing facility in Lee County, also for the same planning horizon. On July 8, 1987, FHFC filed its Petition for Formal Hearing with DHRS contesting the agency's denial of its application for a 120 bed nursing home for the same planning horizon in Lee County. In that same batching cycle, DHRS also comparatively reviewed the applications of Unicare Health Facilities, Inc., to construct a 60 bed facility; Florida Country Place, to construct a 30 bed facility as a part of a retirement complex; Hillhaven Corporation, to construct a 109 bed community nursing home; Health Quest Corporation to construct a 60 bed facility; and Shive Nursing Center, Inc., to construct a 60 bed facility. DHRS determined there was a need in Lee County for the planning horizon in question for an additional 60 beds and thereafter awarded 42 beds to FHFC and 30 beds to Florida Country Place. As of the hearing, DHRS proposes to award a CON for 60 beds to one of the remaining parties. THE PARTIES Manor Care currently owns and operates nine nursing homes in Florida. Of the presently operating homes, seven are rated superior by the state and the other two are rated as standard. The corporation has a regional office in Winter Park, Florida, headed by a senior regional director under whose supervision, Manor Care has constructed and opened three of the above nine facilities. Each of those three was completed on time and within budget and each holds a superior rating. The Sisters of Bon Secours in The United States, Inc., a not for profit corporation based in the State of Maryland, is a civil corporation of the religious order of the Sisters of Bon Secours. This order was founded in 1824 for the purpose of promoting a health care ministry under the auspices of the Roman Catholic Church. The order owns the Bon Secours Health System which carries out this health care mission. Bon Secours Health Systems is also a not for profit entity and will operate the Lee County facility if construction is approved. Bon Secours Health Systems also operates Bon Secours Hospital and Villa Maria Nursing Center in Miami, Florida. As a nonprofit entity, Bon Secours reinvests any excess revenues in its health care delivery system as opposed to returning a profit to private investors. A nonprofit entity does not, however, necessarily mean that a profit is not earned out of operations. FHFC is a small, family owned corporation which owns and operates nursing homes in Florida, Iowa, and Missouri and, with its related companies, Clark Development, and Village Properties, has been in business since 1967. FHFC currently owns and operates five nursing homes in Florida, none of which have ever been owned or managed by an outside company. Further, neither FHFC nor its related companies have ever sold an issued or approved CON. Pines Village had a conditional rating when opened but is currently rated standard. Pines Villages currently owned and operated by FHFC, is located on a five acre landscaped site in Lee County. Amenities on the property include a pond and fishing deck for the use of the patients, and the local Boy Scout troop has built a gardening area for the residents. Volunteer and professional staff are provided by FHFC to accompany residents on the grounds. The facility was originally opened as a 78 bed facility and has operated at that level until only recently. THE PROPOSALS The applicants propose the following facilities and costs: FHFC MANOR CARE BON SEC. Total Proj. Cost $866,940 $3,108,500 $ 3,596,700 New Total GFT $ 13,420 $ 27,000 $34,000 GFT/Bed $ 291.55 $ 450 $ 566.60 Const. Cost $697,840 $1,377,000 $ 2,073,700 Const. Cost/ft2 $ 52.00 $ 51.00 $ 60.99 Const. Cost/Bed $ 11,630 $ 22,950 $34,562 Total Cost/Bed $ 14,449 $ 51,808 $59,945 Manor Care proposes to finance its project by the issuance of convertible debentures at an estimated interest rate of 12 percent which includes the estimated cost of converting the debentures. In the event that lower interest rates become available, Manor Care will take advantage of them. Bon Secours projects financing by tax exempt bonds at 8 1/2 percent. It has secured similar bond funding in the past and is confident it can secure it here. Florida Health Facilities proposes to utilize a conventional loan at 10 percent interest. There is no reason to believe that such financing is not available. The applicants propose the following patient charges: FHFC MANOR CARE BON SECOURS Private --- $ 83.98 $85.00 Semiprivate $69.00 $ 72.43 $74.00 Medicaid $45.34 $ 73.48 --- Medicare $62.00 $109.96 --- VA $81.00 --- --- Private-Alz. --- $ 88.18 --- Semi-private-Alz.-- $ 78.73 --- Each of the current applicants is highly skeptical of the accuracy of its competitors pro forma cost estimates and thereby concludes the costs and resultant charges proposed are "optimistic," "flawed," "unrealistic," "inaccurate," and "internally inconsistent." Even if these criticisms are true, they apply equally to all applicants, and when evaluating the proposals, allowance is made for proprietary puffing and the recognition that the actuality of the future may vary widely from the recollections of the past and the estimates of the present. Consequently, unless shown to be clearly inaccurate or not capable of belief, the representative of the applicants are accepted here as made. The applicants propose the following commitments to Medicaid patients: FHFC MANOR CARE BON SECOURS Medicaid Util. 50 percent 35 percent 33.5 percent Medicaid Rate $58.39 $73.48 $85.00 (P) $74.00 (SP) Current Medicaid utilization at FHFC is 53 percent, a figure which is comparable to other nursing facilities in Lee County. Bon Secours' commitment of 33 1/2 percent is the minimum Medicaid commitment required by the local health plan. Manor Care projects a 35 percent utilization and places an upper limit of 45 percent on Medicaid participation overall. Manor Care tends to locate its facilities in more affluent neighborhoods, however and caters to a more upscale patient mix. Medicare projections by the parties are Manor Care, 5 percent; FHFC, 2 percent; and Bon Secours, 19.9 percent. The latter figure, Bon Secours', would appear to be high, however, for the area in question where statistics available indicate Medicare utilization has declined. Medicare is generally a high reimbursement service. All three proposals are consistent with the goals of the State Health Plan which are to develop alternatives to Institutionalization; to insure appropriate long term care services are available; and to insure such services are appropriately utilized. They are also consistent with the local health plans although in all cases, compliance may not be as clearly shown. However, of all applicants, Bon Secours best addressed the question of Medicare provision and the need for rehabilitative and subacute care facilities in the county. Bon Secours proposes a facility which will emphasize rehabilitative and restorative care under a program known as short term/long term care (stays of 90 days or less). In addition, Bon Secours proposes to also provide long term care of over 90 days when required. Manor Care proposes to offer long term care services and a segregated Alzheimer's Disease unit with 30 of the new beds going to long term care and 30 to the proposed Alzheimer's unit. FHFC intends to add 60 beds to its existing facility in Lee County without an addition in ancillary space. In other words, construction will be limited to that necessary to provide patient rooms, nursing station and baths but not additions to the common areas, the dining area, or the therapy area. QUALITY OF CARE AND STAFFING Manor Care has a developed, effective quality assurance program. It has identified the nursing home requirements from all states in which it operates and compiled those requirements into a comprehensive manual for internal use which is updated annually. Based on the requirements contained in the manual, an unannounced survey is performed by a team which includes specialists in all areas of nursing home care once a year. If a facility is deficient in any category, a plan of correction and a resurvey are required. In addition, a nurse in Manor Care's regional office acts as a consultant on an ongoing basis to the various nursing homes, and the senior regional director, located in Florida, makes regular visits to all Manor Care homes within the state. A member of the Clark family, the sole owners of FHFC, visits each of the corporation's facilities at least biweekly making an examination and inspection of the kitchen, the grounds, and the patient rooms. Periodic family dinner nights are held at each of the facilities at which patients and their families have an opportunity to meet with the senior staff of the facility. This gives the staff the opportunity to receive feedback from the residents and their families. In addition, FHFC requires the submission of a quarterly quality assurance questionnaire by its facilities, provides all new administrators two weeks in-house training at an FHFC facility, and provides, a management team to periodically inspect each of the FHFC facilities to insure that the facility is being managed and operated consistent with the corporation's internal quality assurance manual. If a facility is not in compliance, the administrator and department heads of that facility are required to prepare a deficiency report and establish a plan for correction of the deficiency. No FHFC facility in Florida has ever had its license downgraded to "conditional" after DHRS inspection. Bon Secours' quality assurance program addresses all quality care concerns. In the operation of the program, each department is involved in quality assessment providing for staff input into the establishment of required standards. Bon Secours' Villa Maria facility currently holds a "superior" license and hopes to acquire that category license for its Lee County facility. Villa Maria is accredited by the Joint Commission on Accreditation of Health Organization and by the Commission of Accreditation on Rehabilitation Facilities. The systems utilized to achieve these accreditations will be utilized in Lee facility. The staffing plan proposed by Bon Secours, if implemented, will provide quality care and professional supervision at all times. Due to its relationship with church affiliated training schools, Bon Secours is more likely to find it easier to recruit health care professionals at the entry level. Manor Care intends to provide 3 nursing hours per patient day as opposed to 3.5 as proposed by Bon Secours. FHFC's proposal is projected at 2.5. Current staffing at the FHFC facility, however, exceeds DHRS minimum requirements and it is anticipated that projected staffing for the 60 bed addition will also exceed DHRS minimum requirements. FHFC also will have activities staff available to the patients eight hours per day, seven days a week. Emergency transfer assistance and referral agreements are in existence with more than five local hospitals and mutual aid agreements have been negotiated with approximately ten local nursing homes. Contracts for therapeutic services, dental services, podiatry services, medical utilization review, and a registered dietician are in operation. The facility offers a full time social worker holding a Bachelor's degree and has consultant arrangements with an individual with a Master's degree in social work. The full time social worker performs admissions and discharge coordination, assists with patient care and planning, and provides referral to community resources. A physical therapy aide is on the premises seven days a week. Rehabilitation, speech, and occupational therapy services are contracted for on an "as needed" basis. The current level of usage is not high, however, and while both other applicants propose providing the service through either in-house or contract personnel, this is not a major factor. Bon Secours' staff level in all areas appears generous and might result in unnecessary cost levels even though salaries paid are reportedly lower than normal. BUILDING DESIGN AND EQUIPMENT Manor Care originally proposed a two-story, 120 bed facility. The currently proposed 60 bed design is essentially the first floor of that facility with minor modifications such as the elimination of three-bed rooms. The facility design calls for 27,000 square feet (AS0 square feet per bed) and includes a separate unit for Alzheimer's Disease patients and their activities. The facility, equipped with high quality furnishings and equipment, is designed to provide a homelike atmosphere. Due to its ability to purchase in bulk, Manor Care can provide custom designed fabrics and wall coverings as opposed to stock products, adding a special touch and warmth to the facility's atmosphere. Bon Secours' 34,000 square foot addition, providing 566.6 square feet per bed, is overly large. Its' projected amenities, including a private shower in each patient room, suggest a facility providing first class comfort. There is no separate activities room, however, as the dining room serves that function. Since the dining room is not immediately adjacent to the kitchen, food service may be impacted. FHFC's proposal contemplates a 13,400 square foot, (291.55 square foot/bed), 60 bed addition to its existing facility. Construction would be of noncombustible framing and trusses fabricated from light gauge steel. The proposed 60 bed addition will reproduce one of the existing wings of the current facility and will add a new nursing station at the juncture of the existing facility with the new wing. The proposed addition meets all DHRS design and construction requirements. The existing dining room, kitchen, and recreational facilities are believed to be sufficient to provide services to the new wing since the original facilities were designed to exceed DHRS requirements and are large enough to accommodate the new patients. Construction as proposed will not violate any travel distance requirements and the outside view from the patient rooms satisfies DHRS' twenty foot setback requirement The construction costs proposed by FHFC are realistic and appear substantially less than those of the other two applicants. This difference may be attributable to several factors including the excess capacity in ancillary spaces designed and built into the existing facility which do not need duplication in the construction of the new facility. Another basis for difference is the lack of need for site preparation and kitchen equipment for much the same reason. FHFC's design does not provide private showers in each patient room, as does Bon Secours', but instead calls for a community shower/tub area which provides privacy for a showering patient. The resident will be transported to and from the bathing area fully clothed, and if able to bathe without assistance, will be offered privacy behind a shower curtain while bathing with an aide waiting outside. No more than one patient will be allowed in the bathing area at a time. All of the exit doors at FHFC's facility are equipped with alarms to indicate opening. Access to the facility cannot be gained through side doors which provide exit in case of emergency. The dining room is adjacent to the kitchen providing for hot food to be served and an ease in substitution in the event the patient changes his or her mind about menu selection. Bon Secours proposes a security guard for its facility. Neither other applicant proposes this nor is it considered needed. SPECIAL PROGRAMS Manor Care is the only one of the three applicants proposing a unit dedicated to the treatment of Alzheimer's Disease patients. There is no such program currently available in Lee County nor was there much evidence of need for it presented. Manor Care's proposal calls for a separate wing for patients with Alzheimer's Disease or related disorders which account for, arguably, approximately 50 percent of all nursing home admissions. This wing would include a separate lounge and dining room and would be decorated with special colors, lighting, wall covers and other details developed with special consideration for the effect on Alzheimer's Disease patients. Special treatment programs incorporating activities, dietary, and the medical needs of this type of patient would be provided. Patients with Alzheimer's Disease are difficult to care for and hard to place and it has been suggested that in an appropriate type unit, the patient's condition may possibly improve. Manor Care has extensive experience in operating units of this nature with ten currently operating around the country and others in development. MISCELLANEOUS Manor Care provides a chaplaincy program at all its facilities in Florida, to attend to the religious needs of its residents. Bon Secours, a religious organization, would expect to reflect the religious affiliation of the area which may not necessarily be consistent with the Catholicism of the sponsoring order. The majority of patients at Villa Maria, for example, are Jewish. FHFC currently provides, in its facility, for Catholic, Jewish, and multi-denominational Protestant worship on a regular basis, along with Bible study groups and other religiously oriented gatherings. All three applicants indicate that the programs and proposals offered by its competitors are inadequate and not demonstrably financially feasible. The argument made by each against the submissions of its competitors are, however, not persuasive. Each is a projection of future activity based on historical background in an entirely different area. Nonetheless, it should not be forgotten that each, itself, applied for an equivalent facility. There is little substantive difference in the proposals of the three applicants. All would provide quality in facilities that would meet the standards of the department. Each has applied for a facility in which it anticipates providing a service while at the same time, generating an excess of income over expenses. In evaluating the three applicants, therefore, while considering the negative comments by one toward the others, one is not necessarily persuaded by the detailed objections and criticisms voiced by each. While Bon Secours proposes joint educational programs with institutions of higher learning, none of these are local but are, instead, for the most part in Miami and Tampa. Use of Lee County facilities by these institutions is not considered likely to be heavy absent implementation of local training programs.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore: RECOMMENDED that a Final Order be entered granting Certificate of Need 5030, for 60 community nursing home beds in Lee County, Florida, for the planning horizon of January, 1990, to Florida Health Facilities Corporation/Lee County. RECOMMENDED this 29th day of June, 1988, at Tallahassee, Florida. ARNOLD H. POLLOCK Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 29th day of June, 1988. APPENDIX TO RECOMMENDED ORDER, CASE NOS. 87-3511,3514, & 3516 The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties to this case. BY MANOR CARE: 1 & 2. Accepted and incorporated herein. Irrelevant. Accepted. 5 & 6. Accepted and incorporated herein. Accepted and incorporated herein except for the last sentence which, as to motive, is not supported by the evidence of record. Accepted and incorporated herein. 9 &1 0. Accepted and incorporated herein except for the last phrase starting, "without analyses... " which was not established. Accepted. Accepted and incorporated herein. Accepted and incorporated herein. 14-17. Accepted and incorporated herein. 18 & 19. Accepted but not probative of any matter in issue. 20-22. Accepted and incorporated herein. Accepted. Accepted 25-27. Accepted except for the characterization of FHFC's figures 28 & 29. Accepted and incorporated herein. 30 & 31. Accepted. 32-34. Accepted and incorporated herein. 35. Rejected as written. 36-40. Accepted in substance and incorporated herein. 41 & 42. Accepted and incorporated herein. 43 Accepted but suggested problems not identified or shown. Accepted. Rejected as not supported by evidence of record. Accepted and incorporated herein. Accepted and incorporated herein. 48 & 49. Accepted. 50. Accepted and incorporated herein. 51-53. Accepted, but descriptive comments are considered opinion rather than fact. 54. Accepted and incorporated herein. & 60. Accepted. & 57. Accepted and incorporated herein. Accepted and incorporated herein except for last phrase of last sentence. Accepted and incorporated herein. 61. Accepted and incorporated herein except for first sentence which is rejected. BY BON SECOURS: 1-3. Accepted and incorporated herein. 4. Considered as background and not fact. 5 - 8. Accepted and incorporated herein. 9 - 11. Accepted and incorporated herein. 12 - 14. Accepted and incorporated herein. 15. Accepted and incorporated herein. 16 - 20. Accepted and incorporated herein. 21 & 22. Accepted and incorporated herein. 23 & 24. Accepted as opinion and not as fact. 25. Rejected. 26 & 27. Accepted and incorporated herein. 28 & 29. Accepted as opinion and not as fact. 30 - 32. Accepted. 33 - 35. Accepted. 36. Accepted and incorporated herein. 37 - 39. Accepted. 40 - 43. Accepted and incorporated herein. First sentence rejected, second sentence accepted. Accepted. Rejected as not an appropriate Finding of Fact. 47 - 50. Accepted and incorporated herein. 51. Accepted and incorporated herein except for third sentence which is speculation 52 & 53. Accepted. Rejected as an unjustified conclusion. Rejected as not established. 56 & 57. Accepted as to allegations of proposal but conclusions rejected. 58 & 59. Accepted and incorporated herein. 60 & 61. Accepted and incorporated herein. 62 & 63. Rejected as speculation and unjustified conclusion drawn. 64. Accepted. 65 & 66. Accepted and incorporated herein. 67. Rejected as irrelevant without evidence of circumstances. 68 & 69. Accepted and incorporated herein. 70 & 71. Accepted. Accepted and incorporated herein. Budget fact accepted-balance rejected as conclusion. 74 & 75. Accepted and incorporated herein. 76 & 77. Accepted. 78 & 79. Accepted. 80 & 81. Accepted. Accepted. First sentence rejected as opinion-balance accepted. First sentence accepted and incorporated herein second sentence rejected as not being a Finding of Fact third sentence rejected as opinion only. 85 - 87. Accepted and incorporated herein. 88 & 89. Accepted. Accepted as different and pleasing but not necessarily better. Accepted. Rejected as not proven. Accepted. 94 & 95. Accepted as evidence of difference but not necessarily superiority. Accepted. Rejected as not proven. Accepted and incorporated herein. 99 & 100. Accepted. Details accepted Conclusion rejected. Accepted. First sentence accepted but not considered dispositive of any issue second sentence rejected as not proven. 104 & 105. Accepted. 106-108. Accepted as opinion evidence. 109. Accepted. 110-112. Accepted. 113-116. Accepted. 117. Irrelevant. 118-121. Accepted. 122-124. Accepted. 125-128. Accepted. 129. Accepted but discounted. 130 & 131. Accepted and incorporated herein. Rejected. Accepted and incorporated herein. 134-137. Accepted and incorporated herein. Rejected as contra to the evidence. Accepted. First sentence rejected-Second sentence accepted and incorporated herein. 141-143. Accepted. 144-146. Accepted except for the last sentence in the paragraph which is rejected. 147-149. Accepted. 150 & 151. Rejected as irrelevant and not supported by competent evidence. 152-154. Accepted and, except for 154, incorporated herein. Accepted. Accepted and incorporated herein. Rejected as contra to the evidence. Accepted. BY FHFC: 1 & 2. Accepted and incorporated herein. 3. Accepted and incorporated herein. 4 & 5. Accepted and incorporated herein. 6 & 7. Accepted and incorporated herein. 8. Accepted. 9 - 11. Accepted and incorporated herein. 12 & 13. Accepted. 14 & 15. Accepted. 16. Accepted. 17 & 18. Accepted and incorporated herein. 19. Accepted. 20-22. Accepted. 23-25. Accepted and incorporated herein. 26-28. Rejected as conclusions/opinions and not Findings of Fact. 29 & 30. Accepted but considered more as argument. 31-33. Accepted and, in part, incorporated herein. Accepted. Accepted. 36 & 37. Accepted and incorporated herein. 38-42. Accepted and incorporated herein. 43 & 44. Accepted and incorporated herein. Accepted. Accepted but also considered a comment on the evidence and not necessarily a Finding of Fact Accepted. 48 & 49. Accepted and incorporated herein. 50 & 51. Accepted. 52-54. Accepted and incorporated herein. 55-57. Accepted and incorporated herein. Accepted. Rejected as opinion and not fact. Accepted. Accepted. Accepted and incorporated herein. Accepted. 64 & 65. Accepted and incorporated herein. 66-68. Accepted. 69 & 70. Accepted and incorporated herein. 71. First sentence accepted-second sentence rejected as a recital of the evidence 72 & 73. Accepted and incorporated herein. COPIES FURNISHED: Donna Stinson, Esquire Moyle, Flanigan, Katz, Fitzgerald and Sheehan 118 North Gadsden Street Tallahassee, Florida 32301 Byron Matthews, Esquire Vicki Gordon Kaufman, Esquire H. Guy Collier, Esquire McDermott, Will & Emery North Monroe Street Tallahassee, Florida 32301 Robert D. Newell, Jr., Esquire Newell & Stahl, P.A. South Monroe Street Tallahassee, Florida 32301 John Stone, Esquire Neiman, Neiman, Stone & Spellman 1119 High Street Des Moins, Iowa 50310 Richard Patterson, Esquire 2727 Mahan Drive Tallahassee, Florida 32308
The Issue Which of the applications for certificates of need for community nursing home beds for the Palm Beach County July, 1991, planning horizon filed by Whitehall Boca, an Illinois limited partnership; Manor Care of Boca Raton, Inc. d/b/a Manor Care of Boca Raton; Vari-Care, Inc. d/b/a Boulevard Manor Nursing Center; and Maple Leaf of Palm Beach County Health Care, Inc., should be granted, if any?
Findings Of Fact In November, 1988, the applicants in this proceeding filed applications for certificates of need for nursing home beds in District IX, subdistrict 4 (Palm Beach County) for the July, 1991, planning horizon. The Department of Health and Rehabilitative Services (hereinafter "HRS") published a fixed need pool applicable to this batching cycle of 62 additional nursing home beds for Palm Beach County. Maple Leaf of Palm Beach County Health Care, Inc., a wholly-owned subsidiary of Health Care and Retirement Corporation of America (hereinafter "HCR") proposes to add 30 nursing home beds to its approved 90-bed nursing home to be located in the Jupiter area of northern Palm Beach County. HCR's 30-bed addition would be accomplished by construction of a new 20-bed wing and the conversion of 10 private rooms to semi-private rooms. HCR will license and operate its nursing home through Maple Leaf of Palm Beach County Health Care, Inc., a corporation wholly-owned by HCR and established expressly for the development of this project. There is no operational difference between Maple Leaf of Palm Beach County Health Care, Inc., and HCR. HCR has been in the business of developing and operating nursing homes for over 25 years and operates 130 facilities with 16,000 nursing home beds in 19 states. In Florida, HCR operates 10 nursing homes and has several additional facilities under development. The 90-bed approved nursing home to which HCR seeks to add 30 beds will offer extensive rehabilitation, subacute care, high tech services and a 20-bed special care unit for Alzheimer's Disease and dementia victims. HCR's application for the 30-bed addition does not propose any additional special programs, but the rehabilitative and restorative care capability of the nursing home will be available to the patients admitted to the 30 additional beds. The new construction proposed by HCR consists of a sixth 20-bed wing (pod) added to the nursing home. Upon completion, the 120-bed nursing home will consist of 46,000 square feet with six individual resident pods and a central core area for administrative and support services. Each pod consists of 20 beds, and three pods comprise one nursing unit. One nursing unit is located on each end of the nursing home. Each three-pod unit has its own dining and activities areas. It will not be necessary to construct any additional support services for the proposed 30-bed addition. The pod design proposed by HCR provides unique and innovative benefits to the residents of the nursing home. The pod design breaks down the traditional institutional corridor design into smaller, residential-like increments. Instead of long corridors with rooms on each side, living areas are constructed in 20-bed increments (pods) clustered around a home-like living area or atrium located in the center of the pod. Each atrium is intended to have an identity of its own, such as a sitting area, activity area, library, living room, or game room. The pod design is much more residential in character than the traditional nursing home. HCR nursing homes, including this 30-bed addition, incorporate design elements necessary for both skilled nursing care and subacute care. The 30-bed addition proposed by HCR will meet subacute care standards. Vari-Care, Inc. d/b/a Boulevard Manor Nursing Center (hereinafter "Vari-Care or Boulevard") suggests than its design is superior because it proposes to provide piped-in oxygen to rooms designated for subacute care. However, there is no requirement for oxygen supplies to be built into a room in order to provide subacute care. In today's technology, equipment for oxygen is brought into the room. HCR's allocation of equipment costs for this addition include equipment for the provision of subacute care. The project cost for the 30-bed addition proposed by HCR is $706,000 or $23,533 per bed. The total project cost for the approved 90 beds would be $3,865,000, or $42,944 per bed. Combining the 90- and 30-bed projects results in a total project cost of $4,571,000, or $38,092 per bed. Economies of scale make HCR's 120-bed nursing home more cost effective than construction of only the 90-bed nursing home. Purchase of additional land is not required for the HCR addition. HCR's total project costs for its 30-bed addition and for its resulting 120-bed facility are lower than those of any competing applicant. HCR enjoys economies of scale in its purchase of equipment for nursing homes because of the number of projects that it has under development at any given time and because of the national contracts which it has with material and equipment suppliers. HCR's volume purchasing allows HCR to obtain substantial discounts which, in turn, allows HCR to provide higher quality furnishings and equipment at competitive prices. HCR projects a second year utilization of 93.1% for the 30 additional beds, comprised of 42% Medicaid patients, 10% Medicare patients and 48% private pay and insurance patients. The 90-bed approval has a Certificate of Need (hereinafter "CON") condition which requires a minimum 33% Medicaid payor mix. The overall Medicaid payor mix at the 120-bed nursing home is projected to be 35%. All of the beds including the added beds at the HCR nursing home will be certified to serve Medicaid patients. HCR's most recent history of service to Medicaid patients is 59.4% companywide, which includes a range of 26.7% to 90.4% in Florida facilities. HCR will be able to fulfill its commitment to Medicaid patients in the addition. HCR intends to meet any conditions which include a requirement of 42% Medicaid utilization in the 30 added beds. HCR's utilization projections are reasonable. The HCR nursing home will be accessible to all residents of the service district. HCR proposes the following patient charges for 1992: private room, $101.66; semi-private room, $87.17; Medicaid, $83; and Medicare, $86. HCR's patient charges for 1992, the only year for which each applicant submitted charges, are lower than any competing applicant's charges. In determining the financial feasibility of this 30-bed project, HCR took into consideration financial feasibility of the approved 90-bed nursing home as well as the financial feasibility of the total 120-bed project. The 30- bed addition proposed by HCR as well as the resulting 120-bed nursing home are financially feasible. HCR has never had a nursing home license denied, revoked, or suspended and has never had a nursing home placed into receivership. HCR has never experienced a condition in one of its nursing homes which threatened or resulted in direct significant harm to any of its residents. At the time of hearing, HCR operated four nursing homes in Florida which had superior ratings, including one nursing home which, though continuing to be operated by HCR, underwent a technical change of ownership and thus became ineligible for a superior rating. HCR also operates nursing homes in West Virginia, which has a licensure rating system similar to that of Florida's. In West Virginia, all of HCR's nursing homes have licensure ratings comparable to Florida's superior rating. HCR adheres to extensive quality assurance (hereinafter "QA") standards which are based upon, and in some instances more stringent than, state and federal regulations. The purpose of the QA standards is to ensure the highest possible quality care for the residents of the nursing home. HCR utilizes a multi-tiered system to monitor compliance with the QA standards. Each nursing home performs quarterly a quality assurance audit to determine its compliance with the quality assurance standards. From the regional level, HCR provides professional services consultants, typically registered nurses or registered dieticians, who serve as problem solvers and trouble shooters for facilities within their region and typically visit each facility at least once a month. These professional consultants, who are employees of HCR, act as support for the nursing homes within their region, working with directors of nursing, administrators, registered dieticians, and the department heads in the individual nursing homes to ensure compliance with QA standards and monitor the quality of care provided in the nursing homes. Each HCR nursing home is subjected to an annual QA audit performed pursuant to a contract by an independent, outside organization. After the annual survey, the nursing home is provided with a written report and is required to submit a written plan of correction for any identified deficiencies. Implementation of the plans of correction and ongoing compliance with the QA program are monitored by the professional services consultants and management. HCR utilizes a formalized acuity program which provides for a total assessment and evaluation of each resident to determine the level of care needed for each resident. After admission, the required level of care may change. It is common for the condition of a nursing home resident to change during the nursing home stay. HCR's formalized acuity program takes into account these changes in condition and allows the nursing home to provide the level of staffing appropriate to the level of care required by each resident. The staffing proposed by HCR exceeds state requirements. There will be 13.6 total FTE RN, LPN, and nurse aide staff for the 30-bed addition, organized with 6.126 FTE staff on the first shift, 4.374 on the second shift, and 3.1 on the third shift. This is equivalent to a total staff per resident ratio for the 30 additional beds of .493, and a shift staff per bed ratio for the three shifts of .20, .15, and .10, respectively. HCR's 120-bed nursing home will have 78.4 total FTE RN, LPN, and nurse aide staff, or .653 total nursing staff per resident. The shift staffing in the 120-bed HCR nursing home will consist of 35 FTE for the first shift, 25.2 for the second, and 18.2 for the third, which is equivalent to a shift staff per bed ratio of .29, .21, and .15, respectively. The level of staffing proposed by HCR will enable HCR to provide high quality patient care. The staffing proposed by HCR in its 30-bed addition is higher than any competing applicant except Manor Care of Boca Raton, Inc. d/b/a Manor Care of Boca Raton (hereinafter "Manor Care") and the staffing for HCR's 120-bed facility is the highest of any of the applicants. Vari-Care sought to demonstrate that its design of providing showers in each resident's room was superior. There are safety concerns relating to providing showers in each patient room. Residents receiving skilled and subacute care usually have to be assisted in and out of tubs or showers. Most residents in the HCR nursing home will not be able to enter or bathe unassisted in a shower or tub. Although it is possible for some patients to be rolled into showers in wheel chairs, baths are superior to showers for increasing circulation and preventing decubitus (skin breakdown). Each HCR nursing unit provides a central bathing unit each for males and for females. Central tubs and showers are easier for disabled residents because of the availability of hydraulic lifting devices to assist the residents in and out of the tubs and showers. There are no hydraulic lifting devices in individual rooms. HCR's QA standards establish procedures for protecting patient privacy and patient dignity during times of bathing, and HCR always uses privacy curtains and individual showers for men and women. HCR and each other applicant provided a description of their plans for various operational details of their proposed nursing homes, including plans for recruitment, career ladders, preadmission screening, appropriateness review, discharge planning, utilization review, QA programs and procedures, specialized programs, resident surveys, residents' councils, security and protection of residents' property, dietary services, linkage with local providers, activity coordination, spiritual development, mental health services, restorative and normalizing activities, quality of life enhancements, training-related plans for staff development and improvement of staff skills, and the availability of the facility for training programs. Compliance with these plans and procedures is important in providing high quality of care to nursing home residents. The plans and procedures described in the HCR application are appropriate. Nursing home beds in Palm Beach County are clustered into three distinct areas: the northern area near Jupiter, the middle area near West Palm Beach and Boynton Beach, and the southern area near Boca Raton and Delray Beach. The social and economic environments of these areas and the highway support system suggest the reasonableness of these divisions, although the Local Health Council has not subdivided Palm Beach County into these three areas for formal health planning purposes. At the time of hearing, there were eight approved nursing home projects with 584 new nursing home beds under development in Palm Beach County: 210 of these approved beds were to be located in southern Palm Beach County; 284 beds were to be located in the mid-Palm Beach County area; and 90 beds were to be located in the northern Palm Beach County area. The only new nursing home in the northern Palm Beach County area is the HCR nursing home. HCR will be located in one of the least affluent sections of Palm Beach County. The HCR nursing home will enhance competition in the service area, because it is the only new nursing home to be located in the northern Palm Beach County area and the quality of services to be offered by HCR will challenge existing facilities to enhance their quality of care. Whitehall Boca, an Illinois limited partnership (hereinafter "Whitehall") is an existing, combined ACLF and nursing home located in Boca Raton in southern Palm Beach County. Whitehall is licensed for 73 skilled nursing beds and 115 ACLF beds. However, because Whitehall has converted some semi-private ACLF rooms to private rooms, its effective ACLF capacity is 62. Whitehall proposes to convert 27 ACLF beds to nursing home beds. Whitehall's expressed purpose for the conversion is to meet the demand for nursing home beds from some of their existing ACLF residents. Structurally, the facility is two-stories and consists of two "V"- shaped wings on each floor. Three of the four wings have identical floor plans. The other wing consists of laundry, kitchen, and mechanical facilities, and nine semi-private ACLF resident rooms. The three identical wings each contain 28 resident rooms, two community tubs, and two showers. One of these wings is currently used for ACLF residents only, another is exclusively designated for skilled nursing, and the third wing is divided between 14 ACLF rooms and 14 skilled nursing rooms. Whitehall proposes to convert the 25 ACLF beds located in these 14 rooms of this third wing to 24 skilled nursing beds. Additionally, three existing skilled nursing rooms located on the first floor will be converted from private to semi-private rooms. In total, the conversion will result in Whitehall's nursing home beds increasing from 73 to 100, configured in 12 private and 44 semi-private bed, rooms. This conversion can be accomplished without construction or additional equipment and would involve only $70,000 in new expenditures (representing attorneys' and consultants fees). During the three years prior to filing its CON application, and as long as it has been eligible, Whitehall has received superior licensure ratings. Whitehall directs its marketing so as to attract residents from outside Palm Beach County and from outside the State of Florida. The visibility that this marketing provides Whitehall makes it better able than its competitors to fill the new beds to be awarded in this proceeding, but makes it less likely that any approved additional nursing home beds would be available to residents of Palm Beach County. Therefore, granting Whitehall's CON application could result in the need for new beds in Palm Beach County remaining unsatisfied. To foster career advancement, Whitehall pays 100% tuition for courses of study that relate directly to its employees' jobs. Whitehall also pays 50% tuition for any course of study an employee pursues that does not pertain to their position at Whitehall. Whitehall Boca contracts with Professional Medical Review, a quality assurance review organization. Whitehall Boca's procedure for quality assurance is that Whitehall's Director of Nursing provides to Professional Medical Review data which quantifies the quality of care that is provided at Whitehall. Professional Medical Review then assembles the data and, with guidelines established by that organization, provides Whitehall with its analysis of that data. With that data, Whitehall plans a method of correction. In addition, Whitehall performs its own in-house, day-to-day quality assurance. This level of quality assurance involves documentation of the quality of patient care, infection control, and safety. Because incoming residents may have difficulty adapting to the nursing home setting, Whitehall has created the "newcomers" Sunshine Group to assist in this transition. If further assistance in the transition process is necessary, Whitehall refers the resident to specialized counseling. Whitehall staffs more dietary personnel than other facilities its size because it offers individual catering throughout the entire facility through its contract for food services provided by the Marriott Corporation. It also makes room service available to all residents. Whitehall has in place a restorative dining program. This program is designed for residents who are not eating independently, but are capable of being restored to this level. The restorative dining program at Whitehall stresses the use of special utensils, modifications of diet, and independent eating training. Whitehall provides hospice services on two levels. The first is Whitehall's in-house social worker who is available to the facility's terminally ill residents on a day-to-day basis. The second consists of Whitehall's association with Hospice by the Sea, a private organization that provides counseling to terminally ill patients. Whitehall arranges with amateur entertainers, school children groups, The Humane Society, the YMCA, and the Girl Scouts to provide its residents with entertainment and linkages to the outside world. Whitehall's architectural design provides extraordinary amenities that improve the residents' quality of life. Whitehall's facility features original artwork and elaborate moldings in the corridors, hallways and patient rooms, making it residential in nature. Whitehall's patient rooms are home-like in design and are all equipped with brand name residential furniture. Each room has a quilted bed spread and a designer headboard. The ceilings in the rooms are nine feet high rather than the standard eight feet required by code. Additionally, each room is centrally heated and cooled and has an individual thermostat and fan speed control. The Whitehall facility features a "market square" which provides an outdoor street setting for a dental office, podiatry office, saloon where beer and wine are served, gift shop and a designated chapel for religious services. Whitehall's dining room is large and elegant. The tables are covered with linens, and fresh flowers are placed on each table. Whitehall has an outdoor patio with an awning to provide shade. Entrance to the patio is facilitated by automatic sliding glass doors which allow residents in wheelchairs to move about conveniently. The corridors in the Whitehall facility are ten feet wide rather than eight feet as required by code. Wall coverings and fixtures are used in the corridors. At Whitehall, breakfast is served by special order at any time during the morning. For lunch, Whitehall serves hot and cold foods, i.e., sliced meats and salads (egg and tuna). For dinner, Whitehall serves a variety of meals which are posted on a daily menu. Whitehall offers an Alzheimer support group for families of Alzheimer patients - these groups are open to residents' families as well as to the public generally. Whitehall coordinates a diabetes support group that meets regularly at the facility. Whitehall also conducts an annual health fair, seminars on a variety of subjects and brings in speakers on health related issues all of which are open to the general public. In terms of geographic accessibility to necessary medical services, Whitehall is strategically located. It is conveniently situated between I-95 and the Florida Turnpike in southern Palm Beach County. It is further west than any of the competing applicants which is the area where the majority of growth in the county is taking place. In terms of offering new techniques and quality of care for patients through relationships with research entities, Whitehall is currently the site of a clinical research project of the F.A.U. School of Nursing into the "life cycle of humans." The purpose of the project is to acquaint nursing students with an understanding of the role of the elderly in American society, to develop in them a more thorough understanding of the many functions of a long-term care facility. The Florida Board of Nursing requires nurses to undergo continuing education and obtain a certain number of continuing education units (CEU) in order to maintain their licensure. The nurse training seminars conducted by Whitehall are recognized by the Board of Nursing for CEU credit. These seminars are also open to the public. The costs and methods of conversion proposed by Whitehall are not in question. The beds Whitehall seeks to convert were originally constructed to nursing home code. As a result, the only modification necessary to implement its conversion is the installation of curtain tracks in rooms being converted from private to semi-private. Whitehall maintains referral agreements and other contacts to link it to the surrounding community. Whitehall maintains links with the following hospitals in the area: Boca Community Hospital; Delray Community Hospital and West Boca Hospital. Whitehall estimates that the total project cost for the 27-bed conversion will be $1,368,188 or $50,674 per bed. Whitehall's estimates include $209,090 for land costs or $7,744 per bed. The original costs for the Whitehall building was over $8,000,000. Financially, the Whitehall operation is a highly-leveraged investment, which results in Whitehall paying a high rate of interest. Interest costs on the Whitehall construction mortgage are approximately $1,100,000 per year. Whitehall has never admitted Medicaid-eligible residents to its facility and does not offer to serve any Medicaid-eligible residents in its proposed 27-bed conversion. Although Whitehall's refusal to accept Medicaid- eligible residents is based upon Whitehall's belief that the level of reimbursement for those patients is insufficient for Whitehall to continue to maintain its existing levels of amenities and service, Whitehall has performed no calculations to determine what its Medicaid reimbursement would be or whether it would have to decrease its level of care or amenities in order to accept Medicaid-eligible residents. Whitehall has accepted a small percentage of Medicare-eligible patients in the past, but Whitehall does not propose to certify any portion of the 27-bed conversion to provide care to Medicare- eligible patients. Whitehall has distributed $909,000 to its partners since Spring, 1988. Whitehall's projection of revenues and expenses after the 27-bed conversion assumes a yearly disbursement to partners of $500,000. Thus, high charges are necessary to cover the substantial mortgage interest and partnership dividends. Whitehall projects patient room charges in 1992 of $181 for a standard private room, $115 for a semi-private room, and $96 for Medicare reimbursement. This room rate applies to both nursing home and ACLF residents at Whitehall. The private pay charges projected by Whitehall are higher than those of any other applicant. Whitehall's semi-private room charge is the highest in Palm Beach County. Whitehall projects that it will have 79 total FTE direct care staff in the combined nursing home/ACLF in the second year of operation after conversion of the 27 beds. However, Whitehall's staffing projections are based upon a patient census of 130, which includes ACLF residents. Upon conversion of the 27 ACLF beds, Whitehall will have only 100 nursing home beds, not 130. Whitehall did not fully describe its staffing per shift. It is not possible to determine how Whitehall's nursing home beds will be staffed. Whitehall does not propose to change its staffing levels as a result of the conversion of 27 ACLF beds to nursing beds. An ACLF resident does not require as high a level of staffing as a nursing home resident. Because 27 ACLF beds are being converted to 27 nursing home beds, Whitehall's level of staffing for nursing home patients will be reduced if Whitehall does not add staff. Approximately 10% of Whitehall's nursing home residents come from outside Florida. Approximately 15% to 20% of Whitehall's nursing home residents come from outside Palm Beach County. Whitehall has been operating 62 ACLF beds rather than its full licensed complement of ACLF beds for approximately six years. Whitehall's 62 ACLF beds are occupied at approximately 80% to 85% occupancy. Most of the beds which Whitehall proposed to convert to nursing home beds are occupied by ACLF residents, who tend to be long-term residents. Whitehall's occupancy projections require its 27 converted beds to be filled to 95% occupancy within the first quarter of their operation. However, Whitehall does not assume that it is going to fill the 27 additional nursing home beds with its ACLF patients (in spite of Whitehall's stated purpose to convert the beds for use by ACLF residents) and Whitehall does not intend to atop admitting ACLF residents to its facility. Whitehall was unable to explain how it could continue to accommodate its ACLF patients while at the same time meeting its nursing home occupancy projections. The financial projections and schedules prepared in support of the Whitehall application are based upon facility-wide revenues and expenses for nursing home and ACLF residents. Whitehall prepared no financial feasibility projections for the 100-bed nursing home which will result from the 27-bed conversion or for the 27-bed conversion. It is not possible to determine from the evidence submitted by Whitehall whether this 27-bed conversion or the resulting 100 nursing home bed operation will be financially feasible in the long term. Boulevard is an existing nursing home located in Boynton Beach in the mid-Palm Beach County area. Boulevard currently operates 110 nursing home beds. Boulevard has a license to operate 44 additional beds acquired from Mason's Nursing Home. Boulevard is constructing a new wing to house the 44 beds. During construction, those 44 beds are inactive. Twenty-five (22.7%) of Boulevard's existing 110 beds are certified for Medicaid and 56 are certified for Medicare. When the 44 additional beds become operational, Boulevard's Medicaid certified beds will increase to 43 (27.9%). Vari-Care, Inc., a Delaware public corporation established in 1968, operates 25 nursing care facilities throughout the country, 20 of which are nursing homes. Since its inception, Vari-Care has operated its nursing facilities consistent with its corporate credo, "health care hospitality," that is, providing a health care environment with many of the hospitality characteristics commonly offered by the hotel and restaurant industries. Vari-Care operates three superior-rated nursing homes in Florida including Boulevard Manor Nursing Center, located on Seacrest Boulevard in Boynton Beach, Palm Beach County, Florida, which it has operated since 1976 and purchased in 1988. All nursing homes owned or operated by Vari-Care in Florida, including Boulevard Manor, have received superior ratings since the rating system has been in effect in Florida. Vari-Care's nursing homes outside Florida have always received the highest or next-to-highest rating in states having a nursing home rating system. All nursing homes owned or operated by Vari-Care in Florida, including Boulevard Manor, comply with or exceed staffing ratio requirements established by applicable laws, rules, and regulations. Boulevard Manor is currently medicare certified, does not have any outstanding deficiencies with the Health Care Financing Administration, has satisfied the Health Care Financing Administration's conditions of participation during its past three surveys, and has never been the subject of any certification or licensure revocation proceeding or moratorium. Vari-Care has never owned or operated a nursing home which has had its license revoked, been decertified from Medicare, or had its Medicare participation status revoked. Vari-Care provides managerial, programmatic, and operational resources to nursing homes it owns and operates, including the provision of a full-time Operations Director, who performs an operational review in each facility on a quarterly basis. Vari-Care's quality assurance program at Boulevard Manor incorporates the use of a regional nurse to perform approximately 25 to 30 quality assurance audits in a nursing home for each visit. After conducting the audit, the nurse confers with the nursing home's Director of Nursing and Administrator to review the scoring results and analyze any problems discovered. The Director of Nursing then turns the audits over to an established quality assurance committee within the nursing home to review the audits and determine what corrective actions need to be taken. The quality assurance committee makes recommendations to the Administrator and Director of Nursing, who formulate and institute an action plan. Vari-Care's quality assurance program meets or exceeds legal requirements. Boulevard Manor's utilization review plan evaluates the effectiveness and appropriateness of care rendered to Medicaid and Medicare patients. Reviews are performed by a committee comprised of two physicians having no financial interest in Boulevard Manor, the Administrator, the Director of Nursing, the Assistant Director of Nursing, and other professional personnel. The utilization review committee meets at a minimum on a monthly basis and on an on- call basis if there is a need. Boulevard Manor's activity program offers 4 to 5 activities on a daily basis, including educational programs, entertainment, and religious activities. Residents of Boulevard Manor are apprised of daily activities through rounds made by Boulevard Manor's staff, daily announcements posted on the facility's bulletin board, and a monthly newsletter designed to inform the residents, staff, community, and families of activities and events at the nursing home. Quality of life enhancements available to Boulevard Manor residents include: an ice cream and gift shop; non-institutional, residential-style furniture throughout the facility; a private dining room for residents and their family members; a chapel and library; a special foster grandparents program; color televisions and private baths within each room; an on-site laundry facility; and a barber and beauty shop. Community programs at Boulevard Manor include: participation in a Meals-on-Wheels program in conjunction with a neighboring church; a "speakers bureau" where nursing home residents go out into the community; visits with students from area schools, including Atlantic High School; a volunteer program for community activities; a voter registration program for residents that are not currently registered voters; and a respite care program for residents requiring care for a short period of time to relieve their usual caretaker. Boulevard Manor has extensive links within the community through informal and formal agreements with acute care hospitals, HMOs, physicians, rehabilitation facilities, the area's Veteran's Administration hospital and clinics, mental health and substance abuse programs, other nursing homes, ACLFs, adult day care programs, adult foster homes, hospice and home health agencies, social service agencies, and other related health care and human services programs. Intensive rehabilitative services available to residents at Boulevard Manor include speech, occupational, physical, and musical therapies, extra- nutritional therapy and dietary training, reality therapy for dementia and other patients, chemical therapy for sufferers of terminal illnesses and severe pain, bladder/bowel retraining and managing of incontinence, active and passive range of motion exercises, and ambulation programs to learn or relearn how to use walking aids and prostheses. Boulevard Manor's provisions for treatment of residents with mental health problems include a contract with a local psychiatrist, Dr. Tom O'Leary, a contract with Hospice-by-the-Sea, in-house programs offered by specially trained staff for treatment of Alzheimer's patients, and relationships with other community mental health resources. The majority of Vari-Care's facilities, including Boulevard Manor, are "clustered" in a particular geographic region with at least two other facilities operated by Vari-Care. Economies of scale resulting from this "clustering" concept include the use of one Regional Director and QA Nurse for all facilities in a particular area, and the ability to enter into regional food vendor contracts which contemplate a similar menu at all area facilities for better quality food at significant savings. Boulevard Manor's educational program includes ongoing affiliations with training programs and schools in the immediate area including Palm Beach Junior College, in which professors from the college teach training courses on such subjects as sexuality, motivation, and controlling personal stress. The addition of a subacute care unit would expand the availability of training programs for professional staff. Career advancement opportunities and other incentives and employee benefits such as tuition reimbursement and recruitment bonuses enable Boulevard Manor to recruit and maintain highly qualified staff at all levels. Boulevard Manor is geographically accessible to its community. It is located 1/2 mile east of 1-95, is directly accessible by public transportation, and is adjacent to Bethesda Memorial Hospital. Boulevard Manor makes use of the out-patient services provided at Bethesda Memorial Hospital including patient therapy, chemotherapy, radiation therapy, X-rays, and blood transfusions. Vari-Care integrates its "health care hospitality" philosophy into the design of its proposed bed addition at Boulevard Manor by offering non- institutional, residential-style furniture throughout the facility, corridors that are not straight but are avenues with room offsets, ceilings that are not flat but vary in height, and a mall concept around a courtyard with landscaping. Unique design features at Boulevard Manor include a drive-up entrance with a covered canopy, a large lobby with hotel-like furniture, a reception area, accent lighting, a beauty shop, a chapel and a study off the lobby, an ice cream and gift shop, a private dining room, a staff lounge and dining area, and a child day-care center for staff. Vari-Care's proposed 26 beds will be housed in semi-private accommodations wherein a partition wall enables each resident to have his or her own window, air conditioning unit, television, full bath, "roll-in" shower to accommodate wheelchairs, and walk-in closet. A partition in the room creates, in effect, a private room within a semi-private accommodation. There will be 120 square feet per resident in the semi-private rooms, which exceeds the State of Florida requirement for semi-private space in nursing homes. Vari-Care proposes to add 26 beds to its facility. Ten of the beds will be added by new construction in each wing of the existing 110-bed structure, bringing that structure up to 120 beds with two nurses stations. The remaining 16 beds will be added by converting 16 private rooms in the new 44-bed addition to semi-private rooms. There are no design changes required in the new wing, other than the conversion of 16 private rooms to semi-private rooms. Vari-Care proposes to certify 15 (58%) of the 26 additional beds to serve Medicaid-eligible residents. Vari-Care does not propose to certify any additional Medicare beds. Vari-Care projects a 32% Medicaid payor mix after addition of the 26 beds. This projection is based solely upon Vari-Care's intent to certify 58 (32% of 180) beds for Medicaid. Vari-Care's application describes a "high demand" for Medicaid beds and Vari-Care testified to a need for additional Medicaid beds. Nevertheless, only 25 of Boulevard's existing beds and 58 of Boulevard's proposed 180 beds will be Medicaid certified. Vari- Care's ability to serve Medicaid patients will be limited by the fact that it will certify only a portion of its beds. Vari-Care's projections of a 32% Medicaid payor mix are inconsistent with its historical payor mix of approximately 20%. Vari-Care's testimony that it will achieve 32% Medicaid simple because it will certify 32% of its beds is inconsistent with Vari-Care's testimony that it has never reached its maximum capacity for Medicaid patients in its existing facility. Vari-Care owns two other nursing homes in Palm Beach County, Medicana located in Lake Worth and The Fountains located in Boca Raton. Boulevard provided 18% of its patient days to Medicaid-eligible residents in calendar year 1988, and provided approximately 20% for the year to date at the time of hearing. In 1988, Medicana provided 15.5% of its patient days to Medicaid- eligible residents, and The Fountains provided 19.6%. Vari-Care's total project cost for the 26-bed addition will be $1,095,353 or $42,129 per bed. This cost includes the cost overrun anticipated by Vari-Care in its new wing but not included in the application estimates. The portion of that cost overrun allocable to the 16-bed conversion in the new wing is $106,408, or $6,650 per bed. Vari-Care's project cost estimates include land purchase costs of $107,620, or $4,139 per bed. Vari-Care projects patient charges in 1992 of $117 for a private room, $107 for a semi-private room, $87 as its Medicaid reimbursement, and $161 as its Medicare reimbursement. The long-term financial feasibility of Vari-Care's proposal is demonstrated by a positive net income for the first two years of operation, the ability of Vari-Care to service its debt adequately, its low debt-to-equity ratio, and its strong projected current ratio. Vari-Care testified that it does not intend to provide subacute care in its new 44-bed wing but that it would provide subacute care in the additional 16 beds in that wing. Boulevard's new wing incorporates design elements intended by Vari-Care to facilitate subacute care, such as piped-in oxygen. However, neither the design nor the construction of this new wing are contingent upon the approval of the 16-bed conversion. From a design standpoint, nothing proposed by Vari-Care in its application will enhance Boulevard's ability to provide subacute care. Boulevard's physical plant will be constructed to provide subacute care in the new wing, regardless of whether this application is approved. Vari-Care presented a schematic with its application which designated those private rooms to be converted to semi-private rooms. At final hearing, Vari-Care identified those rooms to be designated as the distinct subacute care unit. However, the rooms which Vari-Care designated for subacute care are not the same rooms to be converted from private to semi-private. Four of the rooms in the subacute care area are already semi-private rooms. Only four of the beds to be converted to semi-private use are located within the designated subacute care area. Therefore, except for four beds, Boulevard's designated subacute care unit will be in place upon completion of the 44-bed addition. Vari-Care described subacute care as care between acute hospital therapy and nursing home therapy or services not normally provided in a nursing home because of expense, specialized equipment and additional staffing that is necessary. Vari-Care cited examples of subacute care which it would provide to be respirator and ventilator care, tracheotomy care, IV services and decubitus care. However, Boulevard already provides subacute care, including tracheotomies, IV therapy, antibiotic therapy, pain management, dehydration and nutritional services, and decubitus care. Currently, subacute care at Boulevard is provided in the dedicated Medicare wing. The only type of subacute care which Boulevard will add is respirator and ventilator care. However, Vari-Care has not attempted to quantify the number of ventilator or respirator patients that it would treat. In any event, a CON is not required to provide ventilator or respirator care. The subacute care patients which Boulevard currently treats in the existing 110 beds are predominantly Medicare patients. Vari-Care expects 50% of the patients in the new 16 subacute beds and 10% of the patients in the 44 new beds to be Medicare patients. However, Boulevard does not propose to certify any additional Medicare beds, and only 1% of its Medicare patients will be treated in the existing 110 beds after construction of the new wing. Although Boulevard mist recently experienced a 14% Medicare utilization, or about 15 Medicare patients, Vari-Care's application assumes a 7.22% Medicare utilization, or about 12 patients (.0722 x 170), after the addition of a subacute care unit. The new subacute care beds will not increase the number of Medicare patients which Boulevard treats. Virtually all of the Medicare patient load which Boulevard now treats in its existing 110 beds will be treated in the new wing, and about half of Boulevard's current Medicare patient load will move to the new 16 subacute care beds. Subacute care requires a much higher level of staffing. The administrator of the Boulevard nursing home testified that the staffing ratios for the new addition, "as one of the conditions of the CON", are "much higher than" the current staffing levels, because of the planned subacute care. The CON condition referred to by the administrator was the condition imposed by HRS in its intent to approve the Vari-Care application. This condition would require a direct care staff to bed ratio (RNs, LPNs, and nurse aides) of .18 for the first shift, .12 for the second shift, and .08 for the third shift. Actually, these staff ratios reflect the current staffing levels at Boulevard's 110-bed facility. The testimony of the Boulevard administrator was contradicted by Vari-Care's Vice President of Operations, who testified that Boulevard's current staffing ratios will be maintained by Boulevard in the 26 new beds. There is no evidence that Boulevard will provide a much higher level of staffing in the addition. Boulevard's staffing is lower than that of any other applicant. Boulevard's proposed total nurse staffing for the second year of operation of the 180-bed nursing home is 73.5 total FTE, which is equivalent to a staff per resident ratio of .432. The shift staffing proposed by Boulevard is 33 FTE for the first shift, 24 FTE for the second, and 17 FTE for the third, which is equivalent to a shift staff per bed ratio of .18, .13, and .09 respectively. These staff ratios are roughly equivalent to those required by HRS in its condition for the 26-bed addition. Boulevard's proposed 16-bed subacute unit is closely related to its new 44-bed wing. However, the staffing proposed by Vari-Care for the new 44-bed wing is inconsistent with the staffing proposed by Vari-Care for the 16-bed subacute unit. When Vari-Care submitted its CON application for the new 44-bed wing, it proposed a direct care nursing staff of 88.02 total FTE for the resulting 154-bed facility. The staffing described by Vari-Care for the 154-bed facility is higher than the staffing which Vari-Care now proposes for the 180- bed facility. The staffing proposed by Vari-Care is inconsistent with its testimony that it did not intend to provide subacute care in the 44-bed addition and that higher staffing is required to provide subacute care. Vari-Care has not submitted an application consistent with its proposal for subacute care. Vari-Care has not quantified any need for the only two forms of subacute care, ventilator care and respirator care, which it does not currently provide. Although subacute care is acknowledged to require a higher level of staffing, the level of staffing proposed by Vari-Care is essentially the same as that in its existing 110-bed facility and is lower than that proposed for its 154-bed home. Boulevard's facility design is not dependent upon its proposal to provide subacute care. The rooms designated for subacute care are not the same as the rooms containing the beds to be converted from private to semi-private beds. The level of staffing proposed by Vari-Care is actually lower than that proposed by any other applicant, none of whom proposes to add subacute care through these pending applications. Manor Care is a 120-bed skilled nursing home facility in Boca Raton, south Palm Beach County. It holds final CON approval for a 30-bed dedicated Alzheimer unit. The Alzheimer unit will open in June, 1990. Manor Care currently holds a superior license and has held a superior license for as long as the facility has been eligible for one. Currently, 30% of its total patient days are for Medicaid residents. Of Manor Care's existing 120 beds, 36 beds (30%) are licensed for Medicaid. That is consistent with the CON condition on the original facility that 30% of the beds be licensed for Medicaid. Manor Care offers full physical therapy, occupational therapy, and speech therapy services. Manor Care offers a full complement of skilled nursing care, including tracheotomy, IV therapy and decubitus care. Manor Care classifies these specific services as skilled nursing care," not "subacute care." Manor Care characterizes "subacute care" as those services which would normally be delivered in a rehabilitation hospital. Subacute care requires 3 times the staffing normally provided in a nursing home. Manor Care believes that examples of subacute care are spinal cord injury and head trauma. On the other hand, Vari-Care chooses to characterize the services of tracheotomy, IV therapy and decubitus care as "subacute" care, and that is what it proposed to provide in its dedicated subacute unit. Manor Care offers these skilled services throughout its facility; it does not utilize a dedicated unit to provide them. Medicare patients in nursing homes normally require skilled nursing care. In this regard, 11.6% of total patient days at Manor Care in 1988 were for Medicare residents. That represents the highest Medicare percentage in Palm Beach County. Manor Care employs the state-of-the-cart approach for providing nursing home services. For example, Manor Care holds CON-approval to establish a 30-bed dedicated Alzheimer unit with specialized staff and programming. Manor Care is the only existing provider in this proceeding which treats Alzheimer disease in a segregated modality. (HCR's approved facility will also house a dedicated Alzheimer unit.) Manor Care has neither transferred nor voided any CON. Manor Care has had no Medicare conditions of non-compliance. Its license has never been revoked, suspended or denied. Manor Care has had no beds decertified by Medicare or Medicaid. Manor Care has no intention of selling its facility. Manor Care of Boca Raton, Inc. d/b/a Manor Care of Boca Raton is a wholly-owned subsidiary of Manor Healthcare Corp. Manor Healthcare Corp. owns 155 nursing homed in 28 states. It has 9 nursing homes and 3 ACLFs in the State of Florida. Manor Healthcare has established six regional-based offices with a full complement of staff to assist its individual nursing homes in all areas of operations. It has a regional office in Orlando to service Florida. Through its corporate and regional offices, Manor Healthcare employs a team of professionals who are responsible for providing support functions to the nursing centers, such as: quality assurance, nursing training, administration, purchasing, facility planning, assisted living, Alzheimer care, managed care, accounting, dietary, marketing, staff recruitment, and chaplaincy. This centralized support system enhances operational capabilities and efficiencies. Manor Healthcare's primary goals are quality assurance and quality of care. It seeks to return nursing home residents to the community as soon as possible. In this regard, Manor Healthcare, on the average, returns 45% of its residents to the community. Manor Care proposes to add 30 skilled beds to its facility by locating them on the 2nd Floor above the 30-bed Alzheimer unit. This addition will include 15 semi-private rooms, lounge space, office space, conference space, an elevator, and a nursing station. Manor Care will offer the same quality, level and scope of skilled nursing services in the 30-bed addition as currently offered at its facility. The proposed addition will be integrated into the existing facility. The addition will be adjacent to existing therapy areas and near several dining room and lounge areas. Due to substantial existing ancillary areas, these 30 beds can be added without adding much ancillary spaces. Manor Care expressly agrees to the following CON conditions: 30 skilled nursing beds; 2.8 nursing hours per patient day; 37% Medicaid patient days in the addition; and 9400 square feet on the 2nd Floor. The total project cost (before CON application fee) for the 30-bed addition is $1,270,700. Manor Care projects that the 30-bed addition will be in use by June 1, 1991. The project cost will be 51% debt-financed; the rest will be financed with equity funds. The nursing and other staff at Manor Care are well qualified; its staffing ratios exceed licensure requirements by at least 25%. The proposed staffing levels, including the 30-bed addition, also exceed licensure requirements by at least 25%. Manor Care maintains an educational program plan to improve the ability of staff to meet the demands of its nursing home residents. These programs will continue to be employed at the Manor Care facility. All employees are required to attend educational programs pertinent to the improvement of skills within their respective disciplines. All employees are required to attend annual programs on fire prevention, accident prevention, infection control, effective communication, and the psychosocial/psychophysical aspects of aging. Health care seminars are sponsored by Manor Care on a quarterly basis. Topics cover a wide range of subjects related to enhancing quality of care in nursing homes. These seminars are available to facility staff and community health care professionals. Manor Care maintains a restorative program intended to enable each resident to achieve maximum function with the ultimate goal of returning patients back to the community whenever possible. For those unable to return home, the program seeks to ensure that all residents continue to function at their maximum potential. Examples of specific restorative programs include: progressive ambulation; bowel management; bladder management; self-feeding training; activities of daily living training; pain management for chronic and post operative pain; muscle control training and others. In this regard, Manor Care utilizes its "Excel Care" computerized system intended to document and evaluate the success of its restorative and rehabilitative programs. This program allows for the efficient monitoring of residents' responses to therapy and nursing care. Per this system, every unit of care is measured by outcome standards. The outcome standards describe the expected results in the patient's condition if treatment and therapy is successfully carried out. Manor Care maintains a utilization review committee comprised of three physicians, the administrator, the social services director, and the Director of Nursing. Its purpose is to meet every 30 days to assess patients and to ensure that appropriate and effective utilization of services is being provided. The purpose of Manor Care's QA program is to promote and support optimum quality standards in all disciplines. This objective is accomplished through: continuing in-service education programs; on-going consultation among corporate quality standards staff and QA regional specialists; unannounced annual surveys conducted by a Manor Healthcare QA team of health care professionals; and on-going surveying of guarantor/resident satisfaction with nursing home services. The Manor Care nursing home is reviewed annually on an unannounced basis by the QA interdisciplinary team of Manor Healthcare Corp. specialists. The QA review criteria meet all the minimum standards set by Medicare and exceed the most stringent state regulations throughout the country, including Florida. The unannounced annual review covers the following areas: resident care, dietary, activities, housekeeping, laundry, physician services, maintenance, medical records, pharmacy services, social services, administrative records and safety. Manor Care of Boca Raton was internally surveyed in January, 1989. It rated within the top 10% of all 150 Manor Healthcare facilities in the country. Within 30 days of an admission, the patient's guarantor is mailed a "satisfaction survey" form. The guarantor is asked to evaluate Manor Care's performance as to nursing, dietary, activities, therapies, etc. The form is self-addressed and is to be mailed to the Manor Healthcare corporate offices. Manor Care maintains an 800 toll-free health care hotline that is a direct line to the QA department of Manor Healthcare. This is available to all persons who want to ask questions, obtain information, make suggestions, or who require follow-up on unresolved concerns at the individual nursing home level. In effect, this serves as a consumer hotline. Manor Care designs and maintains activity programs that are responsive and appropriate to meet the physical, mental, and social needs of its residents. They include at least the following: various therapy activities; large group activities weekly; at least two religious activities per week; facility-wide general visits from the public; special events; birthday parties; activities after the evening meal; therapeutic programs for residents with special needs (such as stroke victims or blind persons); outings away from the nursing home; music activities; and special holiday events. Manor Care maintains a formalized program for involving families and community volunteers to promote the quality of life for its residents. Community volunteers participate on a routine basis in providing services to the residents, such as: reading to residents, distributing newspapers and magazines, assisting on community outings, and assisting with correspondence. These services bring the community closer to the nursing home residents. Manor Care establishes and maintains linkages with state and local health care providers to ensure that a continuum of care is available to residents and to facilitate community involvement by the nursing center. These community linkages and referral agreements include: local hospitals, physician specialists, therapists, home health agencies, adult day-care centers, area agencies on aging, homemaker services, private insurance companies, ACLFs, and other community agencies. Manor Care currently holds transfer agreements with four local hospitals. Manor Care works very closely with local agencies to ensure that residents are located in the most appropriate setting for their needs. Manor Care maintains linkages and agreements with less intensive institutions to meet the needs of those persons or residents who do not require or no longer require nursing home care, such as: adult day-care, meals-on-wheels, and senior centers. Due to existing ancillary space, Manor Care can add its proposed 30- bed unit at a relatively small cost. Manor Care already has ample dining room space, activity areas, therapy areas, and social areas which can accommodate an additional 30 beds without difficulty. In addition, Manor Care already retains the core nursing, administrative, therapy, and other staff required to operate a nursing home. As such, additional staff for the 30-bed addition is not substantial. The Manor Care application therefore provides a cost-effective approach to add nursing home beds to the community. Manor Care currently offers and will continue to offer clinical and training opportunities to students currently enrolled in nursing educational programs at local technical schools and universities. Manor Care also provides services to persons seeking to become certified nursing assistants. Manor Care serves as a clinical site for gerontological rotations for nursing students at Palm Beach Community College. Manor Care is developing a similar internship program with Atlantic Vocational Technical School and seeks to develop clinical affiliations with South Technical Vocational School and Florida Atlantic University. This working relationship not only trains students and health care professionals, but also provides Manor Care valuable resources in staff recruitment and development. Manor Care sponsors and will continue to sponsor nurse "refresher" courses which are taught by local area nursing school instructors. Persons wishing to renew their nursing licenses and certification can do so through this course work. Manor Care finances these nurse refresher programs. Manor Care sponsors and finances various health care seminars on a quarterly basis. These seminars are advertised in local hospitals, adult day- care centers, and other agencies. These seminars are available to both Manor Care staff and community health care professionals. Manor Care maintains a "career ladder" program which enables Manor Care employees (both at the facility and within the Manor Healthcare Corp. system) to reach their career goals through promotion, career advancement programs, and tuition support for additional schooling. Both the financial statements of Manor Care of Boca Raton and Manor Healthcare Corp. (which will provide the debt financing) demonstrate the financial strength and financial resource availability to accomplish and operate the proposed 30-bed addition. Manor Care has historically been very accessible to Medicare and Medicaid residents. In 1988, 11.9% total patient days were for Medicare patients. This represented the highest percentage in Palm Beach County. In calendar year 1989 to date, Manor Care has provided 30% of total patient days to Medicaid patients. For its proposed 30-bed addition, Manor Care commits to a minimum of 37% Medicaid If the 30 beds are approved, Manor Care's total facility after one year of operation would provide 34% Medicaid. Manor Care's historical and projected Medicare/Medicaid commitment is substantial, particularly when considered with the other existing providers/applicants in this case: Actual Actual Projected 1988 Medicare 1988 Medicaid Total Facility Medicaid After First Year of Operation Whitehall 1.3% 0 0 Vari-Care 5% 18.0% 26.65% Manor Care 11.9% 26.8% 34% The pro formas in the Manor Care application are reasonable. These pro formas demonstrate that the Manor Care proposal is financially feasible in the long-term. The pro formas are based on reasonable assumptions. The projected utilization underlying the pro formas is reasonable. The projected charges are reasonable. The projected staffing levels, staff salaries, and the other expenses were based on existing data and expense levels, and then reasonably inflated forward. Manor Care's proposed 30-bed addition will be integrated into the existing facility. The addition will benefit from existing, innovative quality of life features designed to enhance privacy and personal choice options for residents and family members. These features include: beauty/barber shop, formal private dining room, lobby areas, therapy areas, activity/recreational areas, specially-equipped rehabilitation dining room, distinct lounge area for families, self-contained Alzheimer's unit, carpeted conference room, several private room accommodations, outdoor patio areas, each patient room with its own bathroom, and reading rooms. In addition, the patient rooms are larger than the state requires and are very proximate to the nursing stations. The Manor Care facility incorporates many residential design and home-like features. Color schemes are emphasized for a home-like atmosphere, such as: muted vinyl wall covering; color-coordinated draperies, bedspreads and curtains (residents can choose their color scheme at admission); and lounges which are theme-decorated around particular purposes, such as a game room. Patients are permitted to exercise choice in furnishings and decorations. Patient room size is a major factor in controlling construction costs. At Manor Care, the rooms are rectangular with the shorter walls on the outside. This design minimizes exterior wall space, which is more expensive to construct than interior wall space. Minimized exterior walls also improve energy efficiency. The proximity of nursing stations to the patient rooms at Manor Care is cost-effective. The rectangular room shape reduces the cost of construction by reducing corridor length and square footage. Shorter corridors are less costly and also are more operationally efficient. The central core area at the facility concentrates the ancillary and support areas. Administrative areas are centrally located for easy access by residents and families. Resident lounges are located near the nursing station, thereby facilitating supervision by nursing staff. The State Health Plan consists of three broadly-stated goals. Goal 1 is to develop an adequate supply of long-term care services throughout Florida. Each of the four proposals for additional beds is consistent with this goal in that each proposal contributes to the supply of beds determined to be needed in Palm Beach County. Goal 2 of the State Health Plan is to develop a supply of appropriate long-term care services that are accessible to all residents. The HCR, Manor Care, and Vari-Care proposals are consistent with this goal in that each would supply nursing home services to those in need of such services, and their nursing homes will be accessible to all residents of the planning district, including Medicaid patients. Further, HCR will be the only new facility in northern Palm Beach County, and Manor Care is located in southern Palm Beach County, which experiences the highest demand for nursing home beds in Palm Beach County. Lastly, all three of those applicants will accept a significant number of Medicaid and Medicare patients. On the other hand, the Whitehall application is not consistent with this goal. First, Whitehall has never served Medicaid residents and does not propose to do so. Second, Whitehall does not provide substantial Medicare: .7% in 1987, and 1.3% in 1988. Third, Whitehall may not be affordable for many Palm Beach County residents. Its charges are the highest in Palm Beach County. Fourth, Whitehall markets itself to non-Florida residents. About 20% of its nursing home and ACLF patients reside outside Florida. Hence, approval of Whitehall's 27-beds does not promote access for Palm Beach County or Florida residents. Goal 3 is to insure that long-term care services are appropriately utilized throughout Florida. All four applicants have in place utilization and pre-admission screening programs for appropriate utilization of nursing home services. Accordingly, the proposals of HCR, Vari-Care, and Manor Care are consistent with the State Health Plan; however, the proposal of Whitehall is not. The District IX Local Health Council has adopted five long-term care CON allocation factors which are applicable to proposals for additional nursing home beds in Palm Beach County. The first factor is that freestanding nursing homes should have a minimum of 120 beds in urban subdistricts. Palm Beach County is an urban subdistrict in District IX. HCR's proposal is consistent with this recommendation in that the HCR proposal will bring HCR's nursing home up to the minimum 120-bed size unit. Manor Care is consistent with this recommendation in that it is an existing 120-bed facility with a 30-bed Alzheimer unit approval. Likewise, Vari-Care meets this recommendation since it is a 154-bed facility. Whitehall, however, fails to meet this recommendation since it only has 73 nursing home beds and only seeks approval for 27 more, for a total of 100 beds. Within this first recommendation is a recommendation that priority be given to additions to nursing homes so that the total capacity would reach, but not be greater than, 120 beds. The HCR proposal is consistent with this recommendation in that its proposal, if granted, would increase the number of beds in that facility to only 120. Accordingly, HCR should be given priority in this proceeding in order to meet the first recommendation in the Local Health Council. To the contrary, Whitehall should be given no priority since it does not propose to meet the first recommendation of the Local Health Council. The second recommendation of the Local Health Council is that all new nursing homes and expansions should agree that a minimum of 30% of its patient days will be provided to Medicaid-eligible patients, if such patients are available within the subdistrict. Medicaid-eligible are available within the subdistrict and accounted for more than 700,060 patient days in Palm Beach County in calendar year 1988. HCR's proposal for 42% of its additional patient days to be devoted to Medicaid-eligible patients exceeds the recommendation of the Local Health Council, and the facility-wide commitment to 35% of its patient days to Medicaid-eligible patients likewise exceeds the recommendation. Similarly, Manor Care agrees to a 37% Medicaid condition to its CON approval and, therefore, this factor is satisfied. Likewise, Vari-Care projects a 32% Medicaid payor mix. Whitehall will serve no Medicaid patients, and, accordingly, fails to comply with this recommendation of the Local Health Council. The third recommendation of the Local Health Council is that priority should be given to applicants who demonstrate a range of long-term care services. HCR's 120-bed facility would offer a range of services to all of its patients including those in the proposed addition. Similarly, Manor Care Vari- Care, and Whitehall propose and provide a range of services to their patients and will do so in their proposed additions. The fourth recommendation of the Local Health Council is that priority should be given to applicants who demonstrate a documented history of providing good residential care, staff ratios that exceed minimum requirement, provisions for the treatment of residents with mental health problems, and the inclusion of intensive rehabilitation services The HCR, Manor Care and Vari-Care proposals are consistent with this recommendation in that their staffing ratios exceed minimum requirements, they provide treatment for residents -with mental health problems, they have documented their ability to provide good quality care by operating facilities with superior licenses, and intensive rehabilitation services will be available to their residents. Medicare participation often indicates the level of intensity of skilled services offered at a facility. In this regard, Whitehall's Medicare participation of .7% in 1987 and 1.3% in 1988 does not demonstrate a substantial commitment to intensive skilled or rehabilitation services. The fifth recommendation of the Local Health Council is that priority should be given to applicants who propose service to a distinct patient population that currently is not being served within the Subdistrict. No applicant identified a distinct patient population that is not currently being served within the Subdistrict. Whitehall suggests that its application promotes this factor since it has Jewish patients. It does not suggest that the other applicants do not have Jewish patients. However, there are already three dedicated Jewish nursing homes in Palm Beach County. The presence of three dedicated Jewish nursing homes clearly indicates that the Jewish population is currently being served within the Subdistrict. Whitehall further concedes that its services (frozen Kosher dinners) is not the equivalent of those services of offered at a dedicated Jewish nursing home. Accordingly, no applicant should receive priority pursuant to this final recommendation of the Local Health Council since no applicant has identified a distinct population not currently being served, and no applicant has proposed to serve such a population. Accordingly, the HCR, Vari-Care, and Manor Care proposals comply with the District IX Local Health Council plan, but the Whitehall application does not. HCR's proposed facility will be located in northern Palm Beach County, Vari-Care's facility is located in central Palm Beach County, and Manor Care and Whitehall are located in very close proximity to each other in southern Palm Beach County. The two facilities in southern Palm Beach County both have licensure ratings of superior. It is clear that Whitehall's facility is more luxurious than that of Manor Care (and the other applicants for that matter), and its patient charges are high enough to offer many quality of life enhancements which other facilities are unable to offer. For example, Whitehall offers its patients room service, complimentary beer and wine, and a chauffeur- driven Cadillac for excursions outside the nursing home. However, Manor Care offers services more indicative of a high quality of care than Whitehall. Per its application, Whitehall will not staff its 3-11 or its 11-7 shift with nursing administrators, therapists, nurse-aides, activity directors, or social services. In comparison, Manor Care will provide such staff in its 3- 11 shift, and nurse-aides in the 11-7 shift. Whitehall does not provide in- house physical therapists. Manor Care employs physical therapists. Whitehall provides minimal skilled nursing services based on its small levels of Medicare participation. Whitehall proposes no additional Medicare-certified beds. Manor Care maintained the highest level of Medicare participation in Palm Beach County in 1988. At Whitehall, Alzheimer's patients are mingled in with other nursing home patients. Manor Care has final CON approval to establish a 30-bed dedicated Alzheimer unit so as to treat Alzheimer disease in the most appropriate modality. Whitehall mixes its ACLF and nursing home residents. They share dining rooms, activities, staff, and occupy the same floor. That is very uncommon. Regents Park of Boca Raton (hereinafter "Regents Park"), operated by Petitioner Health Quest Management Corporation III, is a 120-bed nursing center located in Boca Raton. Whitehall is located only about one mile from Regents Park, and Manor Care is located three to five miles from Regents Park. Approximately 90% of Regents Park's patients come from the Boca Raton area. Most are referred to the facility by Boca Hospital and West Boca Hospital. Like Regents Park, Manor Care and Whitehall also receive referrals from Boca Hospital and West Boca Hospital. Regents Park's general nursing program is the bedrock of the facility's service program. Additionally, Regents Park offers an established rehabilitation program. The facility maintains a fully equipped rehabilitation department housed in a specialized module that was built onto the facility some years ago. All of Regents Park's Medicare patients, as well as a substantial proportion of its skilled care patients, participate in the rehabilitation program. Boca Raton's local hospitals refer patients to Regents Park for rehabilitation. Most nursing homes experience less than half the Medicare utilization of Regents Park and Manor Care. These two facilities have historically ranked among the largest providers of Medicare services in Palm Beach County, despite their close proximity. Regents Park also offers an established program for low-functioning patients, which includes Alzheimer's patients and patients suffering from other dementias. Approximately thirty residents participate in the low-functioning program, and the program has four specialized staff. Health Quest claims that it would lose staff and patient days if Whitehall or Manor Care were approved. At the same time, Health Quest admits: it would not release staff; it would not limit current services; Health Quest is an excellent provider and can compete in the future for new residents; and Health Quest staffs well above minimum licensure requirements. Hence, by its own admission, Health Quest failed to show any credible or meaningful adverse impact if Manor Care or Whitehall were approved. Health Quest estimates it might suffer only a $12,000 or a $26,000 net loss if either application were approved. That amount does not constitute substantial, adverse impact.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is, therefore, RECOMMENDED that HRS enter a Final Order Approving the application of HCR for a CON for 30 additional nursing home beds; Approving the application of Manor Care for a CON for 30 additional nursing home beds; Denying the application of Vari-Care for a CON for 26 additional nursing home beds; and Denying the application of Whitehall for a CON for 27 additional nursing home beds. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 22nd of January, 1990. LINDA M. RIGOT Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 22nd day of January, 1990. APPENDIX TO RECOMMENDED ORDER DOAH CASE NUMBERS 89-2502, 89-2504, 89-2505, 89-2506, and 89-2507 Health Quest's proposed findings of fact numbered 1, 2, 5, 6, 8, 10, 26, 28, and 31 have been adopted either verbatim or in substance in this Recommended Order. Health Quest's proposed findings of fact numbered 3, 7, 27, and 32 have been rejected as unnecessary for determination of the issues involved in this proceeding. Health Quest's proposed findings of fact numbered 4, 11-15, 21, 23-25, 29, 30, and 33-35 have been rejected as not being supported by the weight of the credible evidence in this proceeding. Health Quest's proposed findings of fact numbered 9, 16-20, 22, and 36 have been rejected as being subordinate to the issues involved in this proceeding. Health Quest's proposed findings of fact numbered 37 and 38 have been rejected as being immaterial to the issues involved herein. Health Quest's proposed findings of fact numbered 39-48 have been rejected as not constituting' findings of fact but rather as constituting argument of counsel, recitation of the testimony, or conclusions of law. Health Quest's proposed findings of fact numbered 49-79 have been rejected as being irrelevant to the issues involved in this proceeding. HRS' proposed findings of fact numbered 1, 4, and 5 have been adopted either verbatim or in substance in this Recommended Order. HRS' proposed findings of fact numbered 2 and 6 have been rejected as being unnecessary for determination of the issues involved in this proceeding. HRS' proposed findings of fact numbered 3 and 7 have been rejected as not constituting findings of fact but rather as constituting argument of counsel, recitation of the testimony, or conclusions of law. HRS' proposed finding of fact numbered 8 has been rejected as being subordinate to the issues involved in this proceeding. HRS' proposed finding of fact numbered 9 has been rejected as not being supported by the weight of the credible evidence in this proceeding. HRS" proposed finding of fact numbered 10 has been rejected as being contrary to the weight of the credible evidence in this proceeding. HCR's proposed findings of fact numbered 1-29 and 31-54 have been adopted either verbatim or in substance in this Recommended Order. HCR's proposed finding of fact numbered 30 has been rejected as being irrelevant to the issues involved in this proceeding. Vari-Care's proposed findings of fact numbered 1-3, 5-8, 13, 15, 18- 23, 31, 33, 34, 37, 38, 41 42, 48, 50-54, 58, 61, 64, 70, 75, 76, 78, 79, and 82 have been adopted either verbatim or in substance in this Recommended Order. Vari-Care's proposed findings of fact numbered 4, 12, 24-27, 66, 69, 74, and 91 have been rejected as not being supported by the weight of the credible evidence in his proceeding. Vari-Care's proposed findings of fact numbered 9-11, 28, 30, 40, 43, 44, 63, 77, 80, 84, 85, and 90 have been rejected as not constituting findings of fact but rather as constituting argument of counsel, recitation of the testimony, or conclusions of law. Vari-Care's proposed findings of fact numbered 14, 16, 32, 35, 36, 39, 45-47, 49, 59, and 73 have been rejected as being subordinate to the issues involved in this proceeding. Vari-Care's proposed findings of fact numbered 17, 29, 55, 65, 67, 68, and 72 have rejected as being unnecessary for determination of the issues involved in this proceeding. Vari-Care's proposed findings of fact numbered 56 and 81 have been rejected as being immaterial to the issues involved herein. Vari-Care's proposed findings of fact numbered 57, 60, 62, 71, 83, and 86-89 have been rejected as being irrelevant to the issues involved in this proceeding. Whitehall's proposed findings of fact numbered 39, 47, 75-77, 82, 84, 85, 93, 118, 119, 146, and 151 have been rejected as being immaterial to the issues involved herein. Whitehall's proposed findings of fact numbered 1, 6, 11, 16, 21, 30, 34, 41, 48, 51, 54-56, 58, 59, 61, 65, 66, 74, 78, 88-90, 92, 96, 97, 99, 106, 121, 124, 126, 137, 139, 141, 142, 147, 148, and 150 have been adopted either verbatim or in substance in this Recommended Order. Whitehall's proposed findings of fact numbered 2, 7-9, 12, 13, 17-19, 29, 31, 40, 43-46, 63, 64, 83, 86, 91, 107, 128, 131, 136, 140, and 152 have been rejected as not being supported by the weight of the credible evidence in this proceeding. Whitehall's proposed findings of fact numbered 3, 50, 101, 111-117, 125, 129, 155, and 156 have been rejected as being irrelevant to the issues involved in this proceeding Whitehall's proposed findings of fact numbered 20, 23-25, 27, 38, 42, 49, 52, 57, 60, 67, 69, 70, 72, 73, 79-81, 87, 94, 95, 98, 100, 102-105, 108- 110, 120, 122, 123, 127, 130, 134, 135, 143-145, and 149 have been rejected as being subordinate to the issues involved in this proceeding. Whitehall's proposed findings of fact numbered 4 and 5 have been rejected as not constituting findings of fact but rather as constituting argument of counsel, recitation of the testimony, or conclusions of law. Whitehall's proposed findings of fact numbered 10, 22, 26, 28, 36, 37, 53, 62, 68, 71, 132, 133, 138, 153, and 154 have been rejected as being unnecessary for determination of the issues involved in this proceeding. Whitehall's proposed findings of fact numbered 14, 15, 32, 33, and 35 have been rejected as being contrary to the weight of the credible evidence in this proceeding. Manor Care's proposed findings of fact numbered 1, 2, 4, 5, 7-9, 11, 13-24, 27-37, 39, 40, 42, 43, 45, 47, 48, 50, 51, 53, 54, 57, 58, 60, 63, 64, 66, 69, 71-73, 75-78, 80, 81, 83, 89, 93-99, 102, 103, 107, 108, 110-113, 121, 130-141, 143-145, 147, and 149 have been adopted either verbatim or in substance in this Recommended Order. Manor Care's proposed findings of fact numbered 3, 101, 104, 106, 117, and 148 have been rejected as not constituting findings of fact but rather as constituting argument of counsel, recitation of the testimony, or conclusions of law. Manor Care's proposed findings of fact numbered 6, 12, 38, 49, 55, 56, 59, 65, 67, 68, 74, 82, 90, 92, 100, 114, 116, and 118-120 have been rejected as being unnecessary for determination of the issues involved in this proceeding. Manor Care's proposed findings of fact numbered 10, 26, 41, 44, 46, 52, 61, 62, 70, 79, 86-8, 105, 109, 115, 122, 142, 146, 150, and 151 have been rejected as being subordinate to the issues involved in this proceeding. Manor Care's proposed findings of fact numbered 25, 84, 91, and 123- 129 have been rejected as being irrelevant to the issues involved in this proceeding. Manor Care's proposed finding of fact numbered 85 has been rejected as being immaterial to the issues involved herein. COPIES FURNISHED: Samuel J. Dubbin, Esquire Gerald M.Cohen, Esquire STEEL HECTOR & DAVIS 4000 Southeast Financial Center Miami, Florida 33131-2398 Steven W. Huss, Esquire 1017 Thomasville Road Suite C Tallahassee, Florida 32303 Charles M. Loeser, Esquire 315 West Jefferson Boulevard South Bend, Indiana 46601 Byron B. Mathews, Jr., Esquire 700 Brickell Avenue Miami, Florida 33131 Richard Patterson, Esquire Department of Health and Rehabilitative Services 2727 Mahan Drive Fort Knox Executive Center Tallahassee, Florida 32308 James C. Hauser, Esquire Messer, Vickers, Caparello, French & Madsen, P.A. Post Office Box 1876 Tallahassee, Florida 32302 Alfred W. Clark, Esquire Post Office Box 623 Tallahassee, Florida 32302 Sam Power, Agency Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 John Miller, General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 =================================================================
