04-003150CON Select Specialty Hospital-Marion, Inc. vs. Agency For Health Care Administration Status: Closed Recommended Order on Tuesday, July 11, 2006.

Summary: Petitioner did not prove that its application for a 44-bed Long-Term Care Hospital met, on balance, the applicable statutory and rule criteria.

STATE OF FLORIDA

DI VI SION OF ADMINISTRATIVE HEARINGS

SELECT SPECIALTY HOSPITAL - )

MARION, INC., )

)

Petitioner, )

)

vs. ) Case No. 04 - 3150CO N

)

AGENCY FOR HEALTH CARE )

ADMINISTRATION, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the case was heard by Charles A.

Stampelos, a duly - designated Administrative Law Judge at the

Di vi sion of Administrative Hearings on February 7 and 8, 2006,

in Tallahassee, Florida.

APPEARANCES

For Petition er Select Specialty Hospital - Marion, Inc.:

Mark A. Emanuele, Esquire

Panza, Maurer, & Maynard, P.A.

Bank of America Building, Third Floor

3600 North Federal Highway

Fort Lauderdale, Florida 33308

For Respondent Agency for He alth Care Administration :

Timothy Elliott, Esquire

Agency for Health Care Administration

2727 Mahan Drive, Building 3

Mail Station 3

Tallahassee, Florida 32308

Nelson E. Rodney, Esquire

8350 Northwest 52nd Terrace, Sui te 103

Miami, Florida 33166

STATEMENT OF THE ISSUE

The issue in this case is whether the Certificate of Need

(CON) application No. 9757 filed by Select Specialty Hospital -

Marion, Inc. (Select) for the establishment of a 44 - bed free

standing Long - Term Care Hospital (LTCH) in Agency for Health

Care Administration (Age ncy or AHCA) Servi ce District 6 , in Polk

County, should be approved.

PRELIMINARY STATEMENT

In 2004, Select filed CON application No. 9757 for the

establishment of a 44 - bed free standing LTCH in AHCA Service

District 6 (District 6) . 1 The final hearing was scheduled for

January 18 through 20, 2006, but was continued. The final

hearing was held on February 7 and 8, 2006.

On Februar y 6, 2006, the parties filed a Joint Pre - Hearing

S tipulation.

During the final hearing, Select called the following

witnesses: Greg ory H. Sassman , an expert in LTCH development ;

Jose Martinez - Salas, M.D. , an expert in pulmonary medicine,

critical care medicine, and internal medicine ; Marsha Webb -

M edl in , an expert in hospital administration, critical care

nursing, LTCH nursing, administration, and operations ; Patricia

Greenb e rg , an expert in health care planning, financial

feasibility, and LTCH planning, feasibility, and operations ; and

Naushira Pandya , M.D. , an expert in geriatric and internal

medicine. Select Exhibits (S) numbered 1 through 13 were

admitted into e vi dence.

The Agency called Jeffrey Gregg, the Chief of the Bureau of

Health Facility Regulation of the Agency and an expert in CON

review and health care planning. Agency Exhibits (AHCA)

numbered 1 through 8 and 11 were admitted into e vi dence. (A HCA

Exhibits numbered 9 and 10 were withdrawn.)

Select filed a Request for Judicial Notice to be taken of

Florida Administrative Code Rules 59C - 1.002 and 59C - 2.100. The

request was granted with the condition that the parties respond

regarding the relevancy of these rules. Each party filed a

response.

The Transcript (T) (Volumes 1 - 3) of the final hearing was

filed with the Di vi sion of Administra tive Hearings (DOAH) on

February 20, 2006. On May 19 , 2006, Select and the Agency filed

proposed recommended orders and they have been considered in the

preparation of this Recommended Order.

FINDINGS OF FACT

The Parties

1. AHCA . The Agency for Health Ca re Administration is the

state agency authorized to evaluate and render final

determinations on CON applications pursuant to Section

408.034(1), Florida Statutes. 2

2. Select . Select Specialty Hospital - Marion , Inc. is the

applicant in this p roceeding. Se lect is a wholly - owned

subsidiary of Select Medi c al Corporation , which operates

approximately 9 9 LTCHs in 2 7 states.

LTCH Ser vi ces Generally .

3. An LTCH is defined by statute and Agency rule as " a

hospital licensed under chapter 395 which meets the requirem ents

of 42 C.F.R. s. 412.23(e) and seeks exclusion from the Medicare

prospective payment system for inpatient hospital ser vi ces. "

LTHCs are licensed as acute care hospitals, but are clearly

different. In Florida, existing LTCHs can add beds without

under going CON review.

4. Approximately 93 to 96 percent of LTCH patients are

admitted from short - term acute care hospitals.

5. LTCHs are a part of the continuum of care that runs from

hospitals to post - acute care facilities such as nursing homes,

skilled nursing fa cilities (SNFs), hospital - based skilled

nursing units (SNUs), and comprehensive medical rehabilitation

(CMR) facilities.

6. LTCHs are designed to serve patients that would

otherwise have to be maintained in a traditional acute care

hospital (often in the ICU) , or be moved to a traditional post -

acute care facility where the patient may not receive the level

of care needed.

7. Patients with co - morbidities, complex medical

conditions, severe injuries due to trauma, or frailties due to

age are typically appropriate LTCH patients, particularly if the

patient would otherwise remain in the ICU of a tr aditional acute

care hospital. For such patients, an LTCH is likely the most

appropriate setting from both a financial and patient - care

standpoint.

8. There is a distinct pop ulation of patients who, because

of the complexity or severity of their medical condition, are

best served in an LTCH. However, there is an overlap between

the population of patients that can be served in an LTCH and the

population of patients that could also be well - served in the ICU

of an acute care hospital or a traditional post acute care

setting with ventilator capability.

9. SNFs, SNUs, CMR facilities, and home health care are not

appropriate for the typical LTCH patient because the patient's

acuity lev el and medical/therapeutic needs are higher than those

generally tr eated in those settings. U nlike traditional post -

acute care settings, which typically do not admit patients who

still require acute care, the core patient - group served by LTCHs

are patient s who require considerable acute care through daily

physician vi sits and intensive nursing care in excess of seven

h ours of direct nursing car e per patient day and remain at an

LTCH for an average length of stay (ALOS) of 25 days or greater .

(Depending on the Diagnostic Related Group (DRG) category for a

particular diagnosis, generally, the ALOS for a short - term acute

care hospital patient is between three and five days .)

10. It is important for an LTCH patient that the family be

involved in the treatment and the continued care of the patient

after the patient has been discharged to home or to another

level of care on the continuum, such as an SNF/SNU or CMR.

11. Select offers four basic care programs: pulmonary,

wound care, neurotrauma, and medically complex.

12. A t Select facilities, patients are screened prior to

admission to an LTCH to determine whether they are appropriate

for admission. InterQual is a set of proprietary criteria used

by Select to determine whether patients are suitable candidates

for admission to an LTCH or another form of care.

CON Application and Preliminary Agency Action

13. Select applied for a C ON to establish a 44 - bed free -

standing LTCH in Polk County, one county located in D istrict 6.

The facility will consist of 48,598 GSF of new construc tion.

The total project cost is estimated at $14,373,624.

14. The application was complete, and according to

prehearing stipulations, the only reason that the application

was denied and the issue in the case at hand is need. Select

has the burden of pro vi ng that there is a need for the LTCH in

D istrict 6 .

15. Select agreed, as a condition for approval of its

application, to provide 2.8 percent of patient days for Medicaid

and c harity care.

16. The Agency's re vi ew of CON application No. 9757

complied with statut ory and regulatory requirements.

17. The Agency's re vi ew of CON application No. 9757

resulted in the issuance of a State Agency Action Report ( SAAR )

on June 10 , 2004 , which recommended the denial of CON

application No. 9757 based on Select 's failure to demons trate a

need for the proposed facility.

District 6 and Polk County Demographics

18. The population of District 6 as of J uly 200 5 was

2 , 084 , 339 and is projected to increase nine percent to 2,272,017

by July 2010 . This population is dispersed throughout five

counties comprising District 6 : Polk, Hillsborough, Hardee,

Manatee, and Highlands. This includes a population of 3 54 , 327

in the age cohort 65 ( the age group eligible for Medicare ) and

is projected to increase by 15.94 percent by July 2010 . This

age gr oup contains the patients that are mainly served by LTCHs,

as m ore than 75 percent of admissions to an LTCH are elderly

(65).

19. The population of Polk County in July 200 5 was 5 32 , 100 ,

projected to increase by eight percent by July 2010 and 103 , 257

for t he 65 age cohort , projected to increase by 15.13 percent

by July 2010 .

20. There are two LTCHs that currently serve District 6 .

Both are operated by Kindred and have a combined 175 LTCH beds. 3

21. According to AHCA data, Polk County residents were

discharge d from an LTCH in Florida 505 times in the years 2000

to 2005 (first three quarters) . Of those 505 LTCH discharges, a

total of 452, or 89.5 percent , were from a Kindred facility 4 in

Hillsborough County. AHCA 3. 5 However, this data does not

indicate whic h hospital or other facility the patient may have

been referred from , which may be significant. For example, the

patients could have been discharged from hospitals or other

facilities other than a Polk County hospital /facility .

Notwithstanding, this data shows that from year 2002 to 2005,

Polk County residents have accessed the LTCHs in Hillsborough

County. Also, aside from an upward, unexplain ed spike in 2002,

the utilization numbers are relatively flat.

22. Kindred Hospital - Bay Area - Tampa (Kindred B ay Area)

operates 73 licensed LTCH beds and is located one county west of

Polk County, in Hillsborough County. It is located

approximately one (1) hour away from Winter Haven, which is

Select's proposed site in the cen tral area of Polk County .

23. From July 2004 through June 2005, the total occupancy

of Kindred B ay Area was at 62.20 percent . From July 2002 t o

June 2003, the total occupancy for this facility was 67.15

percent.

24. Kindred Hospital - Central Tampa (Kindred Central

Tampa) is also located in Hillsb orough County, approximately one

(1) hour away from Winter Haven . 6

25. From July 2004 through June 2005, the total occupancy

of Kindred Central Tampa was 67.37 percent . From July 2002 thru

June 2003, the total occupancy for this facility was 77 .03

percent.

26. Select's sister facility, Select - Orlando , approved for

40 LTCH beds, is located in AHCA Service District 7 in Orange

County, which is n ortheast of Polk County. (Select Specialty

Hospital - Orlando is also located in District 7, operating 35

licensed LTCH beds with occupancy for the year ending June 2005

of 75.83 percent.)

27. In the years 2003 - 2005 (2003 was the first year the

facility was operational), Polk County residents were discharged

from the Select - Orlando facility 38 times. This is

approximately 7. 5 percent of the total Polk County patients

discharged.

28. In 2005, only one Polk County resident was discharged

from a facility other than the two Kindred facilities or the

Select Orlando facility.

29. For July 2004 t o June 2005, the occupancy for all LTCH s

in the State of Florida was 66.91 percent and 65.21 percent for

District 6 . From July 2002 to June 2003, the occupancy for all

LTCHs in the State of Florida was 73.23 percent and 72.91

percent for District 6. There has been a decline in utilization

of LTCHs on a statewide and district - wide (District 6) basis.

30. Select presented letters of support for the LTCH

facility in Polk C ounty, including letters from local hospital

administration and physicians . See , e.g. , S 2, Volume I, Tab 2

at 38 - 43 and Tab 4 ; S 2, Volume II, Tab s 7 and 8 .

Select's Analysis of Need

31. The Agency has not adopted a need methodology for LTCH

ser vi ces. There is no published fixed need pool for LTCHs.

32. Select examined population estimates for Polk County

and surrounding areas; the nu mber of acute care hospital beds in

the area; the number of LTCH beds in the area; discharge data

from area acute care hospitals; the types of patients treated at

acute care hospitals; the lengths of stays of the patients

treated at those hospitals; and in put from local hospital

personnel and physicians.

33. Select started its analysis of need on a district - wide

basis, but ultimately defined its primary service area as Polk

County. T 131 - 134, 156 - 157. (Select defined its primary

service areas as an area w ithin a 20 mile radius.)

34. Select used four methods to establish the need for the

LTCH in Polk County:

a. Extended length of stay analysis

b. GMLOS (Geometric Mean Length of Stay) 15 days

analysis

c. Long - stay short - term acute care versus LTCH

penetration anal ysis

d. UB - 92 patient discharge analysis (Polk County)

35. An extended length of stay analysis involves analyzing

discharges by DRG from Polk County hospitals to arrive at the

top DRGs experienced by these hospitals. This analy s is will

exclude lengths of stays under 2 5 days, patients under the age

of 14, substance abuse diagnosis, obstetric diagnosis, newborn

diagnosis, psychiatric diagnosis, and rehabilitation diagnosis.

Th e total amount of discharges is multiplied by the anticipated

length of stay for an LTCH patient (the analysis can be done

statewide or using a national average) and then divided by 365

to arrive at an average daily census of patients.

36. Select analy zed Polk County discharges that matched the

criteria above and came up with 644 patients , whi ch was

multiplied by 40.6 (F lorida average LTCH stay at time of

application) in one calculation and 33 (national average LTCH

stay at time of application) in a second calculation, before

dividing by 365 in both to arrive at an average daily census

(ADC).

37. Using 40.6 as the average length of stay ( ALOS ) , there

is an ADC of 72. With an average occupancy of 7 2 percent , there

is a need for 96 beds in Polk County .

38. Using 33 as the ALOS, there is an ADC of 58 and a need

for 77 beds in Polk County at 75 percen t occupancy.

39. Select LTCHs have a 28 - day ALOS, which yields an

average daily census of 4 9.4 with a bed need for 66 beds in Polk

County at 75 percent occupancy.

40. T he GMLOS 15 analysis involves looking at geometric

mean lengths of stays for individual D RGs that begin at eight

(8) days , excluding obstetrics, psychological, substance abuse,

and rehab patients, and then calculating how many of these

patients stayed 15 days past their GMLOS for the particular DRG.

The number of patients is then multiplied by the ALOS for

F lorida and the nation and a bed need is determined. 7

41. Using this analysis and data for the 12 months ending

September, 2003, Select contends that there were 823 patients

who would have exceeded their GMLOS by 15 days . U sing 40.6 as

the F lo rida average LTCH stay , results in an ADC of 92.

Operating at 75 percent occupancy yields a need for 122 beds .

Using 33 days as the national average LTCH stay, results in an

ADC of 74. O perating at 75 percent occupancy , yields a net need

for 99 beds in Po lk County . (Using calendar year 2004 data and

the same ALOS of 33 days and occupancy of 75 percent, yields a

net need in Polk County for 130 beds. Select's GMLOS 15

analysis also yields a positive net bed need for Polk County

exceeding the 44 - beds requ ested, u sing a n ALOS of 30 and 28 and

either 2003 or 2004 data. ) S 6 at pages 8 - 10 ; T 149 - 151.

42. Select also used th e GMLOS 15 methodology to predict

need for additional LTCH beds on a county - wide basis (for the

five counties within District 6) and a district - wide basis.

Using 2003 data and 33 days as the average LTCH stay, there is a

projected net need for 305 beds district - wide operating at 75

percent occupancy. (A net need for additional LTCH beds is also

shown when either 2003 or 2004 data is use d with ALOSs of 30 and

28. ) S 6 at 8 - 10 .

43. W hen applied to Hillsborough County, using different

patient days and GMLOS 15 case numbers, but the same occupancy

percentages, the GMLOS 15 methodology reflects a net LTCH bed

need for Hillsborough County. For example, using 2003 and 2004

data, a 28 ALOS, and a 75 percent occupancy level, the

methodology yields a net bed need of 99 beds in Hillsborough

County. Id. A net bed need also is calculated for

Hillsborough County when an adjustment is made to the data for

severity. S 6 at 11 - 13 . (Select's "most conservative

position", using a "capture rate analysis of severity adjusted

matters , " yields a negative bed need for Hillsborough County and

a much lower district - wide net bed need than the other GMLOS

1 5 analyses described herein. Select suggests that this

analysis understates need. S 6 at 14.)

44. Notwithstanding the overall favorable bed need analysis

discussed above , as noted herein, the occupancy levels at the

Kindred facilities in Hillsborough County have been declining in

recent years and are below the 75 percent occupancy level.

Absent persuasive evidence that residents of Hillsborough County

are being deprived of access to LTCH services, it appears that

Select's net bed need projections for Hillsb orough County and

District 6 are overstated. Select did not prove (by use of its

GMLOS 15 analysis or otherwise) that there is a need for

additional LTCH beds in District 6 .

45. GMLOS 7 was also discussed by Select , but is too

aggressive for purposes of LTCH planning.

46. The third method of comparing patients in Polk County

who had a long stay (24 days) in a Short Term Acute Care ( STAC )

facility versus those who went to an LTCH does not produce an

actual bed need number, but instead provides evidence of a need

for an LTCH in a particular area. Select contends that th e

application of this method shows that there is a lack of access

to the other facilities in District 6 and there is a need for a n

LTCH facility in Polk County.

47. A n analysis of UB - 92 patient discharge data involves

pulling the uniform billing records for each patient and looking

at the severity adjustment of the long stay patients. The

information is available on the AHCA database. ( According to

Mr. Gregg, UB - 92 data "would be one of the bes t sources that one

could use to define severity and eliminate some patients from

this length of stay group." T 382. ) The DRG alone will not

take into account co - morbidities , but the UB - 92 will. Th e

analysis of UB - 92 data does not compute a specific bed need, but

may show that the existence of need.

48. Both parties co ntend that using the GMLOS 15 m ethod

is the most accurate.

49. Using the GMLOS 15 method quoted above, Select

determined that there was a need for a 44 - bed LTCH facility in

Polk County and Di strict 6 .

Issues Regarding Need Analysis

50. There are some problems with the GMLOS 15 method for

determin in g need. One problem is the inflated length of stay of

40.6 days used in the application. Other problem s include the

assumption of 100 percent capt ure of eligible patients and the

assumption that any patient who stays 15 days over their GMLOS

would be eligible for LTCH ser vi ces, which is not necessarily

true.

51. There have been numerous recent approvals for LTCHs in

the S tate of Florida, and some of these new facilities will

impact the capacity numbers of the already existing facilities. 8

52. Proper patient identification is a concern of the

Agency with regard to overlap with other suitable ser vi ces. The

Agency contends that using the UB - 92 forms is a m ore accurate

way of determining which patients are most suitable for LTCH

services.

53. LTCH patients cost Medicare more than patients in other

settings.

54. The Medicare Payment Advisory Commission (MedPAC) was

established to advise Congress on issues that a ffect the

Medicare program. The Agency introduced into evidence Chapter 5

of the June 2004 MedPAC report into evidence , which concentrated

on "Defining long - term care hospitals". AHCA 5; see also AHCA 6

and 7.

55. The Agency has been concerned with the id entification

of patients who are in need of LTCH services as compared with

patients who would be better suited in a post - acute care

setting, such as a SNU/SNF or CMR facility.

56. The June 2004 MedPAC report stated in part that LTCH

ser vi ces are for a small n umber of medically complex patients

and that acute hospitals and SNFs are the principal alternatives

to an LTCH. The report also contends that LTCH supply is a

strong predictor of their use. In other words, according to

Mr. Gregg, LTCHs "are a supplier - induced demand." T 317.

Travel Patterns and Family/Physician Involvement

57. Patient, family, and physician preferences have always

been a part of health care planning. They affect both

availability and accessibility.

58. F amilies and other care givers pl a y a critical role

regarding the delivery of care to LTCH patients. The elderly

are a special population with special needs. They commonly have

to manage multiple problems, including financial difficulties,

drug management, transportation logistics, and sometimes fragile

mental and physical conditions. Older patients, as care givers,

also have a more difficult time driving, especially over longer

distances. Medical experts have opined that having an LTCH over

one hour away from the patient population in Polk County (the

Winter Haven area) is not geographically accessible for the

elderly needing LTCH services in Polk County.

59. Further, while primary care physician s may choose to

travel to an LTCH to continue to serve their patients, in

real i ty, this does not generally occur when the LTCH is a fair

distance from their usual practice area.

60. Select believes the travel patterns from Polk County to

Hillsborough County, where the two LTCHs in District 6 are

located, show that there is a need for one in the Win ter Haven

area of Polk County. Although the travel patterns and the

travel time to the current facilities may make it inconvenient

for the patient or the families, the benefits of LTCH care

greatly outweigh this inconvenience.

Need on a Sub district vs. District Level

61. The Agency reviews the need for additional LTCHs on a

district - wide basis. S 12 at 52 - 54.

62. The fact that there are existing facilities already in

D istrict 6 that are being underutilized is a counterargument for

"need" in D istrict 6 .

63. Se lect conducted the majority of its needs analysis o n

a sub district level. If a CON application for an LTCH could be

reviewed and approved on a sub district level, here using Polk

County alone, Select would be able to satisfy the need

requirement, based , in part , on the number of acute care beds in

Polk County , the lack of any LTCH beds in Polk County, travel

and accessibility - related issues, population trends , and the

county - wide health care provider support for the facility.

CONCLUSIONS OF LAW

64. The Di vi s ion of Administrative Hearings has

jurisdiction over the parties to and the subject matter of this

proceeding pursuant to Sections 120.568, 120.57(1), and

408.039(5), Fl orida Stat utes

65. Select has the burden of pro vi ng by a preponderance of

the e vi dence th at CON application No. 9757 should be approved.

Boca Raton Artificial Kidney Center, Inc. v. Department of

Health & Rehabilitative Ser vi ces , 475 So. 2d 260 (Fla. 1st DCA

1985); § 120.57(1)(j), Fla. Stat.

66. The award of a CON must be based on a balanced

con sideration of all applicable and statutory rule criteria.

Balsam v. Department of Health & Rehabilitative Ser vi ces , 486

So. 2d 1341 (Fla. 1st DCA 1986). "[T]he appropriate weight to

be given to each indi vi dual criterion is not fixed, but rather

must vary on a case - by - case basis, depending upon the facts of

each case." Collier Medical Center, Inc. v. Department of

Health & Rehabilitative Ser vi ces , 462 So. 2d 83, 84 (Fla. 1st

DCA 1985).

67. The parties stipulated that the main issue to be

resolved in this pro ceeding is whether there is a need for

Select's 44 - bed LTCH project . See § 408.035(1), (2), and (5),

Fla. Stat. Other issues include whether Select's project will

foster competition that promoted quality and cost - effectiveness

and consideration of Select 's (and its parent) past and proposed

provision of health care services to Medicaid patients and the

medically indigent. See § 408.035(7) and (9), Fla. Stat. 9

68. AHCA has reviewed the need for LTCH CON applications on

a district - wide basis. See , e.g. , Sele ct Specialty Hospital -

Marion, Inc. v. State of Florida, Agency for Health Care

Administration , Case No. 04 - 0444CON (DOAH October 31,2005; AHCA

December 21, 2005). AHCA 11.

69. A "'District' means a health service planning district

composed of the follow ing counties: . . . District 6. -

Hillsborough, Manatee, Polk, Hardee, and Highlands Counties."

§ 408.032(5), Fla. Stat. A "'Long - term care hospital means a

hospital licensed under chapter 395 which meets the requirements

of 42 C.F.R. s. 412.23(e) and see ks exclusion from the acute

care Medicare prospective payment system for inpatient hospital

services." § 408.032(13), Fla. Stat.

70. A CON application is reviewed in context with several

statutory criteria including "[t]he need for the health care

faciliti es and health services being proposed" and "[t]he

availability, quality of care, accessibility, and extent of

utilization of existing health care facilities and health

services in the service district of the applicant."

§ 408.035 (1) and (2), Fla. Stat.

71. In general, health care projects, which are subject to

CON review, are reviewed on a district - wide as opposed to

subdistrict - wide basis, unless otherwise indicated by statute or

rule.

72. "'Subdistricts' mean a subdivision of a district

designated by the lo cal health council as established under

Rules 59C - 2.100 and 59C - 2.200, F.A.C." Fla. Admin. Code R. 59C -

1.002(38).

73. "Acute care subdistricts are proposed by Loca l Health

Councils and utilized by the agency in conjunction with the

methodology for determi ning need for acute care beds. A full

description of the need methodology appears in Rule 59C - 1.038,

Florida Administrative Code." Fla. Admin. Code R. 59C - 2.100(1).

(Rule 59C - 1.038 was repealed in 2005.) Polk County is defined

as "[s]ubdistrict 6 - 2 , " a n acute care subdistrict. Fla. Admin.

Code R. 59C - 2.100(3)(f)2. However, an "'[a]cute care bed' means

a patient accommodation or space licensed by the agency pursuant

to Chapter 395, Part I, F.S., and regulated under Rule 59C -

1.038, F.A.C. Acute care be ds exclude . . . beds in long term

care hospitals licensed pursuant to Chapter 395, Part I, F.S."

Fla. Admin. Code R. 59C - 1 .002(1) (emphasis added) .

74. Pursuant to Florida Administrative Code Rule 59C -

1.008(2)(e)2. a. - d. , Select has the burden to prove need through

a needs assessment that includes, at a minimum, the following

topics:

a. Population, demographics and dynamics;

b. Availability, utilization, and quality of like

services in the district, subdistrict , or both;

c. Medical treatment trends; and

d. Market con ditions.

75. As noted, the need for an additional LTCH is assessed

by examining, in part, the availability, utilization, and

quality of like services in the district, subdistrict , or both.

However, there is only one definition of "subdistricts" and Polk

Cou nty is, by Agency rule, an acute care subdistrict, not an

LTCH subdistrict. As a result, LTCHs are evaluated on a

district - wide basis and not on a subdistrict - wide basis.

76. The excess availability of beds in District 6 at the

two Kindred LTCH facilities demonstrates a lack of need for a

new LTCH in D istrict 6 .

77. A " geographical barrier " that consists of inconvenient

traffic patterns or a travel time of one (1) hour is not a

sufficient barrier to access.

78. Select has not met i ts burden of proof in this ca se

because it did not show that there is a need in District 6 for

an additional LTCH facility. On balance, Select's CON

application should be denied.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is

RECOMMENDED that t he Agency issue a final order denying

Select Specialty Hospital - Marion, Inc.'s CON application No.

9757.

DONE AND ENTERED this 11th day of July , 2006 , in

Tallahassee, Leon County, Florida.

S

CHARLES A. STAMPELOS

Adminis trative Law Judge

Di vi sion 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

Di vi sion of Admin istrative Hearings

this 11th day of July , 2006.

ENDNOTES

1 / Select's CON application was comparatively reviewed by the

Agency with a co - batched applications filed by SemperCare

Hospital of Lakeland, Inc. and BayCare L ong Term Acute Care,

Inc. All of the CON applications were initially denied by the

Agency in its State Agency Action Report (SAAR) issued June 11,

2004. SemperCare filed a petition challenging its denial, but

subsequently voluntarily dismissed its petiti on on or about

January 4, 2006.

2 / All citations are to the 2005 version of the Florida Statutes

unless otherwise indicated.

3 / In District 6, relevant here, as of December 16, 2005, there

are 23 acute care hospital facilities and 5,756 beds; four

general hospital facilities with 131 comprehensive

rehabilitation beds; and two hospital facilities with skilled

nursing units with 30 beds. In Polk County, there are six

short - term acute care hospitals, with Lakeland Regional Medical

Center and Winter Ha ven Hospital designated as tertiary care

hospitals. There are approximately 1,569 acute care beds in

Polk County as of January 1005.

4 / There is testimony that it has been somewhat difficult to

place patients at a Kindred facility, either because the

facility was full or it had a quota of dialysis or Medicaid

patients and could not accept any more patients at the time.

See , e.g. , S 9 at 17, 23, 26 - 27.

5 / This data is patient origin information by county of the

patient's residence. Ms. Greenber g dis agrees with this data and

suggests that less than ten percent of the people in need of

LTCH services in Polk County actually went to an LTCH in

Hillsborough County. T 134 - 135, 198, 201. (Select's CON

application stated: "Less than 10 percent of Polk County

residents are admitted to [LTCHs] anywhere in the State,

evidencing a clear need and that existing facilities are not

accessible." S 2, Volume I at 29. )

6 / The Agency uses a two - hour travel time standard within the

service district (here Distri ct 6) for LTCHs. The drive times

to an existing LTCH in Hillsborough or Orange counties could be

less depending on where the Polk County resident resides.

7 / Select examined the patient population that was admitted to

Polk County hospitals because a large percentage of Select's

LTCH admissions are likely to come from Polk County hospitals.

Ms. Greenberg assumed 100 percent. T 163.

8 / The A gency has recently approved 14 facilities, either

initially, or after recommended orders. Two of these

facili ties, located in Pinellas and Pasco counties, are expected

to take some of the patient referrals away from the Kindred

facilities in Hillsborough County.

9 / Select's national experience and proposed percentages for

Medicaid and charity care exceed the statewide and nationwide

averages. T 186 - 188. Select's project will enhance access for

LTCH services for residents of Polk County, and particularly

those residents residing in the Winter Haven area, but not

necessarily improve access for residents of Dis trict 6.

Select's project will enhance competition in the Polk County

area for the provision of LTCH services. However, it was not

proven that the project would improve cost - effectiveness or

quality in District 6, although it would be more cost - effective

for individual residents of Polk County needing LTCH services.

COPIES FURNISHED :

Christa Calamas, Secretary

Agency for Health Care Administration

Fort Knox Building, Suite 3116

2727 Mahan Drive

Tallahassee, Florida 32308

William Roberts, General Cou nsel

Agency for Health Care Administration

Fort Knox Building, Suite 3431

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

Richard Shoop, Agency Clerk

Agency for Health Care Administration

2727 Mahan Drive, Building 3

Mail Station 3

Tallahassee, Florida 32308

Mark A. Emanuele, Esquire

Panza, Maurer, & Maynard, P.A.

Bank of America Building, Third Floor

3600 North Federal Highway

Fort Lauderdale, Florida 33308

Nelson E. Rodney, Esquire

8350 Northwest 52nd Terrace, Suite 103

Miami, Florida 331 66

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of this Recommended Order. Any exceptions

to this Recommended Order should be filed with the agency that

will issue the Final O rder in this case.