15-002005CON Compassionate Care Hospice Of The Gulf Coast, Inc. vs. Agency For Health Care Administration Status: Closed Recommended Order on Monday, September 19, 2016.

Summary: Petitioner failed to prove "special circumstances" necessary for approval of its CON Application for a new hospice program in Service Area 8D, where there was a fixed need pool of zero.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

COMPASSIONATE CARE HOSPICE OF

THE GULF COAST, INC.,

Petitioner,

vs. Case No. 15 - 2005CON

AGENCY FOR HEALTH CARE

ADMINISTRATION,

Respondent,

and

TIDEWELL HOSPICE, INC.,

Intervenor.

_______________________________/

RECOMMENDED ORDER

An administrative hearing was held in this case on

March 8 through 10 and March 14 through 17, 2016, in

Tallahassee, Florida , before James H. Peterson, III,

Administrative Law Judge with the Division of Administrative

Hearings (DOAH) .

APPEARANCES

For Compassionate Care Hospice of the Gulf Coast, Inc.:

Geoffrey D. Smith , Esquire

Susan C. Smith , Esquire

Smith & Associates

3301 Thomasville Road, Suite 201

Tallahassee, Florida 32303

For the Agency for Health Care Administration:

Richard J. Saliba , Esquire

Michael Hardy , Esquire

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

For Tidewell Hospice, Inc.:

Robert D. Newell, Jr. , Esquire

Newell, Te rry & Douglas, P.A.

817 North Gadsden Street

Tallahassee, Florida 32303 - 6313

STATEMENT OF THE ISSUE

Whether the Agency for Health Care Administration (AHCA)

should approve the a pplication of Compassionate Care Hospice of

the Gulf Coast, Inc. (Petitioner, the Applicant, or CCH) , for

Certificate of Need (CON) No. 10337 to provide hospice services

in Sarasota County, Florida.

PRELIMINARY STA TEMENT

Petitioner timely filed its a pplication for CON 10337

(Application) to esta blish a new hospice program in Service Area

8D, Sarasota County, in the October 2014 AHCA Hospice Program

Batching Cycle. AHCA deemed the A pplication complete, reviewed

it, and preliminarily denied the Application. Petitioner timely

filed a Petition challenging AHCAÓs preliminary decision to deny

its Application and requesting a hearing pursuant to s ection

120.57, Florida Statutes. 1/

Tidewell Hospice, Inc. (Tidewell or Intervenor ), an

existing hospice program provider in Service Area 8D, timely

petitioned to intervene, seeking entry of a final order denying

CCHÓs Application. Intervention was granted subject to proo f of

legal standing at hearing. The Tidewell and C CH p etitions were

referred to DOAH on April 13, 2015 and scheduled for final

hearing.

At the final hearing, CCH presented the testimony of

Elizabeth A. Lillo, accepted as an expert in nursing, cardiac

nursing, and hospice nursing; Dana Rowse, accepted as a n expert

in respiratory therapy; Eileen D. Hession , CCHÓ s chief quality

officer ; Catherine Cuthbert - Allman, accepted as an expert in the

management and administration of hospice; Donald Haas, M.D.,

accepted as an expert in cardiology and end - stage heart fa ilure;

Rana McClelland , CCHÓs parentÓs regional program director in

Florida ; Brent Brady, accepted as an expert in hospice and

palliative care administration and hospice chaplaincy; and

Patricia Greenberg, accepted as an expert in healthcare planning

and healthcare finance. CCH offered the deposition testimonies

of Missy Bassinger, Ex hibit P - 137; Barbara Cogswell, Ex hibit

P - 138; Carolyn Copenhaver, Ex hibit P - 139; Stella Hardy, Ex hibit

P - 140; Michael Jones, Exhibit P - 141; Ro sa Juarez, Ex hibit P - 14 2 ;

Mich ael Juceam, Ex hibit P - 143 ; Thomas Kelly, Ex hibit P - 144 ;

Lauren Kusznir , Ex hibit P - 145 ; Michael Levine , Ex hibit P - 146 ;

Wendy Merlino, Ex hibit P - 147; Abby Riddle, Ex hibit P - 148; Bruce

Robinson, M.D., Ex hibit P - 149; Louis Rosenfeld, M.D., Ex hibit

P - 150; and Nicole Williams, Ex hibit P - 151, which were received

i nto evidence .

In addition, CCH Exhibits P - 1 through P - 8, P - 13 through

P - 18, P - 20 through P - 29, P - 31, P - 32, P - 35 through P - 39, P - 43,

P - 44, P - 46 through P - 49, P - 57 through P - 63, P - 70, P - 153, P - 159,

an d P - 163A through P - 163E were presented and received into

evidence. CCH Exhibits P - 9 through P - 12 were withdrawn. CCH

Exhibits P - 19, P - 30, P - 34, P - 40 through P - 42, P - 45, P - 50 through

P - 52, P - 55 , and P - 56 were offered, but not received into

e vidence. CCH Exhibits P - 33, P - 53, P - 54, P - 64 through P - 69, and

P72 through P - 136 were not received into evidence, but were

proffered . Exhibit P - 71 was proffered with the understanding

that its admissibility would be ruled upon in this Recommended

Order. Upon further consideration of the proffer, it is

concluded that the objection to the admission of Exhibit P - 71 is

sustained , that the exhibit is more prejudicial than probative,

and that other evidence of TidewellÓs qualit y outweighs the

negative inferences that could be drawn from the exhibit. 2/

T idewell presented the testimony of: Robert Coseo,

accepted as an expert in Business Administration; Mary Heath,

accepted as an expert in hospice nursing administration,

healthcare management, and hospice interdisciplinary care; Linda

Niles, accepted as an expert in hospice nursing and hospic e

inpatient care; Ken Kinzie, accepted as an expert in grief and

bereavement; Christina Speir, accepted as an expert in

professional re lations and hospice outreach ; Irene Henderson,

accepted as an expert in hospice nursing, hospice volunteer

services and h ospice complimentary services; Vicklon Jaynes,

accepted as an expert in healthcare risk management, healthcare

compliance, and nursing; Stacy Groff, accepted as an expert in

hospice volunteer services; Thomas Davidson, accepted as an

expert in healthcare p lanning and in healthcare finance; and

Denise Pope, accepted as an expert in healthcare philanthropy

and healthcare fund development. Tidewell offered the

depositions of Stella P. Grant, Ex hibit I - 88; David Hoops,

Ex hibit I - 89; Tanya Prete, Ex hibit I - 90; Kathleen Spoonmore,

Ex hibit I - 91; Noemi Sanchez, Ex hibit I - 92; Renee Luchtman,

Ex hibit I - 93; and Erica Floyd Thomas, Ex hibit I - 94 ; plus a late -

filed exhibit consisting of two pages that the parties agreed

were meant to be attached to Exhibit I - 94 ; all of w hich were

received into evidence . In addition, Tidewell Exhibits I - 1

through I - 38, I - 40 through I - 44, and I - 46 through I - 97 were

received into evidence. Tidewell Exhibit s I - 39 and I - 45 were

offered, but not received into evidence. Tidewell Exhibit I - 45

was proffered.

AHCA presented the testimony of Marisol Fitch, who was

accepted as an expert in CON and healthcare planning. AHCA

offered Exhibit R - 1 which was received into evidence.

The proceedings were recorded and a transcript was ordered.

The parties were given 40 days from the filing of the t ranscript

within which to file proposed recommended orders. The

Transcript of the final hearing, consisting of 11 volumes, was

filed on Apr il 1, 2016 . The parties were thereafter granted

extension s of time , until June 6, 2016, to file their proposed

recommended orders. Both CCH and Tidewell timely filed their

respective Proposed R ecommended O rders. AHCA did not file a

proposed recommended order. Following an Order granting

Tidewell's unopposed motion to amend to correct scrivener's

errors , Tidewell filed an Amended Proposed Recommended Order on

June 13, 2016. The Proposed Recommended Orders submitted by CCH

and Tidewell were considered in the preparation of this

Recommended Order.

FINDINGS OF FACT

I. THE PARTIES

1. AHCA is the state agency authorized to evaluate and

render final determinations on CON applications pursuant to

section 408.034, Florida Statutes.

2. CCH is a development stage , Florida for - profit,

privately - owned corporation, formed for the purpose of

initiating hospice services in the Gulf Coast region of Florida,

including Sarasota, Manatee , and Pasco Counties.

3. Compassionate Care Group, LTD (CCH - LTD) , the

ApplicantÓs parent, is a national, for - profit hospice provider,

headquartered in Parsippany, New Jersey, operating 39 hospice

programs in 22 states, with 57 offices. CCH - LTD (or its

affiliate ( s ) ) currently provides hospice services in Service

Area 6B consisting of Polk, Highlands, and Hardee Counties ;

Service Area 3E , consisting of Lake and Sumter Counties ; and

Service Area 11 , consisting of Miami - Dade and Monroe Counties.

The hospice services offered in S ervice Area 6B is CCH - LTD's

only mature program in Florida. The o ther two are still in the

start - up phase.

4. Tidewell is a Florida , not - for - profit corporation ,

currently licensed to provide hospice services and is currently

the sole hospice provider in three geographically contiguous

Hospice Service Areas , including Service Areas 8D, Sarasota

County; 8A, Charlotte and DeSoto Counties; and 6C, Manatee

County.

5. Tidewell currently serves on an annual basis

approximately 8,000 patients and their families, employs 500 to

600 fulltime , and 100 to 150 part - time , employees and has

approximately 1,000 active volunteers. Tidewell has a total

average daily census of appr oximately 1,130 patients.

TidewellÓs average daily census in Service Area 8D, Sarasota

County, is approximately 500 patients.

II. STIPULATED FACTS AND LAW

6. CCH submitted its Application for CON 10337 to

establish a new hospice program in Service Area 8D, Sarasota

County, in the October 2014 AHCA Hospice Program Batching Cycle.

7. CCH's Application was deemed complete, reviewed, and

preliminarily denied by AHCA.

8. CCH timely petitioned for a hearing, pursuant to

section 120.57 .

9. Tidewell timely petitioned to intervene. Intervention

was granted subject to proof of legal standing at hearing.

10. All of the review criteria in section 408.035 and

Florida Administrative Code Rules 59C - 1.008, 59C - 1.030 and

59C - 1.0355 were at issue in this proceeding , except the

following su bsections of section 408.035(1) : (h) is not

applicable to this proceeding; ( j) is not applicable to this

proceeding; and (d) for which the parties stipulated that CCH

has access to sufficient resources, including health personnel,

management personnel, and funds for capital and operating

expenditures for project start - up as described in its

Application, except for manpower specifically associated with

CCH's proposed Cardiac Connections, Pulmonary Connections, and

Promises programs.

11. Florida law requires a hospice program to provide a

continuum of palliative and supportive care for terminally - ill

patients and their families.

12. "Palliative care" means services or interventions

which are not curative, but are p rovided for the reduction or

abatement of pain and suffering.

13. A terminal ly - ill patient is defined under sections

400.601(3), (7) , and (10), Florida Statutes, as having a medical

prognosis of 12 months or less life expectancy.

14. The goal of hospice is to provide physical, emotional,

psychological, and spiritual comfort and support to dying

patients and their families.

15. Hospice care is provided pursuant to an individualized

plan of care developed by an interdisciplinary team consisting

of physici ans, nurses, home health aides, social workers,

bereavement counselors, spiritual care counselors, chaplains,

and others.

16. There are four levels of service in hospice care:

routine home care; continuous care; general inpatient care; and

respite care. Routine home care (provided where patients

reside) accounts for the vast majority of admissions and patient

days.

17. Continuous care, sometimes called "crisis care , " is

provided in a home care setting or in any setting where patients

reside. Continuous care is provided for short durations when

symptoms become so severe that around - the - clock care is

necessary for pain and symptom management.

18. General inpatient level of care is provided in either

a hospital setting, a skilled nursing unit, or in a fre e standing

hospice inpatient unit.

19. Respite care is generally designed for caregiver

relief. It allows patients to stay in facilities for brief

periods to provide breaks for caregivers.

20. The Medicare hospice benefit requires terminally - ill

patient s to have a life expectancy prognosis of six months or

less to be eligible to elect the Medicare benefit. Like Florida

law ( c hapter 400, Florida Statutes), the Federal Medicare

benefit excludes patients seeking curative treatments from

hospice eligibility .

21. Medicare is the largest payor source for hospice

services. Other sources include Medicaid, private insurance,

managed care plans including Medicaid Managed Care, other

government payors and charity.

22. Hospices are required to accept all patients

regardless of ability to pay.

III. STATUTORY REVIEW CRITERIA

A. The n eed for t he h ealth care facilities and health

s ervices being p roposed. § 408.035(1)(a), Fla. Stat.

23. On October 3, 2014, AHCA publi shed a numerical fixed

need of zero for new hospice p rograms in Hospice Service

Area 8D, comprised of Sarasota County , for the October 2014

ÐOther Beds and ProgramsÑ batching cycle with a planning horizon

of January 2016. The published need of zero was not timely

challenge d by any party and is , the refore , the numerical need

applicable to this case. A published need of zero creates a

rebuttable presumption that a new hospice is not needed.

Florida Administrative Code Rule 59C - 1.0355(3)(b) provides:

(b) Conformance with Statutory Review

Criteria. A Certificate of Need for the

establishment of a new Hospice program or

construction of a freestanding inpatient

Hospice facility shall not be approved

unless the applicant meets the applicable

review criteria in Sections 408.035 and

408.043(2), F.S., and the standards and need

determination criteria set forth in this

rule. Applications to establish a new

Hospice program shall not be approved in the

absence of a numeric need indicated by the

formula in paragraph (4) (a) of this rule,

unless other criteria i n this rule and in

Sections 408.035 and 408.043(2), F.S.,

outweigh the lack of a numeric need.

24. Conceding the absence of a published numerical need in

the batch cycle, CCH filed the Application seeking to establish

a new hospice program in Service Area 8D, Sarasota County, based

on the existence of Ð not normal and special circumstances .Ñ

25. CCH asserts that there are a number of not normal and

special circumstances in Sarasota Co unty that outweigh the lack

of a numerical fixed n eed in the overall weighing and balancing

of the statutory and rule review criteria. The not normal and

special circumstances alleged by CCH include :

a. Tidewell is a regional monopoly

provider, operating the sole hospice in

three contiguous hospice service areas. Per

sec tion 408.043(2), Florida Statutes, and

Rule 59C - 1.0355(3)(c), F.A.C., the lack of

published numeric need is outweighed by the

need to promote competition and discourage

regional monopolies.

b. There are over 46,979 Medicaid

recipients living in Sarasota. Pursuant to

section 409.967(2)(c), Florida Statutes,

under the new Medicaid managed care model,

AHCA established Medicaid Managed Care

Requirements to ensure there is an Ðadequate

networkÑ of h ealth care providers in place

to provide Medicaid patients with choices

when seeking health care services. An

Ðadequate networkÑ of hospices requires a

minimum of two hospice providers per county.

The Applicant asserts Medicaid recipients in

Service Area 8D are being underserved

because they do not have an adequate network

of providers to choose from in Sarasota.

c. Patients, families, physicians, long

term care facilities, home health agencies,

and other typical hospice referral sources

for hospice la ck any choice of provider in

Service Area 8D. T his is especially

important for those who have had negative

experiences with Tidewell. There are

numerous large scale referral sources in

Sarasota that are unhappy about, reluctant

to, or in some instances e ven refusing to

refer patients to Tidewell because of their

negative experiences. The patients not

being referred to hospice because Tidewell

is the only option are underserved.

d. Almost 10 percent of Sarasota County

residents who received hospice ser vices in

2012, 528 out of 5,707 patients, left

Sarasota County to do so. While there is no

statistical way to determine why these

residents opted to leave Service Area 8D for

their hospice care, the number is

significant given the large scale referral

sou rces, including home health agencies and

long term care providers, dissatisfied with

Tidewell or who prefer choice.

e. Hospice patients with end - stage heart,

pulmonary, and renal diseases, are

underserved in Service Area 8D. TidewellÓs

decreasing trend s on admitting these

patients is inconsistent with national,

Florida, and Sarasota County data

demonstrating increasing needs for hospice

care for these patients. The cost and

difficulty of caring for these patients

often causes hospices to avoid admitting

them. The Applicant has developed disease

specific programs targeting these patients.

26. In addition to the alleged not normal and special

circumstances summa rized above, CCH asserts that the AHCA's

numeric need calculation of zero should be given little w e ight

in determining whether to a pprove the Application because there

are anomalies in TidewellÓs reported admissions that distort the

apparent penetration ra te used in the calculation. At the final

hearing, CCH pointed out that , while AHCA allows double counting

for purposes of the fixed n eed calculation, from a health

planning perspective , the apparent penetration rate can be

distorted by routin ely double counting admissions. CCH provided

an example where Tidewell report ed admitting more than 100

percent of the potential cancer deaths over 65. Based on this

analysis, CCH argues that because of a distorted penetration

rate, the presumption of no need for a new hospice should be

given little weight.

27. CCH's attempt to demonstrate an error in the fixed

need pool calculation, however, is untimely . Subsections 2

and 3 of r ule 5 9 C - 1.008(2)(a) state:

2. Any person who identifies an error in

the Fixed Need Pool numbers must advise the

Agency of the error within 10 days of the

date the Fixed Need Pool was published in

the Florida Administrative Register. If the

Agency concurs in the error, the Fixed Need

Pool number will be adjusted and re -

publishe d in the first available edition of

the Florida Administrative Register. Failure

to notify the Agency of the error during

this time period will result in no

adjustment to the Fixed Need Pool number for

that batching cycle.

3. Except as provided in subparagraph 2.

above, the batching cycle specific Fixed

Need Pools shall not be changed or adjusted

in the future regardless of any future

changes in need methodologies, population

estimates, bed inventories, or other factors

which would lead to different projections of

need, if retroactively applied.

28. Therefore, CCH's purported evidence of an error in the

calculation of the fix ed need pool has not been considered , and

the rebuttable presumption that a new hospice is not needed has

not been diminishe d by CCH's criticism of the fixed need

calculation .

29. CCH's alleged not normal and special circumstances are

addressed below in the same order as summarized in paragraphs

2 5 . a . through e . , above .

1. Regional Monopoly

30. Section 408.043(2), Florida Statutes, provides in

pertinent part:

HOSPICES. Ï When an application is made for a

certificate of need to establish or to

expand a hospice, the need for such hospice

shall be determined on the basis of the need

for and availability of hospice services in

t he community. The formula on which the

certificate of need is based shal l

discourage regional monopolies and promote

competition . . . .

31. Tidewell is the sole hospice provider in three

adjoining hospice service areas (Service Areas 8D, 8B, and 6C),

encompassing Manatee, Sarasota, Charlotte, and Desoto Counties.

T his situation is unique in the s tate. There is no other part

of the s tate consisting of multiple contiguous hospice service

areas with only a single hospice provider. In fact, there is no

other part of the s tate where there are even two adjoining

service areas with a single hospice provider.

32. The four counties that comprise the three hospice

service areas where Tidewell operates as the sole provider are

recognized as a ÐregionÑ by the U.S. Bureau of the Census and

the Office of Management and Budget. These four counties

constitute a recognized combined statistical area used for

federal planning and budgeting decisions.

33. Multiple witnesses confirmed Tidewell operates as a

single in tegrated regional provider. All of TidewellÓs licensed

hospices have the same officers and directors; adhere to the

same policies, procedures, and protocols ; and share multiple

support services , such as information technology and human

resources. Practically speaking, Tidewell functions as a single

hospice in the four counties which comprise Service Areas 8D,

8B, and 6C.

34. While neither the applicable statute n or rule defines

Ðmonopoly,Ñ its commonly understood meaning is that there is an

exclu sive or sole provider of services or goods in an area.

Tidewell is the only hospice provider in the four counties that

make up Service Areas 8D, 8B, and 6C . It is found, under the

circumstances, that Tidewell has a regional monopoly in those

contiguous service areas .

35. The fact that T idewell is a regional monopoly,

standing alone, however, is not a sufficient basis to justify

approval of a new hospice program in Service Area 8D.

2. Enhancing Access for Medicaid Managed Care

Eligible Patients

36. AHCA recently transitioned it s Medicaid program to a

managed care delivery model. In so doing, the s tate was

required to develop Ðadequate networkÑ standards for healthcare

services offered to Medicaid patients, including hospice

services. Section 409.967(2)(c), Florida Statutes, requires

AHCA to develop standards governing the number, type, and

regional dispersal of healthcare providers to ensure access.

37. There are two separate components of the Statewide

Medicaid Managed Care Program: (1) Man aged Medical Assistance

(MMA) , and (2) Medicaid Long T erm Care (LTC). AHCA developed

model contracts for managed care plans seeking to become

approved Medicaid plan providers under the MMA or LTC programs.

The model contracts included Ðadequate networkÑ standards for

the various healthcare providers, i ncluding hospices. Under the

MMA and LTC model contracts, there must be a minimum of two

hospice providers per county.

38. The Ðadequate netwo rkÑ standards contained in the

model contracts were developed through a deliberative process

between AHCA and the f ederal governmentÓs Center for Medicare

and Medicaid Services (CMS) as part of the Medicaid Waiver

Program issued by CMS . AHCA and CMS used the existing CMS

standards from other programs as a starting point, and then made

informed decisions on particular adjustments to the standards as

necessary. Ultimately, some of the standards adopted for

Florida were more stringe nt than the CMS standards and some were

less stringent, d epending on Florida use rates. The hospice

standard adopted for Florida is two hospices per county. One of

the reasons that t he standard of two hospices per county was

adopted is to provide for patient choice in hospice care.

39. Fifty - six of FloridaÓs 67 counties have two or more

licensed hospices . Nevertheless , Abbie Riddle, AHCAÓs Medicaid

Plan Management Operations Bureau Chief, testified that there is

nothing unusual or not normal about a county not meeting the

hospice Ðadequate netwo rkÑ standards because she had issued

waivers in nu merous counties throughout the s tate where there

were fewer than two licensed hospices, including Sarasota

County .

40. Tidewell argues that because Service Area 8D MMA and

LTC contracts are operating under a waiver, there is no reason

to be concerned about the lack of an Ðadequate network.Ñ There

is no evidence, however, that the decision to issue waiver s for

fewer than two hospices within a county was based upon an

adequacy analysis or determination. Rather, Ms. Riddle , on

behalf of AHCA, granted waivers to all counties that did not

have at least two hospices with a physical address within th e

county.

41. Further, AHCAÓs waiver authority under the model

contract does not suggest that the issuance of a waiver is a

determination of network adequacy. Rather , Section VI, B., 3 .

of the model cont r act provides:

If the Managed Care Plan is able to

demonstrate to the AgencyÓs satisfaction

that a region as a whol e is un ab le to meet

network requirements, the Agency may waive

the requirement at its discretion in

writing. As soon as additional service

providers become available, however, the

Managed Care Plan shall augment its network

to include such providers in order to me et

the network adequacy requirements. Such a

written waiver shall require attestation by

the Managed Care Plan that it agrees to

modify its network to include such providers

as they become available.

42. The addition of another hospice program in Service

Area 8D , Sarasota County, would be consistent with the

applicable Ðadequate networkÑ standards for hospice services .

This finding, however, is not the equivalent of finding that

there is an underserved population in Sarasota County.

3. Lack of Choice and Out - Migration

43. CCH relies on 13 letters of support from the community

and 13 deposed witnesses who all urge that choice and

competition are sufficient reason s to support approval of CCHÓs

Application. The letters and witnesses , however, express

personal opinions that are not based upon any demonstrated

expertise in health planning . Those opinions , therefore, have

not been given significant weight .

44. CCH also presented evidence that some residents of

Sarasota County receive hospice ser vices from hospices located

in surrounding counties. That evidence , however, was

insufficient to demonstrate a cause for the outmigration. The

ob servations of outmigration, alone, do not support a conclusion

that the outmigration would be prevent ed by the addition of

another hospice provider.

4. Specific Terminally - Ill Populations Not Being

Served

45. The Special Circumstances provision in the hospice

r ule recognizes that a CON may be granted in the absence of need

when there are specific terminally - ill populations that are not

being served. This can include a specific disease category.

46. The health planners testifying at the final hearing

agreed th at a given population does not have to be completely

unserved to rise to a level of special circumstance. Rather, it

is adequate to demonstrate that a given population i s

underserved compared to the statewide use rate of hospice

services for that population .

47. CCH asserts that h ospice patients with end - stage

heart, pulmonary, and renal diseases are underserved in Service

Area 8D. CCH described its programs especially designed to meet

the needs of patients with those diseases. CCH faile d, however,

to demonstrate that patients in Service Area 8D in those disease

categories are underserved.

48. In describ ing its Cardiac Connections Program,

Pulmonary Connections Program, and Advanced C are Connection

Programs , CCH relied on evidence from those who created an d

operate the programs. D ocumenting an ability to provide care

under specialty programs with alternative or additional clinical

protocols, however, i s not the equivalent of documenting

substandard care by an existing provider, an underserved group,

or Ðspecial circumstancesÑ sufficient to find a need for the

Applicant who is offering those alternative protocols.

49. Only 40 percent of CCH - LTD affiliate program offices

have implemented the Cardiac Connectio ns Program . Even where

implemented, not all of CCH - LTDÓs end - stage heart failure

patients are enrolled in Cardiac Connections.

50. CCH acknowledged that CCH - LTD hospices are still able

to deliver acceptable and appropriate care to end - stage heart

disease hospice patients without the Cardiac Connections

Program.

51. CCH describe d the Cardiac Connections Program as an

enhanced service and agreed that the failure of CCH - LTD

affiliate facilities to provide its end - stage heart failure

patients w ith Cardiac Connection Program services does not

constitute Ðsubstandard serviceÑ to those patients. In fact,

CCH agrees that adequate palliative hospice care can be provided

to end - stage heart patients without the Cardiac Connections

Program.

52. As an example of the significance of the Cardiac

Connections Program , CCH cites the fact that its Cardiac

Connections Program admits inotrope and left ventricle assist

device ( LVAD ) patients. CCH suggests that , because inotropes

must be started in an intens ive care setting and are expensive,

many hospices will not provide inotropes in a home setting for

their patients.

53. Tidewell , however, also admits LVAD patients and

patients being infused with inotropes. Those patients are

included in TidewellÓs complex case management protocol when the

patient is going to be infused at home and Tidewell pays for all

infused medications related to the patientÓs primary diagnosis.

54. The evidence further demonstrated that Tidewell

understands the needs of end - st age heart failure patients and

provides high quality care hospice services for those patients

consistent with best practices and generally accepted

guidelines .

55. As argued with regard to end - stage heart failure

patients and its Cardiac Connections Progr am, CCH contends that

end - stage pulmonary disease patients in Sarasota County are an

underserved group because those patients do not have access to

CCHÓs Pulmonary Connections Program.

56. CCH - LTD's national Pulmonary Connections Program

coordinator, howe ver, acknowledged that hospice patients with a

primary diagnosis of end - stage pulmonary disease, who are not

enrolled in its Pulmonary Connections Program, should not be

presumed to be receiving substandard care.

57. Tidewell demonstrated that Tidewell provides high

quality palliative care to its end - stage pulmonary disease

patients, consistent with best practices, including the

necessary patient and family training for the symptoms

associated with shortness of breath.

58. Although CCH also argued that its R enal Advanced Care

Connections program would enhance access for renal failure

patients in Sarasota County, the evidence in that regard was not

sufficiently developed at hearing to support any findings of

fact with r egard to an unmet need that would be served by that

program.

59. In addition to describing its specialty programs, CCH

relies on admissions data and general demographic or disease

prevalence information to support its contention that there is

an unmet hospice need in Service Area 8D for end - stage cardiac,

pulmonary, and renal patients . For instance, CCH provided

evidence showing that heart disease is the number one leading

cause of hospitalization nationally and in Florida , and that it

has a high mortality rate . It was also shown that, nationally,

there were over 5.7 million heart diseas e hospitalizations in

2008, and that figure is projected to grow to over 10 million by

2037.

60. Using admissions data, CCH made various data

comparisons to demonstrate the need for CCHÓs Cardiac

Connections Program in Sarasota County. CCH compared the rate

of re - hospitalization (within 30 days) for patients in the

Cardiac Connections Program, with general readmission rate s

(i.e. not specifically from hospice programs) for end - stage

heart failure patients nationally, and all end - stage heart

failure readmissions to Sarasota County and surrounding

hospitals. CCH also compared the rates of re - hospitalization of

cancer patients with heart failure patients.

61. CCH did not, however, offer evidence to allow a

comparison of TidewellÓs re - hospitalization rates for Service

Area 8D end - stage heart failure hospice p atients with rates for

Cardiac Connections Program patients. Nor did CCH provide data

to allow a comparison of the hospital readmission rates for

Cardiac Connections Program patients with the re - hospitalization

rates for CCH - LTD affiliate end - stage heart failure patients

where end - stage heart failure patients are not enrolled in the

Cardiac Connections Program.

62. CCH also submitted a dmissions data showing that

Florida has the second highest number of pulmonary disease cases

in the U.S. behind California , which has double the population .

The evidence showed that Florida ranks number one for pulmonary

disease with a prevalence rate of six percent, followed by

California at four percent . Sarasota Co unty is even higher with

a 7.37 percent prevalence rate, closely fo llowed by Manatee

County at 6.5 percent .

63. Relying primarily on comparative admissions data, CCH

argues that the population requiring hospice care for heart,

pulmonary and renal failure has been going up, while the

percentage of patients served by Tidewell for those populations

has declined.

64. The admissions data for Tidewell submitted by CCH in

support of its argument of allegedly underserved population s,

however, does not properly utilize death rate s necessary to

determine Ðpenetration rate s .Ñ

65. Rather than relying on general demographic and disease

prevalence information or merely comparing differen ces in the

number of admissions in trying to determine whether underservice

exists, it is more accurate to compare penetration rates.

Penetration rates for an area within a given time period are

calculated by dividing the number of hospice admissions by the

resident deaths for the area during the time period .

66. U sing penetration rates calculated and published by

AHCA, TidewellÓs overall annual penetration rates for Service

Area 8D range from four to nine percent higher than the Florida

average penetration rates during the period from 2004 to 2014 .

While CCH has criticized the calculations for TidewellÓs

penetration rates as inflated due to AHCA's double counting of

readmissions, the numbers hold up in other contexts , indicating

that Tidewell is available and accessible for those persons

eligible for hospice to a greater degree than the average

Florida hospice.

67. When annual Service Area 8D hospice admissions for

end - stage heart failure patients as a percent age of annual

Service Area 8D end - stage heart failure deaths from 2011 to 2014

( from Department of Elder Affairs Ó admissions data that does not

include readmissions and death statistics from the Flor ida

Bureau of Vital Statistics , respectively ) are compared to the

average penetration rate for all Florida hospices, it shows

that, although the state ave rage fluctuates annually, TidewellÓs

rate increased incrementally year over year, and approximated,

or exceeded , the state average rate three out of four years.

68. Comparing Service Area 8D to all of Florida, using

h ospice end - stage pulmonary disease and end - stage renal disease

admissions as a percent age of end - stage pulmonary and renal

disease deaths, respectively , for the years 2011 to 2014, shows

that annual variations in the average rates exist in both

Service Area 8D and Florida , but there is no pattern of

historical or remarkable underservice to hospice eligible

patients of Service Area 8D for either disease .

69. To the extent the state average penetration exceeds

TidewellÓs in any one year, it does not suppo rt the notion that

the difference represents a ÐgapÑ in service. Gaps, for

purposes of the special circumstance applications, must be a

material or sustained trend, not a blip.

B. Availability, quality of care, accessibility , and

extent of utilization of existing healthcare facilities, and

health services in the service distr ict of the applicants.

§ 408.035(1)(b), Fla. Stat.

70. Sarasota County , with a population of over 400,000

residents , has a healthcare delivery system with 6 acute care

hospitals, 31 skilled nursing facilities, 61 assisted living

facilities, 53 home health agencies , 9 adult family care homes,

54 homemaker and companion services , 20 surgical centers,

1,100 doctors, and over 5,000 register ed nurses.

71. As the sole provider of hospice services in Sarasota

County, Tidewell is governed by a 15 - member volunteer Board of

Trustees who all live in and are representative of TidewellÓs

S ervice A reas. The Board provides independent accountability to

the communities served by Tidewell, including Sarasota County,

Service Area 8D.

72. In addition to its principle administrative office in

Sarasota, Tidewell has located two of its eight satellite

offices wi thin the geographic boundaries of Service Area 8D ,

Sarasota County .

73. In addition, Tidewell owns and operates seven hospice

houses with a total of 65 licensed general inpatient beds, which

can also be used for residential patients and respite care. Two

of TidewellÓs hospice houses are located in Service Area 8D ,

with six beds in the hospice house located in Venice and 12 beds

in Sarasota .

74. A hospice house residential patient is a patient

receiving the hospice routine home level of care when the

p atient does not have anywhere else available or safe to receive

t he care (e.g. homeless patients and patients without a

caregiver).

75. Although Tidewell maintains contracts with all the

hospitals and nursing homes in its Service Area s to utilize

facilit y beds for general inpatient , respite care and

residential care, TidewellÓs hospice houses provide a more

homelike environment, and are more accessible and preferred by

families .

76. Tidewell makes all of its hospice program services,

hospice houses , and community services available to patients

regardless of their ability to pay, religious preference, race ,

nationality, ethnicity , or sexual orientation.

77. Tid ewell is Medicaid and Medicare c ertified to serve

patients and families eligible for those program benefits, and

is accredited, with ÐdeemedÑ status, by the Community Health

Accreditation Program (CHAP) (i.e. AHCA defers to and accepts

CHAP accreditation surveys in lieu of routine AHCA operational

surveys). CHAPÓs standards and practices mirror those contained

in the Federal Medicare Hospice Conditions of Participation

(CoPs).

78. Tidewell is accredited by the N ational Institute for

Jewish Hospice, and Tidewell has a full time Rabbi available and

accessible in Service Area 8D.

79. Tidewell eff ectively competes with other types of

post - acute care providers, like private duty home health

companies in its Service Areas .

80. Tidewell allocates its excess revenue philanthropic

contributions to operating reserves and to provide additional

and enhanced services for patients, families , and the community

at large.

81. In Sarasota County , Service Area 8D, Tidewell deploys

one assisted living facility (ALF) team, two h ome teams, one

nursing home team, and three hospice house teams, and has

coverag e from its crisis/continuous care, admissions, and triage

(after hours and weekends) teams. Each of these service team s

in Sarasota County includes seven to eight registered nurse (RN)

case managers (one RN for every 12 patients) , one licensed

practical nurse ( LPN ), four to five certified n ursing a ssistants

( CNA ), three social workers ( SW ) , and one c haplain.

82. Tidewell also employs , for use in Service Area 8D ,

additional clinical staffing personnel for upticks in census,

after hours and triage, admission s and crisis care, including

20 as - needed CNAs, 25 crisis care LPNs, 20 RN s and one LPN for

triage and after hours, a wound care coordinator , and a

certified ch ild life specialist. Tidewell has access to

contracted RNs and LPNs if the census ever exceeds employed

staffing ratios.

83. Beyond the interdisciplinary group (IDG) positions

required by the CoPs, Tidewell supplies each IDG team with an

experienced hospice RN c linical d irector and a t eam coordinator.

Tidewell also employs an RN wound care program c oordinator to

assist RN case managers in managing patients with wound s and a

s pecialist trained in therapeutic play for children and how to

support parents of chronically ill children.

84. Tidewell maintains a state - of - the - art call center to

immediately dispatch and track triage RNs and to respond to

requests for informat ion from patients, families, and physicians

during evenings and weekends.

85. Tidewell gives all patients eligible for general

inpatient , residential, and respite care a choice of all

contracted venues and hospice houses that have a bed available.

F amilies ofte n choose the geographically closest hospice ho use

available, without regard to the Service Area where they reside.

86. In hospice, the location where the patient receives

care is considered the patientÓs residence. When the

geographically nea rest hospice house selected by a patient and

family for their convenience is in a Tidewell Service Area ,

other the one in which the patient is currently receiving care,

AHCA requires that the transfer to the new Service Area be

reported as a new admission on the hospiceÓs semi - a nnual

u tilization r eport to AHCA. AHCA considers this approach to be

consistent with the requirements of r ule 59C - 1.0355(8)(a)2.,

which links reported admissions to S ervice A reas.

87. TidewellÓs size and economies of scale allow it to

provide an array of enhanced counseling services to patients,

families, and the community. Tidewell operates a g rief

e ducation and s upport c enter (the Center), managed by an expert

in bereavement, with 10 full - time g rief s pecialists who hold

either a license as a clinical social worker or a MasterÓs

degree in counseling, or both. Three Tidewell grief counselors

are assigned to hospice patients and families in Sarasota

County . In addition to counseling individuals, the Center

organizes grief groups in the community .

88. In fiscal year 2015 , in Sarasota County, 865 hospice

family members accessed Tidewell community group bereavemen t

services beyond the 13 - month Medicare hospice benefit period ,

and Tidewell also served 1,623 community group attendees with no

prior hospice connection.

89. The Center also provides, at no charge, emergency

counseling interventions. Tidewell g rief c ounselors are on call

and respond to calls from law enforcement, fire - rescue, and

medical personnel in the community to deal with grief associated

with serious accidents and disasters.

90. Tid ewell has an extensive and well - organized

professional relations and outreach program to ensure that

existing and new physicians, nursing homes, ALFs, and other

potential referral sources ar e aware of TidewellÓs services.

Tidewell provides literature to physicians, nurse practitioners ,

and physician assistants for use in promoting end - of - life

conversations with patients early, and t o let physician s know

that Tidewell is available 24/7, every day, to evaluate their

patient s for hospice eligibility.

91. Tidewell provides a significant number of well -

organized, well - staffed , professional programs to patients,

families, and the community free of charge , which are not

otherwise required or reimbursed under the Medicare hospice

benefit. The programs include complementary services , the

Tidewell Honors Veterans program , and the T ransitions program.

92. Complementary services are methods of intervention

that work in conjunction with traditional medicine and nursing

interventions to provide the patient with moments of joy, stress

relief, and l asting legacies for the family. Comp lementary

service therapies include pet therapy, massage, horticultural

intervention, expressive arts, music therapy, humor, Reiki,

aromatherapy, care and touch, life legacy and reminiscence.

93. T he complementary therapy department is st affed by two

massage therapists and one expressive arts facilitator,

contracts with two horticulture contractors and one expressive

arts contractor, and relies heavily on volunteers.

94. Sarasota Service Area 8D had a total of 1 , 201

complementary visits from Tidew ell staff , contractors , and

volunteers in fiscal year 2015.

95. In fiscal year 2015, Tidewell served 478 veterans in

its Tidewell Honors Veterans hospice program and 42 p atients in

its Transitions program in Sarasota County. The Tidewell Honors

Veterans is a program that recognizes v eterans and expresses the

communityÓs gratitude for military service.

96. The Transitions prog ram is a pre - hospice, volunteer -

operated program that offers practical assistance to those in

the community with a diagnosis of on e year or less life

expectancy , but who have not elected hospice c are.

97. Tidewell employs a child life specialist and

participates in FloridaÓs Partners in Care ( PIC ) program, which

allows pediatric patients with chronic terminal illnesses to

receive curative care while also el ecting hospice palliative

care. Tidewell currently has 21 children enrolled in its PIC

program and four pediatric hospice patients.

98. The P IC p rogram operate s at a deficit because the

reimbursement rate from the waiver program is insufficient to

fully compensate the staff. Other than the waiver program

funding, there are no grants or othe r funding services for the

PIC p rogram.

99. Tidewell has a contract with music therapists for a

combined 30 hours a week to see PIC patients and consult with

pediatric hospice patients.

100. Currently, Tidewell has a total of 1 , 002 volunteers

that are active and available for assignment. Tidewell employs

an expert in no n - profit management to organize and m a intain its

volunteer services. Tidewell has four volunteer coordinators

physically located in Sarasota County. Each of the Sarasota

volunteer coordinators works with 120 to 150 volunteers .

101 . CCH submitted a necdotal evidence that one

cardiologist (Dr. Rosenfeld) and two nursing facilities

(according to Dr. Robinson) have had difficulty with referrals

to Tidewell . That evidence, however, from a health planning

perspective, especially in view of the credible evidence

submitted by Tidewell demonstrating the quality, accessibility,

and extent of utilization of Tidewell services in Sarasota

County , is entitled to little weight.

102. Persuasive evidence submitted by Tidewell showed

significant volume of admissions at Tidewell , effective overall

outreach to physicians , and TidewellÓs success in penetrating

Service Area 8D.

C. The ability of Applicant to provide quality of care and

ApplicantÓs record of providing quality of c are.

§ 408.035(1)(c), Fla. Stat.

103. In the State Agency Action Report ( SAAR ), AHCA

addressed CCH - LTD Ós history of providing quality of care in its

existing Florida operations and found that CCH - LTD attained a

Ðfive - o f - five star ratingÑ in each of five survey questions,

meaning Ðrespondents were 90 to 100 percent satisfied with the

hospiceÓs performance.Ñ

104. CCH - LTD has an established Quality Assessment

Performance Improvement (QAPI) program in place throughout all

of its operations, with continual assessment of quality

measures, ongoing and periodic audits of patient medical charts,

quarterly meetings between 12 Reg ional QAPI coordinators and

local programs, and monitoring to assure follow - up on

improvement items. In addition, CCH - LTD conducts internal

periodic surveys to assure ongoing compliance.

105. All of CCH - LTD Ós 39 programs have been accredited by

CHAP, wh ich is considered as the Ðgold standardÑ for hospice

quality.

106. Accordin g to CCH - LTDÓs current Florida regional

d irector, the CCH - LTD affiliate in Florida Service Area 6B had a

Ð miscommunication Ñ with AHCA in 2015 regarding its hospice

license renewal application. In February 2015, AHCA required

CCH - LTD to close its affiliateÓs hospice in Service Area 6B for

failure to submit a renewal application and to discharge or

transfer its approximately 230 patients to other hospices, until

the affiliate obtained a new license in June of 2015. This

incident , in all probability , interfered with the continuity of

care for those patients because of CCH - LTD Ós miscommunication

with AHCA.

107. CCH , however, cooperated in the transfer of patients

and the transfers were made in an orderly process until the

issue with the temporary lapse in license was fully resolved .

After that, AHCA reissued CCH its license, and AHCA has

subsequently surveyed the program and found it to be without

deficiencies.

D. The availability of resources, includin g health

personnel, management personnel, and funds for capital and

operating expenditures, for project accompl ishment and

operation. § 408.035(1)(d), Fla. Stat.

108. CCH demonstrated that it has the resources available,

or can secure the necessary resources, for accomplishment of the

proposed project .

E. The extent to which the proposed services will enhance

access to healthcare for residents of the service district.

§ 408.035(1)(e), Fla. Stat.

109. While the addition of another hospice would provide a

choice for hospice care in Sarasota County, considering the

present zero fixed need determination for Service Area 8D , as

well as evidence of the quality services and accessibility

currently provided by Tidewell , it is found that approval of the

Application would not materially improve access to hospice care

for residents of Service District 8D. To the contrary, evidence

presented by Tidewell demonstrated that approval of CCHÓs

proposed program will, im mediately and over the long term, have

a material adverse impact on Tidewell and the hospice services

provided by Tidewell to the Sarasota community.

110. Ti dewell, using reasonable assumptions regarding

length of stay, number of patients that would be lost to CCH,

and variability of TidewellÓs expenses, demonstrated that a

reasonable expectation from approval of the Application will

cause Tidewell to incur a lost contribution margin per patient

day of $72.92, totaling at least $1.2 million for each yea r that

CCH captures 300 or more of TidewellÓs Service Area 8D

admissions.

111. If CCH captures 300 admissions annually , Tidewell

reasonably and conservatively expects, based on a calculation of

average historical donations per a dmission, to lose at least

$145,000 in philanthropy annually.

112. Considering available options to absorb the

contribution margin and philanthropic losses in the event CCH is

approved , and because Medicare hospice benefit core services are

required by law, Tidewell determined th at operational and

administrative costs for core patient and family services costs

w ould not be cut (except for reducing the variable costs

associated with the 300 lost admissions accounted for in

TidewellÓs contribution margin analysis).

113. Given the impact, approval of the Application would

require Tidwell to look for reductions to costs in its enhanced

patient services (not otherwise required by the Medicare hospice

benefit ) and community education and support services, which

Tidewell currently provides and for which Tidewell incurred

costs in fiscal year 2015 of approximately $1.5 million

exclusive of grants.

114. Speci fically, and within two years of CCHÓs second

year of operation, Tidewell reasonably estimated that it will

need to eliminate : 100 percent of TidewellÓs community grief

education and support group s; the Transitions Program; 100

percent of complementary services to patients; 100 percent of

its volunteer progr am ; and TidewellÓs Childrens Program.

115. Tidewell has cut community services in the past when

operating revenue dropped significantly. Between fiscal year

2012 and fiscal year 20 14, whe n operating revenue dropped

$10 million, Tidewell had to cut $346,000 from ber eavement

services and over $300,000 from complementary services. This

history indicates a willingness and likelihood Tidewell would

make similar cuts if a competitor reduces TidewellÓs

con tribution margin by $1.5 million .

116. CCH conte nds that Tidewell can easily absorb any lost

margin because Tidewell had an increase in unrestricted net

asset s in 2015 of approximately $10 m illion. However,

a pproximately $6 million of TidewellÓs 2015 asset increase came

f rom philanthropy, of which $2.5 million came from a single

donor. Another $1 million of the increase came from

investments. Neither philanthropy nor investment income are

considered assured for purposes of projecting future net assets

and funding losses. In reality, and disregarding philanthropy

and interest, a net operating rev enue of only approximately

$2.7 million would have been available to Tidewell to absorb a

contributi on margin loss of $1.2 million in 2015.

117. It is fair to characterize the impact of terminating

these Tidew ell programs as signi ficant and adverse in the short -

and long - term for Tidewell and the services it provides to the

Sarasota community .

F . The immediate and long - term financial feasibility of

the proposal. § 408.035(1)(f), Fla. Stat.

118. Assuming CCH secures 300 admissions in year two of

its proposed project, its project appears financiall y feasible

in the near and long - term .

G . The extent to which the proposal will foster

competition that promotes quality and cost effectiveness.

§ 408.035(1)(g), Fla. Stat.

119. While approval of the Application would increase

competition, in view of other findings regarding the negative

impact on Tidewell and likely interference with its thriving

hospice program with complementary, voluntary and overall

quality , it is concluded that competition of the type proposed

by CCH is not needed in Service Area 8D, nor would it promote

quality and cost effectiveness.

H . The applicantÓs past and proposed provision of

healthcare services to Medicaid patients and the medically

indigent. § 408.035(1)(i), Fla. Stat.

120. CCH demonstrated a history of providing services to

both Medicaid and charity patients. The Applicant projects

4.3 percent of patient days to be provided to Medicaid and

charity patients and conditioned the Application on contracting

with the Medicaid managed care plan provider.

CONCLUSIONS OF LAW

Jurisdiction

121. The Division of Administrative Hearings has

jurisdiction over the parties and the subject matter of these

proceedings. §§ 120.569, 120.57(1), and 408.039(5 ), Fla. Stat.

Standing

122. In order for an existing healthcare facility to have

standing to interv ene in a CON proceeding, it must show that it

will be Ð substantially affected Ñ by approval of the certificate

of need application at issue. § 408.039(5) (c) , Fla. Stat. In

order to be substantially affected by the outcome of a

proceeding, a party must sho w: (1) injury in fact of sufficient

immediacy, and (2) that the personÓs substantial injury is of a

type or nature which the proceeding is designed to protect.

Agrico Chem. Co. v. DepÓt of Envtl. Reg. , 406 So. 2d 478 (Fla.

2 d DCA 1981).

123. Tidewell proved by a prepond erance of the evidence

that it has standing to participate as a party in this

proceeding. Tidewell demonstrated that approving CCHÓs

Application will have an immed iate and long - term adverse,

unnecessary impact on Tidewell in the absence of need. The

adverse impact on Tidewell , as outlined in the Findings of Fact,

above, is of the type or nature of injury against which this

proceeding is designed to protect , and is substantial enough to

establish standing.

Burden of Proof

124. The petitions in this case commenced a de novo

proceeding intended to formulate final agency action, Ð not to

review action taken earlier and preliminarily. Ñ Fla. Dep't of

Transp. v. J.W.C. Co. , 396 So. 2d 778, 786 - 87 (Fla. 1st DCA

1981)(citing McDonald v. DepÓt of Banking & Fin. , 346 So. 2d 569

(Fla. 1st DCA 1977)) ; § 120.57(1), Fla. Stat. Therefore, the

Agency's prel iminary decision on a CON application, including

findings in a SAAR, is not entitled to a presumption of

correctness. Id.

125. CCH, as a n applicant for a CON , has the burden of

demonstrating that its A pplication should be granted. Boca

Raton Artificial Kidney Ctr. v. DepÓt of HRS , 475 So. 2d 250

(Fla. 1st DCA 1985). The award of a CON must be based on a

balanced consideration of applicable statutory and rule

criteria. DepÓt of HRS v. Johnson and Johnson Home Healthcare

Inc. , 447 So. 2d 361 (Fla. 1st DCA 1984); Balsam v. DepÓt of

HRS , 486 So. 2d 1314 (Fla. 1st DCA 1988). The weight to be

given each criterion is not fixed but varies dependi ng on the

facts of each case. Collier Med. Ctr., Inc. v. DepÓt of HRS ,

462 So. 2d 83 (Fla. 1st DCA 1985).

Fixed Need Pool

126. Two times a year, the applicable fixed need pool rule

projects future numerical need for hospices in each Service Area

and compares it with the current and future capacity of existing

providers to meet that need. F la . A dmin . C ode R . 59C - 1.0355 .

127. The published fixed need pool numerical projections

for hospices in each Service Area accounts for the growth of all

terminally ill populations who may benefit from hospice.

Alternative methodologies, which substitute comparative

admission data or penetration rates for a particular disease

cohort, are not admi ssible to displace a numerical need

calculation of zero . Lifepath, Inc. v. AHCA , Case No. 00 -

3203CON et seq . , RO at 116 - 118 ( DOAH March 17, 2003; AHCA

July 8 , 2003).

Regional Monopoly

128. As found as a matter of fact, TidewellÓs hospice

programs occupy three contiguous Service Areas recognized as a

ÐregionÑ by the U.S. Bureau of the Census and the Office of

Management and Budget . As the sole provider of hospice services

in the region, Tidewell meets the common definition of

monopoly. 3/

129. Section 408.043(2) provides in pertinent part:

(2) Hospices. Ï When an application is made

for a certificate of need to establish or to

expand a hospice, the need for such hospice

shall be determined on the basis of the need

for and availability of hospice service s in

the community. The formula on which the

certificate of need is based shall

discourage regional monopolies and promote

competition.

( Emphasis added ) .

130. Section 408.043(2) does not prohibit regional

monopolies , nor does it require the formula to do so. Rather,

it requires the formula to Ð discourage regional monopolies and

promote competition.Ñ

131. While the formula in r ule 59C - 1.0355 found a numeric

need of zero despite the presence of a regional monopoly, it

cannot be said that the rule , in and of itself, encouraged ( or

failed to discourage ) a regional monopoly. Even if it did, r ule

59C - 1.0355 has not been challenged in this proceeding , and the

fact that Tidewell has a regional monopoly, sta nding alone, is

an insufficient basis to approve another hospice program in

Service Area 8D .

Special Circumstances Î Alleged Underserved Populations

132. Rule 59C - 1.0355(3)(b) provides in pertinent part:

Applications to establish a new Hospice

program shall not be approved in the absence

of a numeric need indicated by the formula

in paragraph (4)(a) of this rule, unless

other criteria in this rule and in Sections

408.035 and 408.043(2), F.S., outweigh the

lack of a numeric need.

133. Rule 59C - 1.0355(4)(d) provides in pertinent part:

(d) Approval Under Special Circumstances.

In the absence of numeric need identified in

paragraph (4)(a), the applicant must

demonstrate that circumstances exist to

justify the approval of a new Hospice.

Evidence submitted by the applicant must

document one or more of the following:

1. That a specific terminally ill

population is not being served.

2. That a county or counties within the

service area of a licensed Hospice program

are not being served.

134. FloridaÓs CON program for hospices requires, in the

absence of a published numerical need, that a CON applicant

identify a specific underserved group, of sufficient size and

underservice, and that the addition of a new program in the

absence of published n umerical need is justified. Even if such

an underserved group is sufficiently identified and quantified,

the CON should not be awarded unless each applicable statutory

criteria is weighed individually, and balanced collectively, in

relation to the alleged special circumstances.

135. The Applicant did not demonstrate, by the

preponderance of evidence, that hospice patients and families

are not being adequately served by the existing provider, or

that the existing provider is not an accessible, available, h igh

quality hospice program provider.

136. Specifically, the evidence show ed that end - stage

heart failure , renal failure , and end - stage pulmonary disease

hospice patients are adequately served by Tidewell consistent

with c urrent best clinical practices. Although CCH may have

different protocols for managing these patients, a different

approach to serve a group already being adequately served does

not demonstrate underservice .

137. CCH has not otherwise demonstrated a sufficient

future market growth of allegedly underserved patients to

support another provider without diminishing the market share of

the exiting provider.

138. To the extent that the evidence demonstrated what the

fixed need pool Ðwould have beenÑ in Sarasota County if

TidewellÓs transfer s had not been counted in the applicable

planning horizon, the demonstration suffers from at least two

flaws: the demonstration should have been the subject of a

timely filed challenge to the fixed need pool publication of

numerical need, pursuant r ule 5 9 C - 1.008(2)(a)2. and; even if

proper to consider here, CCHÓs approach fails to discount the

transfers reported by other multi - service area providers.

139. Rule 59C - 1.0355(8) requires semi - a nnual u ti lization

r eports to be filed by hospices with AHCA. The r eports, with

regard to the Ðnumber of new patients admittedÑ expressly

requires in pertinent part:

(a) For the number of new patients

admitted:

1. The 6 - month total of admissions under

age 65 and age 65 and over by type of

diagnosis (e.g., cancer; AIDS).

2. The number of admissions during each of

the 6 months covered by the report, by

service area of residence.

140. It is reasonable, pursuant to that r ule, for AHCA to

require hospices with multiple service areas to report, as an

admission, any transfer of a patient between service areas.

141. Considering all of the evidence , review criteria and

applicable law , CCH did not sufficiently identif y or quantif y an

underserved group, nor did CCH prove the existence of spe cial

circumstances that outweigh the applicable statutory criteria

and the foreseeable adverse impact of a new program on the

exi s ting provider and community.

RECOMMENDATION

Accordingly, based upon the foregoing findings of fact and

conclusions of law, it is

RECOMMENDED that the Agency for Health Care Administration

enter a final o rder denying CON Application No. 10337.

DONE AND ENTERED this 19th day of September , 2016, in

Tallahassee, Leon County, Florida.

S

JAMES H. PETERSON, III

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 19th day of September , 2016.

ENDNOTES

1/ Unless otherwise noted, all citations to the Florida Statutes

and Florida Administrative Code are to current versions.

2/ See § 90. 403, Fla. Stat. ( relevant evidence excluded where

probative value substantially outweighed by danger of unfair

prejudice). On the same grounds, although admitted into

evidence, Exhibit I - 46, consisting of a Stipulation and Order of

Settlement and Dismissal entered into between a CCH - LTD New York

affiliate and the United States, h as b een given no weight in the

findings and conclusions set forth in this Recommended Order.

3/ The primary definition of ÐmonopolyÑ found in Blacks Law

Dictionary , 812 (5th ed. 1979) , provides :

A privilege or peculiar advantage vested in

one or more persons or companies, consisting

in the exclusive right (or power) to carry

on a particular business or trade,

manufacture a particular article, or control

the sale of the whole supply of a particu lar

commodity. A form of market structure in

which one or only a few firms dominate the

total sales of a product or service.

COPIES FURNISHED :

Richard J. Saliba, Esquire

Michael Hardy , Esquire

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

(eServed)

Geoffrey D. Smith , Esquire

Susan C. Smith , Esquire

Smith & Associates

3301 Thomasville Road, Suite 201

Tallahassee, Florida 32303

(eServed)

Robert D. Newell, Jr. , Esquire

Newell, Terry & Douglas, P.A.

817 North Gadsden Street

Tallahassee, Florida 32303 - 6313

(eServed)

Richard J. Shoop, Agency Clerk

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

(eServed)

Elizabeth Dudek, Secretary

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 1

Tallahassee, Florida 32308

(eServed)

Stuart Williams, General Counsel

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

(eServed)

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 Order in this case.