97-006005CON Jewish Family Home Care vs. Agency For Health Care Administration Status: Closed Recommended Order on Monday, June 29, 1998.

Summary: AHCA must deem Certificate of Need (CON) application to have been withdrawn from further review where applicant failed to submit required fee or audited financial statements by omissions deadline.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

JEWISH FAMILY HOME CARE, )

)

Petitioner, )

)

vs. ) Case No. 97-6005

)

AGENCY FOR HEALTH CARE )

ADMINISTRATION, )

)

Respondent. )

________________________________)

RECOMMENDED ORDER

Pursuant to notice, a Section 120.57(1) hearing was held in

this case on May 1, 1998, by telephone conference call, before

Stuart M. Lerner, a duly designated Administrative Law Judge of

the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Jane B. Sumen, Administrator

Jewish Family Home Care

5950 West Oakland Park Boulevard

Suite 209

Lauderhill, Florida 33313

For Respondent: Richard A. Patterson, Esquire

Agency for Health Care Administration

2727 Mahan Drive, Suite 3431

Fort Knox Building III

Tallahassee, Florida 32308-5403

STATEMENT OF THE ISSUES

Whether Petitioner's application for a certificate of need

should be deemed withdrawn from further review and consideration

for the reasons stated in the Agency for Health Care

Administration's November 12, 1997, letter to Petitioner.

PRELIMINARY STATEMENT

By letter dated November 12, 1997, the Agency for Health

Care Administration (Agency) advised Petitioner of its intention

to deem withdrawn from further review and consideration

Petitioner's application for a certificate of need authorizing

Petitioner's establishment of a Medicare-certified home health

agency. The letter (which was addressed to Petitioner's

administrator) read as follows:

In accordance with the provisions of Section

408.037 and 408.039(3), Florida Statutes, you

were given until November 10, 1997, to

respond satisfactorily to the omissions noted

in the correspondence from this office dated

October 9, 1997, relative to your proposal on

behalf of Jewish Family Home Care to

establish a Medicare certified home health

agency to be located in Broward County,

District 10.

Because of your failure to submit the correct

CON filing fee in accordance with Chapter

59C-1.008(3)(b)2, Florida Administrative Code

and an audited financial statement of the

applicant in accordance with Chapter 59C-

1.008(5)(c)1-3, Florida Administrative Code,

and Section 408.037(1)(c), Florida Statutes,

your application is deemed incomplete and

withdrawn from further review. Specifically,

the correct filing fee is $5,662.25 based on

a total project cost subject to a fee of

$44,150 ($5,000 plus .015 of each dollar of

the proposed expenditure.) The total fee

submitted was $5,425. With regard to the

required financial statements, a profit and

loss statement does not constitute an audited

financial statement.

You have the right to request an

administrative hearing on this decision under

the provisions of Florida's Administrative

Procedure Act, Chapter 120, Florida Statutes,

and under Agency Rule 59C-1.010, Florida

Administrative Code. A request for hearing,

if any, must be in writing and must be

actually received by this agency within 21

days of the first day of publication of

notice of withdrawal in the Florida

Administrative Weekly. A request for hearing

must contain the information required in Rule

28-5.201, Florida Administrative Code, and

must make reference to the "CON Action

Number" referred to in this letter. The

original and one copy of each request for

hearing may be filed with or mailed to the

following location: Sam Power, Senior

Attorney, Agency Clerk, Agency for Health

Care Administration, Fort Knox Executive

Center, 2727 Mahan Drive, Building 3, Room

3426A, Tallahassee, Florida 32308.

By letter dated November 19, 1997, which read as follows,

Petitioner requested a hearing on the Agency's proposed action:

Under the provisions of Florida's

Administrative Procedure Act, Chapter 120,

Florida Statutes, and under Agency Rule 59C-

1.010, Florida Administrative Code, Jewish

Family Home Care is requesting an

administrative hearing pursuant to action

taken on CON Action Number 8926.

Jewish Family Home Care will at the time of

the hearing present a check for $237.25

correcting the discrepancy in calculation for

the CON filing fee.

Jewish Family Home Care will also, at the

time of the hearing, present an audited

financial statement for Jewish Family Service

of Broward County of which Jewish Family Home

Care is a division. An audited financial

statement for Jewish Family Home Care is not

available at this time due to the fiscal year

having ended September 30, 1997 and fiscal

year 1997 being Jewish Family Home Care's

first year in operation.

We look forward to hearing from your office

in the near future.

On December 30, 1997, the Agency referred the matter to the

Division of Administrative Hearings (Division) for the assignment

of a Division Administrative Law Judge to conduct the

administrative hearing that Petitioner had requested.

As noted above, the hearing was held on May 1, 1998. Two

witnesses testified at the hearing: Jane Sumen, Petitioner's

administrator (who testified on behalf of Petitioner); and

Alberta Granger, a supervisory employee with the Agency (who

testified on behalf of the Agency). In addition to the testimony

of these two witnesses, 13 exhibits (Petitioner's Exhibits 1 and

2 and AHCA Exhibits 1 through 11) were offered and received into

evidence.

At the conclusion of the evidentiary portion of the hearing,

the undersigned, on the record, advised the parties that the

deadline for filing proposed recommended orders was 20 days from

the date of the Division's receipt of the transcript of the

hearing. The hearing transcript was filed with the Division on

June 1, 1998. On Monday, June 22, 1998, the Agency filed a

proposed recommended order, which the undersigned has carefully

considered. To date, Petitioner has not filed a proposed

recommended order.

FINDINGS OF FACT

Based upon the evidence adduced at hearing and the record as

a whole, the following findings of fact are made:

1. Petitioner is a division of Jewish Family Service of

Broward County, which operates under the umbrella of the Jewish

Federation of Broward County.

2. On August 1, 1997, Petitioner submitted to the Agency a

letter indicating its intent to seek a certificate of need

authorizing the establishment of a Medicare-certified home health

agency in Broward County.

3. By letter dated August 27, 1997, the Agency advised

Petitioner that Petitioner's letter of intent "had been accepted

. . . for submission of an application in the upcoming review

cycle" and that the application filing deadline was September 24,

1997. In its letter, the Agency provided the following

additional advisement:

The application filing fee is $5,000.00 plus

0.015 times the total project cost up to a

maximum fee of $22,000.00. The minimum fee

for projects with no capital expenditure is

now $5,000.00. The non-refundable filing fee

should be submitted with the application on

or before the application due date listed

above [September 24, 1997].

4. Petitioner filed its application for a certificate of

need on September 24, 1997.

5. The application indicated that the "project cost subject

to fee" (Schedule 1, Line 51, which excludes the base application

filing fee of $5,000.00) would be $44,150.00.

6. Accompanying Petitioner's application, among other

things, was a check in the amount of $5,000.00 and an audited

financial statement of Jewish Family Service of Broward County

covering the fiscal year ending September 30, 1995. No other

audited financial statements were provided.

7. By letter dated October 9, 1997 (Agency's omissions

letter), the Agency advised Petitioner that Petitioner had

submitted neither the "appropriate [filing] fee," nor the audited

financial statement(s), "needed to implement formal review" of

Petitioner's application, and it requested that Petitioner cure

these deficiencies by providing the appropriate fee and by

furnishing "audited financial statements of the applicant's most

recent complete fiscal year of operation," or, "[i]f the most

recent fiscal year ended within 120 days prior to the application

filing deadline and the audited financial statements [we]re not

yet available, [of] the prior fiscal year." In its omissions

letter, the Agency issued Petitioner the following warning:

Section 408.039, (1992 Supplement to Florida

Statutes), requires that you file a response

to the attached omissions with the agency and

the appropriate health council by November

10, 1997. Failure to file your written

response to this office and the appropriate

local health council by 5 p.m. on that date

will result in your application being deemed

withdrawn from consideration, pursuant to

Rule 59C-1.010, Florida Administrative Code.

8. Petitioner received the Agency's omissions letter on

October 14, 1997.

9. Petitioner submitted its response to the Agency's

omissions letter on November 10, 1997. It provided the Agency

with a check in the amount of $425.00 and financial statements

and reports (including a profit and loss statement covering the

period starting October 1996 and ending September 1997) that were

not audited. In a cover letter, Petitioner explained that, "[a]t

this time, there is no complete financial audit for Jewish Family

Home Care, since its first fiscal year just ended on September

30, 1997."

10. On November 12, 1997, the Agency sent a letter to

Petitioner advising that, "[b]ecause of [Petitioner's] failure to

submit the correct CON filing fee in accordance with Chapter 59C-

1.008(3)(b)2., Florida Administrative Code and an audited

financial statement of the applicant in accordance with Chapter

59C-1.008(5)(c)1.-3., Florida Administrative Code, and Section

408.037(1)(c), Florida Statutes, [Petitioner's] application

[would be] deemed incomplete and withdrawn from further review."

11. Petitioner thereafter requested an administrative

hearing on the matter.

CONCLUSIONS OF LAW

12. Sections 408.031 through 408.045, Florida Statutes,

contain the "Health Facility and Services Development Act" (Act).

Section 408.031, Florida Statutes.

13. Section 408.034(1), Florida Statutes, of the Act

designates the Agency "as the single state agency to issue,

revoke, or deny certificates of need and to issue, revoke, or

deny exemptions from certificate-of-need review in accordance

with the district plans, the statewide health plan, and present

and future federal and state statutes."

14. A "certificate of need," as that term is used in the

Act, is defined in Section 408.032(3), Florida Statutes, as "a

written statement issued by the agency evidencing community need

for a new, converted, expanded, or otherwise significantly

modified health care facility, health service, or hospice."

15. With certain exceptions not applicable to the instant

case, an application for a certificate of need must be filed with

the Agency before a Medicare-certified home health agency may be

established. Section 408.036(1)(e), Florida Statutes. These

applications are subject to comparative review.

16. "An application for a certificate of need must

contain . . . [a]n audited financial statement of the applicant."

Section 408.037(1)(c), Florida Statutes. "The audited financial

statement of the applicant must be for the most current fiscal

year. If the most recent fiscal year ended within 120 days prior

to the application filing deadline and the audited financial

statements are not yet available, then the prior fiscal year will

be considered the most recent." Rule 59C-1.008(5)(c)1, Florida

Administrative Code. 1 If the applicant is an existing health

care facility, audited financial statements of the two most

recent consecutive fiscal years must be provided.

Section 408.037(1)(c), Florida Statutes; Rule 59C-1.008(5)(c)2,

Florida Administrative Code. "Only audited financial statements

of the applicant will be accepted. Audited financial statements

of any part of the applicant, including but not limited to

subsidiaries, divisions, specific facilities or cost centers,

will not qualify as an audit of the applicant. Nor shall the

audited financial statements of the applicant's parent

corporation qualify as an audit of the applicant." Rule 59C-

1.008(5)(c)3, Florida Administrative Code.

17. An application for a certificate of need must also be

accompanied by the correct application filing fee. Rule 59C-

1.008(5), Florida Administrative Code. The amount of the fee is

to be calculated as follows:

(1) A minimum base fee of $5,000.

(2) In addition to the base fee of $5,000,

0.015 of each dollar of proposed expenditure,

except that a fee may not exceed $22,000.

Section 408.038, Florida Statutes. "For the sole purpose of

calculating the application fee, the proposed expenditure

includes only the items of cost contributing to capital

expenditures of the proposed project." Rule 59C-1.008(3)(a),

Florida Administrative Code.

18. An application not accompanied by a t least the "minimum

base fee" will not be accepted by the Agency. Rule 59C-

1.008(3)(a), Florida Administrative Code.

19. Agency staff must determine, within 15 days after the

expiration of the application filing deadline, whether an

application is complete and accompanied by the correct filing

fee. If the application is incomplete or if the amount tendered

is insufficient to cover the filing fee, Agency staff must, in

writing, so notify the applicant and request that any

deficiencies be cured. Pursuant to Section 408.039(3)(a),

Florida Statutes, "the staff may make only one such request" and

"[i]f the requested information is not filed with the [Agency]

within 21 days of the receipt of the staff's request, the

application shall be deemed incomplete and deemed withdrawn from

consideration." Rule 59C-1.008(3)(b)2, Florida Administrative

Code, similarly provides that, where an applicant has submitted

the base fee of $5,000.00, but less than the full amount of the

total fee, "if the correct fee is not received by the agency

staff by the close of business on the promulgated applicant

omissions deadline, the application will be deemed incomplete and

deemed withdrawn from further review." These mandatory

provisions of Section 408.039(3)(a), Florida Statutes, and

Rule 59C-1.008(3)(b)2, Florida Administrative Code, may not be

disregarded by the Agency. See Vantage Healthcare Corporation v.

Agency for Health Care Administration , 687 So. 2d 306 (Fla. 1st

DCA 1997); NME Hospitals, Inc. v. Department of Health and

Rehabilitative Services , 492 So. 2d 379 (Fla. 1st DCA 1986).

20. The burden was on Petitioner at hearing to establish,

by a preponderance of the evidence, that it timely submitted a

complete application and the correct filing fee. See Department

of Banking and Finance v. Osborne Stern and Company , 670 So. 2d

932, 934 (Fla. 1996); Pershing Industries, Inc. v. Department of

Banking and Finance , 591 So. 2d 991, 994 (Fla. 1st DCA 1991);

Department of Transportation v. J.W.C. Company, Inc. , 396 So. 2d

778, 787-88 (Fla. 1st DCA 1981); Section 120.57(1)(h), Florida

Statutes("Findings of fact shall be based on a preponderance of

the evidence, except in penal or licensure disciplinary

proceedings or except as otherwise provided by statute.").

21. Petitioner did not meet its burden of proof. The

record evidence reveals that: Petitioner's application was

accompanied by neither the "audited financial statement of the

applicant" required by Section 408.037(1)(c), Florida Statutes,

and Rule 59C-1.008(5)(c), Florida Administrative Code, nor the

full amount of the application filing fee required by

Section 408.038, Florida Statutes, and Rule 59C-1.008(3) and (5),

Florida Administrative Code; the Agency, in accordance with

Section 408.039(3)(a), Florida Statutes, requested Petitioner, in

writing, to cure these deficiencies by November 10, 1997;

Petitioner received the Agency's written request on October 14,

1997, more than 21 days prior to the November 10, 1997, deadline

the Agency established; and Petitioner failed to submit by the

November 10, 1997, deadline either the required "audited

financial statement of the applicant" or the correct filing fee.

Under such circumstances, the Agency must follow the mandate of

Section 408.039(3)(a), Florida Statutes, and Chapter 59C-

1.008(3)(b)2, Florida Administrative Code, and (as it indicated

it would in its November 12, 1997, letter to Petitioner) deem

Petitioner's application to be incomplete and to have been

withdrawn from further review and consideration.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is

RECOMMENDED that the Agency enter a final order taking the

action proposed in its November 12, 1997, letter to Petitioner.

DONE AND ENTERED this 29th day of June, 1998, in

Tallahassee, Leon County, Florida.

___________________________________

STUART M. LERNER

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone] SUNCOM 278-9675

Fax Filing [phone]

Filed with the Clerk of the

Division of Administrative Hearings

this 29th day of June, 1998.

ENDNOTE

1 The Agency has "permit[ted] applicant's to file audited

financial statements for a partial year, if that is how long they

have been in business." Providence Home Health Care v. Agency

for Health Care Administration , AHCA Case No. 95-995-FOF-CON

(AHCA July 17, 1995)(Final Order)

COPIES FURNISHED:

Jane B. Sumen, Administrator

Jewish Family Home Care

5950 West Oakland Park Boulevard

Suite 209

Lauderhill, Florida 33313

Richard A. Patterson, Esquire

Agency for Health Care Administration

2727 Mahan Drive, Suite 3431

Fort Knox Building III

Tallahassee, Florida 32308-5403

R. S. Power, Agency Clerk

Agency for Health Care Administration

Fort Knox Building No. 3, Suite 3431

2727 Mahan Drive

Tallahassee, Florida 32308-5403

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.

1 The Agency has "permit[ted] applicant's to file audited

financial statements for a partial year, if that is how long they

have been in business." Providence Home Health Care v. Agency

for Health Care Administration , AHCA Case No. 95-995-FOF-CON

(AHCA July 17, 1995)(Final Order)