Health Care and Retirement Corp. of America v. Department of Health and Rehabilitative Services

• Decision Date: 01 December 1987
• Docket Number: No. BQ-22,BQ-22
• Citation: 516 So.2d 292,12 Fla. L. Weekly 2702
• Parties: 12 Fla. L. Weekly 2702 HEALTH CARE AND RETIREMENT CORPORATION OF AMERICA, d/b/a Heartland of Palm Beach, Appellant, v. DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES, Appellee.
• Court: Florida District Court of Appeals

Page 292

516 So.2d 292

12 Fla. L. Weekly 2702

HEALTH CARE AND RETIREMENT CORPORATION OF AMERICA, d/b/a Heartland of Palm Beach, Appellant, v. DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES, Appellee.

No. BQ-22.

District Court of Appeal of Florida First District.

Dec. 1, 1987.

G. Steven Pfeiffer of Laramore & Clark, P.A., Tallahassee, for appellant.

R.S. Power, Asst. Gen. Counsel, Dept. of Health and Rehabilitative Services, Tallahassee, for appellee.

PER CURIAM.

This cause is before us on appeal from an order entered by the Department of Health and Rehabilitative Services (HRS) rejecting the recommendation of the hearing officer (HO) and denying appellant a certificate of need (CON) to construct a nursing home in Palm Beach County. We reverse.

Appellant has raised three issues: (1) whether HRS's determination that appellant inappropriately amended its application is arbitrary, capricious, and not in accordance with the law; (2) whether HRS's determination that exceptional circumstances do not exist in Palm Beach County is arbitrary, capricious, and not in accordance with the law; and (3) whether HRS's action is contrary to action that has been taken in similar cases, and there is no reasonable explanation for the different results.

Appellant applied for a CON for 120 community nursing home beds in Palm Beach County. HRS gave notice of its initial intent to deny the application, and appellant requested a formal administrative hearing. No one petitioned to intervene. Final hearing had been scheduled to commence on February 3, 1986. On January 22, 1986, the parties filed a joint motion for continuance. In the motion, the parties agreed:

(1) There was no need for nursing home beds in Palm Beach County pursuant to HRS's application of the mathematical formula outlined in Rule 10-5.11(21)(b), Florida Administrative Code.

(2) Rule 10-5.11(21)(b)10, Florida Administrative Code, provides a "special exception" to the rule which allows a petitioner to obtain a CON when HRS's strict application of the formula results in zero bed need.

(3) Appellant was in the process of gathering data and documentation to support issuance of a CON under the "special exception" provision to meet needs of at least two medically underserved groups--Alzheimer's disease and subacute care patients.

(4) Appellant had contacted various officials in Palm Beach County to verifiably quantify the specific need that existed for special services and facilities for Alzheimer's disease and subacute care patients. Appellant was also in the process of developing a survey of physicians which would quantify specific placement problems that physicians had in placing those special groups of patients. Appellant was unable to complete its study but would be able to complete its study if a continuance of 60 days was permitted.

(5) Appellant informed HRS of its progress in gathering and documenting the necessary information to support issuance of a CON. The data and documentation procured by appellant on the need of Alzheimer's disease and subacute care patients would support an amended updated application to be filed by appellant.

(6) HRS assured appellant that it would give serious consideration to its updated application and supporting documents. HRS agreed that if the updated application established the need for a nursing home to serve Alzheimer's disease and subacute care patients in Palm Beach County, there was a good prospect of settling the case.

(7) A continuance of the final hearing would allow appellant sufficient time to complete the gathering of data and documentation to support an updated amended application demonstrating need for community nursing home beds for underserved groups, including Alzheimer's disease and subacute care patients.

Appellant's initial application was not in evidence.

The parties entered into a prehearing stipulation which stated:

The issues of fact to be litigated are whether there is a need for the nursing home beds proposed by HRC [appellant]. Specifically, the issues of fact to be litigated are whether there are population groups in Palm Beach County who have a need for nursing home services, but are denied access to currently licensed beds because existing facilities do not provide adequate care, treatment, and programs to meet their needs. These population groups are patients who suffer from Alzheimer's disease or related disorders, and patients who are discharged from hospitals requiring higher levels of care than are provided in existing facilities in Palm Beach County.

On April 3 and 4, 1986, a hearing was conducted. At the hearing, HRS objected to presentation of evidence by appellant regarding the special needs of persons who suffer from Alzheimer's disease.

The parties submitted proposed recommended orders. On July 8, 1986, the HO entered a recommended order. In part, he determined that no one intervened; that no facilities in Palm Beach County offer appropriate services for victims of Alzheimer's disease (except perhaps Darcy Hall, which provides adult day care); that HRS estimates in 1986 as many as 27,200 victims of the disease live in Palm Beach County, of which 80 percent will require custodial care in the future; and that appellant is proposing to develop a nursing home designed and staffed to provide care and treatment to meet the special needs of persons who are suffering from Alzheimer's disease. Noting the failure of existing facilities to provide appropriate care in conjunction with the foregoing statistics, the HO found that the proposed facility is needed. The HO recommended that HRS issue a CON for a 120-bed nursing home that would be limited and conditioned upon all beds being dedicated only to the provision of services and facilities for victims of Alzheimer's disease.

The HO found as fact that Alzheimer's disease is a degenerative process of the brain which is characterized by memory loss, communicative problems, confusion, disorientation, incontinence, and social dysfunctions. The disease is progressive. In the final stage, an Alzheimer's disease victim will lose all ability to communicate and may become bedridden and comatose. Victims of the disease do not recover; their condition steadily deteriorates during the course of the illness until they die. Alzheimer's disease victims present considerable difficulty for care givers. Representatives of the Palm Beach County Alzheimer's Disease and Related Disorders Association, HRS District IX Local Health Council, and Palm Beach County Hospital are charged with being familiar with local facilities that provide care for Alzheimer's disease victims. Each testified that there are no facilities in Palm Beach County that provide appropriate care and treatment for victims of Alzheimer's disease.

Some existing nursing homes in Palm Beach County accept victims of Alzheimer's disease in their facilities. There are no nursing homes or other facilities in the county that offer special programs and an environment for victims of Alzheimer's disease. A survey of 36 physicians was conducted by a board certified neurologist. The study, which was done on a small segment of the medical community in Palm Beach County, reflected that this small segment was unable to find appropriate inpatient placement for 135 patients and was unable to locate suitable day care facilities for 150 patients during the prior year.

Appellant has proposed to develop a facility that would be designed and staffed to provide the sort of care and treatment which would meet the special and unique needs of persons who suffer from Alzheimer's disease. The facility would be developed so as to provide a complete continuum of care to patients during all stages of the illness.

No exceptions to the recommended order were filed.

In the final order, HRS adopted the findings of fact set forth in the recommended order, with the exception of the finding that there is a need for the Alzheimer's facility proposed by appellant. HRS concluded that finding of need was based on exceptional circumstances and was a conclusion of law. HRS also concluded that appellant inappropriately amended its original CON application and that special needs of persons who suffer from Alzheimer's disease do not constitute an exceptional circumstance justifying an award of a CON.

Under issue one, we find that HRS erred in concluding that appellant amended its CON application by proposing to serve victims of Alzheimer's disease. The only new element in the application was that appellant sought approval of its application by showing that there was a "not normal" condition in Palm Beach County. The assurance given by HRS when agreeing to a continuance, that it would consider appellant's updated application and evidence showing need based on special care of patients suffering from Alzheimer's disease, amounted to a recognition that this basis of need and supporting information fell within the general scope of the basis of need asserted in the original application. HRS has shown no reason for us to rule to the contrary. The contentions made in support of its complete change of position on this issue are insufficient for the following reasons.

HRS erroneously relies on Gulf Court Nursing Center v. Department of Health and Rehabilitative Services, 483 So.2d 700 (Fla. 1st DCA 1986), for the proposition that appellant could not present evidence regarding specific needs of identified population groups in Palm Beach County. In Gulf Court, this court was presented with the issue of whether an applicant was entitled to comparative review with applicants who applied in a prior "batching cycle." This court held that comparative review was mandated because the prior applicants amended their applications to seek approval within the planning horizon of the latter applicant. Gulf Court did not address an application based upon exceptional circumstances and did not prohibit presentation of updated current planning...