STATE AGENCY ACTION REPORT - The Agency For … · STATE AGENCY ACTION REPORT ... were received...

STATE AGENCY ACTION REPORT

ON APPLICATION FOR CERTIFICATE OF NEED

A. PROJECT IDENTIFICATION

1. Applicant/CON Action Number

HealthSouth of Fort Lauderdale, Limited Partnership/CON #9560 d/b/a HealthSouth Sunrise Rehabilitation Hospital HealthSouth Corporation One HealthSouth Parkway Birmingham, Alabama 35243 Authorized Representative: Loree Skelton (205) 967-7116 St. John's Rehabilitation Hospital & Nursing Ctr., Inc./CON #9561 d/b/a St. John's Rehabilitation Hospital & Nursing Center, f/k/a Broward County Nursing Home, Inc. 502 East Park Avenue Tallahassee, Florida 32301 Authorized Representative: Paul H. Amundsen, Esq. (850) 425-2444 Tenet HealthSystems Hospitals, Inc./CON #9562 d/b/a Hollywood Medical Center 500 West Cypress Creek Road, Suite 370 Fort Lauderdale, Florida 33309 Authorized Representative: Robert Greene (954) 351-1014 South Broward Hospital District/CON #9563 d/b/a Memorial Regional Hospital 3501 Johnson Street Hollywood, Florida 33021 Authorized Representative: Jon D. Bandes, Director of Planning (954) 985-3452

CON Action Number: 9560, 9561, 9562 & 9563

2

2. Service District/Subdistrict

District 10, Broward County

B. PUBLIC HEARING Although no public hearing was requested, the applicants did submit letters of support for their respective projects as presented below: HealthSouth of Fort Lauderdale, Limited Partnership (CON #9560) submitted seven (7) letters of support for the proposed project to add 11 beds to its existing 116-bed HealthSouth Sunrise Rehabilitation Hospital. Letters of support were received from two case managers, one at University Hospital and Medical Center in Tamarac and the other from Westside Regional Medical Center in Plantation. Other letters of support were received from the Mayor of Sunrise, a local attorney with clients as patients at the hospital, the president of the Sunrise Chamber of Commerce, the Director of Community Services at the Broward County Property Appraisers Office and a seven-group physicians office, who has admitted to the facility for over 16 years. The physicians group and the case manager at Westside Regional Medical Center made reference to delays in admissions because of bed availability problems. All of the letters are of general support, not offering any numeric data or unique circumstances supporting the project. St. John's Rehabilitation Hospital & Nursing Center, Inc. (CON #9561) submitted ten letters of support in its effort to add 11 (the applicant also submitted a partial request for five) CMR beds to the 20-bed comprehensive medical rehabilitation program at its facility. Six of the letters were from physicians who admit patients to the facility and the theme of their letters acknowledges the quality and compassionate care provided patients at the facility. One physician even had a member of his own family at the facility for three years and said that she received excellent care. Another physician praised the facility with this comment: "With its combination of a rehabilitation hospital, nursing home, and assisted living facility; SJRH offers a continuum of care that is unparalleled in our geographic region." Other letters were from: a clinical neuropsychologist; a utilization review coordinator with BCBS/Health Options; the facility Chaplin, who is also a recipient of rehabilitative services at the facility; and a Workers' Compensation rehabilitation nurse case manager. As with the physicians, these individuals expressed support for the project and confirmation of the quality, compassionate care provided at St. John's Rehabilitation Hospital and Nursing Center.


3

Tenet HealthSystems Hospitals, Inc. (CON #9562) d/b/a Hollywood Medical Center submitted five letters from area physicians supporting the hospital's effort to increase the CMR beds by 11 (Tenet also submitted a five-bed partial request). All letters support need for additional beds and speak to the quality and effectiveness of the staff. Most of the practitioners appear to be internist, cardiologist, or family medicine physicians. One of the physicians is an urologist. All of the letters are of general support, not offering any numeric data or unique circumstances supporting the project. South Broward Hospital District (CON #9563) d/b/a Memorial Regional Hospital submitted 20 letters of support for its proposed six-bed addition to its comprehensive medical rehabilitation program. All 20 of the letters, 18 by physicians and two by HMO representatives, voice the need for a dedicated pediatric CMR program in Broward County since there currently are none. Some of the physician letters note that the applicant provides the only Pediatric Trauma Center in Broward County and that the Joe DiMaggio Children's Hospital treats numerous patients with traumatic brain injury, spinal cord injury, orthopedic emergencies and neurological disorders. These patients often require rehabilitative services. Other physicians speak to the quality of care provided and the dedication by staff to assure highly specialized, compassionate care to children. All of the letters are of general support, not offering any numeric data or unique circumstances supporting the project.

C. PROJECT SUMMARY HealthSouth of Fort Lauderdale, Limited Partnership (CON #9560) d/b/a HealthSouth Sunrise Rehabilitation Hospital is part of a proprietary hospital system to the extent that HealthSouth Corporation controls 99 percent of the partnership. HealthSouth Sunrise Rehabilitation Hospital, a 116-bed Class III specialty rehabilitation hospital, is located at 4399 Nob Hill Road in Sunrise, District 10. The applicant currently provides adult inpatient comprehensive medical rehabilitation (CMR) services as well as outpatient CMR services. The applicant is proposing the addition of 11 CMR beds to its existing 116 and 10 CON approved (#9262) CMR beds for a 137-bed facility. As a condition of approval, the applicant proposes to provide three (3.0) percent of the annual patient days for the proposed 11-bed addition to Medicaid patients and one (1.0) percent of these days to indigent/charity patients. There is an existing condition at the facility pursuant to the approval of CON #9262 that carries a combined Medicaid/charity


4

condition of 0.23 percent of total annual patient days in the 126 currently licensed beds. A blending of the proposed three (3.0) percent Medicaid and one (1.0) percent charity condition would result in a Medicaid and charity condition of 0.56 percent in the 137 licensed and approved beds.

The total project cost is estimated at $1,268,410. Construction costs are projected to be $742,500 to renovate 8,180 GSF of existing space. No new space is indicated for the project. St. John's Rehabilitation Hospital & Nursing Center, Inc. (CON #9561) d/b/a St. John's Rehabilitation Hospital & Nursing Center, (f/k/a Broward County Nursing Home, Inc.) is a private, not-for-profit Florida corporation established under the sponsorship of the Archdiocese of Miami, operates a Class III, 20-bed comprehensive medical rehabilitation specialty hospital (CMR) and a 160-bed skilled nursing facility at 3075 N.W. 35th Avenue, Lauderdale Lakes in Broward County. The applicant seeks approval for the addition of 11 CMR beds, or as an alternative, to add five (5) CMR beds (CON #9561P) to its existing 20-bed program. The 11-bed addition will be accomplished through the renovation 3,469 GSF of space at a construction cost of $54,300. The total cost of the proposed 11-bed project is estimated to be $106,500. The alternative project for five (5) CMR beds (#9561P) proposes to renovate 1,446 GSF at a cost of $11,700. The total cost of this partial project is expected to be $49,660. According to the Certificate of Need Predicated on Conditions page, the applicant is proposing a minimum of three percent of its total annual patient days to Medicaid/charity care patients. St. John’s Rehabilitation Hospital currently has no existing conditions. Therefore blending the proposed three percent for 11 beds with the 20 existing beds would result in a combined Medicaid/charity condition of 1.06 percent for the 31 CMR beds. If the five-bed project is approved, a blending of the proposed condition with the existing 20 beds will result in a 0.6 percent combined Medicaid/charity condition.


5

Tenet HealthSystems Hospitals, Inc. (CON #9562) d/b/a Hollywood Medical Center, is a wholly owned subsidiary of Tenet Healthcare Corporation, a publicly traded company that owns and operates hospitals, health care facilities and nursing homes throughout the United States. Hollywood Medical Center, located at 3600 Washington St. in Hollywood, is a Class I, 324-bed for-profit general acute care hospital that includes a 33-bed comprehensive medical rehabilitation program. The applicant is seeking to add 11 CMR beds to its existing program, or as an alternative, to add five (5) CMR beds (CON #9562P). The 11-bed addition will be accomplished through the renovation 6,000 GSF of space at a renovation/construction cost of $490,000. The total cost of the proposed 11-bed project is estimated to be $923,575. The alternative project for five (5) CMR beds (CON #9562P) proposes to renovate 1,240 GSF at a cost of $60,000. The total cost of this partial project is expected to be $248,075. According to the Certificate of Need Predicated on Conditions page, the applicant is proposing a minimum of three percent of its total annual patient days to charity care patients in either the 44 or 38 CMR beds. There is an existing condition of two percent Medicaid and charity assigned to the 33 licensed CMR beds. The applicant has consistently complied with this condition. Assuming approval of the proposed 11-bed project, a blending of the proposed three percent condition with the existing 33 beds at two percent combined Medicaid/charity would result in a new combined condition of 2.25 percent for the 44 beds. If the five-bed project is approved, a blending of the proposed five beds at three percent with the existing 33 beds at two percent will result in a new combined condition of 2.13 percent Medicaid/charity on the 38-bed project. South Broward Hospital District (CON #9563) d/b/a Memorial Regional Hospital was created by legislative enactment, is governed by a seven-member Board of Commissioners and possesses taxing authority. Memorial Regional Hospital is a 684-bed Class I general acute care hospital which includes: 71 adult psychiatric beds; 11 adult substance abuse beds; 10 child/adolescent psychiatric beds; 22 Level II NICU beds; 19 Level III NICU beds, a 26-bed hospital based skilled nursing unit and 36 comprehensive medical rehabilitation beds. The applicant proposes to add six comprehensive medical rehabilitation beds (CMR) beds to the Joe DiMaggio Children's Hospital, a "hospital without walls" located within Memorial Regional Hospital. The proposed addition of the six-bed pediatric rehabilitation unit will be located in 3,000 square feet of renovated space on the fourth floor of Memorial Regional Hospital. The


6

renovation cost is projected at $525,000 and the total project cost is expected to be $789,150. According to the Certificate of Need Predicated on Conditions page, the applicant is proposing 15 percent of annual patient days associated with the six pediatric CMR beds, be dedicated to Medicaid patients. In addition, three percent of annual gross revenues for the six-bed unit will be provided as indigent care. There is an existing condition at the facility pursuant to CON #8048 that carries a four percent Medicaid condition and a 3.5 percent charity condition on the 36 licensed CMR beds. A blending of the existing and proposed conditions would result in a new Medicaid condition of 5.57 on the 42 licensed and a 3.43 percent condition on these same beds for charity patients.

D. REVIEW PROCEDURE

The evaluation process is structured by the certificate of need review criteria found in Section 408.035, Florida Statutes, rules of the State of Florida, Chapters 59C-1 and 59C-2, Florida Administrative Code, and local health plans. These criteria form the basis for the goals of the review process. The goals represent desirable outcomes to be attained by successful applicants who demonstrate an overall compliance with the criteria. Analysis of an applicant's capability to undertake the proposed project successfully is conducted by evaluating the responses and data provided in the application, and independent information gathered by the reviewer.

Applications are analyzed to identify strengths and weaknesses in each proposal. If more than one application is submitted for the same type of project in the same district (subdistrict), applications are comparatively reviewed to determine which applicant(s) best meets the review criteria. Rule 59C-1.010(2) (b), Florida Administrative Code, prohibits any amendments once an application has been deemed complete. The burden of proof to entitlement of a certificate rests with the applicant. As such, the applicant is responsible for the representations in the application. This is attested to as part of the application in the Certification of the applicant. As part of the fact-finding, the consultant, Ed Carter, analyzed the application with consultation from the financial analyst, John Williamson, who reviewed the financial data and architect Joel Hill, who evaluated the architecturals and the schematic drawings.


7

E. CONFORMITY OF PROJECT WITH REVIEW CRITERIA

The following indicate the level of conformity of the proposed project(s) with the review criteria and application content requirements found in Sections 408.035, and 408.037; applicable rules of the State of Florida, Chapters 59C-1 and 59C-2, Florida Administrative Code; and Local Health Plans.

1. Fixed Need Pool a. Does the project proposed respond to need as published by a fixed

need pool? Chapter 59C-1.008 and rule 59C-1.039. In Volume 28, Number 4, dated January 25, 2002 on page 375 of the Florida Administrative Weekly, a fixed need pool projection of 11 beds was published for comprehensive medical rehabilitation beds in District 10 for the July 2007 planning horizon. District 10 has 283 licensed and 19 CON approved comprehensive medical rehabilitation beds. The comprehensive medical rehabilitation beds in District 10 experienced an occupancy rate of 80.42 percent during the period July 2000 through June 2001.

CMR Occupancy Rates District 10

Facility

County

Licensed Beds

Occupancy % (07/00-06/01)

HealthSouth Sunrise Rehabilitation Hospital. Broward 116 88.29% Hollywood Medical Center Broward 33 53.61% Holy Cross Hospital Broward 48 89.93% Memorial Regional Hospital Broward 36 88.14% North Broward Medical Center Broward 30 68.60% St. John's Rehabilitation Hospital & Nursing Ctr. Broward 20 60.01% Average 283 80.42%

Source: Florida Hospital Bed and Service Utilization by District - January 25, 2002

All four co-batched applicants are individually seeking beds within the fixed need projection of 11 CMR beds for District 10. One of the co-batched applicants is seeking to establish fewer than the 11 beds published as needed in the district. Memorial Regional Hospital seeks to add six CMR beds while the other three intend to add eleven beds to their respective existing CMR programs. Two of these applicants, St. John's Rehabilitation Hospital and Nursing Center and Tenet/Hollywood Medical Center, propose alternative five-bed partial projects.


8

2. Local Health Plan Preferences Is need for the project proposed supported by the applicable district plan? ss. 408.035(1)(a), Florida Statutes and Ch. 59C-1.039, Florida Administrative Code. The District 10 October 2000 CON Allocation Factors Report does not provide preferences in the review of applications pertaining to comprehensive medical rehabilitation beds. The Broward Regional Health Planning Council does include the following general provision for hospitals in its CON preferences: (1) Priority should be given to those applicants that have a

history of and clear expression of intent to provide services to the indigent.

HealthSouth of Fort Lauderdale, Limited Partnership (CON #9560) d/b/a HealthSouth Sunrise Rehabilitation Hospital proposes to provide indigent/charity care equal to at least one percent of patient days and three percent of patient days to Medicaid patients associated with the proposed 11-bed addition. Based on information reported to AHCA, this applicant provided 1.8 percent Medicaid and no charity care for the FY 2000 reporting period. The applicant has a policy for admitting financial hardship discount and charity patients that requires the completion of disclosure forms prior to the patient receiving clinical services.

St. John's Rehabilitation Hospital & Nursing Center, Inc. (CON #9561) d/b/a St. John's Rehabilitation Hospital & Nursing Center, is part of the extensive Catholic Health Services (CHS) network which provides a broad continuum of health care, residential, community support and advocacy services to the elderly, the poor and the needy throughout the Archdiocese of Miami, which includes Broward County. Indigent patients who are candidates for rehabilitation services at St. John's will continue to be assessed on a case-by case basis and approval for an appropriate placement will be sought from CHS. The applicant agrees to be condition upon approval of the proposed 11 CMR beds (or five-bed partial) for a minimum of three percent of the CMR program's total patient days to a combination of Medicaid and/or indigent patients. Based on its current payor mix in the CMR hospital, the applicant projects utilization that includes about 4.0 percent traditional Medicaid patient days and about 1.2 percent self-pay days, which it states may include a few charity care days. Based on


9

information reported to AHCA, this applicant provided 8.1 percent Medicaid and no charity care for the FY 2000 reporting period.

Tenet HealthSystems Hospitals, Inc. (CON #9562) d/b/a Hollywood Medical Center is proposing a minimum of three percent of its total annual patient days to charity care patients. The applicant has consistently complied with its current two percent Medicaid and charity condition for the 33 licensed CMR beds. The applicant explains that historically it has not denied access to any party regardless of ability to pay, however the proximity of its hospital to one of the taxing district hospitals that provides CMR services, is why most of the indigent patients requiring this service go to the taxing district hospitals. Hollywood Medical Center reported Medicaid admissions for 1999 at 3.8 percent, for 2000 at 3.3 percent and for 2001 at 3.6 percent. No specific charity admissions were reported. Based on information reported to AHCA, this applicant provided 3.2 percent Medicaid and 0.5 percent charity care for the FY 2000 reporting period.

South Broward Hospital District (CON #9563) d/b/a Memorial Regional Hospital is proposing 15 percent of annual patient days associated with the six pediatric CMR beds, be dedicated to Medicaid patients. In addition, three percent of annual gross revenues for the six-bed unit will be provided as indigent care. For the years 1998 through 2000 the applicant consistently complied with its condition to provide four percent of 36 CMR beds to Medicaid patients and 3.5 percent to charity. According to the applicant, currently, the South Broward Hospital District serves all patients in Broward County, including 108,000 who do not have health insurance. The South Broward District is the safety net provider in the south Broward service area and therefore carries the burden of significantly higher Medicaid and uncompensated care. In the last three years, the amount of revenue associated with the provision of care to medically indigent patients has increased by over 30 percent, according to the applicant. Based on information reported to AHCA, this applicant provided 13.0 percent Medicaid and 6.6 percent charity care for the FY 2000 reporting period.


10

3. Agency Rule Criteria Please indicate how each applicable preference for the type of service proposed is met. Refer to Chapter 59C-1.039, Florida Administrative Code, for applicable preferences.

a. Section 59C-1.039(3) & (4), Florida Administrative Code: General Provisions and Required Staffing and Services

General Provisions: 1. Service Location. The CMR inpatient services regulated under

this rule may be provided in a hospital licensed as a general hospital or licensed as a specialty hospital. Two of the competing applicants for CMR beds are classified as Class III Specialty Hospitals and the other two are Class I General Acute Care Hospitals with designated CMR units. See Project Summary for facility license designation.

2. Separately Organized Units. CMR inpatient services shall be provided in one or more separately organized units within a general hospital or specialty hospital. HealthSouth of Fort Lauderdale, Limited Partnership (CON #9560) d/b/a HealthSouth Sunrise Rehabilitation Hospital is an existing 116-bed Class III Specialty Hospital governed under Chapter 395, Florida Statutes. The applicant is approved for 10 additional CMR beds, which are expected to become operational in August 2002, bringing its licensed bed complement to 126 beds. The applicant seeks to expand the facility by 11 comprehensive medical rehabilitation beds arranged in five semi-private rooms and one private room. St. John's Rehabilitation Hospital & Nursing Center, Inc. (CON #9561) d/b/a St. John's Rehabilitation Hospital & Nursing Center is an existing 20-bed Class III Specialty Hospital governed under Chapter 395, Florida Statutes. The facility is co-located with a 160-bed skilled nursing home. The applicant seeks to add 11 CMR beds or a partial five-bed project as an alternative. According to the architectural review, the bed addition will be accomplished in part through the conversion of private rooms to semi-private use.


11

Tenet HealthSystems Hospitals, Inc. (CON #9562) d/b/a Hollywood Medical Center proposes to add 11 CMR beds to an existing 33-bed CMR unit within a 324-bed general acute care hospital. The applicant is requesting consideration of a partial five-bed project as an alternative to the 11 beds originally requested. Space for the addition beds will be gained from renovation/conversion of existing areas. For details see Architect's Report in 4. h. South Broward Hospital District (CON #9563) d/b/a Memorial Regional Hospital is a 684-bed Class I General Acute Care Hospital with a 36-bed CMR unit. The applicant seeks to add six CMR beds to the Joe DiMaggio Children's Hospital on the fourth floor. Though physically separated from the existing 36-bed CMR unit on the seventh floor of the hospital, the applicant states that the pediatric rehabilitation unit at Joe DiMaggio Children's Hospital will not be independent of the existing rehabilitation expertise at the hospital and will operate as a satellite of the adult unit. The six-bed unit will consist of two semi-private rooms and two private rooms.

3. Minimum Number of Beds. A general hospital providing comprehensive medical rehabilitation inpatient services should normally have a minimum of 20 comprehensive medical rehabilitation inpatient beds. A specialty hospital providing CMR inpatient services shall have a minimum of 60 CMR inpatient beds. Of the four co-batched applicants, only St. John's Rehabilitation Hospital & Nursing Center has fewer beds than required by this element of the Rule. Pursuant to a Joint Stipulation in DOAH Case Number 82-2638, St. John's Nursing and Rehabilitation Center was issued CON #2183 (Amended) authorizing the applicant to "Convert 20 skilled nursing home beds to comprehensive inpatient physical rehabilitation beds". The 20-bed "facility" was licensed (License #1528) under Chapter 395, Part I, Florida Statutes on November 1, 1984 as Broward County Nursing Home, Inc. d/b/a St. John's Nursing & Rehabilitation Hospital. Under this license the licensee was authorized to operate a 20-bed Special Rehabilitation Hospital.


12

4. Conformance with Criteria for Approval. A CON for the establishment of new CMR inpatient services, the construction or addition of new CMR inpatient beds, or the conversion of licensed hospital acute care beds to CMR inpatient beds shall not normally be approved unless the applicant meets the applicable review criteria in Section 408.035, Florida Statutes, and the standards of need determination criteria set forth in this rule. For all co-batched applicants, see response to E.1.a., above and E.4.a., below.

5. Medicare and Medicaid Participation. An applicant proposing to increase the number of licensed CMR inpatient beds at its facility shall participate in the Medicare and Medicaid programs. HealthSouth of Fort Lauderdale, Limited Partnership (CON #9560) d/b/a HealthSouth Sunrise Rehabilitation Hospital is a participating provider in the Medicare and Medicaid programs and intends to maintain this status for the proposed 11 new CMR beds. St. John's Rehabilitation Hospital & Nursing Center, Inc. (CON #9561) d/b/a St. John's Rehabilitation Hospital & Nursing Center, is a participating provider in the Medicare and Medicaid programs and intends to maintain this status for the proposed 11 new (or five partial) CMR beds. Tenet HealthSystems Hospitals, Inc. (CON #9562) d/b/a Hollywood Medical Center is a current participant in the Medicare and Medicaid programs and intends to maintain this status for the proposed 11 new (or five partial) CMR beds. South Broward Hospital District (CON #9563) d/b/a Memorial Regional Hospital is a participating provider in the Medicare and Medicaid programs and intends to maintain this status for the proposed six new CMR beds.

b. Required Staffing and Services.

1. Director of Rehabilitation. CMR inpatient services must be provided under the medical director of rehabilitation who is a board-certified or board-eligible physiatrist and has had at least two years of experience in the medical management of inpatients requiring rehabilitation services.


13

HealthSouth of Fort Lauderdale, Limited Partnership (CON #9560) d/b/a HealthSouth Sunrise Rehabilitation Hospital has as its medical director, Dr. Scott David Tannenbaum a board-certified physiatrist, who has served in this position since November 1995. Dr. Tannenbaum has more than 11 years of experience in the medical management op patients requiring CMR services. In addition to Dr. Tannenbaum, Dr. Lauren Lerner is board-certified in physical medicine and rehabilitation and is the medical director of the CARF-accredited spinal cord and brain injury programs at the hospital. Medical director of Sunrise's CARF-accredited comprehensive pain management program is Dr. Matthew Deutscher, board-certified in physical medicine and rehabilitation. Dr. Deutscher has more than 12 years of experience in the medical management of patients requiring rehabilitation services. St. John's Rehabilitation Hospital & Nursing Center, Inc. (CON #9561) d/b/a St. John's Rehabilitation Hospital & Nursing Center has as its medical director Dr. Veronica Gipps, who is board-certified in physical medicine and rehabilitation, and serves as a diplomat to the American Board of Physical Medicine and Rehabilitation. Dr. Gipps has been in practice for 10 years and affiliated with St. John's Rehabilitation Hospital for seven of those years. Tenet HealthSystems Hospitals, Inc. (CON #9562) d/b/a Hollywood Medical Center has as its medical director Ronald Barton Tolchin, D.O., FAAPM&R, a physiatrist who is board-certified by and a fellow of the American Board of Physical Medicine and Rehabilitation. Dr. Tolchin's University appointments include Nova Southeastern University, University of Miami Medical School and University of Medicine and Dentistry of New Jersey. He maintains his clinical instructor positions at Nova and University of Miami and also holds the Assistant Professor and Chairman position in Nova's Department of Family Medicine, Department of Physical Medicine and Rehabilitation. Dr. Tolchin is also on the staff of Mount Sinai Medical Center, Aventura Hospital and Medical Center, North Shore Medical Center and VA Medical Center.


14

South Broward Hospital District (CON #9563) d/b/a Memorial Regional Hospital has two board-certified physiatrists on staff that will be available to patients of the proposed six-bed addition of the dedicated pediatric rehabilitation beds in the Joe DiMaggio Children's Hospital. Dr. Alan Novick is currently the rehabilitation medical director at Memorial Regional Hospital. Prior to being appointed medical director in July 2001 of all rehabilitation programs at Memorial, Dr. Novick served as medical director for Occupational Rehabilitation at the Hospital from 1994 to 2000. Dr. Esperanza Vargas-Posada is the current medical director of Pediatric Rehabilitation and Early Intervention and Development Programs at the Joe DiMaggio Children's Hospital. Dr. Vargas-Posada is board-certified by the American Board of Physical Medicine and Rehabilitation as a physiatrist and is licensed to practice medicine in both New York and Florida. Dr. Vargas-Posadas' career spans more than 30 years and includes positions such as medical director for various pediatric rehabilitation units including West Gables Rehabilitation Hospital in Miami, the Joe DiMaggio Children's Hospital at Memorial Regional Hospital in Hollywood, and as Attending Physiatrist at Blythedale Children's Hospital and New York Medical College, both in New York according to the vitae, included in the application. The applicant states that Dr. Vargas' experience and training in the highly specialized field of pediatric rehabilitation medicine is evidence that she is a very qualified choice to be Medical Director of both Pediatric Rehabilitation and the Early Intervention and Development Programs at the Joe DiMaggio Children's Hospital.

2. Other Required Services. In addition to the physician services, CMR inpatient services shall include at least the following services provided by qualified personnel: 1. Rehabilitation nursing 2. Physical therapy 3. Occupational therapy 4. Speech therapy 5. Social services 6. Psychological services 7. Orthotic and prosthetic services


15

HealthSouth of Fort Lauderdale, Limited Partnership (CON #9560) d/b/a HealthSouth Sunrise Rehabilitation Hospital is an existing provider of CMR services and provides a range of services that meet or exceed the minimum requirements and intends to increase staffing to continue this level of care in the proposed new beds. Orthotic and prosthetic services will be provided through external vendors. St. John's Rehabilitation Hospital & Nursing Center, Inc. (CON #9561) d/b/a St. John's Rehabilitation Hospital & Nursing Center, is an existing provider of CMR services and provides a range of services that meet or exceed the minimum requirements and intends to increase staffing to continue this level of care in the proposed new beds. Orthotic and prosthetic services will be provided through various external vendors. Tenet HealthSystems Hospitals, Inc. (CON #9562) d/b/a Hollywood Medical Center is an existing provider of CMR services and provides a range of services that meet or exceed the minimum requirements and intends to increase staffing to continue this level of care in the proposed new beds. Psychological services and orthotics/prosthetics services will be provided via contractual relationships with independent parties. South Broward Hospital District (CON #9563) d/b/a Memorial Regional Hospital is an existing provider of CMR services and provides a range of services that meet or exceed the minimum requirements and intends to increase staffing to continue this level of care in the proposed new beds. Therapists are trained in the use of orthotic and prosthetic devices and assist in patient fittings and the use of these devices. While the applicant did not specifically state, it is presumed that a contract exists with outside vendors to provide orthotic/prosthetic devices to patients in the hospital. Very few facilities are set-up to create these devices in-house.

c. Section 59C-1.039(5)(g), Florida Administrative Code, states that priority considerations for CMR inpatient services will be given to applicants who: (1) are a disproportionate share hospital; (2) are proposing to service Medicaid-eligible persons; and, (3) are a designated trauma center.

HealthSouth of Fort Lauderdale, Limited Partnership (CON #9560) d/b/a HealthSouth Sunrise Rehabilitation Hospital is not a disproportionate share hospital, nor is it a designated trauma center. A


16

blending of the proposed three (3.0) percent Medicaid condition would result in a combined 0.0026 percent condition in the 127 licensed and approved beds. In addition to the Medicaid condition, a blended indigent/charity condition would result in 0.0009 percent of total annual patient days to indigent/charity patients in the 127 licensed and approved beds. St. John's Rehabilitation Hospital & Nursing Center, Inc. (CON #9561) d/b/a St. John's Rehabilitation Hospital & Nursing Center is not a disproportionate share hospital, nor is it a designated trauma center. There are no existing CON conditions relative to CMR services at the facility. The applicant is proposing a minimum of three percent of its total annual patient days to Medicaid/charity patients. Tenet HealthSystems Hospitals, Inc. (CON #9562) d/b/a Hollywood Medical Center is not a disproportionate share hospital, nor is it a designated trauma center. There is an existing condition of two percent Medicaid and charity assigned to the 33 licensed CMR beds and the applicant has consistently complied with this condition. In this application the applicant is proposing a minimum of three percent of its total annual patient days to charity care patients only. South Broward Hospital District (CON #9563) d/b/a Memorial Regional Hospital is a designated Medicaid Disproportionate Share Provider for State Fiscal Year 2001-2002. It is also a Level I trauma center for adults and pediatric patients. The pediatric emergency department and trauma center are provided through the Joe DiMaggio Children's Hospital at Memorial Regional Hospital and staffed 24 hours per day, seven days per week with pediatric emergency physicians and pediatric nurses who specialize in emergency medicine. There is an existing condition at the facility pursuant to CON #8048 that carries a four percent Medicaid condition and a 3.5 percent charity condition on the 36 licensed CMR beds. In this application the applicant is proposing 15 percent of annual patient days associated with the proposed six pediatric CMR beds be dedicated to Medicaid patients. In addition, three percent of annual gross revenues for the six-bed unit will be provided as indigent care. A blending of the existing and proposed conditions would result in a new Medicaid condition of 5.57 on the 42 licensed and presumed approved CMR beds and a 3.43 percent condition on these same beds for charity patients.


17

d. 59C-1.039(6), Florida Administrative Code, Access Standard Comprehensive medical rehabilitation inpatient services should be available within a maximum ground travel time of two hours under average travel conditions for at least 90 percent of the district’s total population. Inpatient CMR services in the district are available within a two hours drive time for at least 90 percent of the district’s total population.

e. 59C-1.039(7), Florida Administrative Code, Quality of Care: CMR inpatient services shall comply with agency standards for program licensure described in Section 59A-3, Florida Administrative Code. Applicants who submit an application that is consistent with the agency licensure standards are deemed to be in compliance with this provision. Applicants proposing to add beds to a licensed CMR inpatient service have received full Medicare certification as a rehabilitation hospital. All four of the existing CMR providers are Medicare providers of CMR services. Refer to Section 4. b. below.

f. 59C-1.039(8), Florida Administrative Code, Services Description: An applicant for comprehensive medical rehabilitation inpatient service shall provide a detailed program description in its certificate of need application including: 1. Age groups to be served.

HealthSouth of Fort Lauderdale, Limited Partnership (CON #9560) d/b/a HealthSouth Sunrise Rehabilitation Hospital indicates it serves patients aged 14 and up, however over 72 percent of the patients discharged in 2000 were Medicare patients. St. John's Rehabilitation Hospital & Nursing Center, Inc. (CON #9561) d/b/a St. John's Rehabilitation Hospital & Nursing Center stated that discharge data revealed that 75 percent of the patients discharged in CY 2001 were 65 and older, "leaving a significant portion (25 percent) who were younger adults." The applicant anticipates that it will continue to draw a similar blend of elderly and younger patients in the expanded CMR program, since it will continue to offer the same services plus aquatic rehabilitation, transitional ADL training, and expanded dining/socialization programs.


18

Tenet HealthSystems Hospitals, Inc. (CON #9562) d/b/a Hollywood Medical Center reported the average age of patients, during the 12 months ending June 30, 2001, in the CMR unit was 75.9 and the median age was 79 years of age with the youngest being 24 and the oldest 100 years of age. Persons 65 years of age and older comprise 81.1 percent of admissions to the CMR unit and the applicant does not expect the age dispersion to change with the expansion of the 33-bed CMR unit by 11 (or five) beds. South Broward Hospital District (CON #9563) d/b/a Memorial Regional Hospital currently operates a 36-bed CMR unit dedicated to adult patients. The proposed six-bed addition seeks to establish a dedicated CMR unit for pediatric patients within the Joe DiMaggio Children's Hospital at Memorial Regional Hospital. The facility currently provides highly specialized medical care to all children and adolescents ages 0 to 18. Adolescent cases are placed in Joe DiMaggio Children's Hospital or Memorial Regional Hospital on a case-by-case basis. The applicant did not provide a breakdown of admissions or discharges by age group in response to this criterion. However, elsewhere in the application it is revealed that 41 percent of CMR discharges for 2001 were Medicare patients. The applicant has the lowest Medicare discharge rate for CMR patients among the co-batched applicants. While not specifically revealed, this could support the need for pediatric/adolescent beds requested by the applicant with 59 percent of CMR discharges presumably under 65 years of age.

2. Specialty inpatient rehabilitation services to be provided, if any (e.g. spinal cord injury; brain injury). HealthSouth of Fort Lauderdale, Limited Partnership (CON #9560) d/b/a HealthSouth Sunrise Rehabilitation Hospital listed six programs offered at its facility that are CARF accredited. The applicant did not identify any new programs as a result of the proposed 11 CMR bed addition. Existing programs offered by the applicant include: 1. Comprehensive Integrated Inpatient Rehabilitation Prog. 2. Brain Injury Program 3. Spinal Cord Rehabilitation System of Care

4. Comprehensive Pain Management Program (Inpt. & Outpt.) 5. Work-specific Occupational Rehabilitation Program 6. Home and Community-Based Rehabilitation Program


19

Along with each of the CARF-accredited programs the applicant offers the following programs in both inpatient and outpatient settings: > Orthopedic Rehabilitation > Lymphedema Management > Stroke Rehabilitation > Outpatient Pediatric Rehab > Amputee Rehabilitation > Disabled Driver Program > Hand Rehabilitation > Outpatient Rehabilitation > Pulmonary Rehabilitation > Assisted Technology > Aquatics Program > Outpatient Cardiac Rehab > Day Rehab/Treatment Prog. > Women's Health Rehab Prog. > Neurological Rehab Prog. > The Bridge > Complementary Health Program The applicant described each of the programs listed above in its application. St. John's Rehabilitation Hospital & Nursing Center, Inc. (CON #9561) d/b/a St. John's Rehabilitation Hospital & Nursing Center currently offers the following medical rehabilitation programs: > Stroke Rehabilitation > Traumatic Brain Injury Program > Neurological Rehabilitation: + Spinal cord injury + Multiple sclerosis + Peripheral neuropathy + AIDS patients with neurological involvement + Parkinson's disease + Spasticity management + Other neurological disorders > Orthopedic Rehabilitation + Fast track joint rehabilitation program + Total joint rehabilitation + Multiple trauma > Amputee Rehabilitation > Arthritis Rehabilitation > Outpatient rehabilitation/follow-up services In addition to the above programs/services, the applicant expects to provide the following programs when the existing CMR unit relocates to renovated areas in the St. Joseph's Residence this fall. The new programs will include:


20

> Aquatic rehabilitation programs > Transitional ADL living/training programs > Community dining and socialization The applicant states that it is applying for CARF accreditation. Tenet HealthSystems Hospitals, Inc. (CON #9562) d/b/a Hollywood Medical Center CMR program is accredited by the Commission on Accreditation of Rehabilitation Facilities (CARF) and includes patients with the following diagnoses: amputation, brain injury, complex orthopedic injuries, congenital deformities, fractured hip repair, Guillain Barre, multiple sclerosis, multiple trauma, muscular dystrophy, neurological disorder, Parkinson's disease, polyarthritis including rheumatoid arthritis, pulmonary diseases, spinal cord injuries, stroke and total joint replacements. The applicant did not indicate that the addition of beds would add any new services or programs at the hospital. South Broward Hospital District (CON #9563) d/b/a Memorial Regional Hospital offers a variety of programs for its adult rehabilitation patients that will be extended and specially tailored to include the needs of pediatric patients. These programs include: a brain injury program that is certified by the State of Florida, Department of Health, a spinal cord injury program, a variety of physical therapy programs, occupational therapy for outpatients, speech/language pathology, neuropsychology/rehabilitation psychology and an early intervention and developmental program. According to the applicant, the Early Intervention and Developmental Program is certified by the Broward County Board of County Commissioners under the Children's Services Administration Division, as an Early Intervention and Development Program provider. The applicant states that there are currently there are only two Broward County providers that offer a certified Early Intervention and Developmental Program and they are the South Broward Hospital District and the North Broward Hospital District. The Joe DiMaggio Children's Hospital Early Intervention and Developmental Program currently serves infants and toddlers age zero (0) to three (3) years who exhibit one or more risk factors for developmental delay, or slow or impaired development. The facility sees approximately 750 patients through the Early Intervention and Developmental program each year. The proposed project will provide a six-bed dedicated pediatric CMR program within the hospital. The applicant is both JCAHO and CARF accredited.


21

3. Proposed staffing, including qualifications of the medical director, a description of staffing appropriate for any specialty program, and a discussion of the training and experience requirements of all staff who will provide comprehensive medical rehabilitation inpatient services. All four of the co-batched applicants have existing CMR programs, fully staffed with trained, qualified professionals and a medical director. Each application contains a curriculum vitae of its qualified medical director. For a detail of the proposed staffing, see Schedule 6A in each application.

4. A plan for recruiting staff, showing expected sources of staff. All four of the co-batched applicants are established hospitals with experience in the recruitment, retention and development of staff. While none of them indicated that they expected problems in recruiting registered nurses for their proposed CMR bed additions, it is common knowledge that there is a nursing shortage in the country. HealthSouth of Fort Lauderdale, Limited Partnership (CON #9560) d/b/a HealthSouth Sunrise Rehabilitation Hospital states that it provides a complete and innovative recruitment and retention program, including "sign-up bonuses". HealthSouth Corporation has clinical affiliation agreements with more than 550 Universities and Colleges, which are available to the applicant. HealthSouth Corporation is an attractive employer, offering opportunities for career growth and relocation. HealthSouth Corporation believes in recruitment from within: therefore, any new staff openings are posted at each of the existing hospitals in Florida. The applicant did not indicate it expected a problem recruiting qualified registered nurses to fill the four new positions created by the proposed project. St. John's Rehabilitation Hospital & Nursing Center, Inc. (CON #9561) d/b/a St. John's Rehabilitation Hospital & Nursing Center proposes to add 2.2 FTEs registered nurses for the second year if it is approved for 11 new CMR beds or 0.9 RN FTEs if approved for only five CMR beds. The applicant expects to be able to add rehab staff gradually through its routine recruitment techniques and uses Catholic Health Services to fill open positions. This will entail reviewing on-file applications from qualified candidates, advertising/interviewing for open positions, participating in school job fairs, and accessing the CHS network of manpower resources.


22

The applicant also expects there are staff members currently working in the ALF areas of St. Joseph's Residence who would be qualified to work in the CMR program when it relocates to that building, or interested in training to do so in the face of the reduction in ALF beds. The applicant did not indicate it expected a problem recruiting qualified registered nurses to fill the new positions created by the proposed project. Tenet HealthSystems Hospitals, Inc. (CON #9562) d/b/a Hollywood Medical Center is proposing the addition of three RN FTEs in the second year of operations, whether it is approved for 11 or five new CMR beds. The applicant expects to recruit the additional staff required for the expansion from its current pool of staff and its traditional method of staff recruitment. The applicant is a member of the South Florida Hospital and Healthcare Association, which is in the midst of developing and implementing a national campaign to recruit health care professionals to the region for placement in its member hospitals. The facility has a retention program in place that provides extensive benefits in addition to recognition and reward programs and community and employee activities. The applicant did not indicate it expected a problem recruiting qualified registered nurses to fill the new positions created by the proposed project. South Broward Hospital District (CON #9563) d/b/a Memorial Regional Hospital proposes to add 4.2 RNs to staff the six proposed CMR beds. As the second largest hospital in Broward County, the applicant has established recruitment techniques as part of its strong recruitment program: advertisements in major city newspapers, postings via the internet and the South Broward Hospital District website, and the use of a professional recruiter, are some of the tools used to recruit needed staff. The applicant believes that retention and development of clinical staff is just as crucial as recruitment and hiring of staff. Consequently the applicant has an aggressive program for continued development of staff. The applicant did not indicate it expected a problem recruiting qualified registered nurses to fill the new positions created by the proposed project.

5. Expected sources of patient referrals. HealthSouth of Fort Lauderdale, Limited Partnership (CON #9560) d/b/a HealthSouth Sunrise Rehabilitation Hospital received 3,675 patient referrals from 715 physicians during 2001. Slightly over half (54.5 percent) of these referrals were from three


23

Broward County hospitals: Florida Medical Center 20.2 percent (741), Westside Regional Medical Center 19.5 percent (716) and University Hospital & Medical Center with 14.8 percent (545). Another 27.3 percent (1004) referrals were classified as, "Other Facilities" by the applicant, which included patients from Palm Beach, Broward and Dade Counties. The applicant anticipates similar referral patterns in the future and projects referral sources to arise from secondary markets in north Dade County and south Palm Beach County. Furthermore, the applicant intends to target the growing Hispanic community in south Florida by soliciting large Hispanic churches, working with the local Latin Chamber of Commerce, placing ads in local Hispanic publications and through the resources of HealthSouth International marketing team and HealthSouth Puerto Rico. St. John's Rehabilitation Hospital & Nursing Center, Inc. (CON #9561) d/b/a St. John's Rehabilitation Hospital & Nursing Center already has a wide referral base which extends throughout Broward County and on into northern Miami-Dade County. The applicant cited Agency discharge data for 2001, stating that about eight percent of the facility's discharges were from Miami-Dade. The presence of 120 ALF units, 160 skilled nursing beds, and 108 HUD elderly housing units as well as Catholic Home Health Services of Broward on the applicants' campus, provides a steady stream of patients who require rehabilitation services. The applicants association with Catholic Health Services and with Catholic churches drives many referrals. In addition, the applicant has a long-lasting relationship with key area physicians who refer patients to the facility. Tenet HealthSystems Hospitals, Inc. (CON #9562) d/b/a Hollywood Medical Center experienced 92.2 percent of its admissions from hospital transfer patients for the 12-month period ending June 30, 2001. The facility has both admission and discharge relationships with the following providers: Aventura Hospital and Medical Center, Palmetto General Hospital, Parkway Regional Medical Center, Cleveland Clinic Hospital, Memorial Healthcare System, Hillcrest Nursing and Rehab, Hollywood Hills, Regents Park, Palm Gardens, Miami Jewish Home of the aged, Douglas Gardens, HCR Manor Care of Plantation, HCR Manor Care of Lauderhill, HCR Manor Care of Miami Lakes, and Carehouse of Hallandale Beach. The applicant does not expect referral patterns to change as a result of a new bed addition.


24

South Broward Hospital District (CON #9563) d/b/a Memorial Regional Hospital expects that its inpatient pediatric CMR unit's volume will likely be driven by emergency and trauma admissions including brain and spinal cord injuries as well as neurosurgery and orthopedic cases. The Joe DiMaggio Children's Hospital currently offers the only Pediatric Trauma Center in South Broward County. Based on 2001 calendar year discharges, internal demand generated 148 patients. As a system, the South Broward Hospital District d/b/a Memorial Healthcare System has two other sister hospitals from which to receive inpatient rehabilitation referrals. The applicant lists at least 12 area hospitals it has transfer agreements with and while some of these facilities may offer CMR services, none of them offer a dedicated pediatric inpatient rehabilitation unit as proposed by the applicant. Another referral source is expected to be from the numerous programs offered by the South Broward Hospital District, who enjoys a reputation as one of South Florida's leading health care systems. For a detail listing of hospitals with transfer agreements and the district's facilities and services, see page 94 of the application.

6. Projected number of comprehensive medical rehabilitation in-patient services patient days by payer type, including Medicare, Medicaid, private insurance, self-pay and charity care patient days for the first two years of operation after completion of the proposed project.

Co-Batched Applicant’s Patient Days by Payer Type

Applicant

Medicare

Medicaid

HMO/PPO Insurance

Charity Self-Pay

Other

9560 Health South 74.0% 3.0% 19.5% 3.5% 0.0% 9561 St. John’s 92.9% 4.0% 2.0% 1.2% 0.0% 9562 Hollywood 85.0% 2.0% 10.0%* 3.0% 0.0% 9563 Memorial 0.0%* 23.7% 69.2% 7.1% 0.0%

Source: CON applications, Schedule 7B, second year, project only *CON 9563 will add pediatric CMR beds if approved

HealthSouth of Fort Lauderdale, Limited Partnership (CON #9560) d/b/a HealthSouth Sunrise Rehabilitation Hospital projects first year utilization of the 11 beds will be 2,410 patient days with the second year at 3,272 patient days of care to patients. Of these projected patient days, the applicant expects both years to reflect a payor mix of 74 percent Medicare, three percent Medicaid, two and two-tenths percent commercial insurance, 17.3 percent other managed care, two and a half percent other payers and one percent self pay. These projections are similar to the overall revenue projections for the hospital.


25

St. John's Rehabilitation Hospital & Nursing Center, Inc. (CON #9561) d/b/a St. John's Rehabilitation Hospital & Nursing Center projects first year utilization of the 11 beds at 1,202 patient days with the second year at 1,603 patient days of care to patients. For the five-bed alternate/partial project the applicant projects first year utilization at 500 patient days followed in the second year at 666 patient days. Of these projected patient days, the applicant expects both years for both the 11-bed and the five-bed project to reflect a payor mix of 92.9 percent Medicare (Medicare 73.9 percent + Medicare/HMO 19.0 percent), four percent Medicaid, two percent HMO/PPO and commercial insurance, and one and two tenths percent self pay. As presented on Schedule, these payor sources exceed 100 percent. There appears to be an inconsistency between the Managed care data on page 46 of the application and Schedule 7B. On page 46 the applicant has a footnote to Managed care stating that it includes Medicare and Medicaid HMO patients, yet on Schedule 7B it appears the applicant has inserted the 19.0 percent as only Medicare/HMO. Overall these projections are similar to revenue projections for the entire hospital. Tenet HealthSystems Hospitals, Inc. (CON #9562) d/b/a Hollywood Medical Center projects first year utilization of the 11 beds at 2,925 patient days with the second year at 2,925 patient days of care to patients. For the five-bed alternate/partial project the applicant projects first year utilization at 1,452 patient days followed in the second year at 1,823 patient days. Of these projected patient days, the applicant expects both years for both the 11-bed and the five-bed project to reflect a payor mix of 85 percent Medicare, two percent Medicaid, ten percent HMO/PPO, and three percent self-pay. South Broward Hospital District (CON #9563) d/b/a Memorial Regional Hospital projects first year utilization of the six (6) beds will be 1,358 patient days with the second year at 1,860 patient days of care to patients. Of these projected patient days, the applicant expects both years to reflect a payor mix with no Medicare, 23.7 percent Medicaid, six and a half percent commercial insurance, 62.7 percent other managed care, and seven and one tenth percent self pay. Because this project targets pediatric patients, the applicant does not project revenue from Medicare where in the entire hospital, Medicare is projected to account for 24.3 percent of overall revenue.


26

7. Admission policies of the facility with regard to charity care patients. HealthSouth of Fort Lauderdale, Limited Partnership (CON #9560) d/b/a HealthSouth Sunrise Rehabilitation Hospital has a policy for admitting financial hardship discount and charity patients that requires the completion of disclosure forms prior to the patient receiving clinical services. Based on information from the financial analysis section of AHCA for the fiscal year 2000, this applicant provided 1.8 percent Medicaid and no charity care for the FY 2000 reporting period. St. John's Rehabilitation Hospital & Nursing Center, Inc. (CON #9561) d/b/a St. John's Rehabilitation Hospital & Nursing Center is part of the extensive Catholic Health Services (CHS) network which provides a broad continuum of health care, residential, community support and advocacy services to the elderly, the poor and the needy throughout the Archdiocese of Miami, which includes Broward County. Indigent patients who are candidates for rehabilitation services at St. John's will continue to be assessed on a case-by-case basis and approval for an appropriate placement will be sought from CHS. The applicant agrees to be condition upon approval of the proposed 11 CMR beds (or five-bed partial) for a minimum of three percent of the CMR program's total patient days to a combination of Medicaid and/or indigent patients. Based on its current payor mix in the CMR hospital, the applicant projects utilization that includes about 4.0 percent traditional Medicaid patient days and about 1.2 percent self-pay days, which it states may include a few charity care days. Based on information from the financial analyst section of AHCA for the fiscal year 2000, this applicant provided 8.1 percent Medicaid and no charity care for the FY 2000 reporting period. Tenet HealthSystems Hospitals, Inc. (CON #9562) d/b/a Hollywood Medical Center is proposing a minimum of three percent of its total annual patient days to charity care patients. The applicant has consistently complied with its current two percent Medicaid and charity condition for the 33 licensed CMR beds. The applicant explains that historically it has not denied access to any party regardless of ability to pay, however the proximity of its hospital to one of the taxing district hospitals that provides CMR services, is why most of the indigent patients requiring this service go to the taxing district hospitals. Hollywood Medical Center reported Medicaid admissions for 1999 at 3.8 percent, for 2000 at 3.3 percent and for 2001 at 3.6 percent. No specific charity


27

admissions were reported. Based on information from the financial analyst section of AHCA for the fiscal year 2000, this applicant provided 3.2 percent Medicaid and 0.5 percent charity care for the FY 2000 reporting period South Broward Hospital District (CON #9563) d/b/a Memorial Regional Hospital is proposing three percent of annual gross revenues for the six-bed unit will be provided as indigent care. For the years 1998 through 2000 the applicant consistently complied with its condition to provide four percent of 36 CMR beds to Medicaid patients and 3.5 percent to charity. Currently, the South Broward Hospital District serves all patients in Broward County, including 108,000 who do not have health insurance. The South Broward District is the safety net provider in the south Broward service area and therefore carries the burden of significantly higher Medicaid and uncompensated care. In the last three years, the amount of revenue associated with the provision of care to medically indigent patients has increased by over 30 percent, according to the applicant. In fiscal year 2001, the South Broward Hospital District provided approximately $190 million in uncompensated care to the medically indigent population of Broward County, which the applicant states includes charity care and uncollected accounts. Memorial Regional Hospital accounted for approximately 65 percent or $123 million of that total. Based on information from the financial analyst section of AHCA for the fiscal year 2000, this applicant provided 13.0 percent Medicaid and 6.6 percent charity care for the FY 2000 reporting period

g. 59C-1.039(9), Florida Administrative Code, Applications from Licensed Providers of CMR Inpatient Services. A facility providing licensed CMR inpatient services seeking certificate of need approval for additional CMR inpatient beds shall provide the following information in its certificate of need application in addition to the information required by subsection f (Services Description): All four of the co-batched applicants seek additional CMR beds. 1. Number of CMR medical rehabilitation inpatient services

admissions and patient days for the 12-month period ending six months prior to the beginning date of the quarter of the publication of the fixed bed need pool.


28

CMR Patient Days and Occupancy Rates July 1, 2000 through June 30, 2001 Co-Batched Applicants

Facility

Patient Days/ Admissions

Licensed

Beds

Occupancy

% HealthSouth Sunrise Rehab. Hosp. 37,381/2,048 116 88.29% Hollywood Medical Center 6,457/605 33 53.61% Memorial Regional Hospital 11,581/981 36 88.14% St. John's Rehabilitation Hospital 4,381/365 20 60.01% Average 283 80.42%

Source: Florida Hospital Bed and Service Utilization by District - January 25, 2002 and CON applications 9560-9563

HealthSouth of Fort Lauderdale, Limited Partnership (CON #9560) d/b/a HealthSouth Sunrise Rehabilitation Hospital:

HSRH Admissions and Days; July 1, 2000 - June 30, 2001

Payer Admissions Patient Days Medicare 1,498 27,983 Other Managed Care 393 6,872 Other Payers 102 1,435 Medicaid 30 568 Commercial Insurance 13 397 Self-pay 12 115 Medicaid HMO 0 0 Medicare HMO 0 0 Total 2,048 37,370

Source: Application #9560 St. John's Rehabilitation Hospital & Nursing Center, Inc. (CON #9561) d/b/a St. John's Rehabilitation Hospital & Nursing Center states that during the period specified, July 2000 through June 2001, St. John's Rehabilitation Hospital reported 365 CMR admissions, which accounted for 4,381 patient days. Tenet HealthSystems Hospitals, Inc. (CON #9562) d/b/a Hollywood Medical Center states that the number of admissions and patient days experienced by the applicant during the 12-month period ending June 30, 2001, which is the applicable period referenced by this rule, were 605 admissions and 6,457 patient days. South Broward Hospital District (CON #9563) d/b/a Memorial Regional Hospital states that the number of admissions and patient days experienced by the applicant during the 12-month period ending June 30, 2001, which is the applicable period referenced by this rule, were 981 admissions and 11,581 patient days.


29

2. Number of CMR inpatient services patient days by payor type, including Medicare, Medicaid, private insurance, self-pay and charity care patient days, for the 12-month period ending six months prior to the beginning date of the quarter of the publication of the fixed bed need pool. HealthSouth of Fort Lauderdale, Limited Partnership (CON #9560) d/b/a HealthSouth Sunrise Rehabilitation Hospital:

HSRH Patient Days by Payor; July 1, 2000 - June 30, 2001

Payor Patient Days % of Total Medicare 27,983 74.9% Other Managed Care 6,872 18.4% Other Payers 1,435 3.8% Medicaid 568 1.5% Commercial Insurance 397 1.1% Self-pay 115 0.3% Medicaid HMO 0 0.0% Medicare HMO 0 0.0% Total 37,370 100.0%

Source: Application #9560 St. John's Rehabilitation Hospital & Nursing Center, Inc. (CON #9561) d/b/a St. John's Rehabilitation Hospital & Nursing Center:

St. John's Patient Days by Payor; July 1, 2000 - June 30, 2001

Payor Patient Days % of Total Medicare (traditional) 3,188 72.8% Medicaid (traditional) 242 5.5% Managed Care* 835 19.1% Commercial Insurance 77 1.8% Private Pay 37 0.8% Total 4,379** 100.0%

*Includes Medicare and Medicaid HMO patients **The figure differs from AHCA data by two days Source: Application #9561 Tenet HealthSystems Hospitals, Inc. (CON #9562) d/b/a Hollywood Medical Center:

Tenet CMR Patient Days by Payor; July 1, 2000 - June 30, 2001

Payor Patient Days % of Total Medicare 4,724 76.5% Medicaid 175 2.8% Managed Care 1,186 19.2% Self Pay/Charity 92 1.5% Total 6,177 100.0%

Source: Application #9562


30

It is noted that the number of patient days presented by the applicant in this table is 280 less than presented in number one above (6457 - 6177 = 280). South Broward Hospital District (CON #9563) d/b/a Memorial Regional Hospital:

SBHD CMR Patient Days by Payor;; July 1, 2000 - June 30, 2001

Payor Patient Days % of Total Medicare 4,545 40.2% Medicaid 716 6.4% Private Insurance 4,227 37.4% Self Pay 988 8.7% Charity Care 519 4.6% Other 306 2.7% Total 11,301 100.0%

Source: Application #9563 The applicant states that the above data was calculated from the hospital’s internal discharge data and differs slightly in comparison to patient days published by the Broward Regional Health Planning Council, Inc.

3. Gross revenues by payer source for the 12-month period ending six months prior to the beginning date of the quarter of the publication of the fixed bed need pool. HealthSouth of Fort Lauderdale, Limited Partnership (CON #9560) d/b/a HealthSouth Sunrise Rehabilitation Hospital:

HSRH Patient Charges by Payor; July 1, 2000 - June 30, 2001

Payor Charges % of Total Medicare $36,535,915 73.8% Other Managed Care $ 9,811,409 19.8% Other Payers $ 1,846,974 3.7% Medicaid $ 698,194 1.4% Commercial Insurance $ 497,732 1.0% Self-pay $ 141,041 0.3% Medicaid HMO $ 0 0.0% Medicare HMO $ 0 0.0% Total $49,531,265 100.0%

Source: Application #9560 The applicant states that gross revenue is defined as charges before contractual adjustments and write-offs. St. John's Rehabilitation Hospital & Nursing Center, Inc. (CON #9561) d/b/a St. John's Rehabilitation Hospital & Nursing Center:


31

St. John's Gross Revenues by Payor; July 1, 2000 - June 30, 2001

Payor Gross Revenue % of Total Medicare $2,957,041 72.39% Medicaid $ 203,510 4.98% HMO $ 781,157 19.12% Commercial Insurance $ 111,432 2.73% Private Pay $ 31,772 0.78% Total 4,084,912 100.00%

Source: Application #9561 Tenet HealthSystems Hospitals, Inc. (CON #9562) d/b/a Hollywood Medical Center:

Tenet CMR Gross Revenue by Payor; July 1, 2000 - June 30, 2001

Payor Gross Revenue % of Total Medicare $13,488,864 76.6% Medicaid $ 558,504 3.2% Managed Care $ 3,243,370 18.4% Self Pay/Charity $ 308,516 1.8% Total $17,599,254 100.0%

Source: Application #9562 South Broward Hospital District (CON #9563) d/b/a Memorial Regional Hospital:

SBHD Joe DiMaggio Children's Hospital Total Gross Revenue by Payor; July 1, 2000 - June 30, 2001

Payor Gross Revenue % of Total Medicare $ 0 0.0% Medicaid $ 32,763,905 26.3% Private Insurance $ 78,547,569 63.0% Self Pay $ 12,317,157 9.9% Charity Care $ 350,218 0.3% Other $ 632,459 0.5% Total $124,611,308 100.0%

Source: Application #9563

4. Current staffing. HealthSouth of Fort Lauderdale, Limited Partnership (CON #9560) d/b/a HealthSouth Sunrise Rehabilitation Hospital is a 116-bed CMR specialty hospital. The applicant completed Schedule 6-A of the application, reflecting both the existing staff of 392 FTEs for the 116 beds and proposed staffing for the addition of 11 beds. The applicant states that staffing based on projected volume and staffing ratios used at the facility will require an additional 26.70 FTEs by year two in nursing, ancillary and patient support functions.


32

St. John's Rehabilitation Hospital & Nursing Center, Inc. (CON #9561) d/b/a St. John's Rehabilitation Hospital & Nursing Center currently operates a 20-bed CMR Hospital and a 160-bed skilled nursing facility at the same site. The total staff of the 20-bed CMR Hospital is 37.4 FTEs. The applicant is proposing to add 11 new CMR beds and expects to increase the staff by 6.60 FTEs in the second year of operations with a total staff of 44 FTEs for the 31 beds. The applicant has requested an alternative/partial project for five CMR beds. Should this alternate project be approved, the applicant intends to add 2.8 FTEs in the second year resulting in a total of 40.20 FTEs to staff 25 beds. The applicant noted that the majority of the rehab hospital support services are provided by the nursing center, therefore no FTEs are reported in these areas. This note applies to both the 11-bed and the five-bed staffing displayed on Schedule 6A. Tenet HealthSystems Hospitals, Inc. (CON #9562) d/b/a Hollywood Medical Center currently operates a 33-bed CMR within a 324-bed acute care hospital. The applicant proposes to add 11 new CMR beds with an alternative/partial project to add five new CMR beds. Schedule 6A reports current staffing at 44 FTEs. If approved for the 11 CMR bed addition the applicant proposes to add 12.5 FTEs the first year of operations and no additional personnel for year two, resulting in a total of 56.5 FTEs for the 44 CMR beds. If approved for the five-bed addition, the applicant proposes to add 8.5 FTEs in the first year and no additional FTEs in year two, for a total of 52.5 FTEs for the 38 CMR beds. South Broward Hospital District (CON #9563) d/b/a Memorial Regional Hospital currently operates 36 CMR beds within a 684-bed acute care hospital. The applicant provided total facility staffing on Schedule 6A which represents 3,298 FTEs. The proposed six pediatric CMR bed addition is to be separately located in the Joe DiMaggio Children's Hospital area, away from the existing 36-bed adult CMR unit, in Memorial Regional Hospital. Staffing for the six new CMR beds will add 16 FTEs in the first year of operations and no additional pediatric CMR staff in year two. Staffing for the existing adult 36-bed CMR were not revealed.


33

5. Current specialty inpatient rehabilitation services, if any (e.g. spinal cord injury; brain injury). HealthSouth of Fort Lauderdale, Limited Partnership (CON #9560) d/b/a HealthSouth Sunrise Rehabilitation Hospital identified six CARF accredited programs it currently offers patients: 1. Comprehensive Integrated Inpatient Rehabilitation Prog.

2. Brain Injury Program 3. Spinal Cord Rehabilitation System of Care 4. Comprehensive Pain Management Prog. (Inpt. & Outpt.) 5. Work-specific Occupational Rehabilitation Program 6. Home and Community Based Rehabilitation Program

Along with each of the CARF-accredited programs the applicant offers the following programs in both inpatient and outpatient settings: > Orthopedic Rehabilitation > Lymphedema Management > Stroke Rehabilitation > Outpatient Pediatric Rehab > Amputee Rehabilitation > Disabled Driver Program > Hand Rehabilitation > Outpatient Rehabilitation > Pulmonary Rehabilitation > Assisted Technology > Aquatics Program > Outpatient Cardiac Rehab > Day Rehab/Treatment Prog. > Women's Health Rehab Prog > Neurological Rehab Prog > The Bridge > Complementary Health Prog The applicant described each of the programs listed above in its application. St. John's Rehabilitation Hospital & Nursing Center, Inc. (CON #9561) d/b/a St. John's Rehabilitation Hospital & Nursing Center currently offers the following medical rehabilitation programs:


34

> Stroke Rehabilitation > Traumatic Brain Injury Program > Neurological Rehabilitation: + Spinal cord injury + Multiple sclerosis + Peripheral neuropathy + AIDS patients with neurological involvement + Parkinson's disease + Spasticity management + Other neurological disorders > Orthopedic Rehabilitation + Fast track joint rehabilitation program + Total joint rehabilitation + Multiple trauma > Amputee Rehabilitation > Arthritis Rehabilitation > Outpatient rehabilitation/follow-up services Tenet HealthSystems Hospitals, Inc. (CON #9562) d/b/a Hollywood Medical Center current CMR program is accredited by the Commission on Accreditation of Rehabilitation Facilities (CARF) and includes patients with the following diagnoses: amputation, brain injury, complex orthopedic injuries, congenital deformities, fractured hip repair, Guillain Barre, multiple sclerosis, multiple trauma, muscular dystrophy, neurological disorder, Parkinson's disease, polyarthritis including rheumatoid arthritis, pulmonary diseases, spinal cord injuries, stroke and total joint replacements. South Broward Hospital District (CON #9563) d/b/a Memorial Regional Hospital currently offers a variety of programs for its adult rehabilitation patients that will be extended and specially tailored to include the needs of pediatric patients. These programs include: a brain injury program that is certified by the State of Florida, Department of Health, a spinal cord injury program, a variety of physical therapy programs, occupational therapy for outpatients, speech/language pathology, neuropsychology/rehabilitation psychology and an early intervention and developmental program. According to the applicant, the Early Intervention and Developmental Program is certified by the Broward County Board of County Commissioners under the Children's Services Administration Division, as an Early Intervention and Development Program provider. The applicant states that there are currently only two Broward County providers that offer a certified Early Intervention and Developmental Program and they are the South Broward Hospital District and the North


35

Broward Hospital District. The Joe DiMaggio Children's Hospital Early Intervention and Developmental Program currently serves infants and toddlers age zero (0) to three (3) years who exhibit one or more risk factors for developmental delay, or slow or impaired development. The facility sees approximately 750 patients through the Early Intervention and Developmental program each year.

h. 59C-1.039(10), Florida Administrative Code, Utilization Reports

All four of the co-batched applicants currently provide utilization data required by AHCA reporting requirements and pledged to continue to do so in the future.

4. Statutory Review Criteria a. Is need for the project evidenced by the availability, quality of care,

efficiency, accessibility and extent of utilization of existing health care facilities and health services in the applicant’s service area? ss. 408.035(2), 408.035(7), Florida Statutes. As of January 2002, District 10, consisting of Broward County, had a total of 283 licensed comprehensive medical rehabilitation (CMR) beds and 10 certificate of need approved beds. The licensed CMR beds experienced an average occupancy rate of 80.42 percent for the reporting period July 2000 through June 2001. Existing bed/utilization within the district include:

District 10 Comprehensive Medical Rehabilitation Beds/Occupancy Facility # Beds Occup. Health South Sunrise Rehab Hospital - a Specialty Hosp 116 88.29% Hollywood Medical Center - a General Hospital 33 53.61% Holy Cross Hospital - a General Hospital 48 89.93% Memorial Regional Hospital - a General Hospital 36 88.14% North Broward Medical Center - a General Hospital 30 68.60% St. John's Rehabilitation Hospital - a Specialty Hospital 20 60.01% Total 283 80.42%

Source: AHCA, Florida Hospital Bed Need Projections by District, 1/25/02 AHCA Florida Hospital Bed and Service Utilization by District, 1/25/02 HealthSouth of Fort Lauderdale, Limited Partnership (CON #9560) d/b/a HealthSouth Sunrise Rehabilitation Hospital applicant and is second only to Holy Cross Hospital (89.93 percent for 48 beds) in CMR utilization for this reporting period.


36

As previously stated, the applicant is accredited by both the Joint Commission for the Accreditation of Healthcare Organizations (JCAHO), and CARF, The Rehabilitation Accreditation Commission. In addition to general accreditation by CARF, the applicant is CARF accredited for the following specialty programs: Comprehensive Integrated Inpatient Rehabilitation Program; Spinal Cord Rehabilitation System of Care; Comprehensive Pain Management Program (Inpatient and Outpatient); Brain Injury Program; Work-Specific Occupational Rehabilitation Program; and Home and Community Based Rehabilitation Programs. On page seven of the application (Table 2), the applicant demonstrates that it has operated at or above the proposed district maximum of 85 percent utilization for the last 25 consecutive quarters. It claims the strong demand for its CMR services consistently results in the facility to running a high occupancy. The applicant states that in 2001, it denied services to 23 patients because there were not enough beds to accommodate their needs. Even though the fixed bed need pool projections take precedence over the Special Circumstances provision of the CMR rule (59C-1.039(5)(e), Florida Administrative Code, the applicant claims to meet the provision of the rule that states the occupancy rate of the hospital's CMR beds was at least 90 percent for at least two consecutive calendar quarters during the 12-month period ending six months prior to the beginning date of the quarter of the publication of the fixed bed need pool. Even though the applicant attained 90 and 95 percent consecutive occupancies the last two quarters of 2001, this is not within the time frame of the rule to qualify for special circumstances for approval of additional CMR beds. It should be noted that the Agency voided CON #9262 approved for 10 additional CMR beds on November 21, 2001, even though the applicant contends they will be operational in August of this year. The status of this CON is under appeal at this time. St. John's Rehabilitation Hospital & Nursing Center, Inc. (CON #9561) d/b/a St. John's Rehabilitation Hospital & Nursing Center was founded in 1980 by the Archdiocese of Miami as a non-profit, faith based nursing home, and according to the applicant remains an important element in the extensive post-acute care continuum administered by the Archdiocese of Miami through its Catholic Health Services organization. A need for intensive inpatient rehabilitation services on the St. John's campus was identified in the early 1980s and CON approval was granted in 1984 pursuant to a Joint Stipulation agreement in resolution of DOAH Case Number 82-2638 (CON #2183) to establish 20 CMR beds at St. John's. Today the campus includes the following programs and services:


37

20 inpatient rehabilitation (CMR) bed hospital Outpatient rehabilitation services 160 skilled nursing beds Catholic Home Health Services of Broward 120 ALF beds (St. Joseph's Residence) HUD housing facility (St. Joseph Towers) The applicant states the hospital has experienced a dramatic growth in occupancy over the past two years and during the just completed quarter ending March 2002 St. John's Rehabilitation Hospital's occupancy rate was 81.4 percent. This growth is attributable to several factors, including expansion of the variety of programs offered and of the managed care contracts in which St. John's participates. The availability of a continuum of care on the St. John's campus creates a natural "flow" of patients, with the ALF and HUD residential units on the same campus as well as the Nursing Center, providing a steady stream of patients requiring CMR services. The applicants' connection with Catholic Health Services and with the Catholic population through the churches drives many of its referrals. The applicant contends that approval of its project will strengthen competition among CMR providers within Broward County, however approval of the HealthSouth Sunrise application "would further skew the current imbalance among competitors." The continuum of care on the St. John's campus makes it possible for the Rehabilitation Hospital to provide an opportunity for "rehabilitative success" to even the most challenging of patients, thereby fulfilling the mission of the applicant to offer an opportunity for restoration of function to those patients who may not have been considered good rehabilitation candidates by other facilities. The applicant states that successful outcomes with the most involved patients - 80 percent of whom are discharged home from the nursing center - are proof to the applicant that the St. John's process and continuum of care indeed works. The applicant projects overall average utilization in the 31 beds as 69.6 percent in year two and 76 percent in the 25 beds (partial application) in year two. Although need for the project is evidenced by the availability, quality of care, efficiency, accessibility and extent of utilization of existing health care facilities and health services in the applicant’s service area, the applicant’s utilization projections for these additional beds are low compared to other co-batched applicants.


38

Tenet HealthSystems Hospitals, Inc. (CON #9562) d/b/a Hollywood Medical Center, contends that because HealthSouth Sunrise has been awarded 10 beds (CON #9262) in northern Broward County, beds should now be awarded in southern Broward County. The applicant projects 72.9 percent average utilization of the proposed 11 new CMR beds by the end of the second year of operations. For the five-bed partial/alternative project, the applicant projects an average utilization of 99.6 percent for the second year of operations. South Broward Hospital District (CON #9563) d/b/a Memorial Regional Hospital proposes to add six dedicated inpatient pediatric CMR beds to the Joe DiMaggio Children's Hospital section of the facility. The Joe DiMaggio Children's Hospital offers the only designated pediatric trauma center in Broward County. The applicant states that internal demand for inpatient pediatric services is sufficient to support the proposed six-bed addition. Trauma, brain injury, spinal cord injury, neuromuscular disease, neurosurgery, amputations and orthopedics are expected to account for the vast majority of admissions to the pediatric rehabilitation unit. In addition, over 25 percent of the Broward County population is in the 17-and-under age cohort, the target age group for the dedicated CMR unit. This represents approximately 417,768 people. The applicant projected pediatric rehabilitation admissions to be 75 and 103 in years one and two respectively. The average length of stay is projected to be 18 days. From these projections the applicant expects a 61.8 percent occupancy level in year one and an 85 percent occupancy level is expected in year two. The year two occupancy projection is consistent with the occupancy levels experienced by the existing 36 rehabilitation beds, according to the applicant. The South Broward Hospital District has traditionally provided care for financially underserved populations and is the safety net provider in the area. In fiscal year 2001, the South Broward Hospital District provided approximately $190 million in uncompensated care which included charity and uncollected accounts in addition to over $124 million in Medicaid care. The applicant currently operates one of the highest utilized CARF-accredited inpatient adult rehabilitation units in Broward County. In 2001, the 36-bed inpatient adult rehab unit operated at 85.8 percent occupancy. In addition to CARF accreditation, Memorial Regional Hospital has achieved Acute Brain and Spinal Cord Injury program certification from the State of Florida, Department of Health. The applicant plans to seek to expand this certification to include Brain and Spinal Cord Injury Rehabilitation Programs, as well.


39

The applicant concludes that the availability of a dedicated pediatric unit will enhance the continuum of inpatient services and will allow Memorial Regional Hospital/Joe DiMaggio Children's Hospital to group children with similar care needs in an optimal setting that has been designed to meet their unique needs. The applicant projects average utilization of 84.9 percent for the six (6) new CMR beds by the end of the second year of operations. Although the Agency does not publish need for pediatric CMR services and the extent of utilization of existing health care facilities and health services in the applicant’s service area for this population is not known, the applicant has indicated that its internal records show that designating these beds as pediatric CMR beds and placing them in an existing children’s trauma center will improve access to this population and strengthen the continuum of care offered pediatric trauma patients in Broward County. Need for additional CMR beds in Broward County is evidenced by the availability, accessibility and extent of utilization of existing health care facilities and health services in the applicant’s service area.

b. Does the applicant have a history of providing quality of care? Has the applicant demonstrated the ability to provide quality care? ss. 408.035(3), 408.035(12), Florida Statutes. HealthSouth of Fort Lauderdale, Limited Partnership (CON #9560) d/b/a HealthSouth Sunrise Rehabilitation Hospital: As noted earlier, the applicant holds both JCAHO and CARF accreditations and has demonstrated that it has the ability to provide quality care. Agency licensure records indicate that in the past 36 months HealthSouth Sunrise has had no confirmed complaint investigations.


40

St. John's Rehabilitation Hospital & Nursing Center, Inc. (CON #9561) d/b/a St. John's Rehabilitation Hospital & Nursing Center is JCAHO accredited and states that it has applied for CARF accreditation. The applicant described its performance improvement plan in detail and demonstrated its ability to provide quality care. Agency licensure records indicate that in the past 36 months St. John’s Rehabilitation Hospital has had no confirmed complaint investigations. Tenet HealthSystems Hospitals, Inc. (CON #9562) d/b/a Hollywood Medical Center is accredited by JCAHO and CARF. The applicant provided an overview of its performance; appraisal and improvement plan to demonstrate that it has the ability to provide quality care. Agency licensure records indicate that Hollywood Medical Center has had one non-patient care related confirmed complaint investigation in the past 36 months. That investigation confirmed that a patient’s bill was not itemized. South Broward Hospital District (CON #9563) d/b/a Memorial Regional Hospital is both JCAHO and CARF accredited and, according to the applicant, has won numerous consumer based awards including Best Run Hospital from Florida Medical Business in 2002 and Best Pediatric Hospital in Broward from South Florida Parenting, 1996-2001. The applicant states that as the Joe DiMaggio Children’s Hospital, it will seek additional CARF accreditation for this pediatric CMR unit. The applicant has demonstrated its ability to provide quality care. Agency licensure records indicate that Memorial Regional has had 11 confirmed complaint investigations, four of which were without deficiencies in the past 36 months. Two of the confirmed investigations involved emergency access violations and six involved patient care.

c. Is the applicant proposing special health care services for its service area that are not reasonably and economically accessible in adjacent service areas? ss. 408.035(4), Florida Statutes.

The proposed projects do not involve special health care services that are

not reasonably or economically accessible in adjacent districts.


41

d. Is this project to be located in a research or teaching hospital? Will the program affect the clinical needs of health professional training programs in the service area? ss. 408.035(5), Florida Statutes. None of the co-batched applicants proposed projects that will be located in statutorily defined teaching hospitals and none of the projects primary purpose is research. All co-batched applicants indicate that their respective projects will support the clinical needs of health professionals in the proposed service area. Each has affiliations with various area schools. HealthSouth of Fort Lauderdale, Limited Partnership (CON #9560) d/b/a HealthSouth Sunrise Rehabilitation Hospital states that it has clinical affiliations for student training with several area schools including the University of Florida, University of Miami, Nova Southeastern University and Florida International University. St. John's Rehabilitation Hospital & Nursing Center, Inc. (CON #9561) d/b/a St. John's Rehabilitation Hospital & Nursing Center, states that it has training affiliations with several area schools including Atlantic Vocational School, McFadden Vocational and Sheridan Vocational Schools, the University of Central Florida, Florida International University, Nova Southeastern, the University of Miami, Florida A & M University, Keiser College, Palm Beach Community College, Barry University and others. Tenet HealthSystems Hospitals, Inc. (CON #9562) d/b/a Hollywood Medical Center, lists the various area schools with which it has teaching affiliations including Nova Southeastern University, Barry University, Broward Community College, Florida International University and Sheridan Vocational Tech. South Broward Hospital District (CON #9563) d/b/a Memorial Regional Hospital provided a listing, which included numerous teaching institutions with which it states the hospital regularly maintains teaching affiliations. These include 19 schools in its physical therapy program, including Boston University and the University of Dublin at Trinity College, seven in its occupational therapy program, five in its speech/language pathology therapy program and four in it therapeutic recreation program.


42

e. What resources, including health manpower, management personnel, and funds for capital and operating expenditures, are available for project accomplishment and operation? ss. 408.035(6), Florida Statutes.

HealthSouth of Fort Lauderdale, Limited Partnership (CON #9560) d/b/a HealthSouth Sunrise Rehabilitation Hospital. The audited financial Statements for the periods ending December 31, 2000 and December 31, 1999 were analyzed for the purpose of evaluating the applicant’s ability to provide the capital and operational funding necessary to implement the project. The following is a list of accounts and ratios used in the analysis: 12/31/2000 12/31/1999 Current Assets $ 8,922,593 $ 5,104,247 Cash and Current Investment $ 29,688 $ 236,302 Assets Restricted for Capital Projects $ 0 $ 0 Total Assets $ 39,917,426 $ 40,645,101 Current Liabilities $ 3,888,234 $ 2,700,804 Total Liabilities $ 24,216,530 $ 23,853,045 Total Equity $ 15,700,896 $ 16,792,056 Net Operating Revenues $ 32,530,706 $ 30,764,143 Interest Expense $ 1,501,545 $ 1,570,118 Net Profit - Operations $ (1,091,160) $ (1,705,617) Net Income $ (1,091,160) $ (1,705,617) Cash Flow from Operations $ (1,805,118) $ 265,876 Working Capital $ 12,513,463 $ 2,403,443 Current Ratio (CA/CL) 2.3 1.9

Cash Flow to Current Liabilities (CFO/CL) -0.5 0.1 Long-Term Debt to Equity (TL-CL/TE) 1.3 1.3 Times Interest Earned (NPO+Int/Int) 0.3 -0.1 Equity to Total Assets (TE/TA) 39.3% 41.3% Operating Margin (NPO/NOR) -3.4% -5.5% Total Margin (NI/NOR) -3.4% -5.5% Return on Assets (NI/TA) -2.7% -4.2% Operating Cash Flow to Assets (CFO/TA) -4.5% 0.7% Short-term position: The applicant’s current ratio of 2.3 indicates current assets are more than two times that of short-term liabilities, a good position. The working capital (current assets less current liabilities) of $12.5 million is a measure of excess liquidity that could be used to fund capital projects. The ratio of cash flow to current liabilities for the year ended December 31, 2000 of -0.5 is below average, and a weak position that results from the net loss for the year. Overall, the applicant has a weak short-term position.


43

Long-term position: The long-term debt to equity of 1.3 indicates long-term debt is greater than equity. This is below average, and a moderately weak position. The cash flow to assets for the year ended 2000 of -4.5 percent is weak. The most recent year had an operating loss of $1,091,160, which resulted in a margin ratio of –3.4 percent, a below average level. Total equity is $15.7 million with the ratio of equity to assets 39.3 percent an average level. Equity decreased from 1999 to 2000. Overall, the applicant has a weak long-term position. Capital requirements: Schedule 2 indicates the applicant has $4.0 million in capital projects. Available capital: HEALTHSOUTH of Ft. Lauderdale Limited Partnership is a wholly owned subsidiary of HEALTHSOUTH Corporation. According to Schedule 3, funding for all projects is coming from the parent. A letter committing HEALTHSOUTH to funding the project was provided; it stated that HEALTHSOUTH has $1.0 billion available under a line of credit and $278 million in cash on hand. The company’s 10K report, submitted with the application, disclosed $180 million in cash, $1.0 billion in working capital, $7.4 billion in total assets and $797 million in annual cash flows as of December 31, 2000. Conclusion: The audited financial statements of the applicant, HEALTHSOUTH of Ft. Lauderdale Limited Partnership, show a weak financial position. However, HEALTHSOUTH Corporation has more than adequate financial strength to meet its capital needs. St. John's Rehabilitation Hospital & Nursing Center, Inc. (CON #9561) d/b/a St. John's Rehabilitation Hospital & Nursing Center. The audited financial statements for the periods ending September 30, 2001 and 2000 were analyzed for the purpose of evaluating the applicant’s ability to provide the capital and operational funding necessary to implement the project. The following is a list of accounts and ratios used in the analysis:


44

09/31/2001 09/31/2000 Current Assets $ 6,153,866 $ 6,252,132 Cash and Current Investment $ 3,890,161 $ 3,737,024 Assets Restricted for Capital Projects $ 52,311 $ 48,254 Total Assets $ 10,381,751 $ 10,300,061 Current Liabilities $ 2,267,841 $ 2,609,951 Total Liabilities $ 9,662,099 $ 9,989,588 Total Equity $ 719,652 $ 310,476 Net Operating Revenues $ 15,612,884 $ 14,064,591 Interest Expense $ 465,279 $ 554,887 Net Profit - Operations $ 103,071 $ (404,211) Net Income $ 409,179 $ (152,331) Cash Flow from Operations $ 865,126 $ 717,743 Working Capital $ 3,886,025 $ 3,642,181 Current Ratio (CA/CL) 2.7 2.4 Cash Flow to Current Liabilities (CFO/CL) 0.4 0.3 Long-Term Debt to Equity (TL-CL/TE) 10.3 23.8 Times Interest Earned (NPO+Int/Int) 1.2 0.3 Equity to Total Assets (TE/TA) 6.9% 3.0% Operating Margin (NPO/NOR) 0.7% -2.9% Total Margin (NI/NOR) 2.6% -1.1% Return on Assets (NI/TA) 1.0% -3.9% Operating Cash Flow to Assets (CFO/TA) 8.3% 7.0% Short-term position: The applicant’s current ratio of 2.7 indicates current assets are more than two times that of short-term liabilities, a good position. The working capital (current assets less current liabilities) of $3.9 million is good for the size of the entity. The ratio of cash flow to current liabilities of 0.4 is below average of 0.7. Overall, the applicant has an acceptable short-term position.


45

Long-term position: The long-term debt to equity ratio of 10.3 indicates long-term debt is more than 10 times greater than equity. This is below average, and a weak position. The ratio of cash flow to assets of 8.3 percent is good. The most recent year had a gain of $409,179, which resulted in a margin ratio of 2.6 percent, an above average level. Total equity is $719 thousand with the ratio of equity to assets 6.9 percent a below average level. Overall, the applicant has a weak but acceptable long-term position. Capital requirements: Schedule 2 indicates the applicant has $747.9 thousand in capital projects with the eleven-bed expansion and $691.0 thousand with the five-bed. The schedule did not include maturities of long-tem debt, which total $360.1 thousand through year one of the project, bringing the total funded need to $1.1 million. Available capital: The applicant expects to fund all projects from cash flows. The audited financial statements for the period ended September 30, 2001 showed $865 thousand in cash flows or $2.6 million through year one of the project and $52.3 thousand in assets restricted for capital improvements. Conclusion: The applicant can meet its capital funding needs if cash flows continue at present levels. Tenet HealthSystems Hospitals, Inc. (CON #9562) d/b/a Hollywood Medical Center. The audited financial statements for the periods ending May 31, 2001 and 2000 were analyzed for the purpose of evaluating the applicant’s ability to provide the capital and operational funding necessary to implement the project. The following is a list of accounts and ratios used in the analysis:


46

05/31/2001 05/31/2000

Current Assets $ 1,034,469,000 $ 1,047,836,000

Cash and Current Investment $ 35,766,000 $ 32,064,000

Assets Restricted for Capital Projects $ 0 $ 0

Total Assets $ 3,090,057,000 $ 3,034,620,000

Current Liabilities $ 574,389,000 $ 497,335,000

Total Liabilities $ 2,077,453,000 $ 2,396,570,000

Total Equity $ 1,015,604,000 $ 638,050,000

Net Operating Revenues $ 4,496,987,000 $ 3,982,660,000

Interest Expense $ 243,593,000 $ 233,535,000

Net Profit - Operations $ 616,074,000 $ 266,328,000

Net Income $ 377,554,000 $ 154,306,000

Cash Flow from Operations $ 667,526,000 $ 427,842,000

Working Capital $ 460,080,000 $ 550,501,000

Current Ratio (CA/CL) 1.8 2.1

Cash Flow to Current Liabilities (CFO/CL) 1.2 0.9

Long-Term Debt to Equity (TL-CL/TE) 1.5 3.0

Times Interest Earned (NPO+Int/Int) 3.5 2.1

Equity to Total Assets (TE/TA) 32.9% 21.0%

Operating Margin (NPO/NOR) 13.7% 6.7%

Total Margin (NI/NOR) 8.4% 3.9%

Return on Assets (NI/TA) 19.9% 8.8%

Operating Cash Flow to Assets (CFO/TA) 21.6% 14.1% Short-term position: The applicant’s current ratio of 1.8 is near the median of Florida hospitals, an acceptable position. The working capital (current assets less current liabilities) of $460 million is a measure of excess liquidity that could be used to fund capital projects. The ratio of cash flow to current liabilities of 1.2 is above the average of Florida hospitals and a strong position. Overall, the applicant has a good short-term position.


47

Long-term position: The ratio of long-term debt to equity of 1.5 is about average. The ratio of cash flows to assets of 21.6 percent is well above average compared to other Florida hospitals, a strong position. The most recent year had an operating profit of $616.1 million resulting in an operating margin of 13.7 percent, a strong position. Total equity is $1.0 billion with the ratio of equity to assets 32.9 percent. Overall, the applicant has a good long-term position. Capital requirements: Schedule 2 indicates capital projects for the applicant totaling $1.08 billion through year two of the project. This did not include maturities of long-term debt and minimum operating lease payments of $210.4 million, which would increase the funded need to $1.29 billion. Available capital: Tenet Healthcare Corporation, the parent of Tenet HealthSystem Hospitals, Inc., will provide funding for these projects. Tenet Healthcare submitted a commitment letter for funding the project. Tenet Healthcare’s audited financial statements for the period ended May 31, 2001 showed assets of $13 billion, net income of $643 million, working capital of $1.1 billion and annual cash flows of $1.82 billion. Conclusion: The strong financial position of the parent, Tenet Healthcare Corporation, along with its commitment to provide funding for the project, provide adequate proof of the applicant’s ability to fund the project and all other capital projects. South Broward Hospital District (CON #9563) d/b/a Memorial Regional Hospital. The audited financial Statements for the periods ending April 30, 2001and 2000 were analyzed for the purpose of evaluating the applicant’s ability to provide the capital and operational funding necessary to implement the project. The following is a list of accounts and ratios used in the analysis:


48

04/30/2001 04/30/2000 Current Assets $ 227,998,000 $ 178,601,000 Cash and Current Investment $ 167,406,000 $ 102,593,000 Assets Restricted for Capital Projects $ 74,564,000 $ 68,283,000 Total Assets $ 682,360,000 $ 608,970,000 Current Liabilities $ 97,064,000 $ 81,731,000 Total Liabilities $ 369,414,000 $ 348,291,000 Total Equity $ 312,946,000 $ 260,679,000 Net Operating Revenues $ 626,225,000 $ 534,637,000 Interest Expense $ 11,271,000 $ 11,099,000 Net Profit - Operations $ (4,319,000) $ (17,726,000) Net Income $ 49,063,000 $ 21,871,000 Cash Flow from Operations $ 66,253,000 $ 28,408,000 Working Capital $ 130,934,000 $ 96,870,000 Current Ratio (CA/CL) 2.3 2.2 Cash Flow to Current Liabilities (CFO/CL) 0.7 0.3 Long-Term Debt to Equity (TL-CL/TE) 0.9 1.0 Times Interest Earned (NPO+Int/Int) 0.6 -0.6 Equity to Total Assets (TE/TA) 45.9% 42.8% Operating Margin (NPO/NOR) -0.7% -3.3% Total Margin (NI/NOR) 7.8% 4.1% Return on Assets (NI/TA) 7.2% 3.6% Operating Cash Flow to Assets (CFO/TA) 9.7% 4.7%

Short-term position: The applicant’s current ratio of 2.3 indicates current assets are slightly more than two times that of short-term liabilities, an average position. The working capital (current assets less current liabilities) of $130.9 million indicates positive short-term liquidity. The applicant has a good short-term position. Long-term position: The long-term debt to equity ratio of 0.9 is between the 50th and the 80th percentile statewide. Long-term debt of $197.5 million is significant but not excessive. Net income totaled $49.1 million in 2001 or 7.8 percent. Net assets total $312.9 million. The applicant has a good long-term position. Capital requirements: Schedule 2 indicates capital projects total $292.9 million. Maturities on long-term debt through 2005 total $37.5 million. The total capital requirement is estimated at $330.4 million.


49

Available capital: The district has set aside $74.6 million in Board designated assets for capital improvements. Another $165.4 million is available in short-term investments. Cash flows from operations totaled $66.3 million in FY 2001. Conclusion: Funding is likely to be available for this project as well as the entire capital budget.

f. What is the immediate and long-term financial feasibility of the proposal? ss. 408.035(8), Florida Statutes.

HealthSouth of Fort Lauderdale, Limited Partnership (CON #9560) d/b/a HealthSouth Sunrise Rehabilitation Hospital. A comparison of the applicant’s estimates to the control group values provides for an objective evaluation of financial feasibility, (the likelihood that the services can be provided under the parameters and conditions contained in Schedules 7 and 8), and efficiency, (the degree of economies achievable through the skill and management of the applicant). In general, projections that approximate the median are the most desirable, and balance the opposing forces of feasibility and efficiency. In other words, as estimates approach the highest in the group, it is more likely that the project is feasible, because fewer economies must be realized to achieve the desired outcome. Conversely, as estimates approach the lowest in the group, it is less likely that the project is feasible, because a much higher level of economies must be realized to achieve the desired outcome. These relationships hold true for a constant intensity of service through the relevant range of outcomes. As these relationships go beyond the relevant range of outcomes, revenues and expenses may, either go beyond what the market will tolerate, or may decrease to levels where activities are no longer sustainable. Comparative data were derived from hospitals in peer groups that reported data in 2000; the applicant will be compared to the hospitals in group 18. Per Diem rates are projected to increase by an average of 3.3 percent per year. Inflation adjustments were based on the most current Florida Hospital Input Price Index. Gross revenues, net revenues, and costs were obtained from Schedules 7 and 8 in the financial portion of the application. These were compared to the control group as a calculated amount per adjusted patient day. The adjustment is made to factor out the outpatient revenues in the per patient day computation.


50

Net revenue per adjusted patient day (NRAPD) of $659 in year one and $669 in year two is between the control group lowest and median values of $536 and $804 in year one and $552 and $828 in year two. The lowest value is generally viewed as the practical lower limit on economies of operation. With net revenues per adjusted patient day falling between the lowest and median the facility is expected to consume health care resources in proportion to the services provided. (See Comparative Table). The 2000 actual NRAPD of $576 for this hospital was slightly above the median for the group of $562. Projected cost per adjusted patient day of $593 in year one and $602 in year two is between the group lowest and median values of $547 and $834 in year one and $564 and $859 in year two. The projections are considered cost-efficient when compared to the control group. (See Comparative Table). The 2000 actual CAPD for this hospital was $690, which was between the median and highest values in the group of $605 and $719. Costs may be understated. The year two operating profit for the hospital of $4.1 million computes to an operating margin per adjusted patient day of $67 which is between the median and highest values in the group of $-16 and $122. The operating margin is 10.1 percent, which is above average for Florida hospitals. The projected margin does not appear to be reasonable when compared to actual historical operations. Financial feasibility is probable, at a lower operating profit.


51

Comparative Table CON # 9560 2006 YEAR 2

HS of Ft. Lauderdale YEAR 2 ACTIVITY INFLATION ADJUSTED

VALUES 2000 DATA Peer Group 18 ACTIVITY PER DAY Highest Median LowestROUTINE SERVICES 56,514,631 935 1,077 538 314INPATIENT AMBULATORY 0 0 8 0 0INPATIENT ANCILLARY SERVICES 0 2,049 966 622OUTPATIENT SERVICES 27,406,439 454 709 213 21OTHER OPERATING REVENUE 355,682 6 47 5 0 TOTAL REVENUE 84,276,752 1,395 3,836 1,735 1,256DEDUCTIONS FROM REVENUE 43,857,796 726 * * * NET REVENUES 40,418,956 669 1,384 828 552EXPENSES ROUTINE 8,889,968 147 347 145 88 ANCILLARY 8,226,923 136 358 210 125 AMBULATORY 4,324,142 OVERHEAD 10,885,967 180 590 489 351 OTHER 4,026,079 67 TOTAL EXPENSES 36,353,079 602 1,225 859 564 OPERATING INCOME 4,065,877 67 122 -16 -114 10.1% PATIENT DAYS 40,524 NOT INFLATION ADJUSTED ADJUSTED PATIENT DAYS 60,431 TOTAL BED DAYS AVAILABLE 50,005 ADJ. FACTOR 0.6706 TOTAL NUMBER OF BEDS 137 PERCENT OCCUPANCY 81.0% 99.4% 87.8% 30.3% PAYER TYPE PATIENT DAYS % TOTAL MEDICARE 29,987 74.0% 86.7% 77.8% 42.7%COMMERCIAL 891 2.2% MEDICAID 619 1.5% 13.9% 4.4% 0.7%PRIVATE 406 1.0% HMO/PPO 7,011 17.3% 30.5% 10.7% 0.0%OTHER 1,610 4.0% TOTAL 40,524 100.0% St. John's Rehabilitation Hospital & Nursing Center, Inc. (CON #9561) d/b/a St. John's Rehabilitation Hospital & Nursing Center. A comparison of the applicant’s estimates to the control group values provides for an objective evaluation of financial feasibility, (the likelihood that the services can be provided under the parameters and conditions contained in Schedules 7 and 8), and efficiency, (the degree of economies achievable through the skill and management of the applicant). In general, projections that approximate the median are the most desirable,


52

and balance the opposing forces of feasibility and efficiency. In other words, as estimates approach the highest in the group, it is more likely that the project is feasible, because fewer economies must be realized to achieve the desired outcome. Conversely, as estimates approach the lowest in the group, it is less likely that the project is feasible, because a much higher level of economies must be realized to achieve the desired outcome. These relationships hold true for a constant intensity of service through the relevant range of outcomes. As these relationships go beyond the relevant range of outcomes, revenues and expenses may, either go beyond what the market will tolerate, or may decrease to levels where activities are no longer sustainable. Comparative data were derived from hospitals in peer groups that reported data in 2000; the applicant will be compared to the hospitals in group 18. Per Diem rates are projected to increase by an average of 3.3 percent per year. Inflation adjustments were based on the most current Florida Hospital Input Price Index. Gross revenues, net revenues, and costs were obtained from Schedules 7 and 8 in the financial portion of the application. These were compared to the control group as a calculated amount per adjusted patient day. The adjustment is made to factor out the outpatient revenues in the per patient day computation. COMPARATIVE DATA FOR THE PROPOSED ELEVEN-BED PROJECT: Net revenue per adjusted patient day (NRAPD) of $822 in year one and $845 in year two is above the control group highest values of $772 in year one and $795 in year two. The highest level is generally viewed as the practical upper limit on economies of operation. With net revenues per adjusted patient day exceeding this level the hospital is expected to consume greater health care resources than the control group in proportion to the services provided. (See Comparative Table). The 2000 actual NRAPD of $589 for this hospital was slightly above the median for the group of $562. The applicant states that estimated Medicare reimbursement is based on anticipated PPS reimbursement for the current mix of cases, which they have determined will result in greater revenue than under cost-based TEFRA. The applicant did not submit data that would allow us to test the reasonableness of their assumptions in estimating revenues.


53

Projected cost per adjusted patient day of $688 in year one is above the group highest values of $684. This is not considered cost efficient when compared to the control group. Projected cost per adjusted patient day of $696 in year two is between the median and highest values of $494 and $704 in year two. (See Comparative Table). The 2000 actual CAPD for this hospital was $605, which was at the median value in the group of $605. The year two operating profit for the hospital of $1.2 million computes to an operating margin per adjusted patient day of $149 which exceeds the highest value in the group of $122. The operating margin is 17.6 percent, which is above the 80th percentile for Florida hospitals. The projected margin does not appear to be reasonable when compared to actual historical operations. While the applicant’s ability to implement the project is not in question, awarding beds to this applicant represents a financially inefficient use of hospital beds compared to other hospitals in the group. COMPARATIVE DATA FOR THE PROPOSED FIVE-BED PROJECT: Net revenue per adjusted patient day (NRAPD) of $819 in year one and $842 in year two is above the control group highest values of $772 in year one and $795 in year two. The highest level is generally viewed as the practical upper limit on economies of operation. With net revenues per adjusted patient day exceeding this level the hospital is expected to consume greater health care resources than the control group in proportion to the services provided. (See Comparative Table). The 2000 actual NRAPD of $589 for this hospital was slightly above the median for the group of $562. The applicant states that estimated Medicare reimbursement is based on anticipated PPS reimbursement for the current mix of cases, which they have determined will result in greater revenue than under cost-based TEFRA. The applicant did not submit data that would allow us to test the reasonableness of their assumptions in estimating revenues. Projected cost per adjusted patient day of $706 in year one and $719 in year two is above the group highest values of $684 in year one and $704 in year two. This is not considered cost efficient when compared to the control group. (See Comparative Table). The 2000 actual CAPD for this hospital was $605, which was at the median value in the group of $605.


54

The year two operating profit for the hospital of $902.3 thousand computes to an operating margin per adjusted patient day of $123, which exceeds the highest value in the group of $122. The operating margin is 14.6 percent, which is above the 80th percentile for Florida hospitals. The projected margin does not appear to be reasonable when compared to actual historical operations. While the applicant’s ability to implement the project is not in question, awarding beds to this applicant represents a financially inefficient use of hospital beds compared to other hospitals in the group.

Comparative Tables CON # 9561 St. John's Rehabilitation Hospital 2005 YEAR 2 2000 DATA Peer Group 18 YEAR 2 ACTIVITY INFLATION ADJUSTED VALUES Eleven Bed Project ACTIVITY PER DAY Highest Median Lowest ROUTINE SERVICES 3,756,204 453 619 309 180 INPATIENT AMBULATORY 0 0 4 0 0 INPATIENT ANCILLARY SERVICES 4,356,699 525 1,178 555 358 OUTPATIENT SERVICES 244,981 30 407 123 12 OTHER OPERATING REVENUE 188,041 23 27 3 0 TOTAL REVENUE 8,545,925 1,031 2,205 998 722 DEDUCTIONS FROM REVENUE 1,539,567 186 * * * NET REVENUES 7,006,358 845 795 476 318 EXPENSES ROUTINE 1,286,458 155 200 84 50 ANCILLARY 1,552,071 187 206 121 72 AMBULATORY 0 OVERHEAD 2,935,625 354 339 281 202 OTHER 0 0 TOTAL EXPENSES 5,774,154 696 704 494 324 OPERATING INCOME 1,232,204 149 122 -16 -114 17.6% PATIENT DAYS 7,872 NOT INFLATION ADJUSTED ADJUSTED PATIENT DAYS 8,292 TOTAL BED DAYS AVAILABLE 11,315 ADJ. FACTOR 0.9493 TOTAL NUMBER OF BEDS 31 PERCENT OCCUPANCY 69.6% 99.4% 87.8% 30.3% PAYER TYPE PT. DAYS % TOTAL MEDICARE 5,814 73.9% 86.7% 77.8% 42.7% COMMERCIAL 0 0.0% MEDICAID 314 4.0% 13.9% 4.4% 0.7% PRIVATE 91 1.2% HMO/PPO 1,653 21.0% 30.5% 10.7% 0.0% OTHER 0 0.0% TOTAL 7,872 100.0%


55

CON # 9561 St. John's Rehabilitation Hospital 2005 YEAR 2 2000 DATA Peer Group 18 YEAR 2 ACTIVITY INFLATION ADJUSTED VALUES

Five Bed Project ACTIVITY PER DAY Highest Median Lowest ROUTINE SERVICES 3,309,105 451 619 309 180 INPATIENT AMBULATORY 0 0 4 0 0 INPATIENT ANCILLARY SERVICES 3,838,124 523 1,178 555 358 OUTPATIENT SERVICES 244,981 33 407 123 12 OTHER OPERATING REVENUE 165,659 23 27 3 0 TOTAL REVENUE 7,557,869 1,031 2,205 998 722 DEDUCTIONS FROM REVENUE 1,385,614 189 * * * NET REVENUES 6,172,255 842 795 476 318 EXPENSES ROUTINE 1,193,920 163 200 84 50 ANCILLARY 1,396,257 190 206 121 72 AMBULATORY 0 OVERHEAD 2,679,761 365 339 281 202 OTHER 0 0 TOTAL EXPENSES 5,269,938 719 704 494 324 OPERATING INCOME 902,317 123 122 -16 -114 14.6%

PATIENT DAYS 6,935NOT INFLATION

ADJUSTED ADJUSTED PATIENT DAYS 7,333 TOTAL BED DAYS AVAILABLE 9,125 ADJ. FACTOR 0.9457 TOTAL NUMBER OF BEDS 25 PERCENT OCCUPANCY 76.0% 99.4% 87.8% 30.3%

PAYER TYPE PATIENT

DAYS % TOTAL MEDICARE 5,122 73.9% 86.7% 77.8% 42.7% COMMERCIAL 0 0.0% MEDICAID 276 4.0% 13.9% 4.4% 0.7% PRIVATE 80 1.2% HMO/PPO 1,457 21.0% 30.5% 10.7% 0.0% OTHER 0 0.0% TOTAL 6,935 100.0% Tenet HealthSystems Hospitals, Inc. (CON #9562) d/b/a Hollywood Medical Center. A comparison of the applicant’s estimates to the control group values provides for an objective evaluation of financial feasibility, (the likelihood that the services can be provided under the parameters and conditions contained in Schedules 7 and 8), and efficiency, (the degree of economies achievable through the skill and management of the applicant).


56

In general, projections that approximate the median are the most desirable, and balance the opposing forces of feasibility and efficiency. In other words, as estimates approach the highest in the group, it is more likely that the project is feasible, because fewer economies must be realized to achieve the desired outcome. Conversely, as estimates approach the lowest in the group, it is less likely that the project is feasible, because a much higher level of economies must be realized to achieve the desired outcome. These relationships hold true for a constant intensity of service through the relevant range of outcomes. As these relationships go beyond the relevant range of outcomes, revenues and expenses may, either go beyond what the market will tolerate, or may decrease to levels where activities are no longer sustainable. Comparative data were derived from hospitals in peer groups that reported data in 2000; the applicant will be compared to the hospitals in peer group 5. Per diem rates are projected to increase by an average of 3.3 percent per year. Inflation adjustments were based on the most current Florida Hospital Input Price Index. COMPARATIVE DATA FOR THE PROPOSED ELEVEN-BED PROJECT: Projected net revenue per adjusted patient day (NRAPD) of $1,841 in year one and $1,806 in year two is above the control group highest values of $1,502 in year one and $1,548 in year two. With net revenues per adjusted patient day exceeding the highest value in the control group this hospital is expected to consume greater health care resources than the control group in proportion to the services provided. (See Comparative Table). The year 2000 actual NRAPD for this hospital was $1,101, approximating the control group median value of $ 1,116 in that year. Projected cost per adjusted patient day of $1,591 in year one and $1,531 in year two is above the control group highest values of $1,327 in year one and $1,367 in year two. (See Comparative Table). Compared to the control group these costs are not considered cost-efficient. The year 2000 actual data reported for this hospital was $1,011 per adjusted patient day, just below the group median of $1,121. Estimated costs are likely overstated. The year two operating profit for the hospital of $11.2 million computes to an operating margin per adjusted patient day of $275 which falls above the control group highest value $246. The computed operating margin ratio is 15.2 percent. The actual margin reported in 2000 was 8.2 percent.


57

While the applicant’s ability to implement the project is not in question, awarding beds to this applicant represents a costly and inefficient use of hospital beds compared to other hospitals in the area. COMPARATIVE DATA FOR THE PROPOSED FIVE-BED PROJECT: Projected net revenue per adjusted patient day (NRAPD) of $1,902 in year one and $1,823 in year two is above the control group highest values of $1,502 in year one and $1,548 in year two. With net revenues per adjusted patient day exceeding the highest value in the control group this hospital is expected to consume greater health care resources than the control group in proportion to the services provided. (See Comparative Table). The year 2000 actual NRAPD for this hospital was $1,101, approximating the control group median value of $1,116 in that year. Projected cost per adjusted patient day of $1,642 in year one and $1,609 in year two is above the control group highest values of $1,327 in year one and $1,367 in year two. (See Comparative Table). Compared to the control group these costs are not considered cost-efficient. The year 2000 actual data reported for this hospital was $1,011 per adjusted patient day, just below the group median of $1,121. The year two operating profit for the hospital of $8.3 million computes to an operating margin per adjusted patient day of $214 which falls between the control group median and highest value of $9 and $246. The computed operating margin ratio is 11.7 percent. The actual margin reported in 2000 was 8.2 percent. While the applicant’s ability to implement the project is not in question, awarding beds to this applicant represents a costly and inefficient use of hospital beds compared to other hospitals in the group.


58

Comparative Tables CON # 9562 Hollywood Medical Center 2005 YEAR 2 2000 DATA Peer Group 5 YEAR 2 ACTIVITY INFLATION ADJUSTED VALUESData for Eleven Bed Project ACTIVITY PER DAY Highest Median Lowest ROUTINE SERVICES 43,374,342 1,062 929 526 260 INPATIENT AMBULATORY 0 0 122 42 16 INPATIENT ANCILLARY SERVICES 180,474,192 4,421 3,523 1,955 1,262 OUTPATIENT SERVICES 93,568,347 2,292 1,881 1,299 837 OTHER OPERATING REVENUE 0 0 82 10 1 TOTAL REVENUE 317,416,881 7,775 5,467 3,794 2,666 DEDUCTIONS FROM REVENUE 243,686,790 5,969 * * * NET REVENUES 73,730,091 1,806 1,548 1,203 804 EXPENSES ROUTINE 39,744,693 974 278 204 154 ANCILLARY 10,435,493 256 568 417 299 AMBULATORY 0 OVERHEAD 12,313,500 302 618 545 380 OTHER 0 0 TOTAL EXPENSES 62,493,686 1,531 1,367 1,224 909 OPERATING INCOME 11,236,405 275 246 9 -374 15.2% PATIENT DAYS 28,791 NOT INFLATION ADJUSTED ADJUSTED PATIENT DAYS 40,826 TOTAL BED DAYS AVAILABLE 118,260 ADJ. FACTOR 0.7052 TOTAL NUMBER OF BEDS 324 PERCENT OCCUPANCY 24.3% 90.6% 53.6% 23.0%

PAYER TYPE PATIENT

DAYS % TOTAL MEDICARE 14,126 49.1% 68.2% 41.6% 19.4% COMMERCIAL 0 0.0% MEDICAID 1,610 5.6% 22.8% 6.0% 0.7% PRIVATE 864 3.0% HMO/PPO 12,191 42.3% 64.6% 36.0% 13.7% OTHER 0 0.0% TOTAL 28,791 100.0%


59

CON # 9562 Hollywood Medical Center 2005 YEAR 2 2000 DATA Peer Group 5 YEAR 2 ACTIVITY INFLATION ADJUSTED VALUES

Data for Five Bed Project ACTIVITY PER DAYHighes

t Median Lowest ROUTINE SERVICES 42,890,143 1,098 929 526 260 INPATIENT AMBULATORY 0 0 122 42 16 INPATIENT ANCILLARY SERVICES 178,378,764 4,568 3,523 1,955 1,262 OUTPATIENT SERVICES 90,775,429 2,325 1,881 1,299 837 OTHER OPERATING REVENUE 0 0 82 10 1 TOTAL REVENUE 312,044,336 7,991 5,467 3,794 2,666 DEDUCTIONS FROM REVENUE 240,866,179 6,168 * * * NET REVENUES 71,178,157 1,823 1,548 1,203 804 EXPENSES ROUTINE 40,314,225 1,032 278 204 154 ANCILLARY 10,314,329 264 568 417 299 AMBULATORY 0 OVERHEAD 12,200,838 312 618 545 380 OTHER 0 0 TOTAL EXPENSES 62,829,392 1,609 1,367 1,224 909 OPERATING INCOME 8,348,765 214 246 9 -374 11.7% PATIENT DAYS 27,689 NOT INFLATION ADJUSTED ADJUSTED PATIENT DAYS 39,048 TOTAL BED DAYS AVAILABLE 118,260 ADJ. FACTOR 0.7091 TOTAL NUMBER OF BEDS 324 PERCENT OCCUPANCY 23.4% 90.6% 53.6% 23.0%

PAYER TYPE PATIENT

DAYS % TOTAL MEDICARE 13,189 47.6% 68.2% 41.6% 19.4% COMMERCIAL 0 0.0% MEDICAID 1,588 5.7% 22.8% 6.0% 0.7% PRIVATE 831 3.0% HMO/PPO 12,081 43.6% 64.6% 36.0% 13.7% OTHER 0 0.0% TOTAL 27,689 100.0% South Broward Hospital District (CON #9563) d/b/a Memorial Regional Hospital. A comparison of the applicant’s estimates to the control group values provides for an objective evaluation of financial feasibility, (the likelihood that the services can be provided under the parameters and conditions contained in Schedules 7 and 8), and efficiency, (the degree of economies achievable through the skill and


60

management of the applicant). In general, projections that approximate the median are the most desirable, and balance the opposing forces of feasibility and efficiency. In other words, as estimates approach the highest in the group, it is more likely that the project is feasible, because fewer economies must be realized to achieve the desired outcome. Conversely, as estimates approach the lowest in the group, it is less likely that the project is feasible, because a much higher level of economies must be realized to achieve the desired outcome. These relationships hold true for a constant intensity of service through the relevant range of outcomes. As these relationships go beyond the relevant range of outcomes, revenues and expenses may, either go beyond what the market will tolerate, or may decrease to levels where activities are no longer sustainable. Comparative data were derived from hospitals in peer groups that reported data in 2000; the applicant will be compared to the hospitals in group 5. Per Diem rates are projected to increase by an average of 3.3 percent per year. Inflation adjustments were based on the most current Florida Hospital Input Price Index. Gross revenues, net revenues, and costs were obtained from Schedules 7 and 8 in the financial portion of the application. These were compared to the control group as a calculated amount per adjusted patient day. The adjustment is made to factor out the outpatient revenues in the per patient day computation. Net revenue per adjusted patient day (NRAPD) of $1,314 in year one and $1,349 in year two is between the control group lowest and median values of $950 and $1,422 in year one and $979 and $1,465 in year two. The lowest value is generally viewed as the practical lower limit on economies of operation. With net revenues per adjusted patient day falling between the lowest and median the facility is expected to consume health care resources in proportion to the services provided. (See Comparative Table). The 2000 actual NRAPD for Memorial Regional Hospital of $1,079 was between the control group lowest and median values of $671 and $1,116. Projected cost per adjusted patient day of $1,342 in year one and $1,381 in year two is between the group lowest and median values of $1,074 and $1,447 in year one and $1,107 and $1,491 in year two. The projections are considered cost efficient when compared to the control group. (See Comparative Table). The 2000 actual CAPD for this hospital was $1,170, which was between the median and highest values in the group of $1,121 and $1.417.


61

The year two operating profit for the hospital of -$9.8 million computes to an operating margin per adjusted patient day of -$32 which is between the lowest and median values in the group of $-374 and $9. The operating margin is -2.4 percent, which is below average for Florida hospitals. The hospital reported an operating margin of –8.4 percent and a total margin of 0.5 percent in 2000. This six-bed project is estimate to add $26,000 in operating profit to the hospital operations. Financial feasibility is probable.

Comparative Table CON # 9563 2005 YEAR 2 South Broward Hospital District YEAR 2 ACTIVITY INFLATION ADJUSTED VALUES 2000 Data Group 5 ACTIVITY PER DAY Highest Median Lowest ROUTINE SERVICES 887,929,703 2,913 1,131 640 317 INPATIENT AMBULATORY 0 0 149 51 19 INPATIENT ANCILLARY SERVICES 0 0 4,290 2,380 1,537 OUTPATIENT SERVICES 409,302,226 1,343 2,290 1,582 776 OTHER OPERATING REVENUE 10,471,708 34 76 12 1 TOTAL REVENUE 1,307,703,637 4,289 6,657 4,621 3,246 DEDUCTIONS FROM REVENUE 896,398,743 2,940 * * * NET REVENUES 411,304,894 1,349 1,884 1,465 979 EXPENSES ROUTINE 101,327,000 332 339 248 187 ANCILLARY 148,088,000 486 692 508 364 AMBULATORY 29,834,000 OVERHEAD 131,926,000 433 753 664 463 OTHER 9,963,000 33 TOTAL EXPENSES 421,138,000 1,381 1,665 1,491 1,107 OPERATING INCOME -9,833,106 -32 246 9 -374 -2.4% PATIENT DAYS 207,002 NOT INFLATION ADJUSTED ADJUSTED PATIENT DAYS 304,863 TOTAL BED DAYS AVAILABLE 249,660 ADJ. FACTOR 0.6790 TOTAL NUMBER OF BEDS 684 PERCENT OCCUPANCY 82.9% 90.6% 53.6% 23.0%

PAYER TYPE PATIENT

DAYS % TOTAL MEDICARE 50,143 24.2% 68.2% 41.6% 19.4% COMMERCIAL 7,925 3.8% MEDICAID 22,512 10.9% 22.8% 6.0% 0.7% PRIVATE 22,367 10.8% HMO/PPO 94,587 45.7% 64.6% 36.0% 13.7% OTHER 9,467 4.6% TOTAL 207,001 100.0%


62

g. Will the proposed project foster competition to promote quality and

cost-effectiveness? ss. 408.035(9), Florida Statutes. HealthSouth of Fort Lauderdale, Limited Partnership (CON #9560) d/b/a HealthSouth Sunrise Rehabilitation Hospital. The applicant projects 75.5 of percent of revenues to come from fixed rate payers and 17.3 percent from managed care. The managed care level is between the control group median and highest level of activity of 10.7 percent and 30.5 percent. Actual reported level in 2000 was 18.0 percent. The projected levels, if realized, are not like to increase competition to promote quality assurance and cost-effectiveness.

Comparative Table for Comprehensive Medical Rehabilitation Beds District 10

March 2002 Hospital Cycle

CON # # Beds Project Cost Net Revenues

Per Day

Total Hospital Operating Cost/Day

Incremental Cost/Day

9560 11 $1,268,410 $669 $602 $606

9561 11 $106,500 $845 $696 $577

9561 5 $49,660 $842 $719 $631

9562 11 $923,575 $1,806 $1,531 -$80

9562 5 $248,075 $1,823 $1,609 -$54

9563 6 $789,150 $1,349 $1,381 $815 St. John's Rehabilitation Hospital & Nursing Center, Inc. (CON #9561) d/b/a St. John's Rehabilitation Hospital & Nursing Center. The applicant projects 77.9 of percent of revenues to come from fixed rate payers and 21.0 percent from managed care. The managed care level is between the control group median and highest level of activity of 10.7 percent and 30.5 percent. Actual reported level in 2000 was 20.2 percent. The projected level, if realized, is not likely to increase competition to promote quality assurance and cost-effectiveness.


63




Per Day



9560 11 $1,268,410 $ 669 $ 602 $606

9561 11 $106,500 $ 845 $ 696 $577

9561 5 $49,660 $ 842 $ 719 $631

9562 11 $923,575 $1,806 $1,531 -$80

9562 5 $248,075 $1,823 $1,609 -$54

9563 6 $789,150 $1,349 $1,381 $815 Tenet HealthSystems Hospitals, Inc. (CON #9562) d/b/a Hollywood Medical Center. The applicant projects managed care to represent 42.3 percent of its patient days for the 11-bed project and 43.6 percent for the five-bed. This is between the control group median and highest level of activity of 36.0 percent and 64.6 percent. Actual reported level in 2000 was 43.6 percent. The projected levels, if realized, are not likely to increase competition to promote quality assurance and cost-effectiveness.




Per Day



9560 11 $1,268,410 $669 $602 $606

9561 11 $106,500 $845 $696 $577

9561 5 $49,660 $842 $719 $631

9562 11 $923,575 $1,806 $1,531 -$80

9562 5 $248,075 $1,823 $1,609 -$54

9563 6 $789,150 $1,349 $1,381 $815 South Broward Hospital District (CON #9563) d/b/a Memorial Regional Hospital. The applicant projects 45.7 of percent of revenues to come from managed care. The managed care level is between the control group median and highest level of activity of 36.0 percent and 64.6 percent. Actual reported level in 2000 was 45.9 percent. The projected level, if realized, is not likely to increase competition to promote quality assurance and cost-effectiveness.


64



CON # # Beds Project

Cost Net Revenues

Per Day



9560 11 $1,268,410 $ 669 $ 602 $606

9561 11 $106,500 $ 845 $ 696 $577

9561 5 $ 49,660 $ 842 $ 719 $631

9562 11 $923,575 $1,806 $1,531 -$80

9562 5 $248,075 $1,823 $1,609 -$54

9563 6 $789,150 $1,349 $1,381 $815

h. Are the proposed costs and methods of construction reasonable? Do they comply with statutory and rule requirements? s. 408.035(10), Florida Statutes; Ch. 59A-3 or 59A-4, Florida Administrative Code.

HealthSouth of Fort Lauderdale, Limited Partnership (CON #9560) d/b/a HealthSouth Sunrise Rehabilitation Hospital. The proposal is to add 11 new beds to the existing 116 beds at the Sunrise Rehabilitation Hospital. The applicant has an additional 10 beds approved, but not on line. All the renovation to the one-story building is interior work. A large therapy gym will be modified to meet code requirements. In addition to an 8 ½ “ X 11” site plan, there is a plan sheet showing the layout of the proposed renovation as well as large-scale plans of the typical patient rooms. There are five semi-private rooms and one private room proposed. Although there was not a plan showing the existing layout of the gym, it was fairly obvious that the new patient rooms are reducing the size of the gym by about 50 percent. There are no specific square footage requirements for a gym in a hospital such as this, it could be assumed that the facility knows how large a gym is needed for their programs. It is not clear if the new patient toilets are accessible or not. The Florida Building Code requires all patient rooms and toilet rooms to be accessible if the facility is designed to “specialize in treating conditions that affect mobility”. The showers appear to be large enough to accommodate a wheelchair. In addition to the patient rooms, there is a nurse station with its required ancillary spaces, a staff lounge with a toilet room (apparently not accessible), and a dayroom.


65

There is no name of a design professional on the architectural plans, and the list of codes in the application is almost totally out of date. It could be assumed that in-house staff might have prepared the plans since the parent company is not a Florida company. There have been extensive changes in the codes, which the state has adopted in recent months. The application referred to Chapter 59A-3 of the Florida Administrative Code, so the applicant is not totally unfamiliar with the health care rules in Florida Costs and construction appear to be reasonable. St. John's Rehabilitation Hospital & Nursing Center, Inc. (CON #9561) d/b/a St. John's Rehabilitation Hospital & Nursing Center. The proposal is to add 11 new beds to the existing 20-bed CMR program and there is also an alternative proposal to add only five beds. The application states that the existing 20 beds in the St. John’s building are “in the process of being relocated” to the St. Joseph’s ALF building on the same campus. The narrative portion of the application is somewhat misleading. Although it is addressed in several ways, the intention to relocate the 20 rehabilitation hospital beds to the existing ALF building has not been submitted for review by the AHCA Office of Plans and Construction, and has therefore not been approved in any way. Until this has been approved, the addition of any new beds is not really a viable issue. There are three sets of plans included in the application. One shows the layout if only the 20 existing beds are relocated and two other schemes show the additional 11 and five beds requested in the application. The application states that some of the St. Joseph’s private patient rooms (renovated for the existing 20 beds) will become semi-private to accommodate the additional requested beds, whether 11 or five. All the plans are essentially identical with the difference being the number of beds, which might be granted with this application. The drawings include site plans, floor plans and large-scale plans of typical patient rooms. The list of applicable building codes on the drawings is mostly correct.


66

All the semi-private rooms are adequately sized and are well arranged. There is a mixture of different type showers shown. Some semi-private rooms share a toilet/bath with other rooms and some patient rooms have private facilities. This is acceptable. Some rooms have square showers and some have larger showers that could possibly allow a wheelchair to be rolled into the shower. The accessibility of these larger showers is not completely clear from the drawings, but it is likely that they will accommodate wheelchairs or other means of seating a patient for bathing. The ground floor, which serves as the main entry point for both the proposed hospital and the existing ALF has several problems. First, the new entry will have to serve both the hospital and the assisted living facility, which are different occupancies from a code standpoint. There are also exit concerns with the first floor plan as submitted. There is no clear way indicated for an adequately sized secondary egress from the first floor nor any maximum travel distances shown. The first floor corridor that serves the hospital patient care and treatment areas is not 8’ clear in width as required. Without additional information about the ALF floors, it is not possible to determine if the required exit width has been provided on the first floor for the population on the upper three floors. The existing elevators appear to be adequately sized for a hospital, but this needs to be verified. The application refers to the construction of the existing St. Joseph’s building, and it may be adequate to meet new construction code requirements. Without other information, this cannot be confirmed. There could also be critical issues with the mechanical and electrical services in this building. The hospital must have a dedicated emergency generator and other services, which may not be allowed to also serve the ALF areas. Obviously, there are some areas, which are common to both occupancies, such as the elevators and food service and housekeeping facilities and this information needs to be presented in more detail for evaluation. The degree to which the proposed hospital area and the existing ALF areas have the required code separation, both vertically and horizontally needs to be addressed. The design professionals who prepared the architectural plans are not familiar to the Office of Plans and Construction, but there are references to Chapter 59A-3 of the Florida Administrative Code, in the application, so they are somewhat familiar with health care rules.


67

Tenet HealthSystems Hospitals, Inc. (CON #9562) d/b/a Hollywood Medical Center. The proposal is to add 11 converted beds to complement the existing 33-bed CMR unit. There is an alternative proposal for only five beds. The application includes a floor plan of part of the existing 6th floor and one floor plan each for the 11-bed and the five-bed requests. From the narrative and the plans, it is impossible to understand how the space proposed for new beds relates to the existing unit. The space shown on the 6th floor is existing hospice space, which is slated for relocation if all 11 new beds are granted. The application does not indicate what will happen to the hospice beds if only five new beds are approved. The plan for the five-bed scenario shows a staff lounge being converted to a private accessible patient room with an accessible toilet and two existing semi–private hospice rooms being converted to semi-private rehab rooms sharing an accessible toilet room. The 11-bed scenario converts all the hospice rooms in the same area to accessible rehab beds. The staff lounge remains as existing in this scheme. However, the narrative is most confusing. It states that “By implementing a vertical expansion into the adjacent nursing unit, the distinct part CMR program (sic) will be able to operate even more efficiently”. From this, it appears that the existing CMR Unit is one floor below (or above) the 6th floor where the proposed new beds are shown. The hospice area is again referred to as “an adjacent vertical unit.” On Page 47. It is not apparent what this means. The key words are “vertical” and “adjacent”. It is difficult to see how a unit can be made more efficient if part of it is on another floor – particularly if there are only five beds added. The 11-bed scheme is more reasonable since all beds are for rehabilitation. If it is actually the case that the existing CMR unit is on another floor, the five-bed scheme would have the nurse station on the 6th floor overseeing both the new rehab beds and hospice beds shown, which would not be acceptable. In the 11-bed scheme, at least all the rooms are for rehabilitation.


68

The idea that a 38 or 44-bed CMR unit would be on two separate floors just does not seem to be a practical situation. In fact, it is difficult to believe that anyone would propose this – so difficult that it seems more likely that the wrong terminology has been used in the application and the existing CMR unit is really adjacent to and on the same floor as the proposed bed conversion. Add to this the fact that there are ancillary spaces such as an activity room and a physical therapy space shown on the 6th floor, which would indicate that rehabilitation activities are taking place on the floor. A list of applicable building codes is not on the drawings as stated, and the ones referred to in the application is incomplete and incorrect. This would not present a problem if the design professional were to update his code references before the design development stage. In spite of the issues above, all the private and semi-private rooms are adequately sized and are well arranged. Some semi-private rooms in the five-bed scheme share a bath with other rooms and some patient rooms have private facilities. The 11-bed scheme has all private patient rooms with accessible toilets. No rooms have showers in the existing plan. This single wheelchair accessible shower room has to serve all the new beds in both schemes. An additional shower would be advised, depending on the nature of the disabilities of the patients. The design professionals who prepared the architectural plans are somewhat familiar to the Office of Plans and Construction, and there are references to Chapter 59A-3 of the Florida Administrative Code in the application, so they are somewhat familiar with Florida health care rules. The cost per bed for the five-bed scheme is considerably less than for the 11-bed scheme, which is to be expected based on the extent of renovation. All costs appear reasonable. South Broward Hospital District (CON #9563) d/b/a Memorial Regional Hospital. The proposal is to add six beds to develop a dedicated inpatient pediatric rehabilitation unit in existing space on the fourth floor, which will be renovated. This pediatric unit will be a satellite of the existing 36-bed adult rehabilitation unit on the 7th floor. The requested beds would increase the hospital’s bed count from 684 to 690. The application does not say what functions are located in the space to be renovated, except that it is not bed space.


69

While it is usually preferable to keep specialized units in one area, the scheme proposed would separate adults rehab rooms from the children’s rooms. The area proposed for renovation is adjacent to an existing pediatric observation unit and will be served by an existing double-sided nurse station and its ancillary spaces. The applicant states that the pediatric area will utilize staff from the existing adult unit and will be managed by the same senior staff. There are only plans of the proposed renovated area in the application, so it is not possible to tell if the new unit is being located on the 4th floor because that is the only space available or if the fact that there is currently pediatric care on the same floor has any bearing on the situation. The type of construction of the area to be utilized is acceptable. The corridors are said to be (or will be) of one-hour fire-rated construction. This is not necessary under current codes, but there is no prohibition against this rating. Corridors of the proposed unit and the existing observation area have separating doors to provide security for both areas. There will be a new playroom/therapy room added across from the nurse station for the children. Since there is not a plan that shows existing conditions in the application, it is not possible to tell the extend of the renovations and what will have to be demolished to accommodate the new beds. Each patient room has its own fully accessible toilet/bath area. The showers are all sized to allow a wheelchair to be rolled into the shower. This is preferred in rehabilitation facilities. All the patient rooms are adequately sized and are well arranged. The nurse station and playroom/therapy room are centered on the space for the new beds with good visual sight lines. Security appears to be a significant issue, and the layout does not present any flaws that would make security difficult. The design professionals who prepared the architectural plans are familiar to the AHCA Office of Plans and Construction. There is a list of applicable codes on the drawings that is mostly correct – some edition dates are not current. All costs and the schedule appear reasonable for this type of renovation.


70

i. Does the applicant have a history of providing health services to Medicaid patients and the medically indigent? Does the applicant propose to provide health services to Medicaid patients and the medically indigent? ss. 408.035(11), Florida Statutes. Refer to Local Health Council Preferences above for a comparison of each applicant’s history of care to the medically indigent to the district.

Charity Care and Medicaid

Comparison of Co-Batched Applicants to the District

Applicant

Proposed Condition *FY 2000 Medicaid

*FY 2000 Charity

Care HealthSouth Sunrise Rehab (9560)

3% Medicaid + 1% indigent/charity on 11 CMR beds ,Blended w/126-beds at 0.23%= 0.56%

1.8% 0%

Hollywood Medical Ctr (9562)

3% combined on 11 beds blended w/2% combined on 33 beds = 2.25% on 44 beds 3% combined on 5 beds blended w/2% on 33 beds = 2.13% on 38 beds

3.2% 0.5%

Memorial Regional (9563)

15% Medicaid/6-beds blended w/ 36-beds @ 4% = 5.57% Medicaid 3% Charity/6 beds 'blended w/36-beds @ 3.5% = 3.43% charity

13.0% 6.6%

St. John's Rehabilitation (9561)

3% combined Medicaid & Charity to be blended w/20 beds @ 0% = 11 beds @ 3% w/20 @ 0% = 1.06% 5 beds @ 3% w/20 @ 0% = 0.6%

8.1% 0%

District 10 9.3% 4.3% Source: AHCA Financial Data, FY 2000; CON applications 9560-9563 *Data for entire hospitals, not just CMR services Fiscal Year 2000 data above for all applicants and the district include all beds: acute, hospital-based skilled nursing, CMR, etc. Two of the four co-batched applicants provide only CMR services. The chart shows that Memorial Regional is not only a high provider of care to the medically indigent population when compared to the district, but offers the highest commitment to that population in this CON application. Of the four co-batched applicants, it is the only Medicaid disproportionate share provider. St. John’s Rehabilitation, one of the two freestanding CMR hospitals, provided the second highest percentage of care to Medicaid recipients in Fiscal Year 2000 and it and Hollywood Medical Center offer the second highest combined Medicaid and charity commitment of the co-batched applicants.


71

Co-Batched Applicant Medicaid Patient Day Percentage Reflected in Year Two Pro Formas

Applicant

# Beds

Schedule 7A

Medicaid % of Patient Days

HealthSouth Sunrise Rehab (9560) 137 1.5% Hollywood Medical Ctr (9562 & 9562P) 11 or 5 2.0% Memorial Regional (9563) 6 23.7% St. John's Rehabilitation (9561 & 9591P) 31 or 25 4.0%

Source: CON applications 9560-9563 As shown in the chart above, pro formas submitted by each applicant support its individual commitment assuming Tenet HealthSystems provides one (1) percent of its patient days to charity care. However, as noted above in the Local Health Council preferences, no specific charity admissions were reported by this applicant.

F. SUMMARY

In Volume 28, Number 4, dated January 25, 2002 of the Florida Administrative Weekly, a CMR fixed need pool projection of 11 beds was published for District 10 for the July 2007 planning horizon. All of the co-batched applicants are responding to published need and have shown that access will be improved if their respective projects are approved. South Broward Hospital District is proposing to establish six of the 11 beds published as need while the other three co-batched applicants are proposing to establish 11 beds. St. John’s and Tenet have both proposed five-bed partial applications and HealthSouth has not made a partial request. All of the co-batched applicants can fund their respective projects but none of the projects are likely to promote quality assurance and cost-effectiveness. South Broward Hospital District has the highest historical percentage of care to the medically indigent and proposes the highest CON condition of the co-batched applicants. HealthSouth has the lowest historical percentage of care to this patient population and proposes the lowest CON condition of the co-batched applicants. Following is a summary of each applicant’s proposal:


72

HealthSouth of Fort Lauderdale, Limited Partnership (CON #9560) d/b/a HealthSouth Sunrise Rehabilitation Hospital, a 116-bed Class III specialty rehabilitation hospital, it is proposing the addition of 11 CMR beds to its existing 116 and 10 CON approved (#9262) CMR beds for a 137-bed facility. The total project cost is estimated at $1,268,410. Construction costs are projected to be $742,500 to renovate 8,180 GSF of existing space. No new space is indicated for the project. After weighing and balancing all applicable review criteria, the following relevant factors are discussed in relation to this proposal:

Need The applicant is responding to the fixed need pool publication. Access Of the co-batched applicants, HealthSouth has the highest average annual occupancy. It was recently approved to add 10 CMR beds, which, as of this writing, are not implement. Quality of Care HealthSouth Sunrise is a quality of care provider and is both JCAHO and CARF accredited. Medicaid/Charity Care The applicant is proposing to condition award of the CON upon providing three percent of its total annual patient days to Medicaid and charity patients on a combined basis. Of the co-batched applicants, Sunrise has a history of providing the least amount of care to the medically indigent and its proposed condition is the lowest. Financial The applicant can fund the project and it is financially feasible. This project is not likely to increase competition to promote quality assurance and cost-effectiveness. Architectural Although there are no architectural concerns with the project, the architect does note that it appears implementation of this project will reduce the size of the existing gym by approximately 50 percent, however there no specific square footage requirements for a gym in a hospital. The costs and construction appear to be reasonable.


73

St. John's Rehabilitation Hospital & Nursing Center, Inc. (CON #9561) d/b/a St. John's Rehabilitation Hospital & Nursing Center, (f/k/a Broward County Nursing Home, Inc.), seeks approval for the addition of 11 CMR beds, or as an alternative, to add five (5) CMR beds (CON #9561P) to its existing 20-bed program. The 11-bed addition will be accomplished through the renovation 3,469 GSF of space at a construction cost of $54,300. The total cost of the proposed 11-bed project is estimated to be $106,500. The alternative project for five (5) CMR beds (#9561P) proposes to renovate 1,446 GSF at a cost of $11,700. The total cost of this partial project is expected to be $49,660. After weighing and balancing all applicable review criteria, the following relevant factors are discussed in relation to this proposal: Need The applicant is responding to the fixed need pool publication. Access Of the co-batched applicants, St. John’s has the second lowest average annual occupancy and is proposing the lowest occupancy in these additional beds. Quality of Care St. John’s is a quality of care provider. It is currently JCAHO and states that it will seek CARF accreditation. Medicaid/Charity Care The applicant is proposing a minimum of three percent of its total annual patient days to Medicaid/charity care patients. Of the co-batched applicants, St. John has the second highest history of providing care to the medically indigent. Its proposed condition, along of that of Tenet, is the second highest of the co-batched applicants. Financial Assuming cash flows continue a present levels, the applicant should be able to fund the project. However, both the 11-bed and the five-bed projects, while financially feasible, represent a financially inefficient use of proposed beds. Neither project is likely to increase competition to promote quality assurance or cost-effectiveness.


74

Architectural The 20-bed CMR hospital is currently located within a skilled nursing facility. The applicant intends to move the hospital within an existing assisted living facility, apparently whether or not the CON is approved. Plans submitted do not address all issues associated with co-locating the proposed hospital within an assisted living facility. For example, one major issue is the need for a dedicated emergency generator for the hospital, which is not shown or discussed. The reasonableness of the proposed costs and methods of construction cannot be determined. It is also not know whether the project complies with statutory and rule requirements. Tenet HealthSystems Hospitals, Inc. (CON #9562) d/b/a Hollywood Medical Center, is a Class I, 324-bed for-profit general acute care hospital that includes a 33-bed comprehensive medical rehabilitation program. The applicant is seeking to add 11 CMR beds to its existing program, or as an alternative, to add five (5) CMR beds (CON #9562P). The 11-bed addition will be accomplished through the renovation 6,000 GSF of space at a renovation/construction cost of $490,000. The total cost of the proposed 11-bed project is estimated to be $923,575. The alternative project for five (5) CMR beds (CON #9562P) proposes to renovate 1,240 GSF at a cost of $60,000. The total cost of this partial project is expected to be $248,075. After weighing and balancing all applicable review criteria, the following relevant factors are discussed in relation to this proposal: Need The applicant is responding to the fixed need pool publication. Access Of the co-batched applicants, Hollywood Medicaid Center has the lowest average annual occupancy. Quality of Care Hollywood Medical Center is a quality of care provider. It is currently JCAHO and CARF accreditation.


75

Medicaid/Charity Care The applicant is proposing a minimum of 2.13 percent of its total annual patient days to Medicaid/charity care patients. Of the co-batched applicants, Tenet has the third highest history of providing care to the medically indigent. It has an existing CON condition of two percent and has consistently complied with this condition. Its proposed condition, along of that of St. John’s, is the second highest of the co-batched applicants. Financial Funding is available for the project. Both the 11-bed and the 5-bed projects, while financially feasible, represent a financially inefficient use of proposed beds. Neither project is not likely to increase competition to promote quality assurance or cost-effectiveness. Architectural Information presented is confusing. It is not clear exactly on which floor of the hospital the 11-bed or partial application for five beds will be located. Despite the unclearness of the units’ location and other issues noted in the architectural review, rooms are adequately sized and well arranged and costs appear reasonable. South Broward Hospital District (CON #9563) d/b/a Memorial Regional Hospital is a 684-bed Class I general acute care hospital which includes: 71 adult psychiatric beds; 11 adult substance abuse beds; 10 child/adolescent psychiatric beds; 22 Level II NICU beds; 19 Level III NICU beds, a 26-bed hospital-based skilled nursing unit and 36 comprehensive medical rehabilitation beds. The applicant proposes to add six comprehensive medical rehabilitation beds (CMR) beds to the Joe DiMaggio Children's Hospital, a "hospital without walls" located within Memorial Regional Hospital. The proposed addition of the six-bed pediatric rehabilitation unit will be located in 3,000 square feet of renovated space on the fourth floor of Memorial Regional Hospital. The renovation cost is projected at $525,000 and the total project cost is expected to be $789,150.


76

After weighing and balancing all applicable review criteria, the following relevant factors are discussed in relation to this proposal:

Need The applicant is responding to the fixed need pool publication. Access Of the co-batched applicants, Memorial Regional Hospital has the second highest average annual occupancy. Quality of Care Memorial Regional Hospital is a quality of care provider. It is currently JCAHO and CARF accreditation. Medicaid/Charity Care The applicant is proposing a minimum of 5.57 percent of its total annual patient days to Medicaid patients and 3.43 percent to charity care patients. Of the co-batched applicants, South Broward Hospital District’s proposed condition is the highest history. The applicant is also the only Medicaid Disproportionate Share provider applying for these CMR beds. It has a strong history of providing care to the medically indigent and has the highest percentage of the co-batched applicants. Financial The applicant can fund the project and financial feasibility is probably. The project is not likely to increase competition to promote quality assurance or cost-effectiveness. Architectural Patient rooms are adequately sized and well arranged. There is good visual control. All costs and the construction schedule appear reasonable.


77

G. RECOMMENDATION

Approve CON #9562P to add five comprehensive medical rehabilitation beds (CMR) to the existing 33-bed CMR unit at Hollywood Medical Center. The project involves 1,240 GSF of renovation and construction costs of $60,000. Total project costs are $248,075. CONDITION: A minimum of 2.13 percent of the total annual patient days in the 38-bed CMR unit shall be provided to Medicaid and charity care patient on a combined basis. Approve CON #9563 to add six comprehensive medical rehabilitation beds to Memorial Regional Hospital’s existing 36-bed CMR unit; establishing a six-bed pediatric medical rehabilitation unit. The project involves 3,000 GSF of renovated space and construction costs of $525,000. Total project costs are $789,150. CONDITIONS: (1) A minimum of 5.57 percent of the total annual patient days in the

42-bed CMR unit shall be provided to Medicaid recipients. (2) A minimum of 3.43 percent of the total annual patient days in the

42-bed CMR unit shall be provided to charity patients. Deny CON #s 9560, 9561, 9561P, and 9562


78

AUTHORIZATION FOR AGENCY ACTION

Authorized representatives of the Agency for Health Care Administration adopted the recommendation contained herein and released the State Agency Action Report.

DATE: Karen Rivera Health Services and Facilities Consultant Supervisor Certificate of Need

Jeffrey N. Gregg

Chief, Bureau of Health Facility Regulation

STATE AGENCY ACTION REPORT - The Agency For … · STATE AGENCY ACTION REPORT ... were received...

Documents

Transcript of STATE AGENCY ACTION REPORT - The Agency For … · STATE AGENCY ACTION REPORT ... were received...