STATE AGENCY ACTION REPORT ON APPLICATION FOR CERTIFICATE OF NEED

Transcription

1 STATE AGENCY ACTION REPORT ON APPLICATION FOR CERTIFICATE OF NEED A. PROJECT IDENTIFICATION 1. Applicant/CON Action Number Psycare Services of Central Florida, LLC/CON #10032 c/o Oglethorpe, Inc Highwoods Preserve Parkway, Suite 114 Tampa, Florida Authorized Representative: James O Shea, MAHCA Chief Operating Officer (813) Service District/Subdistrict District 3 Alachua, Bradford, Citrus, Columbia, Dixie, Gilchrist, Hamilton, Hernando, Lafayette, Lake, Levy, Marion, Putnam, Sumter, Suwannee and Union Counties B. PUBLIC HEARING Geoff Smith of Smith & Associates, Attorneys and Counselors at Law, on behalf of Ocala Behavioral Health, LLC d/b/a Ten Broeck Ocala, submitted a public hearing request in opposition to the proposal - the construction of a new 27-bed adult inpatient psychiatric hospital named Ocala Hospital in District 3, Marion County. The public hearing was facilitated by Jeff Feller, Chief Operations Officer of the WellFlorida Council, Inc. and began at approximately 2:00 p.m., running to approximately 2:35 p.m., on Wednesday, October 22, The location of the public hearing was 1785 N.W. 80 th Boulevard, Gainesville, Florida 32606, with the hearing conducted in the WellFlorida Council s Gainesville facility. According to the sign-in roster, nonspeaking attendees at the hearing totaled eight; two were representatives of the applicant, two were representatives of Shands Hospital, three were local health council (WellFlorida) staff and one was a representative of

2 the Agency. Other sign-in rosters indicated one person made an official oral presentation in opposition to the project and three persons made official oral presentations in support of the project. Mr. Feller made a brief four-minute presentation on the format of the hearing immediately upon the hearing commencement. There was no given time limit per speaker. There were no attendee questions. Total speaking time was approximately 30 minutes, when the four oral presenters time is combined. Mr. Feller ended the proceeding with a one minute closure statement. Below is a brief summary of each speaker s major comments. Geoff Smith on behalf of Ocala Behavioral Health, LLC d/b/a Ten Broeck Ocala, stated there is no need and the case cannot be rationally made for a third freestanding inpatient psychiatric facility in Marion County (District 3). He also stated that the applicant s letter of intent (LOI) should not have been accepted based on the applicant being a subsidiary of the original LOI applicant that triggered the grace period LOI. Mr. Smith advised the stated need for 27 adult psychiatric beds is the beginning of the story, not the end and that circumstances, including new developments and the weighing and balancing of need overall do not support the project. Mr. Smith stated the detail of the oral points would speak for themselves in submitted written materials 1. James O Shea, Chief Operating Officer for Oglethorpe, Inc. (parent), spoke in favor of the project. Mr. O Shea stated Oglethorpe operates three psychiatric hospitals in Florida and that its existing facility in District 3 (Springbrook Hospital) cannot expand further without major construction and that demand there is growing. However, the cost of expanding the existing facility versus building a new facility was not addressed. The proposed location (Marion County) is justified by stating 90 percent of the district population can reach the location within 45 minutes driving time. However, the travel standard is presently met and there are two existing facilities in Marion County. Mr. O Shea stated that a new facility would provide jobs in the community and that regarding financial feasibility, Mr. O Shea stated his company has opened three hospitals within the last year. He also stated patients are not turned away that are in need. Dr. Rich Capiola, Medical Director for Oglethorpe, Inc., spoke in favor of the project. Dr. Capiola stated he talked to doctors and nurses to discuss flow issues and provided one instance in which he evaluated a patient that was in an emergency room (ER) for seven days due to a lack of a psychiatric bed. Dr. Capiola did not state when this instance 1 These written materials are described under the Letters of Opposition section. 2

3 occurred nor in which hospital. While the doctor agreed there is a nursing shortage, he advised it pales in comparison to the shortage of services for psychiatric patients. Michael Glazer of Ausley & McMullen, P.A., representing the applicant, spoke in favor of the project. Mr. Glazer agreed that the 27-bed numeric bed need count is not the end of the need process but is an important part of the process and that the number should not be discounted. It was stated that five substance abuse beds at Ten Broeck 2 were slow to come on-line and sought a CON condition of one percent charity care, far below the commitment that Psycare is making 3. Mr. Glazer also stated that unlike Ten Broeck 4, the applicant will serve the Baker Act population 5. The applicant s representative stated that regarding the LOI issue, the letter and spirit of the law were met. Mr. Glazer alleged that Ten Broeck is probably more concerned about market share than Springbrook, as the latter is stated to be a busy hospital. He also alleged that a nursing shortage is an often-presented circumstance and that such shortage has time and time again been denied by the Agency as a cause to deny approval. Any financial feasibility issues presented are addressed based on the applicant s experience, per Mr. Glazer. He also correctly stated that while the applicant cannot obtain straight Medicaid payments, it is eligible for Medicaid HMO reimbursement. Letters of Support Six unduplicated letters of support are submitted as part of the application. The letters of support are described below in the following order: physicians (three letters); law enforcement (two letters) and clinical laboratory (one letter). All six letters are signed; four of the six are dated with a signature date of September 18, 2008 or more recent. The three physician letters (Phillip Sinaikin, MD, Leo Yason, MD and Robert Blackburn, DO), state that generally the project is for a psychiatric and substance abuse hospital needed in Marion County and the surrounding area. They also overall state a lack of available beds. Dr. Sinaikin indicates an affiliation with Associated Psychiatric Service (New Smyrna Beach, Florida), Dr. Blackburn with All American Medical Associates, Inc. (Spring Hill, Florida) and Dr. Yason in Brooksville, 2 A review of Agency records confirms that in CON Application #9801, approved on December 10, 2004, the applicant, Ten Broeck Central Florida, Inc. (a Marion County proposal) proposed a one percent charity condition. 3 CON Application #10032 conditions, in part, to make emergency mental health services available to indigent clients at a minimum of five percent of total patient days. 4 CON Application #9801 did not condition to become a Baker Act receiving facility and Ten Broeck Ocala is not designated as such as of December 9,

4 Florida. Dr. Yason and Dr. Blackburn indicate a District 3 location (Hernando and Alachua County, respectively). Dr. Sinaikin indicates a District 4 location (Volusia County). None of these physicians identify a quantitative number of patients likely to be impacted by approval or denial of the project. Samuel Williams, Chief of Police, City of Ocala, supports the project, stating that law enforcement has a role in dealing with individuals in danger of harming themselves or others and to provide assistance in taking such individuals into custody, transporting them to secure mental health facilities. Johnny Smith, Levy County Sheriff, also offers a support letter stating that there are Baker Act situations and many occasions where there is a lack of bed space in Gainesville (Alachua County). Sheriff Smith also indicated that there were many calls for older individuals and that the project could provide services to these individuals. These letters do not provide the number of patients and officers likely to be impacted by approval of this project or an estimate of calls received related to Baker Act cases. Begonia Ayo, General Manager, Finlay Clinical Laboratory, Inc. (Miami- Dade County), supports the project and stated that Finlay has provided laboratory services to Florida since 1961, with service over the past few years to the parent s (Oglethorpe, Inc. s) three hospitals Springbrook, The Willough and Port St. Lucie. Ms. Ayo also stated those three hospitals have the highest standard of care. Letters of Opposition Geoffrey D. Smith of Smith & Associates, Attorneys and Counselors at Law, on behalf of Ocala Behavioral Health, LLC d/b/a Ten Broeck Ocala, submitted a four-page opposition letter 6 and a 39-page document of opposition at the public hearing. The document, entitled Analysis of Psycare Services of Central Florida, LLC Proposed Adult Inpatient Psychiatric Hospital (CON #10032) for Psychiatric Solutions, Inc. Ten Broeck Ocala, was prepared by National Healthcare Associates, Inc. of Coral Gables, Florida. Below is a brief summary of major comments in these two documents. Mr. Smith s letter highlights two major reasons for opposition. One is a legal issue and the other is a weighing and balancing of mandatory review criteria that he believes the applicant has not met, based on seven factors. First, as for the legal issue, Smith & Associates contends that 6 Mr. Smith s four-page opposition letter was also received by hand delivery at the Agency on October 15, 2008) 4

5 the Letter of Intent (LOI) under which the applicant applied is invalid, saying the grace period applies to competing applicants only and is not a second chance for a proposed applicant to file a new LOI under a different corporate entity. Smith & Associates contends that the applicant had no legal ability to file a grace period LOI, as its proposal is not a competing proposal to any other properly filed LOI. Second, Smith & Associates states that though the numeric need rule indicates need in the current scenario, the Agency must still weigh and balance all of the statutory criteria to arrive at its determination of need as proposed by the applicant. Smith & Associates states the applicant does not meet the weighing and balancing criteria due to seven reasons: need for a new hospital in the district is not demonstrated by the applicant and no evidence demonstrates that existing facilities suffer poor quality of care (competition for quality already exists in the area); the proposal will duplicate services already provided at Ten Broeck Hospital and The Centers (two existing facilities within the district) and will likely strain an already existing nursing shortage in the area; the project will not improve geographic access and ignores a total of 38 Baker Act beds in Marion County (now or soon-to-be approved); the applicant s financial feasibility is questioned (particularly a lack of certain services and staff not represented in pro-formas, using financial information from individuals who are reported publicly to have past violations of Medicare fraud and abuse provisions; detrimental competitive effects are stated to result from duplication of existing facilities; the construction costs of a new facility in an area that already has multiple existing facilities is a waste of limited health care resources and the proposal will not likely be favorable to Medicaid and charity patients. National Healthcare Associates, Inc. (NHA) of Coral Gables, Florida, submitted an opposition document in which it challenges the 27-bed need due to transitions in 2007, which it states are that Seven Rivers delicensed 15 adult inpatient psychiatric beds, Ten Broeck Ocala added 20 beds and Shands at Vista was approved to convert six adult inpatient psychiatric beds to six adult substance abuse beds. The result was generating a superficial inflation in the average occupancy rate that National Healthcare Associates, Inc. states have been reconciled since the 27-bed need determination was made by the Agency. However, the Agency s need projection took into account all of the above factors. The executive summary itemizes 22 separate conclusions to refute need for the project. A brief summation of some of the prominent conclusions follows. 5

6 Marion County is well balanced with respect to adult psychiatric beds, with both a fifth of District 3 s adult population and a fifth of the district s adult psychiatric beds. The applicant acknowledges only 15 of the 35 total adult psychiatric beds in Marion County and the existing Ten Broeck Ocala psychiatric facility has additional beds in its building that could be converted for psychiatric use without CON approval. The applicant bases need (in part) on a Fall 2004 report published by the Public Policy Institute of Marion County, making the report out-ofdate with psychiatric bed additions since issuance. NHA contends that as Ten Broeck Ocala matures, Marion County adult residents being served by the applicant s parent s Hernando County facility Springbrook Hospital will begin to seek services at Ten Broeck. NHA states that there are 24 Baker Act beds in Marion County at The Centers, which is a licensed crisis stabilization unit and has 15 adult inpatient psychiatric beds and Ten Broeck Ocala is awaiting final certification from the Department of Children and Families for 14 adult Baker Act receiving beds. 7 NHA also contends that members of Springbrook Hospital failed to make payments to McKesson Corp. in the amount of $24,000 in 2003; Greenbrier Hospital (now Springbrook Hospital) filed for Chapter 11 bankruptcy protection in March 1995 and the bankruptcy judge ordered certain members could not further direct operations or finances at Greenbrier, one of those members being James O Shea 8. Federal bankruptcy Judge Alexander Paskay declared the sale of Greenbrier to IAMEC Funding, Inc. to be an abuse of the judicial system because IAMEC was funded by one of the Company s original owners, Robert Cohen 9. The two-page Attachment 1 is a September 15, 2003 St. Petersburg Times on-line article entitled, Springbrook Hospital sued over unpaid bills Ten Broeck Ocala is not designated as a Baker Act Receiving facility as of December 9, James O Shea is the chief executive officer (CEO) and authorized representative of the applicant. 9 Robert Cohen is a managing member of the applicant. It is stated Judge Paskay ordered Cohen (along with others) could not direct operations or finances for Greenbrier and not become an investor, employee or shareholder in the company directing the hospital. 10 According to the on-line article, Robert Cohen served five years in prison in the 1980s after pleading guilty to Medicaid and Medicare fraud, prior to his involvement with Greenbrier. 6

7 Robert M. Cohen, Manager/Member of Psycare Services of Central Florida, LLC pleaded guilty to Medicare fraud on December 4, This may be grounds for denial, suspension or revocation of a hospital license in accord with Chapter (1) (e) Florida Statutes. Attachment 2 is a Marion County Board of County Commissioners Marion County Transportation Impact Fee Fact Sheet. According to NHA, the hospital must pay this impact fee ($127,464) that is not accounted for in the applicant s materials. C. PROJECT SUMMARY Psycare Services of Central Florida, LLC (CON #10032) (Psycare) proposes to construct a 27-bed adult inpatient psychiatric hospital in Marion County (District 3). The applicant is a privately held subsidiary of Oglethorpe, Inc. (corporate offices in Tampa, Florida and parent of the applicant). Psycare states the planned hospital model is designed to replicate the parent s health care model at Springbrook Hospital (located in Brookville, Hernando County, Florida) a Baker Act receiving facility. The project is stated to meet four needs to provide more Baker Act beds, to serve the uninsured, to address transportation services and to educate the public about mental illness, de-stigmatization and offer hope for the mentally ill. A major specialty is treatment of dual diagnosis patients in a primary care setting. The proposal will have accreditation by the Joint Commission (formerly known as the Joint Commission on Accreditation of Healthcare Organizations [JCAHO] until January 2007) and will be certified by the Department of Children and Families as a Baker Act receiving facility. The 27 beds are to be divided as follows: a 10-bed unit for dual diagnosis; a 10-bed unit for involuntary patients admitted through the Baker Act and seven beds to serve geriatric patients (for memory loss and other disorders). The proposed hospital (Ocala Hospital) will be located in Marion County, north of Ocala, south of Citra and southeast of Gainesville, Florida (at the intersection of U.S. 301 and N.E. 175 th St Road 12 ). The applicant proposes the following conditions as stated in Schedule C: Indigent population (four to five percent) Medicaid HMO and 11 Source is 840 F. 2d 173, Case Nos , , , United States Court of Appeals, Third Circuit obtained on November 18, 2008 at 12 CON Application #10032, page #8. 7

8 Other financial assistance (scholarships) as deemed necessary. Conditions are further stated in an attachment to Schedule C. Psycare pledges to make emergency mental health services available to indigent clients at a minimum of five percent of total patient days. Schedule 7B notes indicate that charity care will comprise four percent of the facility s total year one and year two patient days and self-pay will be one percent during both years, respectively. Medicaid HMO is included in managed care, so an exact amount of care to Medicaid HMO patients cannot be determined. Springbrook Hospital, which is the parent corporation s existing psychiatric hospital located in District 3, reported zero Medicaid and Medicaid HMO days for all periods of operation through June 30, Springbrook provided only 0.44 charity care patient days for the FY 2006, which is the most recent financial data reported. Therefore, the applicant s projections are not indicative of the parent corporation District 3 hospital s actual performance. Psycare will provide for the emergency mental health needs of indigent clients through service as a Baker Act receiving facility in District 3. Therefore, Psycare pledges to make emergency mental health services available to indigent clients at a minimum of five percent of total patient days. Psycare also states that it will contract with all Medicaid HMO carriers who service clients in District 3. As noted earlier, the parent corporation s existing District 3 hospital reports zero Medicaid HMO patient days. Psycare will dedicate 25 percent of their inpatient beds to serve the needs of older adults in District 3. The applicant states that the hospital will address the clinical needs of this underserved group through a distinct treatment program that will accept both voluntary and Baker Act clients. Under the direction of a board-certified geriatric psychiatrist, this inpatient treatment program with specialized interventions that address the unique needs of this group. Consistent with this commitment, the hospital will pledge that 20 percent of the inpatient treatment days will be offered to geriatric clients. However, the applicant does not demonstrate that the geriatric population is underserved. The proposed project involves a total cost of $6,354,395. Construction costs are projected at $4,651,080 and the project will involve 22,600 gross square feet (GSF) of new construction. Total project costs include the following: land and building costs; equipment costs; project development, financing and start-up costs. 8

9 D. REVIEW PROCEDURE The evaluation process is structured by the certificate of need review criteria found in Section , Florida Statutes. 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 best meets the review criteria. Rule 59C-1.010(3)(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, Steve Love analyzed the application in its entirety with consultation from the financial analyst, Everett (Butch) Broussard, who evaluated the financial data, and the architect, Scott Waltz, who evaluated the architectural and the schematic drawings as part of the application. E. CONFORMITY OF PROJECT WITH REVIEW CRITERIA The following indicate the level of conformity of the proposed project with the review criteria and application content requirements found in Sections , and ; applicable rules of the State of Florida, Chapters 59C-1 and 59C-2, Florida Administrative Code. 1. Fixed Need Pool a. Does the project proposed respond to need as published by a fixed need pool? Or does the project proposed seek beds or services in excess of the fixed need pool? ss (1) (a), Florida Statutes, Rules 59C-1.008(2) and 59C-1.040(4) Florida Administrative Code. 9

10 In Volume 34, Number 30, dated July 25, 2008 of the Florida Administrative Weekly, a fixed need pool of 27 beds was published for adult inpatient psychiatric beds in District 3 for the January 2014 planning horizon. As of June 13, 2008, District 3 had 187 licensed adult inpatient psychiatric beds with six adult psychiatric beds approved to be delicensed and converted to adult substance abuse beds 13. District 3 s licensed beds experienced an occupancy rate of percent during the 12-month period ending December 31, The applicant is applying in response to the fixed need pool. Of the five facilities in District 3 with licensed adult psychiatric beds as of December 31, 2007, one is a general hospital (Class 1) and four are freestanding (Class 3), as follows: District 3 Adult Inpatient Psychiatric Utilization Calendar Year 2007 Facility Service # Adult Adult County Class Beds Occupancy Lifestream Behavioral Center Lake Class % Shands at Vista Alachua Class % Shands Hospital at the University of Florida* Alachua Class % Seven Rivers Community Hospital ** Citrus Class % Springbrook Hospital Hernando Class % The Centers, Inc. Marion Class % District 8 Total % Source: Florida Hospital Bed Need Projections and Service Utilizations by District, July 2008 Batching Cycle. * Shands delicensed four adult inpatient psychiatric beds effective April 14, ** Seven Rivers delicensed its 16-bed unit effective February 05, Not included in CY 2007 above is Ten Broeck Ocala which licensed 20 adult inpatient psychiatric beds effective March 17, The following is a map of District 3 s licensed adult inpatient psychiatric facilities and the applicant s proposed Ocala hospital site. 13 Ten Broeck Ocala licensed 20 beds effective and Shands at Vista has notification # to convert six adult psychiatric beds to six adult substance abuse beds. Shands converted these beds effective District 3 had 187 licensed beds during portions of CY 2007 and 167 as of 12/31/07. Seven Rivers Medical Center delicensed 16 beds on 2/5/07 and Shands delicensed four beds on 4/14/07. 10

11 District 3 Adult Inpatient Psychiatric Facilities and Proposed Ocala Hospital Specialty Facility Site Source: Microsoft MapPoint

12 The following table illustrates the driving distance in miles between the existing facilities and the proposed Ocala Hospital site: Driving Distance in Miles Existing Facilities and Proposed Site Ocala Hospital (proposed site) Ten Broeck- Ocala The Centers, Inc. Shands at UF Shands at Vista Lifestream Behavioral Center Springbrook Hospital Ocala Hospital (proposed site) Ten Broeck -Ocala The Centers, Inc Shands at UF Shands at Vista Lifestream Behavioral Center Springbrook Hospital Source: Mapquest It is noted here the driving distance in miles between the proposed site (Ocala Hospital) and the nearest licensed and operational psychiatric facility (Ten Broeck-Ocala) is approximately 19.0 miles. The second nearest is The Centers, Inc. (approximately 25.3 miles) and the third nearest is Shands at UF (approximately 29.3 miles). All remaining adult psychiatric licensed and operational facilities are between approximately 32.9 and 85.6 miles distant, as shown in the mileage chart above. This application is filed in response to published need of 27 adult psychiatric beds in District 3. The applicant further justifies need for an adult inpatient psychiatric facility through discussion of the WellFlorida Council, the Marion County Mental Health Wellness Coalition, what the applicant calls the federally designated mental health shortage areas, the DCFS Division 5 Coalition of Circuit 5 15 and finally interview, group discussions and town meetings. Each of these is briefly described below, in turn. The applicant states that through a mental health study being performed by the WellFlorida Council (but not yet complete as of application submission), from , the statewide suicide rate was 16.6 per 100,000 population and domestic violence, for the same period, was at 15 CON Application #10032, on page 19, the applicant indicates that this group was created in September 2008 and consists of mental health consumers such as NAMI representatives, psychiatric and acute care hospital providers, counselors and case managers that proposes to address mental health needs in the counties in Department of Children and Family Services Central Region Division 5. It is not affiliated with the Florida Department of Children and Family Services. 12

13 627.7 offenses per 100,000 population. According to the applicant 16, in District 3, Citrus County had the highest suicide rate (24.4 per 100,000 population) and the second highest domestic violence rate (744.4 per 100,000). Marion County had the second highest suicide rate (21.2 per 100,000 population) and the highest domestic violence rate (751.9 per 100,000 population) for the same period. Other counties are also referenced. The applicant also states that for 2005 and 2006, 10 of the district s 16 counties had suicide rates greater than the state average, per 100,000 population 17. It is noted that Citrus County has the highest suicide rate at 24.4 per thousand with an age 18 and over population of 121,382 and has no inpatient psychiatric beds while Marion County has a 21.2 per thousand rate with a population of 267,251 and 35 adult inpatient psychiatric beds. It appears that the applicant s proposed Marion location will serve an area with less need in relation to suicide rate compared to Citrus County s. The applicant does not clearly demonstrate that the domestic violence rate leads to adult inpatient psychiatric hospitalizations. The applicant also reports a correlation between counties with fewer Baker Act receiving facilities and fewer physical examinations and correspondingly counties with more Baker Act receiving facilities and likewise more physical examinations, per 1,000 population 18. The applicant does not reference a time frame for the correlation between the presence or absence of Baker Act receiving facilities and the physical examinations conducted. The applicant indicates it could be assumed many of the district s individuals are not receiving the help they need; however, it is unclear how the number of physical examinations performed in an area indicates need for adult inpatient psychiatric hospital beds. The applicant notes a 2004 Public Policy Institute (PPI) of Marion County study that addresses mental health access and availability 19. The applicant states it will address seven of the eight priority service needs as determined in the study 20. According to the executive summary, the study concluded, in 2004, the topic of interest to this stated non-profit and non-partisan organization was mental health services in Marion County. The last paragraph of the executive summary reads as follows, 16 CON Application #10032, page #12, Table 4/Selected Mental Health Indicators by County 17 Ibid, page #12, Table 5/Suicide Rates by County in District 3 ( ) per 100,000 Population 18 CON Application #10032, page #14, Table 6/Completed Exams for Baker Act Patients by County and Presence of Receiving Facilities per 1,000 Population 19 The applicant does not include a copy of the study, for Agency review. However, an internet search revealed the following website: The study is 47 pages and includes a one-page executive summary. This document did not show The Centers or Ten Broeck Ocala to be licensed hospitals. 20 CON Application #10032, page #15, Table 7/Priority Service Needs of the Coalition 13

14 The following report is a consensus of perspective on a complex issue. Study recommendations address a plan of action to eliminate the stigma associated with mental illness, to centralize access to services, to educate the community about mental health and mental illness, and to form collaborative partnerships to advocate for a concerted continuum of care. The study does not conclude a need for an additional mental health facility as presented in the application 21. The applicant states a shortterm daycare program is the only identified need the project does not intend to offer; however, it is stated there will be a partial hospitalization program. Subsequent to this study, The Centers opened its 15-bed adult inpatient psychiatric facility on September 13, 2004 and Ten Broeck Ocala licensed 20 adult inpatient psychiatric beds on March 17, Ten Broeck indicates that it provides partial hospitalization in its opposition document. The applicant proceeds to discuss federally designated mental health shortage areas and states that research conducted by the WellFlorida Council in the past few months (apparently months immediately prior to application filed on October 15, 2008) has revealed a whole county mental health shortage in 11 of the 16 counties in District For clarity, only the U.S. Department of Health and Human Services (DHHS), Health Resources and Services Administration (HRSA), Bureau of Health Professions (BHPr), Shortage Designation Branch has the authority to declare a federally designated health professional shortage area (HPSA). Local health councils, such as the WellFlorida Council, do not have such authority. According to the Florida PCO website 23 and the corresponding federal counterpart (DHHS/HRSA/ BHPr/Shortage Designation Branch) website) 24, the Florida counties of Citrus, Hernando and Marion also have whole county mental health HPSA designations, in addition to the 11 stated by the applicant (those being Bradford, Columbia, Dixie, Gilchrist, Hamilton, Lafayette, Lake, Putnam, Sumter, Suwannee and Union). The applicable state and federal websites show that 14 of the 16 counties in District 3 have a whole county HPSA designation for mental 21 page #5, Major Problems and page #6, Solutions to the Problem 22 CON Application #10032, page #18, Table 9/Whole County Mental Health Shortage Area Designations

15 health, not just the 11 previously stated by the applicant 25. Generally, a mental health HPSA based on geographic designation means too few practitioners exist in the area to meet mental health needs. If the determination is based on a special population, generally, a given patient population (such as low income, race or ethnicity) is not served adequately by existing providers, as assessed by the HPSA criteria. The applicant contends that its project will provide additional physicians and mental health providers in the area. The presence or absence of inpatient psychiatric beds and/or facilities is not a mental health HPSA criterion. Psycare also discusses the formation of the Division 5 Coalition of Circuit 5 group which represents the counties of Citrus, Hernando, Lake, Marion and Sumter and whose membership is made up of consumers such as NAMI representatives, psychiatric and acute care hospital providers, counselors and case managers. The applicant indicates that the purpose of this group is to focus together on agreed-on mental health priorities and work together to address the problems. The first meeting was held last month (September 2008 as omissions response was received October 15, 2008), at which time the group elected officers and in a preliminary discussion of needs, agreed that funding was the top priority because of the high number of uninsured people. They also agree to enlist the services of a public relations professional and in response a local hospital CEO offer services of the hospital s public relations staff. Psycare states that staff from Springbrook Hospital and the parent (Oglethorpe, Inc.) will continue to meet with and address the coalition s interests. However, there is no indication that this organization supports a need for another inpatient mental health hospital in Marion County. Psycare also states it had private interviews, group discussions and town meetings regarding the need for additional adult inpatient psychiatric hospital beds. Anecdotal statements are provided concerning Baker Act patients, resources and patient needs. However, the applicant does not state where or when these discussions took place (with the exception of the Wildwood town meeting scheduled for September 18, 2008 noted in the original submission as planned to attend ) 26 and is non-specific on who was in attendance. 25 The 11 counties noted by the applicant have HPSA for mental health whole county geographic designations, whereas the three not noted by the applicant have special population whole county designations. In either case, all 14 counties have HPSA for mental health whole county designations. 26 Page 9 of the CON original submission received on September 10 indicated Hospital staff would be attending this meeting. 15

16 As stated previously, District 3 experienced an occupancy rate of percent during the 12-month period ending December 31, Thirtyfive of the 187 licensed adult psychiatric beds are located in Marion County (at The Centers, Inc beds and at Ten Broeck Ocala - 20 beds). According to AHCA Population Estimates published September 2007, Marion County is projected to realize a percent increase in the population age 18 years and older, from 272,616 in January 2009 to 310,960 in January For the same age group (adult), the growth rate for District 3 is forecast to be percent (1,323,534/1,486,620) with the State of Florida s growth rate at percent (15,114,451 in January 2009/16,783,420 in January 2014) for the population age 18 years and older. This indicates that for the adult age group (18 years and older) Marion County is projected to grow at a faster rate (14.07 percent) than the district (12.32 percent) and that the district will grow at a faster rate than the state (11.04 percent). Agency data for the 12-month period ending December 31, 2007, indicates that percent (728/1,142) of all Marion County resident adult psychiatric patients discharged from District 3 adult inpatient psychiatric facilities were discharged from the sole Marion County psychiatric facility The Center s, Inc. (as of December 31, 2007). The remaining percent (414/1,142) of all Marion County resident psychiatric patients discharged from District 3 adult psychiatric facilities were discharged from non-marion County (but still within District 3) facilities. Below is a table to account for these discharges. Marion County Resident Adult Psychiatric Patient Discharges by Facility CY 2007 Facility County Total Discharges of Marion County Residents Percent of Total Marion County Resident Discharges The Centers, Inc. Marion % Springbrook Hospital Hernando % Shands at Vista Alachua % Lifestream Behavioral Center Lake % Shands Hospital at the U of F Alachua % District 3 Acute Care Hospitals Multiple Counties % Non-District 3 Hospitals Multiple Counties % District 3/Subdistrict 3-4 (Marion County) Total 1, % Source: Florida Center for Health Information and Policy Analysis database Twelve Marion County resident adult psychiatric discharges as shown in the table above were covered by Medicaid HMO. None of the five hospitals in District 3 that had licensed adult inpatient psychiatric beds in 2007, reported a Marion County resident as a charity. 16

17 As shown above, percent of Marion County resident psychiatric discharges were discharged from The Centers, Inc (the sole licensed Marion County inpatient psychiatric hospital during CY 2007) percent of the total Marion County inpatient psychiatric discharges were from the other four District 3 hospitals with licensed inpatient psychiatric beds. Highest to lowest occupancy is this group were Springbrook Hospital (13.42 percent); Shands at Vista (10.20 percent); Lifestream Behavioral Center (4.75 percent); and Shands Hospital at the U of F (1.38 percent). District 3 acute care hospitals accounted for 9.82 percent and the remaining 4.60 percent were discharged from hospitals in other districts. The applicant does not attempt to tie out-migration to their choice of hospital location. It is anticipated that more Marion County patients will be treated in Marion County facilities as a result of the recent licensure of the 20 adult inpatient psychiatric beds at Ten Broeck Ocala. The Florida Center for Health Information and Policy Analysis database also showed 3,178 District 3 adult residents discharged from all hospitals statewide from January 1, 2008 through June 30, 2008, with a psychiatric DRG of 880 through 887. Seventy-six of these were covered by Medicaid HMOs. Lifestream Behavioral Center discharged 50 (or approximately percent 11 (or approximately percent) were discharged from Shands at Vista and the remaining 15 Medicaid HMO patients, were treated in acute care hospitals in District 3 and in non District 3 facilities. The applicant s parent facility, Springbrook did not treat any Medicaid HMO patients in the first half of Agency Rule Criteria/Preferences a. Chapter 59C-1.040, Florida Administrative Code, contain factors to be considered in the review of Certificate of Need Applications for hospital inpatient general psychiatric services for adults. 1. Rule 59C-1.040(4)(e) 1, Florida Administrative Code: Applicants shall provide evidence in their applications that their proposal is consistent with the needs of the community and other criteria contained in Local Health Council Plans, the district Alcohol, Drug Abuse and Mental Health Plan, and the State Health Plan. The application does not respond to this criterion directly. Although Florida no longer has a State Health Plan, and preference criteria for CON review is no longer required of Local Health Council Plans, the appropriate plan for mental health services in 17

18 Marion County is maintained by the Department of Children and Families. The Department monitors compliance with this plan through an annual survey of facilities in Marion County. 2. Rule 59C-1.040(4)(e) 2, Florida Administrative Code: Applications from general hospitals for new or expanded hospital inpatient psychiatric beds for adults shall normally be approved only if the applicant converts a number of acute beds, as defined in rule 59C-1.38, Florida Administrative Code, excluding specialty beds, which is equal to the number of hospital inpatient adult psychiatric beds proposed, unless the applicant can reasonably project an annual occupancy rate of 75 percent for the applicable planning horizon, based on historical utilization patterns, for all acute beds, excluding specialty beds. If the conversion of the number of acute care beds, which equals the number of proposed hospital inpatient general psychiatric beds for adults would result in an annual acute care occupancy exceeding 75 percent for the applicable planning horizon, the applicant shall only be required to convert the number of beds necessary to achieve a projected annual 75 percent acute occupancy for the applicable planning horizon, excluding specialty beds. This criterion is not applicable to the application under review, as the project does not involve the conversion of acute care beds to specialty beds. 3. Rule 59C-1.040(4)(e) 3, Florida Administrative Code: In order to ensure access to hospital inpatient general psychiatric services for Medicaid-eligible and charity care adults, 40 percent of the gross bed need allocated to each district for hospital inpatient general psychiatric services for adults should be allocated to general hospitals. District 3 has 187 licensed inpatient adult psychiatric beds. The 187 beds are dispersed among six facilities one is a general hospital (Class 1) and five are freestanding (Class 3), as follows: 18

19 District 3 Adult Inpatient Psychiatric Facilities Facility County Service Class # Adult Beds Lifestream Behavioral Center Lake Class 3 33 Shands at Vista Alachua Class 3 48 Shands Hospital at the University of Florida* Alachua Class 1 14 Seven Rivers Community Hospital ** Citrus Class 1 16 Springbrook Hospital Hernando Class 3 61 The Centers, Inc. Marion Class 3 15 District 8 Total 187 Source: Florida Hospital Bed Need Projections and Service Utilizations by District, July 2008 Batching Cycle. Note: Shands at Vista has N# to delicense six adult inpatient beds but had not done so as of 6/13/08. The beds were delicensed effective With 10 of the 187 beds being located in general hospitals this represents a 5.34 percent (10/187) allocation to general hospitals. If the project is approved, an addition of 27 beds would reduce the percentage to 4.67 percent (10/214) 27. Accordingly, this criterion will not be met with the approval of the project. Regardless, recent changes in Medicaid reimbursement indicate that the majority of reimbursement for Medicaid patients in this area will be by HMO managed care providers. 4. Rule 59C-1.040(4)(e) 4, Florida Administrative Code: Regardless of whether bed need is shown under the need formula, no additional hospital inpatient general psychiatric beds for adults shall normally be approved in a district unless the average annual occupancy rate of the licensed hospital inpatient general psychiatric beds for adults in the district equals or exceeds 75 percent 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. The adult psychiatric beds in the district experienced an occupancy rate of percent for the January 2007 through December 2007 reporting period. 27 The calculations do not include the six beds delicensed at Shands Vista on and Exemption # issued 8/13/08 to Lifestream Behavioral Center for the addition of four adult inpatient psychiatric beds. Inclusion of both would result in a 4.71 percent ratio of general hospital to specialty hospital adult inpatient psychiatric beds. 19

20 b. Priority Considerations for hospital inpatient general psychiatric services (Rule 59C (4) (i), Florida Administrative Code) (NOTE: All references to child/adolescent psychiatric services are deleted). In weighing and balancing statutory and rule review criteria, preference will be given to both competing and non-competing applicants who: 1. Provide Medicaid and charity care days as a percentage of their total patient days of total patient days provided by other hospitals in the district, as determined for the most recent calendar year prior to the year of the application for which data are available from the Health Care Board. The table below shows existing adult psychiatric providers amount of combined CY 2006 charity care and Medicaid. District 3 Adult Inpatient Psychiatric Facilities Percentage of Combined Medicaid and Charity Care For FY 2006 Combined Facility Medicaid/Charity Lifestream Behavioral Center 18.50% Shands at Vista* N/A Shands Hospital at the University of Florida 30.62% Seven Rivers Community Hospital (Delicensed 02/05/07) 11.78% Springbrook Hospital 0.44% The Centers, Inc. 0.00% Source: 2006 AHCA Hospital Financial Data. Note: Shands Hospital at UF files consolidated financial report which includes Shands at Vista financial data. As a freestanding psychiatric hospital, the applicant s Ocala Hospital facility cannot receive Medicaid fee for service reimbursement. However, the applicant commits to an indigent population of four to five percent and to Medicaid HMOs, in Schedule C Conditions. In the condition narrative, the applicant pledges to make emergency mental health services available to indigent clients at a minimum of five percent of total patient days and states it will contract with all Medicaid HMO carriers who service clients in District 3. According to the applicant s notes to Schedule 7B, charity care will comprise four percent of the facility s total year one and year two patient days and self-pay will be one percent during both years, respectively. Medicaid HMO is included in managed care, so an exact amount of care to Medicaid HMO patients cannot be determined. Springbrook Hospital, operated by the applicant s parent, reported on 0.44 charity care in 2006, none in 2007 or the first half of 2008; and no Medicaid HMO days during any of the aforementioned periods. 20

21 2. Propose to serve the most seriously mentally ill patients to the extent that these patients can benefit from a hospitalbased organized inpatient treatment program. The applicant does not respond directly to this criterion. However, the applicant does state that no client will be turned away without an assessment and viable treatment plan. Psycare also states that it will provide crisis care services for patients in acute crisis who require immediate assistance in a secure, safe and structured environment 28. The applicant also states that it will work to accommodate patients, coordinate programming with the courts and law enforcement, and serve geriatric patients, patients with dual diagnosis and Baker Act patients Propose to serve Medicaid-eligible persons. Psycare states that it will contract with all Medicaid HMO carriers who service clients in District 3. However, Medicaid HMO is included in general managed care, so an exact amount of care to Medicaid HMO patients cannot be determined. The applicant s parent facility in District 3, Springbrook Hospital provided zero patient days to Medicaid HMO patients and only 0.44 percent charity care in FY Utilization data through the 2 nd quarter of 2008, indicates that Springbrook Hospital does not serve Medicaid HMO patients. 4. Propose to serve individuals without regard to their ability to pay. Psycare proposes to follow a charity policy 30. The applicant states intentions to provide charity care in instances where there is no compensation and the patient s family income for the past 12 months does not exceed 150 percent of the current Federal Poverty Guidelines or where hospital charges exceed 25 percent of the patient s annual income and family income does not exceed four times the poverty level. It is further stated in the application that no client is turned away without an assessment and viable treatment plan CON Application #10032, page #5 29 CON Application #10032, page #40 30 Ibid, page #28 31 Ibid, page #29 21

22 5. Agree to be a designated public or private receiving facility. The applicant indicates that the proposed facility would be designated as a Baker Act receiving facility. b. Minimum Size of Specialty Hospitals (Rule 59C-1.040(3)(e) Florida Administrative Code). A specialty hospital providing hospital inpatient general psychiatric services shall have a minimum total capacity of 40 beds. The minimum capacity of a specialty hospital providing hospital inpatient general psychiatric services may include beds used for hospital inpatient substance abuse services regulated under Rule 59C-1.041, Florida Administrative Code. The separately organized units for hospital inpatient general psychiatric services for adults in specialty hospitals shall have a minimum of 15 beds (Rule 59C-1.040(5), Florida Administrative Code). Psycare proposes a 27-bed adult inpatient psychiatric facility. c. Access Standard. Hospital inpatient general psychiatric services should be available within a maximum ground travel time of 45 minutes under average travel conditions for at least 90 percent of the district's total population (Rule 59C-1.040(6), Florida Administrative Code). The travel time standard is met as it applies to District 3. d. Quality of Care. 1. Compliance with Agency Standards. Hospital inpatient general psychiatric services for adults shall comply with the Agency standards for program licensure. Applicants who include a statement in their certificate of need application that they will meet applicable Agency licensure standards are deemed to be in compliance with this provision (Rule 59C (7)(a), Florida Administrative Code). Psycare does not directly respond to this criterion. However, the applicant states the parent s three psychiatric hospitals in Florida have Agency licensure 32. Chapter 59A-3 Florida Administrative Code is not specifically referenced. 32 Ibid, page #4 and page #3, Table 1/Oglethorpe, Inc. Owned & Managed Psychiatric Hospitals 22