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 JFK Medical Center Limited Partnership d/b/a JFK Medical Center CON #10117 One Park Plaza Nashville, Tennessee Authorized Representative: Gina Melby, CEO (561) HealthSouth Rehabilitation Hospital of Martin County, LLC CON # Grandview Parkway, Suite 200 Birmingham, Alabama Authorized Representative: Mark J. Tarr, President (205) Service District/Subdistrict District 9 (Indian River, Martin, Okeechobee, Palm Beach and St. Lucie Counties) B. PUBLIC HEARING A public hearing was not held or requested regarding the proposed projects. Letters of Support: JFK Medical Center Limited Partnership d/b/a JFK Medical Center (CON #10117) included 14 letters of support. Twelve were dated during March 28, 2011 through April 11, Two were not dated and two were not signed.

2 Seven letters were from local physicians. Dr. Marvin Khon, Chief of Orthopedics at JFK Medical Center, states I believe that this program will be instrumental in reducing recovery time and improving the overall well-being of the patient (and) that a rehab unit is the right thing for all our patients in need. Dr. Gregory Martin, Medical Director of the Orthopedic Institute at JFK Medical Center, indicates that the proposed unit will have a positive impact on patient satisfaction, recovery time, physician to patient relationship, and patients family members. Dr. Edgard Pereira of the Palm Beach Radiology Professionals states, I realize the professional development opportunities this program would promote not only for the hospital, but also for its medical staff, and more specifically for its patients. Dr. Randy J. Gershwin indicates that there are not enough rehabilitation beds for his patients, Therefore our patients are denied or delayed admission due to lack of bed availability. Dr. Venkat Kalidindi, Medical Director of East Florida Hospitalists at JFK and Dr. Susan Hanson-Leal, East Florida Hospitalist at JFK, state that the addition of inpatient rehabilitation (at JFK) will allow for a stronger continuum of care across the facility. Eric D. Kramer, M.D., Neurologist with Medical Specialists of the Palm Beaches, indicates that JFK provides high-quality patient care and that a rehab unit will prove to be an asset for his patients. David L. Falk of Falk Prosthetics & Orthotics states, I believe that this program will be instrumental in providing a transparent continuum of care and improving the overall well-being of the patient. The remaining letters are from JFK case managers. Sherry B. Verchick, R.N., indicates that if JFK had a CMR unit, patients could start their intensive rehab process sooner and this would most certainly have a positive effect on the patients outcome. Misty Jordon, LPN, echoes this sentiment and indicates that there are challenges to getting beds in the three acute rehabs in Palm Beach County which delays the recovery and outcome for the patient. Robert B. Hill, President and CEO of Bethesda Healthcare System Inc., submitted a three-page opposition letter to CON # He states that Bethesda serves residents in Palm Beach County and portions of the surrounding counties and cities three reasons for his opposition. First, there is no published need for additional CMR inpatient beds in District 9. Second, he references Rule 59C-1.039(5)(d) Florida Administrative Code (F.A.C.), which indicates that regardless of bed need under the need formula no additional CMR beds shall be approved unless the district s annual occupancy was at least 80 percent for the 12-month period ending six months prior to the beginning date of the quarter of the publication of the fixed need pool. Mr. Hill notes that District 9 s average 2

3 annual occupancy for the 12 months ended June 30, 2010 was percent. However, pursuant to Rule 59C (6)(c) F.A.C., an existing CMR facility that has averaged 80 percent occupancy during the previous 12 months can add by exemption 10 CMR beds or 10 percent of its licensed capacity, whichever is greater. The result is that need is rarely published. Mr. Hill s final reason for opposing JFK s CMR program is that it would result in significant financial loss to Bethesda. Mr. Hill s comments are summarized below: The five CMR facilities in District 9 are not being fully utilized and there is no need for an additional program based on CON rules and need methodology. A new CMR service at JFK would adversely impact Bethesda because Bethesda currently receives referrals from JFK and is likely to lose a substantial number of CMR patients, resulting in a significant financial loss to Bethesda. Nurses, physical therapists, occupational therapists, and other skilled health care personnel are scarce. An additional program at JFK would increase the personnel costs of other CMR providers, including Bethesda, who would have to complete for skilled personnel that in short supply. Geographic access is not a concern in District 9 generally, or in Palm Beach County specifically as there are three CMR facilities surrounding JFK, which are within 30 minutes of each other. District 9 residents have plenty of available choices for CMR within travel times that are far less than the two-hour driving standard contained in the CMR rule. Financial accessibility is not a concern because Bethesda is the safety net hospital for South Palm Beach County and serves a substantial number of medically indigent patients. Mr. Hill asserts that JFK s proposed CMR services offer no incremental benefit to District 9 residents and would result in unnecessary duplication of services. He also asserts that currently, no geographic access issues or financial accessibility concerns exist in District 9. Mr. Hill concludes by reiterating that JFK s CON #10117 should be denied for lack of need, based both on the Agency s lack of demonstrated need (per CON rules) and Bethesda s and other District 9 CMR providers sufficient delivery of high quality CMR inpatient services. HealthSouth Rehabilitation Hospital of Martin County, LLC (CON #10118) included 26 letters of support. Twenty-three were dated during March 28, 2011 through April 8, 2011, and three were not dated. All were signed. 3

4 Representative Gayle B. Harrell, Florida House of Representatives, District 81, indicates that her letter is on behalf of the residents and potential patients in her district (parts of Martin, St. Lucie). She states that this is a much needed facility for Martin County residents. Thirteen letters were received from local physicians, five from Martin Memorial Health Systems case managers, one from Martin s administrative director of rehabilitation, three from local community organizations, three from former HealthSouth patients/family members, and one was from a local home health agency. Drs. Seth D. Coren and Richard Steinfeld, orthopedic surgeons, Eduardo Borges, neurologist and internist Deepti Sadhwani signed a form letter which cites their specialty and that their patients often travel great distances to obtain CMR care. This letter concludes that As a healthcare and patient advocate, I believe we need to ensure our community continues to offer and support the much-needed medical rehabilitation services for our citizens in order to ensure that patients remain in their home and communities as long as possible. I believe that the proposed facility by HealthSouth would deliver expert comprehensive rehabilitation to those individuals who need it most, resulting in better medical outcomes and the chance to recover closer to home. Six Martin County physicians and one St. Lucie County physician signed a form letter which cites their specialty, years of experience and the travel distance to the nearest CMR unit. This letter concludes that As a practicing physician I witness firsthand the problems residents have accessing needed intensive rehabilitation services. There is no doubt in my mind that a need exists for a rehabilitation hospital in Martin County. Furthermore, I am familiar with Martin Memorial and HealthSouth and know both are high quality organizations. I believe both organizations working together will develop the highest quality program possible. In my opinion, Martin Memorial and HealthSouth together represent the best combination for adding this vital new service and I fully endorse efforts to obtain certificate of need approval for the project. William Carlson, M.D., Managing Partner, South Florida Orthopaedics & Sports Medicine, states that his group includes nine orthopedic surgeons who practice at Martin Memorial Hospital South. He states that the group frequently has patients who would be well-served by intensive rehabilitation after inpatient hospital discharge. Dr. Carlson also indicates that travel to obtain CMR care is often a problem and concludes that many of our patients who would benefit from (an inpatient rehabilitation program) decide not to access one. 4

5 Tracey E. Cerbone, M.D., adds that as a neurologist she often has patients who would benefit from an aggressive rehabilitation program following hospital discharge but the nearest CMR facility is 40 miles away and it is a great hardship for the family, often elderly spouses, to make this trip on a daily basis. She concludes that many patients opt to go to a local skilled nursing facility when they would be better served by an inpatient rehabilitation hospital. Rebecca Phillips, OTR, CHT, CLCP, Martin Memorial Health Systems Administrative Director of Rehabilitation, indicates that their outpatient program exceeds expectations in regards to patient satisfaction and outcomes. She also discusses travel difficulties and the use of skilled nursing facilities which have limited rehab and staffing expectations. The case management/discharge planning unit at Martin Memorial supports this facility as a most-needed and essential option for their patients. They state that geographic accessibility often colors their patients choice for follow-up care. The unit believes that with accessibility of comprehensive rehab in their immediate area, patients will go with a smarter choice. Eleven members of Martin Memorial Health Systems Case Management/Discharge Planning Department signed this letter. Barbara Kaufman, President and CEO, Martin County Council on Aging, states that her organization will open the Charles and Rae Kane Center this summer and hopes to be offering outpatient rehabilitation services in partnership with Martin Memorial South as part of the care transitions model. She concludes that the project will fill a substantial hole in the continuum of care for Martin County residents. Tracy Henkes, Executive Director of the Martin/Okeechobee unit of the American Cancer Society, states that Martin County s population grows steadily above the state average and has growing healthcare needs. She concludes that the project will help ensure residents have more opportunities to access expert, local medical care. Victoria L. Suplizio, MS, RN, BC, Chief Operating Officer, Aloha Home Care, states many of the same factors as stated above. She adds that the rehab care at a skilled nursing facility setting is an inadequate substitute for the intensity and frequency of daily therapies, RN care and medical supervision that is mandated upon admission at a CMR hospital. 5

6 The executive director of The Sun Up Center, a non-profit agency that provides services to the developmentally disabled provided a general support letter. Letters from former HealthSouth patients and their family members cite the quality care provided by HealthSouth facilities. They also express confidence that the joint venture between Martin Memorial and HealthSouth will result in a high quality inpatient rehabilitation service that is needed in our community. C. PROJECT SUMMARY JFK Medical Center Limited Partnership d/b/a JFK Medical Center (CON #10117) proposes to establish a 24-bed comprehensive medical rehabilitation (CMR) program at JFK Medical Center Atlantis, Florida located in Palm Beach County. The applicant proposes the following conditions to CON approval on the application s Schedule C. 1. JFK will provide 4.0 percent of its annual CMR patient days to the combination of Medicaid, Medicaid HMO and charity (including self-pay) patients. 2. JFK will seek CARF (Commission on Accreditation of Rehabilitation Facilities) accreditation for its CMR program six months after serving the first patient in the CMR unit. 3. JFK will institute a stroke rehabilitation program upon opening its CMR program and will maintain its specialty certification in stroke rehabilitation from the Joint Commission. 4. The hospital will continue to offer a comprehensive outpatient rehabilitation program, primarily for persons receiving CMR inpatient services at JFK. 5. JFK will provide an Auto Ambulator and the other equipment described below as part of the rehabilitative technology that will be available at JFK when its CMR program opens. JFK may substitute different equipment of equal or better capability. Auto Ambulator ReoGo Ambulator Balance Master Visi-Pitch SaeboFlex VitalStim Bioness Interactive Metronome 6

7 6. JFK will be accredited by the Joint Commission. 7. The medical director of the CMR program will be a board-certified or board-eligible physiatrist with at least two years of experience in the medical management of inpatients requiring rehabilitation services. 8. JFK will provide education programs on disabilities awareness and re-entering the community to improve the quality of life of disabled persons and their families or guardians. These programs will be offered free of charge. 9. The hospital will include educational/meeting space to be used for such functions as community education programs and support group meetings relevant to rehabilitative care sponsored by JFK or outside community organizations. The applicant also provided nine Measurement of Conditions criteria. Portions of the applicant s measurement of condition one on reporting Medicaid and charity care would not be required in the applicant s condition compliance report. The applicant would be required to report the number of total patient days and number of days that were provided the Medicaid, Medicaid HMO and charity care (including self-pay) patients. Section (4), Florida Statutes prohibits accreditation by any private organization as a requirement for the issuance or maintenance of a certificate of need, so CARF accreditation and Joint Commission certification (conditions 2, accreditation portion of 3 and 6) will not be cited as conditions to approval. Condition number 7, the facility medical director is required by administrative rule and as such does not require a report. Additional Measurement of conditions proposed by the applicant includes: 1. JFK will provide a copy of the admission policy for the outpatient rehabilitation program and a count of the annual number of patients served. 2. The hospital will provide copies of printed information documenting the technology, consistent with the listing in the above condition statement, which has been purchased and is in service at JFK. 3. JFK will prepare a list of education programs that were offered relating to the condition. The list will show the title of each course and the dates on which each were conducted. 4. JFK will document the existence of space used in the hospital relating to the above condition (number 9). Should the project be approved, the applicant s proposed conditions would be reported in the annual condition compliance report as required by Rule 59C (3) Florida Administrative Code. 7

8 The total project cost is estimated at $5,824,890. The project involves 14,323 total gross square feet of that 1,100 gross square feet (GSF) is new construction. The project has a total construction cost of $3,718,250. HealthSouth Rehabilitation Hospital of Martin County, LLC (CON #10118) proposes to establish a 34-bed CMR specialty hospital in Martin County on the campus of Martin Memorial Hospital South. The applicant proposes to condition CON approval to this location on Schedule C s Item C. 1. and the attachment s Condition #11. The applicant proposes the following conditions to CON approval on the application s Schedule C. 1. The facility will be accredited by both the Joint Commission and the CARF. HealthSouth Rehabilitation Hospital of Martin County (HRHMC) will seek accreditation from the Joint Commission within the first year of operation and will seek accreditation from the Commission on Accreditation of Rehabilitation Facilities prior to the end of the third year of operation. To be measured by letters/certificate from The Joint Commission and the Commission on Accreditation of Rehabilitation Facilities included in our annual condition compliance report in years one and three. 2. The facility will institute a stroke rehabilitation program when it opens and will obtain specialty certification from The Joint Commission in stroke rehabilitation. HRHMC will seek specialty certification prior to the third year of operation. To be measured by a letter from The Joint Commission indicating stroke specialty certification and included in our annual report in year three. 3. The medical director of the facility will be a physician who is board-certified or board-eligible in physical medicine and rehabilitation with a t least two years of experience in the medical management of inpatients requiring rehabilitation services. To be measured by a copy of our Medical Directors CV/Resume and included in our first annual report. 4. The facility will coordinate and collaborate with Martin Medical Center s comprehensive outpatient rehabilitation program for persons who received CMR inpatient services at the facility. To be measured by letters outlining joint meeting between HRHMC and Martin Memorial s executive leadership and will include HRHMC s Director of Therapy and the Director of Therapy for Martin Memorial Health System. 5. The facility will provide joint education activities for both HRHMC and Martin Memorial staff including case managers from both institutions. 8

9 To be measured through documentation of joint education efforts as part of our annual report. 6. HealthSouth Will provide $5,000 per year for three years on educational events and materials focused on community education programs on disabilities awareness and community reentry to improve the independence and quality of life of persons with disabilities and their caretakers. To be measured by a list of community events held and materials provided related to disabilities and community reentry. This outreach will take various forms and will be outlined in our annual report. 7. We will provide assistance and coordination as well as a meeting room that will be made available to support groups and community education programs developed by HRHMC and others. To be measured by a list of community events including support groups in our annual report. 8. The facility will provide 1.5 percent of patient days to Medicaid patients and 1.0 percent of patient days to uninsured patients who meet the definition of charity care patients under Florida Statutes. HealthSouth will work with acute care hospitals, state social service agencies and private organizations to identify uninsured persons in need of CMR inpatient services in District 3 1. The applicant proposes the following conditions to CON approval on the application s Schedule C. The hospital will provide 1.8 percent of patient days to Medicaid patients and 0.7 percent of patient days to uninsured patients who meet the definition of charity care patients under Florida Statutes. HealthSouth will work with acute care hospitals, state human service agencies and private organizations to identify uninsured persons in need of CMR inpatient services in District 9. To be reported in our annual report. 9. The facility will provide an Auto Ambulator and the other equipment listed below as part of a technology package when the hospital opens. ReoGoAmbulator Balance Master Visipitch SaeboFlex wrist splint and exercise station VitalStim Bioness Interactive Metronome. To be measured by a letter confirming the acquisition on the above equipment or its technical equivalent in our annual report. 1 Assuming the applicant meant to type District 9, in future occurrences of the same typo the reviewer corrected the mistake without note. 9

10 10. For each of the first three years of operation, the facility will provide $10,000 for nursing scholarships and $5,000 for physical therapy assistant scholarships to Indian River State College, which has a campus next to the Martin - South Campus. In order to qualify for scholarships, students will have to meet the following criteria: Must be a Martin County resident Must be either a registered nursing student or a physical therapy assistant student Must maintain a 3.0 GPA To be measured by documentation on the progress of the scholarship program in our annual report. 11. The proposed CMR facility will be located on the campus of Martin - South in Martin County. Martin - South is located at 2100 S.E. Salerno Rd., Stuart, Florida 34997, although the new facility will be assigned its own address. To be measured by documentation of the location of the CMR facility on the Martin-South Campus in our annual report. 12. HRHMC represents a strategic alliance between its members, HealthSouth and Martin Memorial, to develop and operate the proposed facility. To be measured by a letter confirming our HRHMC Board meeting between its members, HealthSouth and Martin Memorial, in our annual report. 13. HRHMC will have shared service arrangements with Martin Memorial Hospital, Inc. To be documented by a letter identifying the purchased service we have agreed to in our annual report. 14. HealthSouth agrees to take all steps within its control to de-license 10 beds (at HealthSouth Treasure Coast), which de-licensure would then be timed to occur at or prior to the licensure of the proposed 34-bed hospital. Once delicensed, HealthSouth would commit not to seek to add beds at the Treasure Coast facility for a period of at least five years. To be documented by submission of a new license for HealthSouth Treasure Coast showing 10 fewer beds. Section (4), Florida Statutes prohibits accreditation by any private organization as a requirement for the issuance or maintenance of a certificate of need, so Joint Commission and CARF accreditation (condition 1 and portion of condition 2) will not be cited as conditions to approval. Condition number 3, the facility medical director is required by administrative rule and as such does not require a report. Should the project be approved, the applicant s conditions would be reported in the annual condition compliance report as required by Rule 59C (3) Florida Administrative Code. 10

11 The total project cost is estimated at $21,519,674. The project involves 48,407 gross square feet (GSF) of new construction. The project has a total construction cost of $9,916,985. D. REVIEW PROCEDURE The evaluation process is structured by the certificate of need review criteria found in Section , 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, applications are comparatively reviewed to determine which applicant(s) best meets the review criteria. Rule 59C (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, Marisol Novak analyzed the application with consultation from the financial analyst, Derron Hillman, who reviewed the financial data and architect, Scott Waltz, who evaluated the architecturals and the schematic drawings. 11

12 E. CONFORMITY OF PROJECT WITH REVIEW CRITERIA The following indicate the level of conformity of the proposed project with the criteria and application content requirements found in Florida Statutes, Sections , and and applicable rules of the State of Florida, Chapter 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? ss (1) (a), Florida Statutes. Rule 59C-1.008(2), Florida Administrative Code and Rule 59C-1.039(5), Florida Administrative Code. In Volume 37, Number 3, dated January 21, 2011 of the Florida Administrative Weekly, a fixed need pool of zero beds was published for CMR beds in District 9 for the July 2016 planning horizon. District 9 has 292 licensed and zero approved CMR beds. District 9 s 292 licensed CMR beds experienced percent utilization during the 12-month period ended June 30, The applicants are applying outside of the fixed need pool. b. According to Rule 59C (5)(d) of the Florida Administrative Code, need for new comprehensive medical rehabilitation inpatient services shall not normally be made unless a bed need exists according to the numeric need methodology in paragraph (5)(c) of this rule. Regardless of whether bed need is shown under the need formula in paragraph (5)(c), no additional comprehensive medical rehabilitation inpatient beds shall normally be approved for a district unless the average annual occupancy rate of the licensed comprehensive medical rehabilitation inpatient beds in the district was at least 80 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. As shown in the table below, District 9 s 292 licensed CMR beds experienced an occupancy rate of percent during the 12-month period ending June 30,

13 Comprehensive Medical Rehabilitation Bed Utilization District 9 July 2009 to June 2010 Facility Beds County Total Occupancy % HealthSouth Treasure Coast Rehab Hospital 90 Indian River 57.40% Bethesda Memorial Hospital 28 Palm Beach 89.91% Delray Medical Center 90 Palm Beach 21.36% St. Mary s Medical Center 50 Palm Beach 22.68% Lawnwood Regional Medical Center & Heart Institute 34 St. Lucie 72.39% District 9 Total % Source: Florida Hospital Bed Need Projections & Service Utilization by District, January 2011 Batching Cycle. In addition, the last six years of utilization for these facilities are illustrated below. Comprehensive Medical Rehabilitation Bed Utilization for District 9, 7/2005-6/2010 7/2004-7/2005-7/2006-7/2007-7/2008- Beds 6/2005 6/2006 6/2007 6/2008 6/2009 7/2009-6/2010 Facility HealthSouth Treasure Coast Rehab Hospital % 52.58% 50.32% 54.76% 56.57% 57.40% Bethesda Memorial Hospital 28 * 53.66% 81.82% 82.64% 92.24% 89.91% Delray Medical Center** % 57.66% 34.53% 33.25% 25.62% 21.36% St. Mary s Medical Center % 36.90% 29.85% 34.91% 29.61% 22.68% Lawnwood Regional Medical Center & Heart Institute % 63.17% 68.17% 73.55% 70.50% 72.39% District % 52.79% 47.05% 49.59% 47.46% 45.21% *Bethesda Medical Center was not licensed until 8/4/2005. It appears that Bethesda would be eligible to add beds by exemption. **This facility was formerly known as Pinecrest Rehabilitation Hospital before 7/2006 Source: Florida Hospital Bed Need Projections & Service Utilization by District for the time periods shown. The map below shows current District 9 CMR providers and the applicants proposed locations. HealthSouth Rehabilitation Hospital of Martin County, LLC (CON #10118) conditions project approval to its facility being located on the Martin Memorial Hospital South campus, which is the address used for the map below. The applicant indicates the facility will have a separate address. CMR 13

14 District 9 Comprehensive Medical Rehabilitation Facilities JFK Medical Center (CON #10117) & HealthSouth Rehabilitation Hospital of Martin County, LLC (CON #10118) MapPoint 2006@Microsoft 14

15 MapQuest directions obtained April 15, 2011 indicate that the existing facilities are located within the following approximate drive times/miles from JFK Medical Center (CON #10117): 13 minutes (Bethesda Memorial 8.13 miles), 19 minutes (Delray Medical Center miles), 20 minutes (St. Mary s Medical Center miles) one hour 13 minutes (Lawnwood Medical Center miles) and one hour 33 minutes (HealthSouth Treasure Coast miles). The existing facilities are located within the following approximate drive times/miles from Martin Memorial South (HealthSouth CON #10118 s approximate location): 28 minutes (St. Mary s Medical Center miles), 39 minutes (Lawnwood miles), minutes (Bethesda Memorial 53 miles), 59 minutes (HealthSouth Treasure Coast miles) and one hour (Delray Medical Center miles). The applicants proposed locations are approximately 47 minutes and miles from one another. c. Other Special or Not Normal Circumstances JFK Medical Center Limited Partnership d/b/a JFK Medical Center (CON #10117) states several not normal circumstances justify approval of the proposal to establish a 24-bed CMR unit at JFK. These include: Palm Beach County is the most populated county and possesses the largest 65 and older population within District 9. This will be true now and in the future. Under the current system, current CMR providers can add beds through the CON exemption process. This makes it unlikely that there will be a net need for CMR beds projected anywhere in the state. This along with the increasingly localized nature of CMR service delivery constitutes a not normal circumstance. Current CMR CON Rule 59C-1.039, F.A.C., has not been amended since Therefore, the rule does not account for the many subsequent changes in health care such as Medicare reimbursement changes affecting CMR, more recent CMS policy changes, current medical literature, resultant changes in CMR service delivery away from the regional referral model and toward a more locally-based stepdown model that emphasizes and enhances patient continuity of care. Available data reinforces the belief, at least in Palm Beach County, CMR units do not function as regional referral centers but instead primarily serve their own acute care discharges (including acute discharges from sister hospitals within the same local system). Huge gaps between the age-adjusted rates of acute care discharges to CMR among District 9 hospitals and the state as a whole, making it obvious that CMR is greatly underutilized in District 9 and Palm Beach County. 15

16 The estimated and projected difference between expected and actual discharges to CMR beds from District 9 hospitals supports a not normal need of between additional CMR beds. The shortfall in CMR utilization represents a suppressed demand that will drive the utilization of the proposed 24-bed at JFK. Therefore, the proposal is unlikely to have a significant adverse impact on any existing provider. JFK contends that inpatient CMR utilization in District 9 significantly lags behind other areas of the state, therefore residents of District 9 receive fewer CMR services than the typical Floridian. The applicant includes the actual acute discharges to inpatient CMR for the July June 2010 reporting period which indicates that District 9 had 2,498 patients discharged to inpatient CMR care. Population data by district indicates that District 9 has 1,888,176 residents as of January 1, JFK presented both discharges and population by age group cohorts. District 9 s 2,498 discharges and 1,888,176 population places it fifth highest out of 11 districts in total CMR discharges and population. The District 9 rate based on July 2009-June 2010 acute care discharges to CMR and January 1, 2010 population estimates was per 100,000. This was the sixth highest use rate out of 11 districts. The table below depicts the rate of acute care discharges to the inpatient CMR setting by district for the period July 2009-June Rate of Acute Care Discharges to CMR Per 100,000 Population District Total , , , , Average Source: Page 22 of CON application #10117 Note: Discharge rate per thousand is based on the acute care discharges to CMR during July 2009-June 2010 and the January 1, 2010 population estimates provided by the applicant. The CON reviewer cannot verify the number of these discharges nor the population 15-44, and age cohorts. 16

17 JFK maintains that the disparity is much greater when age-specific use rates are examined. The applicant s age specific analysis shows that the elderly, ages and 75+, are the most intensive users of CMR services and District 9 has the state s second largest populations in these age group, yet District 9 discharges to CMR care for these age groups lag considerably behind those for the state as a whole. JFK applies the statewide average acute care to CMR discharge rates by age group to the January 2010 age-specific population estimates by district in the table below. Expected Acute Care Discharges to CMR Based on Age-Specific Statewide Rates, July 2009-June 2010 District Total , ,610 3, ,299 2, ,426 2, ,612 3, ,253 3, ,931 3, ,057 3, ,158 2, ,542 3,571 Source: Page 34 of CON application #10117 Focusing on District 9, the applicant states that the district would have been expected to generate 3,791 acute care discharges to CMR during instead of the 2,498 that were actually reported. This is an underutilization by 1,293 (34.1 percent) the greatest amount of underutilization of CMR services of any district in Florida using the parameters of the applicant. The applicant contends that this 1,293 shortfall forms the basis for a quantitative estimate of need for the proposed 24-bed CMR unit. JFK asserts that this shortfall in discharges generates 16,809 CMR inpatient days, based on an average length of stay of 13 days. The 16,809 days yield an average daily census of 46.1 patients. Assuming the 85 percent occupancy used in Rule 59C-1.039, the applicant concludes that the resultant net need for CMR beds to serve the shortfall in District 9 is Using the 5.23 percent increase in population between 2011 and 2015 shown in the table below, the resultant net need for CMR beds to serve the population of District 9 is The estimated population of Palm Beach County totaled 1,288,436 on January 1, By January 1, 2015 the population is projected to reach 1,339,451 - a 4.0 percent increase. As illustrated below, Palm Beach County has the largest current and projected population of any county in District 9. Additionally, Palm Beach County has the largest current and projected population of age

18 District 9 Population Estimates for 2011 and 2015 Total Population Age 65+ County Indian River 142, ,528 39,646 45,132 Martin 143, ,620 41,257 45,689 Okeechobee 39,852 41,524 6,980 8,227 Palm Beach 1,288,436 1,339, , ,010 St. Lucie 277, ,165 61,723 72,511 District 1,892,184 1,991, , ,856 Source: AHCA Population Estimates , published September 2010 The CMR program at JFK will primarily serve patients being discharged from one of the three Hospital Corporation of America (HCA)-affiliated hospitals located within Palm Beach County. The applicant asserts that inpatient CMR programs typically: 1. Primarily serve patients from their home counties 2. Acute care hospital-based CMR units primarily serve acute care discharges from their own hospital and nearby hospitals affiliated with the same parent organization. HCA is the indirect parent company of JFK and is also the indirect parent of two other acute care hospitals in Palm Beach County, Columbia Hospital and Palms West Hospital. None of these acute care hospitals are licensed to provide inpatient CMR services at the present time. The utilization forecast used by the applicant for the proposed CMR unit is predicated on the assumption that statewide average rates of utilization will prevail. JFK used actual historical acute care discharges to CMRs broken down by age and primary diagnosis. This age and diagnosis-specific distribution, expressed as a percentage, was applied to the actual age and diagnosis specific distribution of similar cases with the three HCA-affiliated hospitals in Palm Beach. The results are illustrated in the table below. CMR Bed Need as Extrapolated from Age and Primary Diagnosis Data by the Applicant Facility Discharges Patient Days Average Daily Census Bed Need JFK 412 5, Palms West 87 1, Columbia Three Hospitals Combined 562 7, Source: Page 37 of CON application #10117 The applicant uses this data and method to determine occupancy of the proposed facility, estimating 68.8 percent occupancy for year one and 74.4 percent occupancy for year two based solely from HCA-affiliated discharges. 18

19 JFK states that the rehabilitation model to be employed at the proposed facility is based on the concept that access to rehabilitation services, provided quickly, is the best way to facilitate returning elderly persons back into the community and avoiding long-term stays in a nursing home setting. In discussing District 9 CMR utilization, the applicant contends that the lower occupancies experienced at the larger CMR facilities in District 9 are partially a function of Medicare s 60% rule. Federal Legislation passed in 2007 set a guideline that at least 60 percent of patients discharged from an inpatient rehabilitation facility had to be treated for one of 13 conditions in order for the facility to maintain IRF status and be compensated under the IRF prospective payment system. Consequently, JFK states, many older facilities that were established with larger bed inventories predicated on a greater ability to admit more varied types of cases have difficulties filling their beds. The applicant asserts that these Medicare reimbursement changes are significant to utilization as the majority of CMR patients are elderly and primarily covered by the Medicare program. The CON CMR rule has not been amended since 1995, and therefore, maintains JFK, do not account for the foregoing federal regulatory changes and more recent trends in CMR services. Additionally, the applicant presents the difference in occupancy of large hospital-based CMR hospitals in Florida versus small hospital based CMR units (freestanding CMR hospitals were not included in the comparison). Thirteen units with an average size of 59 beds had an occupancy rate of 46.3 percent; 20 units with an average size of 22 beds had an occupancy rate of 64.8 percent. JFK points specifically to Delray Medical Center and St. Mary s Medical Center, which appear not to have the ability to generate a sufficient number of CMR admissions with their own acute care discharges. Conversely, JFK states that Lawnwood, a sister facility in St. Lucie County with a 34-bed CMR unit, has an occupancy rate of 72.4 percent. JFK presents data it contends substantiates that Delray Medical Center and St. Mary s Medical Center use their CMR beds primarily to serve patients from within their own local systems and do not function as regional referral centers. This data indicates that the primary service area that comprises 76 percent of Delray Medical Center and sister facility s (West Boca Medical Center) acute care discharges accounted for 58 percent of Delray s CMR discharges. Likewise, the applicant presents data that the primary service area that comprises 76 percent of St. Mary s Medical Center and sister facility s (Good Samaritan Medical Center) acute care discharges accounted for 61 percent of St. Mary s CMR discharges. This discharge information, JFK believes, reflects that 19

20 neither Delray Medical Center nor St. Mary s Medical Center are utilized to any appreciable extent by patients discharged to CMR services from HCA-affiliated hospitals in Palm Beach County. JFK states that the two other CMR units in District 9, Lawnwood in St. Lucie County and HealthSouth Treasure Coast in Indian River County, are not realistic alternatives for CMR-eligible patients being discharged from JFK or its sister hospitals in Palm Beach County. Bethesda Memorial Hospital is the shortest driving time from JFK of any existing provider of inpatient CMR services but the applicant contends that this facility frequently operates at or near capacity. While the applicant concedes that a CMR unit at JFK may redirect some patient volume away from Bethesda, JFK contends that the impact on Bethesda will not be significant and may even be beneficial given their capacity constraints. JFK states skilled nursing facilities (SNFs) are generally not an acceptable alternative to CMR services because they provide different levels of service. SNFs are not staffed or equipped to provide intensive rehabilitation services that hospital-based CMRs can provide. JFK maintains that approval of the proposed unit will greatly benefit patients discharged to CMR by the three HCA-affiliated hospitals in Palm Beach County. Furthermore, JFK presents data that 83 percent of Florida residents discharged from hospital-based CMR units were also residents of the county in which the CMR facility was located. Of all discharges, including those from out-of-state, 77 percent were residents of the county in which the CMR facility was located. Similarly, 80 percent of CMR discharges from freestanding CMR hospitals were residents of the county in which the freestanding facility was located. When looking at all discharges from freestanding CMR, 76 percent were residents of the county in which the CMR facility was located. The applicant states that in order to identify and understand the problems encountered by residents of Palm Beach County due to the lack of locally-based inpatient CMR services at JFK Medical Center, JFK contacted key personnel to ascertain experiences regarding the existing level of care. JFK secured and included letters of support (see CON #10117 Item B Letters of Support) from these inquiries supporting its contention that CMR services are needed at JFK. Summarized, these letters believe that the lack of inpatient CMR beds at JFK represents a substantial unmet need and imposes an unfair burden on those patients who cannot or will not travel to other CMR facilities within District 9 due to inherent disruptions in their continuity of care. The applicant asserts that all of the letters attest to the gap in the choices available to patients and families and the gap s rectification if JFK was allowed to provide inpatient CMR services. 20

21 The applicant concludes that acute care discharge data confirms that relatively few District 9 residents end up being admitted to a CMR bed compared to the statewide average. The above discussion of bed need and the utilization forecast presented is based on JFK s assumption that the historic District 9 percent of acute care discharges to CMR will continue to accrue to existing providers in the future as they do currently. JFK maintains that only small portions of the number of discharges characterized as a shortfall are necessary to successfully utilize the proposed unit. Finally, JFK asserts that its modest proposal to establish a 24-bed CMR unit within JFK Medical Center is unlikely to have a significant adverse impact on any existing provider. HealthSouth Rehabilitation Hospital of Martin County, LLC (CON #10118) contends that the fixed need pool does not identify the need for additional rehabilitation services anywhere in the state and has not for many years. HealthSouth lists several circumstances that exist that they consider not normal. These include: There are no CMR services located in the service area, which is Martin County. Martin County has a well-established continuum of health care services, but is currently lacking CMR services. Martin County has an unusually high concentration (29 percent) of the elderly population (65+). This age cohort has the greatest need for CMR services. The vast majority of Florida residents live in a county with CMR services, either hospital-based, freestanding or both. Martin County has the second largest senior population - and one of the largest total populations--of any county in the state without CMR services. It is also larger than several counties with CMR services. Residents of the service area experience an abnormally low rate of rehabilitation discharges per 1,000 population aged 65 and over. In particular, an analysis of the CMR discharge rates for the 65+ population reveals the striking gap between the statewide rate for residents of counties that have CMR facilities and the discharge rate for residents of Martin County. This variance is even greater when compared to the average discharge rate for counties with a freestanding CMR provider. Martin County residents, in all age cohorts, utilize CMR services at a level that is significantly lower than the state as a whole. Martin County and Indian River County are virtual twins on many dimensions with strong similarities in demographic composition, yet Indian River County, which has a rehabilitation hospital, experiences a much higher rehab discharge rate. The lack of a readily accessible CMR service in Martin County has contributed to a low use rate by Martin County residents. 21

22 The size and age makeup of Martin County s population, along with the under-utilization of CMR level services, creates a need for a local CMR provider within the existing continuum of care. A geographical barrier to access CMR services has been created in Martin County by an elderly population, no public transportation, and no CMR services in Martin County. Elderly spouses, other caregivers, and family can find the distances and the unfamiliar surroundings prohibitive. Frequently, elderly spouses are unable to drive or cannot drive at night. For the highest quality outcomes for the patient and peace of mind for the patient s loved ones, family must have frequent access to the patient while he/she is in the CMR hospital. The goal of returning the patient to the community is highly reliant on family participation in the care of the patient from admission to discharge. The family must be confident that they can take care of the patient when they return home. The consistent presence of the family promotes and encourages a better emotional state in the patient and gives them a better chance at a fuller recovery. HealthSouth has found that family involvement on a daily basis, from pre-admission to discharge, has a direct impact on the ability of the patient to return home as opposed to an institutional setting. Patients may choose a lower, less intensive level of rehabilitation therapy (such as in a local skilled nursing facility) rather than receive care in a CMR program outside the area. Such a choice can limit their ability to maximize their functional outcome and potentially be left with functional deficits that could have been avoided. For many conditions, such as stroke, it has been demonstrated that CMR level of care results in a higher level of functional outcome and greater long-term independence than less intensive care such as that provided by skilled nursing. HRHMC will educate the community (both lay and professionals) about CMR level care, why it is different from other levels of care and why CMR patients have better outcomes, including returning to home and to a productive life. The gap between the expected rehab discharge rate in counties with freestanding CMR providers and the current rate means that the proposed 34-bed CMR facility can be developed without having an adverse impact on any existing provider. HRHMC projects that its program will reach 75 percent occupancy by the third year of operation. 22

23 The approval of a CMR facility in Martin County will not prevent any existing CMR provider from continuing to perform its mission in the health care system. Any Martin County resident who currently receives acute care from a provider outside of Martin County is likely to continue to receive CMR services from these same providers. The number of Martin County residents who currently utilize CMR programs in District 9, other than the one located at HealthSouth s Treasure Coast Rehab Hospital, is minimal. HRHMC states that beds should no longer be the controlling factor in determining need because existing providers can add beds via exemption. Section (3)j, Florida Statutes, eliminates certificate of need review for the addition of comprehensive medical rehabilitation beds in a number not exceeding 10 beds or 10 percent of the licensed capacity of the bed category being expanded, whichever is greater. Therefore, the applicant contends, the focus of a CON proposal for a new CMR program should be whether quality of care and access would be materially improved. Additionally, HRHMC maintains that the Agency s CMR rule computes need for CMR beds for each district as a whole, but does not address the distribution of CMR beds within a district or the effects of that distribution on the accessibility of CMR services to residents of the district. HRHMC defines the comprehensive medical rehabilitation process as a distinct level of care, different from long-term acute care, skilled nursing or short-term acute care. The applicant included the CMS definition for inpatient rehabilitation programs: Designed to provide intensive rehabilitation therapy in a resource intensive hospital environment for patients who, due to the complexity of their nursing, medical management, and rehabilitation needs, require and can reasonably be expected to benefit from an inpatient stay and an interdisciplinary approach to the delivery of rehabilitation care. HRHMC indicates that CMS says patients appropriate for a less intensive setting are those who do not require/cannot participate in an intensive rehabilitation therapy program. The applicant contends that the entire continuum of rehabilitation services should be available to patients with serious acute physical impairments such as paralysis, amputation or gait disturbance. Some patients could be treated in either setting, HRHMC concedes, but for most patients one is clearly a superior option. The applicant includes 14 differences between rehabilitation provided in SNFs and CMR facilities, these reasons are listed below: Patient Diagnoses are Limited in CMR Sites from which Patients can be Admitted Length of Stay is Shorter in CMR 23

24 Interdisciplinary Team Approach Attending Physician Visits Medical Director Specialty Registered Nurse Availability Multiple and Intensive Therapy A Physician must Evaluate Patient with 24 hours in a CMR Individualized Overall Plan of Care Required within Four Days of Admission in a CMR CMRs are Required to Monitor Rehabilitation Outcomes Specialized Teams Can be Developed in CMRs SNFs have Higher Mortality Rate than CMRs CMRs have More Specialized Rehabilitation Equipment HRHMC represents the combined efforts of the local provider with an extensive understanding of the health care needs of the community (Martin Memorial) with the national expert in the provision of high quality, cost-effective CMR services (HealthSouth). HRHMC maintains that several factors, including the ongoing development of medical services in this community and the rapidly changing demographics in Martin County, make this project a timely and important expansion in the local continuum of care. District 9 is composed of five counties: Indian River, Martin, Okeechobee, Palm Beach and St. Lucie. The population of the district is expected to grow a total of 6.8 percent from 1,892,184 residents in 2011 to 2,019,937 in Residents make up the fastest growing segment of the population in the area and are projected to grow at an annual rate of 4.5 percent between 2011 and Residents 75 and older make up the next fastest growing segment (see table below). The applicant maintains that growth in the elderly cohorts is significant because this age group typically utilizes health care services, including inpatient rehabilitation services, at a rate significantly higher than that of younger age groups. District 9 Population Projections Age Cohort % Change CAGR , , % 0.8% ,170,509 1,120, % 0.9% , , % 4.5% , , % 1.3% Total 1,892,184 2,019, % 1.3% Source: AHCA Population Estimates, Published September 2010 Next, HRHMC delves into the population characteristics of Martin County illustrating the fastest growing segment of the population in Martin County is aged (see table below). 24

25 Martin County Population Projections Age Cohort % Change CAGR ,500 24, % 0.0% ,177 79, % 0.4% ,599 23, % 4.1% ,658 23, % 1.3% Total 143, , % 1.0% Source: AHCA Population Estimates, Published September 2010 The applicant notes, that in addition to Martin County having a fast growing population it has one of the largest percentages of senior residents of any county in the State of Florida. More than 28 percent of Martin County s population is age 65 and over. This percentage is higher than all but six other counties in the state. Of those six counties, the applicant shows that four have a CMR provider located within the county. The other two counties, Highlands and Sumter, have much smaller total and elderly populations than Martin County. HRHMC points out that Martin County has the sixth largest total population and second largest senior (age 65 & over) population in the state of all counties that do not have a CMR provider. Martin County also has a larger senior and total population than several counties that have CMR providers. Since there are no CMR providers in Martin County, the applicant concludes that residents eligible for CMR services must receive care quite a distance from home. HealthSouth states its experience demonstrates that family involvement in CMR care has a direct impact on the patient s progress and ability to manage his or her condition after discharge. HRHMC maintains that this distance impacts the family s ability to participate, including the large proportion of elderly spouses of patients admitted to CMR facilities. Elderly spouses or other caregivers can find distance and unfamiliar surroundings prohibitive. HealthSouth notes that most Martin County residents receive CMR services at HealthSouth of the Treasure Coast in Vero Beach (Indian River County) and Lawnwood Regional Medical Center in Fort Pierce (St. Lucie County). Travel times under good travel conditions are stated to be between 45 minutes to over an hour one way, so for families to participate in patient care the daily average drive time is between 1.5 to over two hours. Even discounting age, the applicant contends that some families may not be able to afford the 21 to 28 hours in travel time and gasoline of an average 14-day inpatient course of therapy. The table below was provided by HRHMC to show average travel time and distance from the main centers in Martin County. 25

26 Travel Times and Distance to Existing District CMR Facilities HealthSouth Treasure Coast Rehab Hospital Lawnwood Regional Med. Ctr. Delray Medical Center St. Mary s Medical Center Bethesda Memorial Hospital From Min. Miles Min. Miles Min. Miles Min. Miles Min. Miles Stuart Indiantown Port Salerno Palm City Hobe Sound Source: Page 60 of CON application #10118 HealthSouth indicates that Martin County CMR-eligible patients are choosing to forego CMR services because of distances. The applicant quotes a letter from the staff members of the case management/ discharge planning department of Martin Memorial Health Systems and provides a comparison of Martin County resident CMR use with the statewide average to support this. The applicant examines utilization of current CMR facilities first from a geographic standpoint, noting that the current distribution of CMR beds is skewed to the northern and southern ends of the elongated geography of District 9. Currently, 90 CMR beds are in Indian River County, 168 in Palm Beach County, 34 in St. Lucie County, and none in Martin and Okeechobee Counties. Of the current providers, the applicant notes that Bethesda Memorial s 28-bed CMR unit had the highest occupancy rate of the five providers at 89.9 percent. HealthSouth Treasure Coast Rehab Hospital (90 beds) provided the most patient days with an average occupancy level of 57.4 percent. Lawnwood Regional Medical Center (34 beds) was also wellutilized at 72.4 percent. HRHMC states that given that most of the CMR beds at Lawnwood are in semi-private rooms, Lawnwood may be at or near its functional capacity. This is significant to the applicant as Lawnwood is the only CMR facility in District 9, Subdistrict 2 which includes Martin and St. Lucie Counties. Further, HealthSouth states Lawnwood, as a recently designated trauma center will have an increased need for CMR services as that is often an important discharge option post trauma. HRHMC attests that Lawnwood is primarily serving its patients and those of its sister facilities. HRHMC relied on the discharges to inpatient rehab from the Agency s inpatient acute care database to gauge referral to and utilization of CMR facilities. The applicant also used the inpatient rehabilitation database, even though it is not yet possible to link a patient s acute care records with his/her CMR records, for its market share, use rate and bed demand analyses. There is one exception to this the utilization of the 26

27 CMR unit at Bethesda Regional Medical Center 2. Based on this data, HRHMC compiled estimates as to where Martin County CMR patients are currently going for comprehensive medical rehabilitation. Estimated 2010 Market Share of Martin County CMR Patients CMR Provider Patients Market Share HealthSouth Treasure Coast Rehab Hospital % Lawnwood Regional Medical Center % St. Mary s Medical Center 4 4.1% Holy Cross Hospital 2 2.1% Shands Rehabilitation Hospital 2 2.1% HealthSouth Sunrise Rehabilitation Hospital 1 1.0% Mount Sinai Medical Center 1 1.0% Bethesda Regional Medical Center 1 1.0% Total % Source: Page 47 of CON application #10118 HRHMC maintains that there is a direct correlation between the presence of an in-county CMR provider and the CMR use rate. Across all age cohorts, HealthSouth asserts, counties with a freestanding CMR provider have a CMR use rate that is significantly higher than the statewide average for the same age grouping. The applicant presents the 2010 CMR use rate per 1,000 population by age cohort and by county for all counties in Florida. This data shows that Martin County has one of the lowest use rates in the state and the rates for residents aged 65 to 74 and 75 and older are less than 20 percent of the statewide average use rates for the same groups CMR Use Rates for Martin County and Florida Average Martin County Florida Average Source: Pages of CON application #10118 The applicant indicates that Martin County residents utilize CMR services at a rate significantly less than Floridians as a whole and at a rate less than residents of other counties without a CMR provider. HRHMC next discusses the various similarities between Martin and Indian River Counties in terms of population, percent elderly, geographic area and acute care discharges, but notes their divergent rehab discharge rate. Indian River County has 6.7 discharges per 1,000 population compared to only.67 in Martin County. The applicant cites the significant difference in the two counties is the absence of CMR facilities in Martin County. 2 Based on its analysis of both the Inpatient Acute Care Database and the Inpatient Rehabilitation Database, HRHMC asserts that Bethesda Regional Medical Center has not reported consistent, reliable CMR data since the second quarter of HealthSouth contends that Bethesda s CMR patient data from the 12 months ending June 20, 2008 would be representative of its current CMR patient population. 27

28 Additionally, the applicant points to the trend in major rehab modalities for Martin Memorial s outpatient rehab services in the last five years. Between FY 2006 and FY 2010, total outpatient visits grew from 65,747 to 87,646, a 33.3 percent increase. HealthSouth concludes that this increase in outpatient rehabilitation utilization supports that there is a gap in the continuum of care in Martin County. The proposed facility, the applicant asserts, will close this gap and give Martin County patients access to the inpatient rehabilitation services they need without the burden of having to leave their community to access them. HRHMC indicates that it will increase the use rate for CMR services primarily by offering education to discharge planners and physicians at Martin Memorial Health System hospitals and other area hospitals with rehab liaisons. Often, the applicant asserts, without the knowledge and training provided by HealthSouth s rehab liaisons, hospital discharge planners and physicians are not fully aware whether a patient would be eligible for CMR services. The proposed CMR hospital will be operated as a freestanding CMR despite being located on the campus of Martin South. The applicant applied the average use rate by age for counties with a freestanding CMR provider to Martin County s projected population by age to calculate the projected number of CMR patients that would be generated in each year between 2013 and 2017 (see table below). Projected Martin County CMR Patients Freestanding Use Rate Year Total Source: Page 72 of CON application #10118 HRHMC maintains it is to be expected that there will be some inmigration for services from southern St. Lucie County, eastern Glades County, and southeast Okeechobee County. The applicant calculates that in-migration will comprise 61 patients in 2013 and 66 patients in HealthSouth projects this would account for a 10 percent inmigration to HRHMC during the first three years of operation of the proposed facility. The applicant concludes that given HealthSouth s current average length of stay (14.5 days) applied to the projected number of patients, the result is a demand for 9,333 patient days in 2013 and 10,222 patient days in These patient days translate into a potential incremental average 28

29 daily census (ADC) of 26 patients in 2013 and 28 patients in By the Agency standard of 85 percent occupancy, the applicant maintains that the bed need for Martin County would be 31 beds in 2013 and growing to 33 beds by Therefore, HealthSouth proposes to develop a 34-bed hospital, as it is more efficient and cost-effective to operate a hospital with an even number of beds. Finally, HRHMC expects to increase the demand for CMR series in Martin County but the actual utilization of the proposed facility is expected to ramp-up slower than the projected demand. The applicant anticipates that it will be able to meet 77.3 percent of this incremental demand in the first year of operation, and 96.8 percent of incremental market demand by HRHMC project to provide 7,218 patient days (19.8 ADC) in 2013 and 9,425 days, (25.8 ADC) in The proposed facility will therefore operate at an occupancy rate of 58.2 percent in 2013 and 75.9 percent in Projected Utilization of HRHMC in First Three Years of Operation Market Demand Patient Days 9,333 9,538 9,739 Ramp Up Percentage 77.3% 94.5% 96.8% HRHMC Expected Patient Days 7,218 9,014 9,424 HRHMC Expected ADC Percent Occupancy of 34 Beds 58.2% 72.6% 75.9% Source: Page 77 of CON application # 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. 3. General Provisions: (a) 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. JFK Medical Center Limited Partnership d/b/a JFK Medical Center (CON #10117) is proposing to establish a 24-bed CMR unit at its existing general hospital, JFK Medical Center, at 5301 South Congress Avenue, Atlantis, Florida

30 HealthSouth Rehabilitation Hospital of Martin County, LLC (CON #10118) will provide CMR inpatient services in a hospital licensed as a Class III specialty hospital in Martin County on the campus of Martin Memorial South. (b) Separately Organized Units. CMR inpatient services shall be provided in one or more separately organized units within a general hospital or specialty hospital. JFK Medical Center Limited Partnership d/b/a JFK Medical Center (CON #10117) states the inpatient rehabilitation service at JFK will be provided in a separately organized unit. The project will involve renovation of the existing sixth floor north tower at JFK Medical Center to accommodate a 24-bed rehabilitation unit. The applicant states that given the nature of the patient type, all patient rooms will be private and designed with a home-like feel. Patient rooms will provide accommodations for family members and the unit will provide patient support spaces. HealthSouth Rehabilitation Hospital of Martin County, LLC (CON #10118) states that the proposed hospital will be dedicated to providing CMR inpatient services and the entire facility will be solely dedicated to CMR services. While the proposed facility will be freestanding, it will be designated a hospital within a hospital by federal regulation due to the location on the Martin Campus South. (c) 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. JFK Medical Center Limited Partnership d/b/a JFK Medical Center (CON #10117): the proposed unit will be 24 beds, in compliance with this standard. HealthSouth Rehabilitation Hospital of Martin County, LLC (CON #10118) proposes to construct a specialty hospital with 34 CMR inpatient beds. The applicant states that the Agency has previously approved CON applications for facilities with fewer than 60 beds, including a HealthSouth application in Marion County. 30

31 The applicant asserts that HealthSouth has successfully developed specialty hospitals dedicated to CMR services of less than 60 beds and that HealthSouth currently operates several hospitals of 40 beds or less. HealthSouth cites their experience as the largest operator of CMR specialty hospitals in stating that facilities with fewer than 60 beds can be both economically feasible and provide high quality programs. HRHMC states that sitting the proposed facility on a hospital campus with the ability to obtain economies of scale by receiving certain services from the adjacent hospital (Martin Memorial) makes the proposal unique. (d) Conformance with Criteria for Approval. A CON for the establishment of new CMR inpatient services shall not normally be approved unless the applicant meets the applicable review criteria in Section , Florida Statutes, and the standards of need determination criteria set forth in this rule. JFK Medical Center Limited Partnership d/b/a JFK Medical Center (CON #10117) states the proposed project meets applicable review criteria in Section Florida Statutes and the standards and need determination criteria set forth in this rule. The applicant asserts that the application format itself is designed to elicit applicant responses to both applicable statute and rule provisions, and the responses provided demonstrate the consistency of this project with those provisions as described throughout the application. HealthSouth Rehabilitation Hospital of Martin County, LLC (CON #10118) states that it demonstrates that it either meets the applicable review criteria in Section , Florida Statutes, and the standards and need determination criteria set forth in this rule, or it has identified special circumstances in the Martin County service area that allow the Agency to approve this application and be consistent with its prior decisions. (e) Medicare and Medicaid Participation. Applicants proposing to establish a new comprehensive medical rehabilitation inpatient service shall state in their application that they will participate in the Medicare and Medicaid programs. JFK Medical Center Limited Partnership d/b/a JFK Medical Center (CON #10117) states that it currently participates in the Medicare and Medicaid programs and will continue to do so in the rehabilitation unit proposed in CON # The applicant 31

32 asserts that the proposed unit will be a provider-based unit for reimbursement purposes, billing under the hospital s existing provider number. HealthSouth Rehabilitation Hospital of Martin County, LLC (CON #10118) conditions this application on participation in the Medicare and Medicaid programs. All HealthSouth rehabilitation hospitals in Florida participate in both programs. (4) Required Staffing and Services. (a) 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. JFK Medical Center Limited Partnership d/b/a JFK Medical Center (CON #10117) states that the proposed unit will be operated under the medical direction of a board-certified physiatrist. The applicant affirms that the medical director will be responsible for directing and coordinating the interdisciplinary team. JFK anticipates recruiting a physician for the position, and will be assisted by their corporate physician recruitment office. HealthSouth Rehabilitation Hospital of Martin County, LLC (CON #10118) states that CMR services in the proposed facility will be provided under a 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. HRHMC will hire the most appropriate physician to fill the position prior to the proposed facility accepting patients. The applicant states that the medical director will be contracted on an hourly basis. The estimated cost included in year one is $125,000, adjusted by inflation of 2.5 percent in year two and year three. These funds cover only the administrative function and not direct patient services. 32

33 (b) 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 JFK Medical Center Limited Partnership d/b/a JFK Medical Center (CON #10117) states that all of above services are currently available to patients at JFK Medical Center with the exception of rehabilitation nursing and orthotic and prosthetic services. The applicant provides a detailed response indicating that it will have all of the above plus respiratory therapy services. HealthSouth Rehabilitation Hospital of Martin County, LLC (CON #10118) provides a detailed response indicating that it will have all of the above plus respiratory therapy services. (5) Criteria for Determination of Need: (a) Bed Need. A favorable need determination for proposed new expanded comprehensive medical rehabilitation inpatient services shall not normally be made unless a bed need exists according to the numeric need methodology in 59C (5)(c), Florida Administrative Code. JFK Medical Center Limited Partnership d/b/a JFK Medical Center (CON #10117) states that the issue of need for comprehensive medical rehabilitation services and access to care is addressed in detail in response to Question E.1. Fixed Need Pool and Question E. 3. a. regarding availability, quality of care, accessibility and extent of utilization. HealthSouth Rehabilitation Hospital of Martin County, LLC (CON #10118) states that according to the numeric need methodology there is no need for additional CMR beds in District 9. However, the applicant has previously presented its explanation of the not normal circumstances existing in Martin County, which it contends justify approval in the absence of published need. 33

34 (b) Most Recent Average Annual District Occupancy Rate. Regardless of whether bed need is shown under the need formula in paragraph (5)(c), no additional comprehensive medical rehabilitation inpatient beds shall normally be approved for a district unless the average annual occupancy rate of the licensed comprehensive medical rehabilitation inpatient beds in the district was at least 80 percent for the 12 month period ending 6 months prior to the beginning date of the quarter of the publication of the fixed bed need pool. JFK Medical Center Limited Partnership d/b/a JFK Medical Center (CON #10117) states that the issue of need for comprehensive medical rehabilitation services and access to care is addressed in detail in response to Question E.1. Fixed Need Pool and Question E. 3.a. regarding availability, quality of care, accessibility and extent of utilization. HealthSouth Rehabilitation Hospital of Martin County, LLC (CON #10118) states that the most recent occupancy rate for CMR beds in District 9 was 45.2 percent for the 12-month period ending June 30, HRHMC asserts that the previously presented explanation of the circumstances existing in Martin County justify approval of this application. The applicant further contends that because existing facilities are able to expand their bed count without CON review, it is unlikely there will ever be a published need in District 9. Other factors to be Considered in the Review of Certificate of Need Applications for Comprehensive Medical Rehabilitation Inpatient Services. 1. Applicants shall provide evidence in their applications that their proposal is consistent with the needs of the community and other criteria contained in: a. Local Health Council District Health Plans b. State Health Plan JFK Medical Center Limited Partnership d/b/a JFK Medical Center (CON #10117) maintains that this rule requirement is not applicable. District Health Plans are no longer to be considered in the review of CON applications pursuant to statutory changes that have superseded the rule language. The State Health Plan is no longer published. 34

35 HealthSouth Rehabilitation Hospital of Martin County, LLC (CON #10118) states that, currently, there is no State Health Plan to which HRHMC s application can be compared. The needs of Martin County were determined through statistical analysis based on use rate and the unique demographic distribution by age cohort. The applicant contends that the fundamental need is to fill the gap in the rehabilitation continuum of care in Martin County, as demonstrated by the county s low CMR use rate, by locating a CMR program in the county. 2. Applications from general hospitals for new or expanded comprehensive medical rehabilitation inpatient beds shall not normally be approved unless the applicant converts a number of acute care beds, as defined in Rule 59C-1.038, Florida Administrative Code, excluding specialty beds, which is equal to the number of comprehensive medical rehabilitation inpatient beds, 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 care beds, excluding specialty beds. If conversion of the number of acute care beds which equals the number of proposed comprehensive medical rehabilitation inpatient beds 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 care occupancy for the applicable planning horizon, excluding specialty beds. JFK Medical Center Limited Partnership d/b/a JFK Medical Center (CON #10117) states that the requirement set forth in this paragraph is moot, given that Florida law now permits hospitals to add acute care beds without CON review. HealthSouth Rehabilitation Hospital of Martin County, LLC (CON #10118) states it is not a general hospital; therefore, this rule is not applicable to the application. 35

36 (d) Priority Considerations for Comprehensive Medical Rehabilitation Inpatient Services Applicants. In weighing and balancing statutory and rule review criteria, the Agency will give priority consideration to: 1. An applicant that is a disproportionate share hospital as determined consistent with the provisions of section , Florida Statutes. JFK Medical Center Limited Partnership d/b/a JFK Medical Center (CON #10117) states that it is not a disproportionate share hospital or a designated trauma center. However, the applicant states that JFK Medical Center provides a significant proportion of its services to Medicaid-eligible persons as well as indigent, uninsured and underinsured patients. JFK will serve all patients without regard to ability to pay, as well as Medicaid patients in its proposed 24-bed CMR unit. HealthSouth Rehabilitation Hospital of Martin County, LLC (CON #10118) states that as a matter of law, HealthSouth cannot meet the requirements of this preference factor. HealthSouth will be designated as a Class III (specialty hospital) freestanding CMR hospital serving the needs of patients and residents of Martin County. HRHMC is not a disproportionate share provider as determined by the provision of Section , Florida Statutes. However, the applicant states that the hospital will participate in indigent care through the indigent care assessment and will provide the state and community at large with tax revenues that provide programs and services to underserved persons. HRHMC asserts that HealthSouth Corporation has a Financial Hardship, Discount and Charity Policy and a No Insurance Discount Policy that will be applicable to the applicant. Details of these programs are outlined in Attachment 14 of CON application #

37 (a) An applicant proposing to serve Medicaid-eligible persons. JFK Medical Center Limited Partnership d/b/a JFK Medical Center (CON #10117) states that the applicant currently participates in the Medicaid program and will serve Medicaid patients. The applicant will condition the approval of this CON on providing 4.0 percent of its annual CMR patient days to the combination of Medicaid, Medicaid HMO and charity (including self pay) patients. HealthSouth Rehabilitation Hospital of Martin County, LLC (CON #10118) states all HealthSouth rehabilitation hospitals in Florida participate in the Medicaid program and HRHMC will serve Medicaid patients. The applicant will condition the approval of this CON application on providing 1.5 percent of the facility s total annual patient days to Medicaid patients. (b) An applicant that is a designated trauma center, as defined in section 10D , Florida Administrative Code. JFK Medical Center Limited Partnership d/b/a JFK Medical Center (CON #10117) states that it is not a designated trauma center. HealthSouth Rehabilitation Hospital of Martin County, LLC (CON #10118) states that it cannot meet the requirements of this preference factor. HRHMC is not proposing the development of a designated trauma center, as defined in Section 10D , Florida Administrative Code and cannot qualify for trauma center status as it is proposing a specialty hospital. (6) 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. JFK Medical Center Limited Partnership d/b/a JFK Medical Center (CON #10117) did not address this question directly. 37

38 HealthSouth Rehabilitation Hospital of Martin County, LLC (CON #10118) states that the access standard has been met for District 9 and all other districts since The applicant contends that this standard is a worst case criterion and does not take into account the actual dynamics of patient referrals for CMR services. HRHMC asserts that if CMR services are not offered in Martin County, most patients will not have reasonable access regardless of driving times because of age, medical fragility and a desire for continuity of care of patients by their physicians. (7) Quality of Care. (a) Compliance with Agency Standards. Comprehensive medical rehabilitation inpatient series shall comply with the 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. JFK Medical Center Limited Partnership d/b/a JFK Medical Center (CON #10117) states that JFK Medical Center and all other HCA affiliated hospitals in Florida, currently operate in compliance with licensure standards described in Chapter 59A-3, Florida Administrative Code, as well as with CMS Medicare conditions of participation, and will continue to do so following the implementation of the proposed inpatient comprehensive medical rehabilitation unit. The applicant will seek and obtain CARF accreditation. JFK asserts that the CMR center will have the ongoing ability to internally monitor the quality of care provided to patients and implement improvement activities when needed. HCA has a network of national and regional leaders that provide oversight and consultation to its hospital staff in the areas of clinical and quality activities. The applicant asserts it will benefit from this network. JFK indicates that HCA s national clinical leadership board meets monthly, led by the corporate chief medical officer, to review benchmarking data and develop new innovative programs and services. The Quality and Clinical Excellence Program focus on four major areas: clinical outcomes, patient experience, technology and innovation, and culture of safety. The applicant states that all HCA inpatient rehabilitation programs routinely measure patient outcome data via UDSMR benchmarks, and use this information to help strengthen and improve care delivered in those programs. UDSMR is a not-for-profit 38

39 organization affiliated with the University at Buffalo, The State University of New York. JFK states that since its inception in 1987, UDSMR has provided the most comprehensive rehabilitation data to the industry 3. HealthSouth Rehabilitation Hospital of Martin County, LLC (CON #10118) cites that each of HealthSouth s Florida Hospitals is in substantial compliance with Agency standards for program licensure as described by Section 59A-3, Florida Administrative Code. The applicant states that HealthSouth has invested in stateof-the-art quality measurement systems to carefully monitor processes and outcomes, these are in turn regularly measured; HRHMC asserts this system will be implemented at the proposed facility. The applicant states that through HealthSouth s program, through third parties, the facility will have the ongoing ability to internally and externally monitor the quality of care provided to patients. In addition, the facility will have the ability to implement improvement activities when needed. The Quality and Clinical Excellence Programs, as stated by HRHMC, focuses on four major areas: clinical outcomes, patient experience, technology and innovation, and culture of safety. The applicant states that HealthSouth s national clinical leadership board meets monthly, led by the corporate chief medical officer, to review benchmarking data and develop new innovative programs and services. HealthSouth routinely measures patient outcomes data via UDSMR benchmarks. The applicant includes additional facts about UDSMR in Attachment 15 of CON # The UDSMR website at indicates that UDSMR stands for Uniform Data System for Medical Rehabilitation and UDSMR is the vendor of choice for approximately 70 percent of the inpatient rehabilitation facility (IRF) industry. 39

40 (b) Accreditation. Applicant proposing a new comprehensive medical rehabilitation inpatient service shall state how they will meet the accreditation standards of the Commission on Accreditation of Rehabilitation Facilities (CARF) and shall state that they will seek accreditation by CARF. Applicants proposing to add beds to a licensed comprehensive medical rehabilitation inpatient service shall be accredited by CARF consistent with the standards applicable to comprehensive inpatient rehabilitation or specialized inpatient rehabilitation, as applicable to the facility; or, if not yet eligible for CARF accreditation, the applicants shall have received full Medicare certification as a rehabilitation hospital of rehabilitation unit, as applicable to the facility. This criterion is obsolete pursuant to Section (4), Florida Statutes which prohibits accreditation by any private organization as a requirement for the issuance or maintenance of a certificate of need. However, the applicants chose to respond as shown below. JFK Medical Center Limited Partnership d/b/a JFK Medical Center (CON #10117) states that the inpatient rehab program will meet the accreditation standard of CARF and the provisions of a comprehensive physical rehabilitation unit as outlined by The Joint Commission. JFK asserts that an Accreditation Committee will be named to monitor that the programs and services are designed in conformance with CARF standards. In addition, the applicant states that it will maintain contact and a relationship with CARF to ensure continuing conformance to the standards. HealthSouth Rehabilitation Hospital of Martin County, LLC (CON #10118) states that is it committed to meeting and exceeding the requirements of specialty accreditation. The applicant affirms that HealthSouth hospitals have achieved and maintained accreditation and other quality distinctions from a number of accrediting and quality assurance and improvement bodies. HRHMC states that it will condition approval of this application upon having HRHMC accredited by The Joint Commission and CARF and to obtain Joint Commission Stroke Rehabilitation Certification. Florida Statutes prohibits accreditation by any private organization as a requirement for the issuance or maintenance of a certificate of need, so these conditions will not be cited as conditions to approval. The applicant states it will condition approval on the provision it will initiate a stroke rehabilitation program immediately upon licensure. 40

41 (8) Services Description. An applicant for comprehensive medical rehabilitation inpatient services shall provide a detailed program description in its certificate of need application including: (a) Age group to be served. JFK Medical Center Limited Partnership d/b/a JFK Medical Center (CON #10117) anticipates serving patients in all adult patient age ranges as it currently does in its existing inpatient acute care beds. Below is a chart with the projected number and proportion of patient discharges by age category during the proposed facility s second year of operation. Proposed CMR Unit (CON #10117) at JFK, Year Two Discharges by Age Age Number Percent % % % % % % Page 62 of CON application #10117 HealthSouth Rehabilitation Hospital of Martin County, LLC (CON #10118) states that it will provide CMR services to patients of all ages. (b) Specialty inpatient rehabilitation services to be provided, if any (e.g. spinal cord injury; brain injury) JFK Medical Center Limited Partnership d/b/a JFK Medical Center (CON #10117) supplied a description of the following specialty programs it proposes to provide: Stroke Rehabilitation Program Lymphedema Management Program Neurological Rehabilitation Program Arthritis Program Wound Care Program Spinal Cord Injury Program Orthopedic Rehabilitation Program Spasticity Management Program Hand Rehabilitation Treatment Balance and Vestibular Program Fibromyalgia Rehabilitation Program Chronic Pain Management Program 41

42 HealthSouth Rehabilitation Hospital of Martin County, LLC (CON #10118) supplied a description of the following specialty programs it proposes to provide: Stroke Rehabilitation Program Lymphedema Management Program Neurological Rehabilitation Program Arthritis Program Wound Care Program Spinal Cord Injury Program Orthopedic Rehabilitation Program Spasticity Management Program Hand Rehabilitation Treatment Balance and Vestibular Program Fibromyalgia Rehabilitation Program Chronic Pain Management Program Additional services the applicant states it will develop and establish as the need arises include: Traumatic Brain Injury Program Amputee Rehabilitation Program Congenital Deformity Multiple Trauma Parkinson s Disease (c) 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 for all staff who will provide comprehensive medical rehabilitation inpatient services. JFK Medical Center Limited Partnership d/b/a JFK Medical Center (CON #10117): Schedule 6 indicates that during year two (2015) of operation, the applicant plans to have the following staff: Medical Director (by contract and not counted as an FTE) Administration (three FTEs) Nursing Staff (20.6 FTEs) includes 1.0 FTE unit secretary Ancillary (9.25 FTEs) Dietary (No stated FTE) Social Services (1.0 FTEs) Housekeeping (2.1 FTEs) Laundry (No stated FTE) Plant Maintenance (1.0 FTEs) 42

43 As previously stated, the applicant shall provide medical direction by a board-certified physiatrist with at least two years experience in the medical management of inpatients requiring rehabilitation services. JFK lists a brief overview of the training and experience requirements for key direct care staff positions. The applicant states that it will train all medical staff and employees on the significance of a culture of safety. JFK asserts that it has partnered with nationally recognized leaders in patient safety to develop a patient safety task force that is charged with identifying safety challenges and opportunities within the organization and developing innovative strategies to enhance the culture of safety in HCA hospitals. HealthSouth Rehabilitation Hospital of Martin County, LLC (CON #10118): Schedule 6 indicates that during year two (2014) of operation, the applicant plans to have the following staff: Medical Director (by contract and not counted as an FTE) Administration (18.5 FTEs) Nursing Staff (36.91 FTEs) includes 2.0 FTE unit secretaries Ancillary (19.39 FTEs) Dietary (7.5 FTEs) Social Services (2.0 FTEs) Housekeeping (5.5 FTEs) Laundry (by contract, no stated FTE) Plant Maintenance (1.75 FTEs) HealthSouth provides a list of sample training topics and course categories available to its employees. Attachment 4 of the application included HealthSouth s 2010 Catalog of Learning, a 29-page document showing classroom courses, management courses, clinical training courses, etc., including supervisor level staff access to 43 Harvard business courses. As previously stated, the applicant will have a medical director of rehabilitation services who is board-certified or board-eligible physiatrist who has had at least two years of experience in the medical management of inpatients requiring rehabilitation services. 43

44 HRHMC asserts that it will also have the benefit of Martin Memorial s strong track record in its neurology, neurosurgery, orthopedics, stroke programs and other major specialties. The applicant states that Martin Memorial can assure HRHMC has a stable and adequate supply of highly qualified medical and surgical specialists, including Martin Memorial s current staff of five neurologists and three neurosurgeons. (d) A plan for recruiting staff, showing expected sources of staff. JFK Medical Center Limited Partnership d/b/a JFK Medical Center (CON #10117) states that it currently recruits in all affected personnel categories, with the exception of rehabilitation nursing. JFK currently promotes from within, utilizes corporate recruitment personnel and resources, professional recruiting agencies and services when necessary, and advertisements in local, state and national media, as well as professional publications. The applicant asserts that these methods have been adequate to meet the staffing needs of the facility in the past and are expected to continue to be for the proposed CMR unit. HealthSouth Rehabilitation Hospital of Martin County, LLC (CON #10118) states that it is prepared to put forth special efforts to attract quality staff required for its rehabilitation programs and has initiated a number of innovative approaches to recruit and retain staff throughout its Florida facilities as well as throughout its corporate structure. Methods of staff recruitment include: In-house job posting Corporate recruiting Employment open house Professional recruitment firms Participation in local job fairs Referral bonuses for select positions Advertising in local newspapers, specialty newsletter/magazines Advertising in colleges that have specialty programs Strong clinical affiliations program with allied health fields with a wide variety of universities Participation in professional conferences and educational events on a local and regional level HealthSouth Corporation clinical travelers Hard to fill positions are advertised in specialty journals Flyers mailed to home addresses from nationwide mailing lists 44

45 HealthSouth has residency programs with several schools of allied health, actively participates in professional organizations, both locally and nationally, and if necessary offers a sign-up bonus to attract high quality personnel. HealthSouth also has established affiliations with health professional education programs including medical schools, schools of nursing, local vocational/technical schools, and graduate programs for psychologists, physical therapy, occupational therapy, speech therapy and therapeutic recreation. HRHMC states it will have the advantage of using Martin Memorial s established educational affiliations. Martin Memorial maintains relationships with a significant number of universities, for which they provide student clinical experience. HRHMC provides a list of both HealthSouth s and Martin Memorial s affiliations in the application s Attachment 18. On approval of this application, the applicant will provide nursing and physical therapy assistant scholarships for three years. HRHMC states that beyond the local recruitment efforts, it can rely on support from HealthSouth s corporate recruiting department to assist in recruitment of all professional areas. Retention activities include providing benefits such as corporate sponsored continuing education capabilities (Rehabilitation Training Network), generous continuing education allowances, reimbursement for professional licenses, reimbursement of national dues, annual merit pay increases, medical and dental insurance coverage, paid holidays and sick leave, flexible spending accounts, 401K retirement investment plan, life insurance, employee stock benefit plan, various employee recognition programs and activities, management development programs, mentoring programs, tuition reimbursement assistance for staff attending relevant courses and seminars, and a scholarship program. The applicant states it will have an ongoing human resources program to coordinate the needs of its personnel. (e) Expected sources of patient referrals. JFK Medical Center Limited Partnership d/b/a JFK Medical Center (CON #10117) states that nearly all of its referrals will be from the three existing HCA acute care hospitals in Palm Beach County: JFK Medical Center, Columbia Hospital and Palms West Hospital. The applicant expects the majority of patients will be from JFK. Most of the physicians and surgeons practicing in the areas of patient care most likely to result in need for inpatient rehabilitation currently practice at JFK and at one or both of the other acute care hospitals. Therefore these physicians and 45

46 surgeons will be familiar with the proposed program when it is implemented and will be able to provide a strong continuity of care. JFK expects a small number of referrals from area skilled nursing facilities and, very rarely, referrals from other hospitals in Palm Beach County. HealthSouth Rehabilitation Hospital of Martin County, LLC (CON #10118) states that the primary source of patient referrals will be through the Martin Memorial system of hospitals: Martin Memorial Medical Center and Martin Memorial Hospital South and the new Tradition Hospital (Martin Memorial s CON #9981 to establish an 80-bed acute care hospital in St. Lucie County) expected to open in The applicant also anticipates patients from surrounding hospitals that currently do not offer CMR services or specialized programs. HRHMC contends that as a national provider of inpatient rehabilitation, HealthSouth has been successful in developing a regional presence at the majority of facilities that HealthSouth operates. HRHMC states that other referral resources include nursing homes, physicians, assisted living facilities, home health agencies, and word of mouth. HRHMC also expects to serve some Martin County and southern St. Lucie patients that currently travel to HealthSouth Treasure Coast for rehabilitative care. The applicant states that while the vast majority of rehab patients will originate in the Martin Memorial hospital system, a limited number of patients from other hospitals or health care institutions will be served at the proposed CMR facility. Furthermore, HRHMC states a small number of patients my live out of state. (f) Projected number of comprehensive medical rehabilitation inpatient 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. JFK Medical Center Limited Partnership d/b/a JFK Medical Center (CON #10117) presents the following chart showing payer type in years one and two of the project. 46

47 Projected Payer Mix: CON #10117 JFK CMR Years One and Two: Ending June 2015 & June 2016 Year One Year Two Payer Percent Days Percent Days Medicare 56% 3,374 56% 3,651 Medicare MC 19.4% 1, % 1,267 Medicaid 1.8% % 120 Medicaid MC 0.5% % 35 Other Payers 1.8% % 120 Commercial 11.0% % 718 Managed Care 7.6% % 496 Self/Charity 1.8% % % 6, % 6,521 Source: Page 69 of CON application # HealthSouth Rehabilitation Hospital of Martin County, LLC (CON #10118) states it will achieve 75.9 percent occupancy in the third year of operation. The projected patient days reflect a payer mix of 86.5 percent Medicare and Medicare managed care, 1.5 percent Medicaid, 1.0 percent charity care as defined by Florida Statutes and 11.0 percent commercial managed care and other. The applicant refers the reviewer to Schedule 7A of CON application #10118 for the projected revenues for the proposed hospital. Schedule 7A and its notes indicate that during years one and two the facility s total annual patient days will have the following payer mix: 83.8 percent Medicare and Medicare HMO, 1.5 percent Medicaid and Medicaid HMO, 1.0 percent charity care, and 13.7 percent managed care, commercial and other. (g) Admission policies of the facility with regard to charity care patients. JFK Medical Center Limited Partnership d/b/a JFK Medical Center (CON #10117) states it extends and will continue to extend services to all patients in need of care regardless of the ability to pay or source of payment. Medicaid-funded, self-pay and indigent patients are currently served by the applicant. JFK asserts that the proposed project will ensure accessibility by these patients to needed inpatient rehabilitation services. The applicant estimates that 1.8 percent of the project s total annual patient days will be provided to self-pay and charity patients. HealthSouth Rehabilitation Hospital of Martin County, LLC (CON #10118) states it will not discriminate against any person and will treat all patients regardless of their ability to pay should they meet clinical admission requirements. HRHMC also includes HealthSouth s response to access in aggregate as it pertains to Rule 59C-1.030, Florida Administrative Code. The applicant 47

48 restates its proposed conditions to provide 1.5 percent of the facility s total annual patient days to Medicaid patients and 1.0 percent of patient days to charity care patients. HRHMC states that uninsured patients that do not qualify for charity care receive a discount from billed charges for prompt pay. (9) Utilization Reports. Facilities providing licensed comprehensive medical rehabilitation inpatient services shall provide utilization reports to the agency or its designee, as follows: (a) (b) Within 45 days after the end of each calendar quarter, facilities shall provide a report of the number of comprehensive medical rehabilitation inpatient services discharges and patient days which occurred during the quarter. Within 45 days after the end of each calendar year, facilities shall provide a report of the number of comprehensive medical rehabilitation inpatient days which occurred during the year, by principal diagnosis coded consistent with the International Classification of Disease (ICD-9). JFK Medical Center Limited Partnership d/b/a JFK Medical Center (CON #10117) states that it currently reports to the Agency, or its designee, JFK s inpatient acute care discharge data consistent with this provision. The applicant states that it will collect and report similar date for patients discharged from the proposed inpatient rehabilitation unit. HealthSouth Rehabilitation Hospital of Martin County, LLC (CON #10118) states that HealthSouth facilities participate in the Agency s data collection activities and the local health council and this facility will participate in the data collection activities in accordance with Chapter 408 of the Florida Statutes. 3. Statutory Review Criteria a. Is need for the project evidenced by the availability, quality of care, accessibility and extent of utilization of existing health care facilities and health services in the applicant s service area? ss (1)(a) and (b), Florida Statutes. District 9 has 292 licensed CMR beds which experienced percent occupancy during the 12-month reporting period ending June 30, There are no CON approved CMR beds pending licensure as of April 19,

49 JFK Medical Center Limited Partnership d/b/a JFK Medical Center (CON #10117) makes no representations regarding the adequacy of the quality of care available at the existing providers of inpatient comprehensive medical rehabilitation in the district. The applicant asserts that the need for the proposed project is not dependent upon an assertion of an absence of quality preventing utilization. JFK restates that need arises out of the vast gap between actual and expected discharges from acute care to CMR in District 9 coupled with contemporary practices regarding CMR services. The applicant asserts that primarily, CMR services function as a step-down level of care for patients as part of their overall path to recovery from illness or injury. JFK refers back to its answer to E.1., and argues that the substantial underutilization of CMR services has been driven in part by changing Medicare reimbursement regulations rendering larger hospital-based CMR units obsolete and resulting in CMR beds in too few hospitals. JFK contends that many acute care patients are admitted either to a SNF where they receive limited, non-comprehensive rehabilitation services or simply forego treatment. The applicant states that only Bethesda Memorial Hospital is utilized by acute care patients discharged from one of the three HCA affiliated hospitals to any appreciable extent. JFK asserts that because Bethesda s 28-bed unit operates at 90 percent utilization annually and at higher levels during peak seasonal periods, beds are frequently unavailable. In addition, the applicant states that any reliance on Bethesda results in less than optimal continuity of care for patients discharged from the HCA acute setting. While JFK acknowledges the nine-mile distance between it and Bethesda, it contends that given traffic congestion in the southern portion of Palm Beach County, even a distance of nine miles is bound to disrupt the continuity of treatment of a patient residing in the central or western portions of the county. In regard to other proposed CMR facilities in District 9, the applicant states that the current and projected overall and 65+ populations of Martin County are considerably smaller than those of Palm Beach County (see table below). The total population of Martin County represents less than eight percent of the population of District 9 as a whole while Palm Beach County represents over 67 percent of the population. Taking into account the elderly population, Martin County has 9.6 percent of District 9 s 65 and older population, Palm Beach County accounts for a little over 64 percent of the elderly population. 49

50 Estimated Total Population of Martin County, Palm Beach County and District 9 as well as Elderly Population Totals County 2010 % of D9 pop 2015 % of D9 pop pop % of D9 pop pop % of D9 pop Martin 143, % 149, % 40, % 45, % Palm Beach 1,286, % 1,339, % 277, % 307, % District 1,888,176 1,991, , ,856 Source: AHCA population estimates 2000 to 2020, published September The applicant contends that a serious imbalance of CMR beds to total population in Martin County versus Palm Beach County would occur upon approval of the HealthSouth proposed facility. This statement was made by JFK with the assumption that HealthSouth would be applying for 60 beds in accordance with Rule 59C-1.039(3)(c), F.A.C. 4 The applicant does not dispute there is a 30-bed unmet CMR need in Martin County by their calculations. JFK maintains that if no additional CMR beds are allocated to Palm Beach County, but only to Martin County, Palm Beach County s resultant ratio leaves it lagging behind its northern neighbor. The applicant concludes that the most equitable ratio result via approval of JFK and Martin Memorial 5, but not HealthSouth. This combination of approval would result in a ratio of 14.7 CMR beds per 100,000 population in Martin County and 14.6 CMR beds per 100,000 population in Palm Beach County JFK asserts that the approval of HealthSouth s proposed facility would do nothing to foster competition in District 9, and in fact, would lessen it. Currently, HealthSouth provided 39.1 percent of the total CMR patient days reported by District 9 providers during 2010 (see table below). The applicant contends that approval of a new HealthSouth hospital would only serve to worsen the disparity between HealthSouth and all other providers in the district. CMR Patient Days in AHCA District 9, July 2009-June 2010 % of Total Patient Hospital Patient Days Days HealthSouth Treasure Coast 18, % Bethesda Memorial 9, % Delray Medical Center 7, % St. Mary s Medical Center 4, % Lawnwood Regional Medical Center 8, % District Totals 48, % Source: Page 92, CON application # Rule 59C-1.039(3)(c) states, in part: A specialty hospital providing comprehensive medical rehabilitation inpatient services shall have a minimum of 60 CMR inpatient beds. 5 Martin Memorial submitted CON application #10116 for a 22-bed CMR unit in Martin County, but withdrew their application on April 14,

51 HealthSouth Treasure Coast is the only freestanding provider of CMR services in District 9. Over the last five years, JFK maintains, HealthSouth s occupancy has ranged between 50 percent and 59 percent. Thus, the applicant concludes, based on AHCA standard of 85 percent occupancy, HealthSouth Treasure Coast has been chronically underutilized. In terms of the Florida marketplace, JFK states that HealthSouth dominates the freestanding CMR hospital marketplace in Florida nine of 13 freestanding CMR hospitals in Florida are owned by HealthSouth accounting for 72 percent of all freestanding beds and 70 percent of all freestanding patient days. The applicant provides charts on this data on pages of CON application # Furthermore, JFK contends that HealthSouth only provides on average of 3.31 percent of its annual patient days to Medicaid and charity days and compared to the entire group of freestanding CMR hospitals (including HealthSouth facilities) average of 5.11 percent. HealthSouth Rehabilitation Hospital of Martin County, LLC (CON #10118) contends that access appears to be a significant issue due to the medical trade patterns and the way patients, caregivers and physicians actually behave. HRHMC also asserts that existing providers in District 9 serve mostly patients in their immediate medical market and have little reliance on Martin County residents. See table below for home county reliance by CMR providers Home County Reliance for District 9 CMR Providers 2010 Estimated Estimated Home CMR Patients from Total 2010 County Home County CMR Patients Reliance on Home County CMR Provider Bethesda Medical Center Palm Beach % Delray Medical Center Palm Beach % HealthSouth Treasure Coast Rehab Indian River 918 1, % Lawnwood Regional Medical Center St. Lucie % St. Mary s Medical Center Palm Beach % Source: Page 106 of CON application #10117 The applicant states that CMR programs cease to be regarded as accessible by most patients and physicians once the boundary of a county medical market is crossed. HRHMC asserts that this reluctance to travel is exacerbated when the segment of the population required to travel is predominantly elderly. The proposed facility will ensure that Martin County patients have the opportunity for reasonably accessible CMR services without the added burden of traveling outside the community to receive care. The applicant contends that in order to make CMR inpatient services reasonably available to Martin County patients, the Agency should approve a CMR program in Martin County because it is a significant part of the post acute care continuum that is lacking. 51

52 HRHMC indicates that the approval of a CMR program at JFK Medical Center in Palm Beach will do little to improve the access issues resulting in a low use rate by Martin County residents. Palm Beach County has 168 (57.5 percent) of the 292 CMR beds located in District 9. The applicant contends that while Palm Beach County, like Martin County, has a CMR use rate lower than the Florida average Palm Beach County s low use rate cannot be attributed to a lack of CMR beds in the county. Additionally, HRHMC states that a comparison of patient origin data for acute care patients 6 treated at JFK Medical Center and market share data for Martin County residents demonstrates that Martin County patients do not receive care at JFK Medical Center to any significant degree. See table below. Historical JFK Reliance on Martin County Acute Care Patients for the 12 Months Ending June JFK Inpatients 23,470 24,848 24,872 Martin County Patients Treated at JFK JFK Reliance on Martin County Patients 0.7% 0.7% 0.9% Source: Page 107 of CON application #10117 HRHMC contends that there is minimal overlap between medical staff in the Martin Memorial System and other District 9 hospitals that have CMRs, such as Lawnwood, that would impact medical practice patterns. HRHMC also maintains it has demonstrated significantly lower CMR use among all age groups in Martin County. As a result, the applicant concludes, the development of the proposed 34-bed CMR hospital in Martin County is likely to have minimal if any significant adverse impact on any existing CMR provider. Total occupancy of existing CMR beds in District 9 was 45.2 percent. Looking at utilization data for CMR programs in District 9, HRHMC cites Bethesda Memorial Hospital in Palm Beach County as having the highest occupancy rate of the five providers at 89.9 percent. HealthSouth Treasure Coast Rehab Hospital in Indian River County provided the most patient days of care among providers, more than double the number of days of Bethesda Memorial Hospital, with an average occupancy level of 57.4 percent. Lawnwood Regional Medical Center in St. Lucie County was also well-utilized at 72.4 percent. The applicant recognizes Lawnwood Regional Medical Center s CMR unit as the only existing provider in Subdistrict 2 of District 9, Martin and St. Lucie Counties. HRHMC describes the Lawnwood 34-bed unit as a configuration mix of semi-private and some private rooms making it more difficult to accommodate a mixed male and female population, as well as the need to block beds due to infection control issues not 6 Applicant states that this data includes all acute care discharges other than OB, neonates, psych or substance abuse, death or hospice. 52

53 experienced in an all private-bed facility. The applicant maintains that the proposed service area for their CMR has a large and growing elderly population who will find it increasingly difficult to access the program at Lawnwood due to its availability and geographic barriers for their family members to travel to Fort Pierce. HRHMC contends that because no CMR program exists in the county, SNFs have been used as a substitute for CMR services in Martin County since they do provide certain (less intense) rehabilitation services. The applicant notes that Martin County s 795 community nursing home beds averaged 88.9 percent (88.86 percent per LHC data) utilization for the 12 months ending June 30, Below is a chart of historical occupancy rate for Martin County nursing home providers included in CON application #10117 to show utilization. Historical Occupancy Rates for Martin County Nursing Home Providers January 1-December 31 Facility Bed Total Edgewater Manor % 91.60% 91.79% 93.38% 94.71% Martin Nursing & Restorative Care Center % 85.70% 89.17% 80.73% 85.74% Palm City Nursing & Rehab Center % 93.61% 95.37% 95.30% 96.38% Parkway Health & Rehabilitation Center % 93.59% 92.33% 93.31% 90.12% Salerno Bay Manor % 87.76% 78.35% 89.44% 87.34% Stuart Nursing & Restorative Care Center % 79.31% 77.83% 78.76% 83.33% Water s Edge Extended Care % 76.82% 85.84% 83.52% 82.02% Source: CON application #10118, page 122 from Florida Nursing Home Utilization by District and Subdistrict April edition for each of the named years. The applicant cites changes in the Medicare payment systems for SNFs that substantially reduce the financial incentive of nursing homes to provide rehabilitation services. HRHMC states that there are numerous situations in which SNF-level care cannot be substituted for CMR-level care referring to MedPAC data that shows readmission to acute care from SNF is 22 percent compared to a 9.4 percent readmission rate for inpatient rehabilitation providers. The applicant details 14 major differences in the two settings. Ten of these are detailed in the chart provided by the applicant on page 121 and recreated below. 53

54 HealthSouth CON #10118 Comparison of CMR and SNF Settings 54