BEFORE THE ARKANSAS HEALTH SERVICES PERMIT AGENCY FINDINGS OF FACT, CONCLUSIONS OF LAW, AND ORDER

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1 BEFORE THE ARKANSAS HEALTH SERVICES PERMIT AGENCY In the Matter of: Concerned Care for Seniors d/b/a Home Instead Senior Care File # HSPA (1177)-08 FINDINGS OF FACT, CONCLUSIONS OF LAW, AND ORDER Findings of Fact The applicant, Concerned Care for Seniors, 1720 Caraway Suite 3050, Jonesboro is seeking a Permit of Approval (POA) for the purpose of providing Class B Home Health Services to Mississippi County from an office in Jonesboro (Craighead County). The applicant is currently enrolled as a provider for the Elder Choices Medicaid program for home maker and respite services to Mississippi County as well as to the counties of Craighead, Greene, Clay, Randolph, Lawrence, Jackson, and Poinsett. The Elder Choices Medicaid program does not require a POA and can provide Medicaid or private insurance aide services (not personal care) but not Medicare or any Nursing service. This application for a Class B license would allow the applicant to provide skilled care (nursing,) extended care (nursing) and aide services (personal care) for Medicaid or private insurance patients but not Medicare. There is no initial capital cost for this proposed project. The Agency makes the following Findings of Fact: NEED - The application does not meet need as defined by the Population-Based Home Health Methodology. a) The projected population for Year 2012 for Mississippi County is 51,776 persons. There are currently 6 (six) home health agencies serving the whole county. According to Agency Rules, an area with a population of 50,000 to 75,000 may be approved for a maximum of four agencies. There are a total of 11 agencies serving all or portions of Mississippi County. The Home Health agencies serving the entire county include: Mississippi County Health Unit (Blytheville) A - License Mississippi County Health Unit (Osceola ) A - License Arkansas Methodist Medical Center (Paragould) A - License

2 Home Health Professionals (Blytheville) A - License Crittenden Regional Hospital (Osceola) A - License East Arkansas Area Agency on Aging, Inc (Blytheville) B- License There are 5 (five) Agencies serving portions of Mississippi County: Crittenden Regional Hospital (Marked Tree) A - license Crittenden Regional Hospital (West Memphis) A - License Forrest City Home Medical Equipment (Forrest City) B- License ProCare (West Memphis) B - License St. Bernard s Home Care (Jonesboro) A - License There is no population based need in Mississippi County. The projected home health need for Mississippi County is four (4) home health agencies and there are six (6) agencies serving the entire county and five (5) additional agencies serving portions of the county. EXCEPTION The rulebook allows an application to be approved when the methodology does not show a need if the applicant offers documentation to prove that existing agencies are not meeting the needs of the service area population. The applicant states that there is a need for personal care services in Mississippi County that is not being met by current providers. The applicant seeks to provide personal care services to this population with unmet needs. Four agencies serving the entire county are licensed to provide both skilled home health and personal care services to residents of Mississippi County. In addition, East Arkansas Area Agency on Aging, Inc. has a Home Health B license (personal care only) for all of Mississippi County. Two other home health agencies serving portions of Mississippi County are also licensed to provide personal care only. The applicant states that they personally contacted each of these agencies and found that only three of them were actually providing personal care services. Based on this information, the applicant asserts that it is clear that another agency is needed to supply the seniors of Mississippi County with personal care services. The Health Services Permit Agency staff also contacted all of these agencies and three of these are currently providing personal care service. The Agency also reviewed the findings of the Agency s Annual Home Health Survey for the previous three year period.

3 Based on a review of the Agency s Annual Home Health Surveys for 2005 and 2006, of the six agencies serving the entire county, four did not admit any patients for personal care services in Mississippi County. The 2006 survey shows 9 patients who were not admitted for personal care services; 1 did not meet Home Health criteria, 5 refused services, 1 chose a different agency, and 2 were unable to be located by the contacted agency. The 2006 survey results show 200 personal care patients served in 2006, with 169 of the patients over the age of 65; 194 of the patients served were admitted under Medicaid and 86 were discharged during The applicant intends to serve residents who are over the age of 65. The table below details the personal care services for Mississippi County and the State for 2004, 2005, and 2006 Survey Years Mississippi County 2005 Mississippi County 2006 Mississippi County Total Admissions Personal Care # and Over Admits# Total Population* 48,228 47,763 47,517 % of Population Receiving 0.390% 0.402% 0.410% Population > % of Population > 65* 2.419% 2.726% 2.867% 2004 State 2005 State 2006 State Total Admissions - PC# 6,896 6,687 6, and Over Admits# 5,593 5,127 4,968 Total Population* 2,746,823 2,775,708 2,810,872 % of Population Receiving* 0.251% 0.241% 0.232% Population > , , ,421 % of Population > 65* 1.470% 1.331% 1.272% # = Data from Home Health Surveys Administered by Health Services Permit Agency * = Population Estimates from UALR Institute for Economic Advancement (updated 3/22/2007) Based on the aforementioned data, Mississippi County has a higher percentage of the population receiving personal care than the state average. In addition, the 65+ age bracket in Mississippi County is receiving personal care services at a percentage that is two times higher than the state average. The table also shows that the population in the county, including the senior population, has declined during the three year reference period. The population recorded by the 1990 census showed a senior

4 population of 6,734 and the 2000 Census shows the senior population in Mississippi County to have been 6,353. Further analysis of the census data from shows a net decrease in the senior population for the age range of 65-84, but does show an increase from 429 to 794 residents over the age of 85. The 2006 report estimates the over 65 year old population to be 5,897 and estimates 836 residents over the age of 85, which shows the overall decrease in the elderly population as a whole, but an increase in the 85 and over age bracket. The agency contacted all agencies currently serving Mississippi County regarding personal care services and asked the following questions: In the last year, has your agency provided personal care services? have you ever had to deny personal care services to a patient because you lacked the staff to provide personal care services? Have you denied services for any other reason? if you do not provide personal care services, do you refer your personal care patients to another source within the county? if you refer your personal care patients to another home health agency (or agencies), on how many occasions have you attempted to refer patients and could not refer because other agencies did not have the staff to accept your referral? The agency received responses from four of the agencies and the responses showed denial of services only when patients did not meet criteria or because the home health agency did not provide personal care services and in that scenario, the patients were referred either to Area Agency on Aging or Department of Health. Neither of these agencies has had to refuse a personal care patient because of staffing or other issues. The applicant has not offered documentation to prove that existing home health agencies are not meeting the needs of the service area population. STAFFING - The Agency has no objective reason to believe that the proposed home health service cannot be adequately staffed. The applicant provided qualifications for Home Health Aides/Certified Nurse Aides in order for employment. The applicant plans to follow 1.25:1 Care Giver to Client ratio. The applicant plans to recruit via newspaper ads and religious publications mainly, although use of brochures, TV commercials, and display ads may also be used for recruitment. The applicant retention plan includes conducting Care Giver meetings, monthly honors, provide cash awards for training completion, and nominating employees for employee of year awards. ECONOMIC FEASIBILITY There will be no initial capital costs as the proposed Home Health Agency for Mississippi County would be operated out of the existing private care office based in

5 Jonesboro, Craighead County. The first year assumed operating expenses will be funded entirely by Medicaid payments and shows an initial loss, which includes $11,000 in start-up costs. Financial statements provided documentation that funding is available. The applicant provided a cost per visit projection of $14.26 which is above the Medicaid reimbursement for personal care services. However, the applicant believes they will not have a 40% overhead, which would allow the costs to fall below the reimbursement rate. The applicant shows an increasing clientele each month topping at 50 clients a month. The applicant assumes 8 hours of visit time per client per month. One problematic issue with the applicant s projections is the projected mileage to serve patients. The applicant states mileage per trip to be 10 miles. This assumption would be unrealistic as the office is located in Jonesboro and the applicant makes no mention of an office in Mississippi County. The shortest route between Jonesboro and Blytheville is approximately 53 miles; the mileage to Osceola would be higher. The five-fold increase in mileage would significantly raise expenses incurred by the applicant. Therefore, the budget is unrealistic. The applicant did provide an independent accountant s balance sheet showing significant assets to cover losses, and long-term financial resources would be questionable considering the large travel distance and cost per day projections over the reimbursement rate. A second issue with the proposed budget is the applicant states a typical client will be seen approximately 8 hours a month, with an average of 4 trips a month. At the end of the application under Attachment K Criterion #4, the applicant notes that plans of care show that personal care hours range from 6-8 hours per week. The assumption of using 2 hours a week when 6-8 hours is needed on average would greatly raise the number of aides needed by the applicant as well as raise the number of trips needed per client. The increase in trips would subsequently raise the mileage needed to visit clients and make the budget projection disparity even greater. The projected budget does not accurately reflect the actual number of staff needed, nor the actual amount of travel that will be required by a large margin. Based on the forgoing comments, the applicant does not satisfy the economic feasibility criteria for a home health POA. COST CONTAINMENT The applicant states that the Medicaid reimbursement rate is currently $13.84 per hour, while an average daily rate for a nursing home bed is $ The applicant further states that the maximum cost for home health care per patient per month is $941 compared to $3,900- $3,984 per month per patient in a nursing home. Thus, there is a cost savings of approximately $3,000 per month by using home health as compared to a nursing home and patients are able to remain in the home. The applicant also states that increasing residents knowledge about personal care services may reduce costs by reducing the number of trips to the emergency room and aide services provided in the home, would save money that would be spent during a regular trip to the emergency room.

6 LETTERS OF OPPOSITION AND RESPONSES There are no other applicants for home health services because there is no projected need for home health services. The applicant is applying under the Exception Rule and there were four letters of opposition. Three letters were from existing service providers and one letter from the Home Care Association of Arkansas. Opponent: The applicant does not provide sufficient documentation proving existing agencies are not meeting the needs of the county currently. Concerned Care Response: Director of Personal Care in Blytheville Office states a need does exist in the county. Health Department Response (to Agency): The applicant response (above) refers to the Health Dept. office in Blytheville. The person in reference is not the Director but rather the Nurse Case Manager. In its official response to the Agency, the Health Dept. states that it does not actively recruit from physician offices for personal care patients because typically physicians and hospitals make referrals for home health, not personal care. The Health Dept. also stated that they do not typically deny personal care patients unless patients do not meet criteria for services. They added that if staff were not available, they would refer to another agency that accepted personal care patients. Opponent: The applicant does not factor in the increase of personal care services being consumer directed through participation in Independent Choices Medicaid waiver program. Concerned Care Response: We can not alter the state of Independent Choices and it is a plus to the consumer because it offers family members another option as they consider nonmedical care fort their seniors. Opponent: Applicant claims to have contacted existing agency in the application, but no contact was ever made. Concerned Care Response: Hesitant to contact agency due to previous history and relationship with agency. Agency Response: Applicant Response inconsistent with application. Applicant stated in application that all home health agencies in the county were contacted.. Application, Attachment B, Criteria #1, page 1, line 8 states, I personally contacted each of the above noted agencies Line 8 refers to the aforementioned 11 agencies that are referenced in the previous sentence on lines 7-8. Opponent: Existing agencies are referred personal care patients when existing agency can not provide service and no patients referred have been turned away. Concerned Care Response: NONE

7 Conclusions of Law The application DOES NOT SATISFY the statutory and regulatory requirements for the issuance of a Permit of Approval (POA). Mississippi County has no population based need and the applicant did not provide sufficient documentation to support a POA based on the Exception Rule. The applicant claims only three agencies at present time are providing personal care services. Although Class A Home Health licensed agencies can provide personal care, many report that they choose to focus on skilled or intermittent care and they refer personal care agencies to Area Aging which focuses exclusively (B License) on personal care or to the Health Dept which provides both personal care and skilled / intermittent care. Neither Area Aging nor the Health Department report that they do not have the staff or other resources to care for personal care patients. None of the referring home health agencies report that either Area Aging or the Health Department has refused a referral due to staffing or other issues. In addition, the applicant states that a need exists due to an increase in elderly population in Mississippi County. Population data from UALR does not support that assertion. Mississippi County exceeds the state average for personal care and also exceeds the average for personal care for persons over the age of 65 years old. ORDER Based on the above Findings of Fact and Conclusions of Law, the Agency hereby orders that the applicant be DENIED a Permit of Approval (POA). Appeals before the Health Services Commission are provided for under Section V.B. 15, Policies and Procedures for Permit of Approval Review, and will be conducted in accordance with the State Administrative Procedure Act, Act 434 of 1967, as amended. Appeals will be heard on December 13, 2007 at the State Police Headquarters on Geyer Springs Road at 10:00 AM. IT IS SO ORDERED THIS DAY OF OCTOBER, 2007 DIRECTOR, HEALTH SERVICES PERMIT AGENCY