STATE AGENCY ACTION REPORT ON APPLICATION FOR CERTIFICATE OF NEED A. PROJECT IDENTIFICATION 1. Applicant/CON Action Number HealthSouth Rehabilitation Hospital of Marion County, LLC/ CON #10097 505 East Huntland Drive, Suite 270 Austin, Texas 78752 Authorized Representative: Ronald T. Luke, JD, PhD (512) 371-8166 Marion Community Hospital, Inc./CON #10098 1431 SW 1 st Avenue Ocala, Florida 34474 Authorized Representative: H. Rex Etheredge (352) 401-1000 2. Service District/Subdistrict District 3 (Alachua, Bradford, Citrus, Columbia, Dixie, Gilchrist, Hamilton, Hernando, Lafayette, Lake, Levy, Marion, Putnam, Sumter, Suwannee and Union Counties) B. PUBLIC HEARING A public hearing was requested regarding the proposed comprehensive medical rehabilitation (CMR) projects in Marion County, District 3. The public hearing was held on Tuesday, October 26, 2010, at the WellFlorida Council Inc. main conference room in Gainesville, Florida. Kim Gokhale, MA, MPH, Associate Planner for WellFlorida Council, Inc., conducted the hearing. There were nine speakers whose comments are summarized below. Cynthia Kelleher, Randall Braddom, M.D., Cynthia M. Toth, and Dr. Ron Luke representing the applicant, spoke in support of HealthSouth
Rehabilitation Hospital of Marion County, LLC (CON #10097). Robert Colen and A.J. Biros, local members of the community also spoke in support of HealthSouth. Cynthia Kelleher, Vice President of Corporate Development for HealthSouth, thanked the Agency for a prior project approval, two and a half years ago. Per Ms. Kelleher, the application focused on illustrating why the project is needed and that the level of available medical rehabilitation service makes a difference in people s lives and that patients in Marion County are five to 10 times less likely to get CMR care due to access issues. Ms. Kelleher stated HealthSouth is the largest provider of inpatient rehabilitation services in the country, with 97 rehabilitation hospitals, some having outpatient facilities connected to them. Ms. Kelleher stated HealthSouth has nine CMR hospitals with 733 beds in Florida. HealthSouth s first Florida facility was located in Miami and was licensed in1996 and its newest (CMR) facility is HealthSouth Rehab Hospital of Spring Hill licensed in 2003. She indicated that HealthSouth s nine Florida rehab facilities are Joint Commission certified in stroke care and two are Joint Commission certified in brain injury and spinal cord injury. Ms. Kelleher stated that HealthSouth will treat all patients appropriate for its services and not just those over the age of 15. She also stated that one of the project s advantages would be the flexibility to serve a range of patients. Ms. Kelleher stated that her organization operates 40-bed facilities all over the country and finds this arrangement financially and programmatically feasible. She stated that HealthSouth prides itself on high quality care that is measured by outcomes, focuses on technology, and is cost-effective, with its singular focus on inpatient rehabilitation. Ms. Kelleher stated HealthSouth commits to spend a quarter of a million dollars in rehabilitation technology and to implement electronic medical records (EMR) at the facility at a cost of one million dollars. She stated that HealthSouth continuously benchmarks to achieve best practices and to maintain its focus. Ms. Kelleher stated that Marion County, has the largest age 65+ population of any Florida county that does not have a CMR facility. Ms. Kelleher stated both applicants (CON #10097 and CON #10098) use similar bed methodologies to reach their bed need conclusions. Ms. Kelleher stated Marion County is a distinct medical market with no CMR beds and that HealthSouth does not see its project as shifting market share since it believes patients are simply not accessing the level of care the applicant plans to offer. She contended that if a CMR facility is physically located within the county, patients will access the care they are presently not getting. Ms. Kelleher stated that HealthSouth s community assessment indicated that Marion County is somewhat polarized between the two existing hospital systems. HealthSouth will 2
serve all CMR patients regardless of which acute care hospital they are received from and the project will provide the physicians in the community another discharge option. Ms. Kelleher also stated HealthSouth has built the proposed architectural model 11 times, with a range of 32 to 60 beds, tweaked over the years with a focus on patient independence and home transition. The patient rooms will all be private. Ms. Kelleher indicated the applicant will participate in Medicare and Medicaid, charity and indigent care, will be Joint Commission and CARF accredited with stroke rehab and has done work on outreach, focused on continuum of care. Randall Braddom, M.D. stated that he practices in orthopedics, rehabilitation and sports medicine, in Red Bank, New Jersey, and has worked in both CMR and skilled nursing facility (SNF) settings over 38 years in four states. Dr. Braddom contends that patients in Marion County need to have a choice of CMR or SNF levels of care in order to receive the maximum amount of functional return, to in turn lead to maximum quality of life and freedom. He commented that SNF average lengths of stay run about 30 days on a CMR diagnosis whereas CMR facility average lengths of stay run about 15 to 16 days (depending on diagnosis). Dr. Braddom also commented on more frequent physician visits, specialty care physician certifications, 24-hour nursing care and three hour minimum therapy at a CMR facility compared to lesser requirements at a SNF. Dr. Braddom stated that based on various studies of Virginia and Wisconsin patients, death rates are lower at CMRs compared to SNFs, and CMR patients have lower readmission rates than SNF patients. Dr. Braddom emphasized that both SNF and CMR care options are needed in a community the size of Marion County. Cynthia Toth, a health care consultant, engaged by HealthSouth, indicated she was a physical therapist for about 12 years before becoming a hospital administrator (Ms. Toth s resume indicates she was hospital administrator for Shands at AGH during 2000-2004). Ms. Toth stated that she conducted a community need assessment focused on gaining a better understanding of how patients and their families transition home after an acute episode of rehabilitation and what resources or gaps exist in the Marion County community and to learn more about Marion County at large. The assessment centered on postacute need and the community s and community physicians awareness of post-acute options for inpatient rehabilitation. Ms. Toth indicated that discussions where held with about 50 persons over the course of about two months and that five themes of community need emerged 1. One is 1 CON application #10097, page 14, lists 55 persons contacted including: 16 physicians, 16 government officials and Agency representatives, 12 health care executives and professionals, 11 patients and families, eight business leaders, five educators, and three support groups. 3
the need to educate the community on post-acute options and the differences between the levels of care. Two is that reintegration and transition assistance for patients and families is lacking. Three is to provide a general community awareness and education about people with disabilities, and their access and support needs. Four is an infusion of new jobs and economic stimulus, particularly in training opportunities for nursing and allied health professionals and finally, family members of former patients, physicians and business leaders believe there is a lack of awareness of what inpatient (CMR hospital) rehabilitation is and how it differs from SNF rehabilitative care. Ms. Toth indicated that neurologists interviewed stated that when they recommend rehabilitation options in Gainesville, Spring Hill, Jacksonville and Leesburg very few patients leave the area for the care they need. Ms. Toth concluded that CMR services result in faster and better overall health care outcomes and patient reintegration back into the community. HealthSouth will ensure patient community reentry through a community outreach coordinator and is committed to providing funding for three years to the Marion County Parks & Recreation Department to assist in community reintegration. Robert Colen, Vice-Chairman of the On Top of the World Homeowner s Association, located in Ocala (Marion County), indicated he represented over 8,000 residents, 55+ years of age and possibly the largest homeowner s association in Marion County. Mr. Colen stated the type of intense rehabilitation that HealthSouth provides is vital to the quality of life for his residents, that many do not drive at all and that travel distance is too far to existing CMR providers in the district. Mr. Colen emphasized the value and benefit of nearby CMR services that HealthSouth would provide. A. J. Biros, stated that he was a former paramedic firefighter and was transferred to Shands due to an accident he sustained at age 23 (he is now 28) in Marion County and that due to distance, his family could not visit him. He also stated he could not see himself in a SNF. Mr. Biros was complimentary of existing hospitals in Marion County (specifically mentioning West Marion Community Hospital and Ocala Regional Medical Center). Mr. Biros also emphasized the value and benefit of nearby CMR services that HealthSouth would provide. Mr. Biros commented on how the project would increase jobs and patient care. Mr. Biros believed a facility dedicated to CMR patients would be more focused specifically on those patients. Ginger Carroll, CEO of West Marion Community Hospital, Gene Nelson, the health care consultant for Marion Community, and Steve Ecenia, the applicant s attorney representative, spoke in support of Marion Community Hospital, Inc. (CON #10098). Mr. Ecenia also spoke against HealthSouth s CON #10097. 4
Ginger Carroll indicated Ocala Health System has been serving Marion County since 1973 and has a tremendous knowledge base of what the area medical community looks like, the physicians in the area and what services are available locally. Per Ms. Carroll, the project is designed to provide CMR services that are geographically accessible to local residents, is cost-effective, will maximize benefits to physicians, patients and families in need of services and will allow for a continuum of care by a familiar provider. Ms. Carroll commented the applicant has strength and support through affiliation with HCA, which she stated is the second largest provider of CMR services in the country. Ms. Carroll stated her organization supported HealthSouth s 2008 application for a freestanding CMR hospital but that after that was denied, Ocala Health System considered providing CMR services to residents of Marion County (on a smaller scale). Ms. Carroll indicated that CMR services within an acute care hospital will provide the best comprehensive services for Marion County. Ms. Carroll stated the area has a friendly competitive medical community, not unlike that in Alachua County (Gainesville) and that a smaller CMR unit is appropriate for Marion County. Gene Nelson, Consultant, Health Strategies, Inc., stated that Marion County is the largest county in total population, with the largest age 65+ residents in District 3 but has no licensed or approved CMR beds and is the second largest county in total population statewide with no CMR beds. Mr. Nelson indicated that District 3 s CY 2009 CMR average occupancy of 79.3 percent was the highest in the state. Mr. Nelson commented this is just shy of the 80 percent threshold in state rules for approving additional CMR beds, under normal circumstances. Mr. Nelson indicated that since existing providers can incrementally add beds and forever keep the utilization rate low and suppress need. Mr. Nelson stated that several written responses from the community strongly support the applicant s belief that the lack of CMR beds in Marion County represents a substantial unmet need which imposes an unfair burden on patients and their families who cannot or will not seek CMR care outside the area. Mr. Nelson indicated that CMR services are underutilized in Marion County, based on a comparison of acute care facility discharges to CMR providers in the district and acute care facility discharges to SNFs. Mr. Nelson stated that some claim SNFs are being substituted for CMR providers and that if true, one would expect a higher percentage of discharges to SNFs. He indicated that discharges to SNFs do not off-set the shortfall of discharges to CMR providers for Marion County residents. As a consequence, Mr. Nelson stated the application is complimentary rather than competing with existing nursing homes. Based on the applicant s expected and actual discharge calculations, Mr. Nelson 5
indicated a not normal need of between 21 and 25 additional CMR beds for Marion County. Mr. Nelson stated the project will require an addition to an existing hospital facility at far less cost and will meet the need, while HealthSouth (CON #10097) will require the acquisition of land and construction of a new hospital. Mr. Nelson further indicated the applicant will not jeopardize existing CMR providers but the competing HealthSouth will by necessity have to draw patients from existing CMR providers due to the number of beds it requires. Mr. Nelson indicated Marion Community s project will give Marion County patients and their physicians a choice between inpatient CMR services, SNF or outpatient care, will be competitive, can be implemented timely and will be well utilized and financially stable. He concluded that Marion Community s project will increase CMR services in Marion County so that they are more in line with similar services in the district. Steve Ecenia of Rutledge, Ecenia & Purnell, P.A., Attorneys and Counselors at Law, commented first on written materials he entered into the record, a February 16, 2010, 17-page Final Order and corresponding 105 page Recommended Order on CON #10009. 2 The Recommended Order proposed denial and the Final Order denied CON #10009. Mr. Ecenia indicated that little to nothing has changed to warrant approval of CON application #10097. It was stated that previously HealthSouth had a hospital site (for CON #10009) but the current competitor s application (CON #10097) does not have a site. Mr. Ecenia indicated HealthSouth had its chance and submitted all the evidence it could muster to support a 40-bed freestanding CMR hospital but was rejected by the Agency. He further stated there would be no point to rehash issues already raised in the competitor s original application. Mr. Ecenia indicated that existing providers in the community, identified as TimerberRidge and Shands, heavily focus opposition to HealthSouth (CON #10097) and not CON #10098. Mr. Ecenia further indicated CON #10097 s CMR bed demand estimates are even higher than in CON Application #10009, which was soundly rejected by the Recommended Order and Final Order. Mr. Ecenia compared Marion Community Hospital s project cost of around 8.1 million to HealthSouth s and indicated that need could be met on a small scale and at significantly reduced cost by CON #10098. He indicated that HealthSouth has conditioned for 1.8 percent Medicaid and 0.7 percent charity patient days compared to Marion Community s (CON #10098) 4.0 percent Medicaid, Medicaid HMO and charity patient 2 Rendition No. AHCA-10-0196-FOF-CON, CON No. 10009, DOAH Case No. 08-3814CON and Case No. 08-3815CON. 6
days. Mr. Ecenia also expressed doubt that HealthSouth would maintain a 40-bed inpatient CMR facility considering that it does not operate any CMR facilities in Florida under 60 beds. However, 80 percent utilization in the existing facility would be required to add CMR beds by exemption from CON review. Should, either project become operational, 10 CMR beds could be added by the existing provider via exemption under Rule 59C-1.008(6)(c) when utilization exceeds 80 percent during the previous 12 months and there have been no bed additions during these 12 months. Mr. Ecenia stated that approval of the HealthSouth proposal would do nothing to foster competition for CMR services in the area and would in fact, lessen competition because HealthSouth s ability to add beds incrementally would worsen the disparity between HealthSouth s market share and that of the other providers in the district. Mr. Ecenia concluded that Marion Community s project (CON #10098) would enhance and improve continuity of care and circumstances in the area do not support a polarization of health care providers as suggested by HealthSouth representatives. Ron Luke, J.D., Ph.D., President, Research & Planning Consultants, L.P., spoke in support of HealthSouth (CON #10097). Dr. Luke stated he has been doing health planning consulting in Florida since about 1983 and that he was retained by HealthSouth after the Recommended and Final Order (previously mentioned ). Per Dr. Luke, the application has a broader patient range in specialized programs, with additions being spinal cord injury and traumatic brain injury, and additional community initiatives. He stated his belief that the Agency should grant the same preliminary approval to this application as in the previous application. Dr. Luke indicated that HealthSouth s full-service 40-bed freestanding inpatient CMR facility is the best alternative of the two applications. Dr. Luke indicated the districts were established some 30 years ago and demographics have changed over time. He commented that the Agency has approved CMR units in sub-acute districts (in Citrus, Hernando, Lake and Sumter Counties) and that Marion County is the only subacute area in the district that does not have CMR beds. Dr. Luke indicated the applicant would not be a threat to existing local providers because HealthSouth is not in the acute care hospital business. He stated that Marion County patients do not seek CMR services at Shands in spite of Shands efforts to acquire patients from the Marion County area. He indicated that it is not likely this will materialize over the next five years since it has not over the last five. Dr. Luke also stated that TimberRidge does not have a physiatrist and has only the most basic rehabilitation equipment. He discussed the (U.S. federal agency) Centers for Medicare & Medicaid Services (CMS) imposing new limitations to SNF rehabilitation reimbursement and placing more emphasis on applicable 7
patients being served at CMR facilities, as opposed to SNFs. Dr. Luke indicated that the referral rate to CMR by District 3 acute care hospitals located in counties that have freestanding CMR facilities would be the best predictor of how Marion County patients and physicians would respond to the project (as opposed to including discharges in counties that lack a CMR unit). Dr. Luke indicated that because HealthSouth has a facility in Hernando County is no more reason to deny the project than the fact that HCA has a facility in Marion County and proposes an acute care hospital in Sumter County as both facilities would address different markets. Dr. Luke, in conclusion, stated that the application is a bit of a do-over, has been done right this time and that the best thing for Marion County is to have a full-service freestanding CMR facility, to meet the needs of its residents like other areas do. Steve Ecenia, indicated that if CON #10097 is approved, HealthSouth s market share can only go up. He stated his client is committed to providing a full range of services in a reasonably sized unit. Mr. Ecenia reiterated that Mr. Nelson s estimate of CMR bed need of up to 25 beds by 2016 is well under 40 beds as proposed in HealthSouth s application. There were two written submissions regarding CON #10097 and three regarding both CON #10097 and CON #10098. A brief review of these follows. F. Philip Blank of Blank & Meenan, P.A., Attorneys at Law, on behalf of Shands Teaching Hospital & Clinics, Inc. d/b/a Shands Rehab Hospital submitted a 15-page opposition letter to HealthSouth s (CON #10097) project that included four separate exhibits. Shands opposition is based on: the applicant s defined service area, the applicant s need methodology, availability, accessibility and utilization, geographic and programmatic access, quality of care, economic access, availability of resources including health personnel, management personnel and financial resources, the extent of access to health care for residents of the service district, financial feasibility, competition, and adverse impact. The included exhibits reference a January 2009 travel study along with deposition and witness testimony concerning CON #10009. HealthSouth submitted a 23-page spiral bound pamphlet (power point presentation format) document for CON application #10097. The document addresses project goals, the applicant s current Florida and nationwide locations, referral sources and admissions protocols, the applicant s profiles concerning high quality care, investments in technology and cost-effective care, Marion County s needs and medical market, CY 2009 stroke and brain injury discharges in the area, architectural drawings of the project, the hospital overview, comparisons 8
of IRF-SNF-LTCH care (i.e. admission criteria, ALOS, etc.), lower death rates and lower readmission rates in CMR than SNF, What the community is saying and community need. Richard Soehner, Administrator, TimberRidge Rehabilitation & Nursing Center, submitted written opposition to both projects. His opposition letter included a 17-page Final Order and corresponding 105-page Recommended Order concerning, HealthSouth s previously approved CON. Mr. Soehner indicated that a substantial portion of patients in need of rehabilitation services can be appropriately cared for at either a skilled nursing facility like TimberRidge or a CMR. He concluded that needed services are available, accessible and being provided in a quality and cost-efficient manner. Stephen Purves, FACHE, President & CEO, Munroe Regional Medical Center, submitted a two-page opposition letter. He concluded that there is a published need of zero CMR beds for District 3, and the project would have a negative impact on his hospital s financial position and its ability to serve the community as the area s only safety-net hospital. As previously mentioned, Steve Ecenia, on behalf of Marion Community Hospital, Inc., submitted a copy of the CON #10009 Final Order. Letters of Support: HealthSouth Rehabilitation Hospital of Marion County, LLC (CON #10097) included 18 letters of support dated between August 16 and October 4, 2010. Nine of these were from local physicians, three were from executives of On Top of the World Communities, Inc., two were from physical therapists, and one each from Thomas E. Skinner, CEO of Workforce Connection; Peter Beasley, Campus Director for Ramussen College, Peder Johnson, CEO of Hampton Manor and one a relative of a patient. There were eight additional letters, one undated and seven that were dated during March 26 April 4, 2008. Two of these were from HCA hospital executives, three were from patients and three were from relatives of patients. Excerpts of the physician letters follow. 9
10
Thomas E. Skinner, CEO of Workforce Connection (for Citrus, Levy and Marion Counties) indicates that his organization s labor study shows 827 persons in the healthcare industry that we have recently trained through our local workforce funds and the additional individuals who are currently seeking employment in the field of health care (292) and construction (494) individuals that are presently seeking employment. Mr. Skinner indicates that the Marion County labor force consists of 135,986 persons with 19,616 or 14.4 percent of them unemployed. He indicates that the project is projected to add 80 general medical and surgical hospital jobs in Marion County. Mr. Skinner also states that is his organization is ready to assist HealthSouth with the recruitment, training, and placement needs from the construction of the facility to the employment of the hospital staff. Peter Beasley, Campus Director for Ramussen College Ocala Campus, indicates that clinical experiences for our students are limited. HealthSouth s project would greatly benefit our students in healthrelated programs as they would be exposed to rich clinical experiences in an inpatient rehabilitation facility that an organization such as HealthSouth would provide. He also states that HealthSouth would provide job development opportunities for our graduates. Peder Johnson, CEO of Hampton Manor indicates that patients in need of acute rehabilitation are forced to travel great distances or go without the care they need. When patients are forced to leave the area, the family s ability to participate in their loved ones care and recovery process is (adversely) affected, according to Mr. Johnson. Kenneth D. Colen, President of On Top of the World Communities, Inc. writes: A relative of a patient who received CMR treatment in Gainesville writes: 11
Marion Community Hospital, Inc. (CON #10098) has 10 letters of support dated between September 23 30, 2010 and two letters that were not dated. Of the 10 dated letters, five were physicians, three were registered nurses, one was a hospital case manager, one was from Mr. Eric Townsend, President of Marion County Continuity of Care which he describes as a group of healthcare professionals and one was from a local business owner. Excerpts of these letters include: William Gaya, MD, Board Certified Neurologist and Jay J. Rubin, MD, PA, (Neurologist) indicate that they strongly support the addition of inpatient rehabilitation services as they indicate need is convincing. Both cite the difficulty for patients and family with travel to Gainesville or Lady Lake to obtain CMR services. Dr. Anna Khanna (Neurologist) signed the same letter as Dr. Rubin. Jose A. Gaudier MD (Neurology) indicates that when aggressive rehabilitation is needed many of our residents are currently receiving sub-optimal level of rehabilitation, which in many cases leads to further deterioration of health or decreased productivity. He also cites the travel difficulty for patients and families when the patient must go outside the county. Dr. Anish Khanna (Ocala Hospitalist Group, PA) indicates it is a fact that a large portion of patients sent to skilled nursing facilities for rehabilitation do not receive enough physical therapy and/or supervision. Two of the registered nurse letters, also with Ocala Hospitalist Group, PA provided the same letter as Dr. Anish Khanna. Brenda Forrest RN, indicates that she is a Stroke Program Coordinator and that many of our Marion County stroke patients who could benefit from comprehensive inpatient rehabilitation services find it very inconvenient to travel to Gainesville and Leesburg because of the far travel distance. Cindy Warner, BSW, states that she a hospital case manager on the Neuroscience unit at West Marion Community Hospital and that she has sent some patients to Shands Rehab over the years. However, more often than not, patients and families opt for something closer to home and receive far less intensive rehabilitation in one of our local skilled nursing facilities. Mr. Townsend and Jim Samuelson, the local business operator, indicate aggressive multi-modality rehab is not available in Marion County and having such a unit at West Marion would be a huge benefit. 12
C. PROJECT SUMMARY HealthSouth Rehabilitation Hospital of Marion County, LLC (CON #10097) proposes to establish a 40-bed comprehensive medical rehabilitation (CMR) hospital on a 5.5 to 6.5 acre site in Marion County, Florida. The applicant proposes the following conditions to CON approval on the application s Schedule C. 1. 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 3. 2. The hospital will institute a stroke rehabilitation program when it opens and will obtain specialty certification from the Joint Commission in stroke rehabilitation prior to the third year of operation. 3. The hospital will offer a comprehensive outpatient rehabilitation program, predominantly for persons who received CMR services at the hospital. 4. The hospital will provide an Auto Ambulator and the other equipment described below as part of a technology packages when the hospital opens. If technological change makes better equipment available by the time of purchase the hospital may substitute more modern equipment that serves the same functions. AutoAmbulator ReoGoAmbulator Balance Master Visipitch SaeboFlex wrist splint and exercise station VitalStim Bioness Interactive Metronome 3 3 The applicant describes this equipment in CON #10097 pages 31-35. HealthSouth conditions to provide a wide range of technological equipment and proposes $4,313,503 for total equipment for the facility with $234,681 designated as Tech equipment in Notes to Schedule 1. 13
5. The hospital will be accredited by the Joint Commission. The Joint Commission accreditation will occur by the end of the first year of operation. 6. The medical director of the hospital be will board-certified or board-eligible physiatrist with at least two years of experience in the medical management of inpatients requiring rehabilitation services. 7. The hospital will provide at no charge to the community and in accordance with state and federal laws, education programs on disabilities awareness and community re-entry to improve the independence and quality of life of persons with disabilities and their caretakers. a. The hospital will employ a part-time (.5 FTE) Community Outreach Coordinator who will assist patients and families in transition as they return to their communities after an inpatient rehabilitation stay (Attachment 19b). This allied health professional will be knowledgeable of the needs of patients and families and of the local, regional, and national resources. b. The hospital will include space that will be made available to support group meetings and for community education programs developed by HealthSouth and others. c. Twice annually the hospital will sponsor workshops on the Disabilities Awareness Merit Badge for Boy Scouts and Girl Scouts in the Marion District of the North Florida Council. 8. HealthSouth will provide $10,000 in nursing scholarships for three years to both Rasmussen College and The College of Central Florida for a total of $20,000 for each of the three years. In order to quality for scholarships, students will have to meet the following criteria: Must be a Marion County resident Must be either a registered nursing student or a physical therapy assistant Must maintain a 3.0 GPA 9. HealthSouth will provide a clinical instructor three days a week for rotation of nursing students for three years for the College of Central Florida ($10,000 for each of the three years). 14
10. HealthSouth will donate $7,000 annually for the first three years the hospital is in operation to the Marion County Parks and Recreation Department to fund purchases of adaptive equipment to increase access to outdoor recreation activities for persons with disabilities. The Department provided a list of the types of adaptive equipment it would like to purchase that reads as follows: Adaptive kayaks Kayak paddles/gear (adaptive) Beach Scooter Mobi Chair Mobi mat Transition plate for wheel chair transfer Boat ramp plate for ADA access Hand pedal bike The applicant also provided 10 Measurement of Conformance with 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 patients. Section 408.043 (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 certification (portion of condition 2 and all of 5) will not be cited as conditions to approval. Condition number 6, 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 include. 1. The hospital will provide a copy of the admission policy for the outpatient rehabilitation program, a program description and a count of the patients served each year. 2. In its initial report the hospital will provide photos of each piece of equipment installed in the hospital. If the hospital has chosen to purchase a more modern piece of equipment than that listed will be amended and the new equipment replacing it noted. 3. The hospital will provide a list of all community education programs held that relate to condition number 7. This list will show the title of the course, the instructors, the dates of the courses and the intended audience. 15
a. The hospital will include the curricula vita of any person filling the position of Community Outreach Coordinator during the calendar year and their dates of service. The report will also include a description of his or her activities throughout the year. b. The hospital will prepare a list of all meetings held in the hospital that relate to condition number 7. The list will show the nature of the meeting, the groups holding the meeting, and the date of the meeting. c. The hospital will prepare a list of the merit badge workshops held during the year. The list will include the date, location and number of students enrolled in each workshop. 4. The hospital will provide a list of the scholarship recipients, the school each attended, the degree program and the amount of the individual scholarship. 5. The hospital will include a letter from an administrator at the College of Central Florida acknowledging the donation and identifying how the funds were used. 6. The hospital will include a letter from an official of the Marion County Parks and Recreation Department acknowledging the donation and identifying how the funds were used. Should the project be approved, the applicant s proposed conditions would be reported in the annual condition compliance report as required by Rule 59C-1.013 (3) Florida Administrative Code. The total project cost is estimated at $21,079,443. The project involves 49,900 gross square feet (GSF) of new construction at a construction cost of $9,871,171. Marion Community Hospital, Inc. (CON #10098) proposes to establish a 20-bed comprehensive medical rehabilitation unit by adding a fourth floor to West Marion Community Hospital in Marion County, Florida. The applicant proposes to condition CON approval to 4.0 percent of the 20-bed unit s total annual patient days being provided to Medicaid, Medicaid HMO and charity care patients. The total project cost is estimated at $8,084,939. The project involves 18,950 gross square feet (GSF) of new construction at a construction cost of $5,609,200. 16
D. REVIEW PROCEDURE The evaluation process is structured by the certificate of need review criteria found in Section 408.035, Florida Statutes, rules of the State of Florida, Chapters 59C-1 and 59C-2, Florida Administrative Code, and local health plans. These criteria form the basis for the goals of the review process. The goals represent desirable outcomes to be attained by successful applicants who demonstrate an overall compliance with the criteria. Analysis of an applicant's capability to undertake the proposed project successfully is conducted by evaluating the responses and data provided in the application, and independent information gathered by the reviewer. Applications are analyzed to identify strengths and weaknesses in each proposal. If more than one application is submitted for the same type of project in the same district (subdistrict), applications are comparatively reviewed to determine which applicant(s) best meets the review criteria. Rule 59C-1.010(2) (b), Florida Administrative Code, prohibits any amendments once an application has been deemed complete. The burden of proof to entitlement of a certificate rests with the applicant. As such, the applicant is responsible for the representations in the application. This is attested to as part of the application in the Certification of the applicant. As part of the fact-finding, the consultant, Steve Love, provided the public hearing review, Cheslyn Green provided background utilization information in Item E. 1. a & b., and James B. McLemore, 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. 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 408.035, and 408.037 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. 408.035(1), Florida Statutes. Rule 59C-1.008(2), Florida Administrative Code and Rule 59C-1.039(5), Florida Administrative Code. 17
In Volume 36, Number 29, dated July 23, 2010 of the Florida Administrative Weekly, a fixed need pool of zero beds was published for CMR beds in District 3 for the January 2016 planning horizon. District 3 has 158 licensed and zero approved CMR beds. During CY 2009, District 3 had 151 licensed CMR beds and experienced 79.28 percent utilization. Seven beds were licensed to Leesburg Regional Medical Center North effective March 23, 2010. The applicants are applying outside of the fixed need pool. b. According to 59C-1.039 (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 3 s 151 licensed CMR beds experienced an occupancy rate of 79.28 percent during the 12-month period ending December 31, 2009. Comprehensive Medical Rehabilitation Bed Utilization District 3 January 2009 to December 2009 Facility Beds County Total Occupancy % Shands Rehabilitation Hospital 40 Alachua 70.48% Seven Rivers Regional Medical Center* 16 Citrus 34.70% Leesburg Regional Medical Center-North** 15 Lake 87.56% HealthSouth Rehab Hospital of Spring Hill*** 80 Hernando 88.35% District 3 Total 151 79.28% Source: Florida Hospital Bed Need Projections & Service Utilization by District, July 2010 Batching Cycle. Notes: *Seven Rivers Regional Medical Center s 16-bed CMR unit was licensed May 27, 2009. **Leesburg Regional Medical Center North added seven beds effective March 23, 2010. ***HealthSouth Rehab Hospital of Spring Hill added 10 beds effective October 7, 2009. The map below shows current District 3 CMR providers and the applicants proposed locations. HealthSouth (CON #10097) is an approximate location based on information provided by the applicant. 18
District 3 Comprehensive Medical Rehabilitation Facilities HealthSouth Rehabilitation Hospital of Marion County, LLC (CON #10097) & Marion Community Hospital, Inc. (CON #10098) Source: MapQuest 2006. Note: CON #10098 is to be located on a new fourth floor at West Marion Community Hospital. 19
MapQuest directions obtained November 30, 2010 indicate that the four existing facilities are located within the following approximate drive times/miles: 42 minutes (Shands Rehab Hospital 44 miles), 46 minutes (Leesburg North 38 miles), 47 minutes (Seven Rivers Regional Medical Center 33 miles) and an hour and eight minutes (HealthSouth Spring Hill 68 miles from West Marion Community Hospital s (CON #10098) location. We are estimating HealthSouth s (CON #10097) project to be about six minutes and approximately 3.6 miles east of West Marion Community Hospital. While HealthSouth does not have an exact location, the mileage and travel time to the existing providers should not be significantly different than West Marion Community Hospital s. c. Other Special or Not Normal Circumstances HealthSouth Rehabilitation Hospital of Marion County, LLC (CON #10097) stated that there has not been a published need for CMR beds in the last five years and because existing CMR providers can add beds via exemption there will never be a bed need projected for a district. The applicant states that the focus for a CON should be on where new CMR programs are needed. HealthSouth contends that the following special circumstances merit project approval: In order to provide high quality acute care and rehabilitation care to patients who need inpatient CMR services to maximize their recovery it is necessary for the patient to have continuity of care between acute care, inpatient rehabilitation, and outpatient rehabilitation. Reasonable access to continuity of care from onset of injury or illness through completion of the rehabilitation program can only be provided if acute care and CMR providers are located in the same medical market. Due to age, medical fragility and market forces most patients will NOT be referred for CMR services in a different medical market, even if CMR services are the most appropriate to maximize their recovery. The absence of CMR services in the county where a patient receives acute care reduces the CMR use rate in that county. The end result of this is that many patients in Marion County are deprived other CMR care that would have maximized their rehabilitation outcome. 20
District 3 is a large geographic area of 16 counties and 10,983 square miles. It contains the largest number of counties in any district in the state. For CMR planning purposes District 3 consists of five medical markets (Northern Counties, Marion County, Citrus County, Hernando County, Sumter and Lake Counties) with sufficient population to support CMR programs. Four of the five medical markets currently have CMR programs. Only one, Marion County, does not. Further information and documentation about the medical markets is presented below. Marion County alone has a land area greater than the State of Rhode Island and a population sufficient to support a CMR specialty hospital of 40 beds. Failure of the Agency to approve a CMR program in Marion County is a denial of access to a full continuum of rehabilitation services to Marion County residents. The approval of a CMR facility in Marion County will not prevent any existing CMR provider from continuing to perform its mission in the healthcare system. Any Marion County resident who receives acute care in Gainesville is likely to receive CMR services in Gainesville. The number of Marion County residents who utilize other CMR programs in the district is de minimis. HealthSouth indicates that its physician letters from Drs. Gaya, Lowell, Ethier, Kandru, and Web support need for the project and provides excerpts of these letters (see Item B - Public Hearing, Letters of Support). These physicians indicate there is a need for CMR beds in Marion County but do not provide the number of patients they would refer to the facility. HealthSouth next discusses the differences in comprehensive medical rehabilitation and skilled nursing facility rehabilitation programs. This starts with the CMS definition for inpatient rehabilitation facilities (IRFs) which it states is the same as CMRs. 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. HealthSouth indicates that CMS says patients appropriate for a less intensive setting are those who have completed their course of treatment in the referring hospital, but do not require (or cannot participate in or benefit from) 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 21
paralysis, amputation or gait disturbance. It is poor health planning to have only SNF or CMR facilities in a medical market that has sufficient population to support both. While some patients could be treated in either setting, HealthSouth states that for most patients one is clearly superior and patients need both options to reach maximum improvement and functional status. HealthSouth next provides the CMS definition of the SNF: Another inpatient rehabilitation setting is the skilled nursing facility, an institution or a distinct part of an institution in which the primary focus is the provision of either rehabilitation services or skilled nursing care and related services to residents requiring medical or nursing care. HealthSouth indicates that there are 14 differences between rehabilitation provided in SNFs and the CMR facilities. The applicant s table below shows 10 areas. 22
HealthSouth CON #10097 Comparison of CMR and SNF Settings Source: CON application #10097, page 61. 23
As noted in the table above, HealthSouth indicates that CMS requires that at least 60 percent of the patients admitted to CMR hospitals have one of the 13 diagnoses. These are listed below: Stroke Spinal cord injury Congenital deformity Amputation Major multiple trauma Fracture of femur (hip fracture) Brain injury Neurological disorders (including but not limited to, MS, MD, polyneuropathy, and Parkinson s disease Burns Active, polyarthricular rheumatoid arthritis, psoriatic arthritis, and seronegative arthropathies Systemic vasculidities with joint inflammation Severe/advanced osteoarthritis involving two or more major weight-bearing joints (not counting joints with prosthesis) with joint deformity, substantial loss of range of motion, and atrophy of muscles surrounding the joint. (HealthSouth indicates that CMS regulations include several diagnoses with additional qualifications/limitations). Knee or hip joint replacement, with one or more of the following circumstances: bilateral knee or bilateral hip joint replacement surgery during hospitalization, extreme obesity with a Body Mass Index of at least 50 upon admission to the CMR hospital, or the patient is age 85 or older at the time of admission. The applicant provides the following chart which it states demonstrates how this works in the real world, indicating that the diagnoses prompting admissions to HealthSouth CMRs nationally in 2009 were: Percent of Total HealthSouth Diagnoses Admissions Stroke 17.5% Neurological 13.3% Fracture of the lower extremity 11.7% Debility 11.5% Knee/Hip replacement 9.6% Other orthopedic conditions 9.5% Brain injury 7.4% Cardiac conditions 4.7% Spinal Cord Injury 3.6% All other 11.2% Total 100.0% Source: CON application #10097 page 49. 24
HealthSouth indicates that diagnosis numbers 1, 2, 3, 5, 7, and 9 are on the CMS list and were over 60 percent of HealthSouth CMR hospital admissions. CY 2009 percentages were provided but not the actual number of HealthSouth admissions. The applicant states that no particular diagnosis is required for SNF admission if the criteria for nursing care are satisfied. The applicant notes that nursing homes can admit Medicare patients only within 30 days of hospital discharge and after at least a three consecutive day stay. However, CMR facilities can admit from any location provided the patient needs intensive rehab services in an inpatient setting. HealthSouth CMR facilities admitted 94 percent of their patients from acute care hospitals, five percent from physician s offices and one percent from SNFs during CY 2009. While citing the shorter length of stay for CMR facilities compared to SNFs, the applicant notes a 1997 study by Kramer AM, et al., published in the Journal of the American Medical Association indicated that stroke patients treated in the CMR setting were more likely to return home sooner than those in SNFs. Another study (Munin, et al in 2010 comparing 74 SNF and 144 CMR patients during their treatment) indicated that acute hip fracture patients treated in the CMR setting had more intense therapy and average length of stay over 11 days shorter than SNF patients. The applicant concludes that patients deserve the opportunity to obtain sufficient improvement to be able to return home in as short of time as possible and with the best possible results. HealthSouth contends this opportunity requires access to the full continuum of rehabilitation care. The applicant also cites a 2008 study by Vincent and Vincent that indicated morality for cardiovascular patient was 2.6 percent in CMR, but 12.9 percent in SNF. Mortality for pulmonary patients was zero percent for CMR and 14 percent for SNF. They also noted that fewer CMR patients were readmitted to acute care: 15.8 percent compared to 23.2 percent. 4 HealthSouth restates its commitment to provide rehabilitation equipment in the CMR setting and notes that SNFs rarely have any high technology as it proposes for this facility. The applicant summarizes that CMRs and SNFs provide different levels of service and SNFs are not meant to provide intense rehabilitation as CMR hospitals do. HealthSouth concludes that its provision of CMR services would greatly benefit many patients being treated in short-term acute care. 4 Vincent HR, Vincent KR, 2008 Functional and economic outcomes of cardiopulmonary patients/ AJPMR, 87:371-380 per CON application #10097, page 59. 25