state agency action report on application … · community nursing home beds at st. anne’s...

STATE AGENCY ACTION REPORT

ON APPLICATION FOR CERTIFICATE OF NEED

A. PROJECT IDENTIFICATION

1. Applicant/CON Action Number

Villa Maria Nursing and Rehabilitation Center, Inc./CON #10008

1050 N.E. 125th Street North Miami, Florida 33161 Authorized Representative: Mr. Gene Nelson Health Strategies, Inc. (850) 222-7110

2. Service District/Subdistrict District 11, Subdistrict 1 (Miami-Dade County)

B. PUBLIC HEARING

A public hearing was not held or requested on the proposed project which is to add 20 community nursing home beds to a skilled nursing facility (SNF) on the third floor of a 40-bed comprehensive medical rehabilitation (CMR) hospital (St. Catherine’s West), with the latter being previously approved under CON #9722. The 20 community nursing beds are to be acquired through the delicensure of an equal number of community nursing home beds at St. Anne’s Nursing Center. Letters of Support

The Agency for Health Care Administration did not receive directly any letters of support for this project. However, in its application, Villa Maria Nursing and Rehabilitation Center, Inc. (Villa Maria and also Villa Maria West SNF) submits two letters of support from staff at St. Catherine’s Rehabilitation Hospital. The applicant (Villa Maria) states that it is the license holder and operator of the 60-bed St. Catherine’s Rehabilitation Hospital and also the 212-bed Villa Maria Nursing Center. The support letters from the latter facility are both signed with December 17, 2007 dates. One is from Miriam Feliz, MD, Medical Director at St. Catherine’s Rehabilitation Hospital, in North Miami. This letter supports …“the establishment of a sub-acute inpatient rehabilitation unit within St.

CON Action Number: 10008

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Catherine’s West Rehabilitation Hospital in the Hialeah Gardens area”. It generally states a multi-disciplinary approach is needed to enhance medical care for those patients (at St. Catherine’s West Rehabilitation Hospital under CON #9722). The other support letter is from Pedro Cardich, MD, Co-Medical Director at the same facility (St. Catherine’s Rehabilitation Hospital). This letter supports the transfer of 20 skilled nursing beds to the “new building”, stating the transfer of 20 skilled nursing beds will …“enhance the services that the organization will be able to provide”.

No letters of opposition were received regarding this project.

C. PROJECT SUMMARY

Villa Maria Nursing and Rehabilitation Center, Inc. (CON #10008) (Villa Maria or Villa Maria West SNF) proposes to add 20 community nursing home beds to the third floor of a 40-bed comprehensive medical rehabilitation (CMR) hospital to be known as St. Catherine’s West, through the delicensure of an equal number of community nursing home beds at St. Anne’s Nursing Center, a SNF further toward the southern portion of Miami-Dade County, Florida. The CMR facility (St. Catherine’s West) is still under construction, originally approved under CON #9722. The third floor SNF portion of St. Catherine’s West is to be called Villa Maria West SNF. All these facilities are located in the Greater Miami area, District 11, Subdistrict 1, Miami-Dade County, with St. Catherine’s West CMR and Villa Maria West SNF being co-located at 8850 N.W. 122nd Street, Hialeah Gardens, Florida 33018. The project will not add any community skilled nursing home beds to the existing complement of such beds in the subdistrict. The project involves a combined total of 20,743 gross square feet (GSF) of new construction at a total construction cost of $6,653,092. The total cost of the project is $6,940,804. This includes building, project development, financing and start-up costs with land and equipment costs. The applicant proposes a single condition to the approval of the project. The condition is the following physical location of the facility: 8850 N.W. 122nd Street, Hialeah Gardens, Florida 33018. The sacrificing facility, 240-bed St. Anne’s Nursing Center, is conditioned per CON #8158 to have a minimum of 43.75 percent of total annual patient days provided to Medicaid patients.


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D. REVIEW PROCEDURE

The evaluation process is structured by the certificate of need review criteria found in Section 408.035, Florida Statutes. These criteria form the basis for the goals of the review process. The goals represent desirable outcomes to be attained by successful applicants who demonstrate an overall compliance with the criteria. Analysis of an applicant's capability to undertake the proposed project successfully is conducted by assessing the responses provided in the application, and independent information gathered by the reviewer. Applications are analyzed to identify strengths and weaknesses in each proposal. If more than one application is submitted for the same type of project in the same district (subdistrict), applications are comparatively reviewed to determine which applicant best meets the review criteria. Section 59C-1.010(2) (b), Florida Administrative Code, allows no application amendment information subsequent to the application being deemed complete. The burden of proof to entitlement of a certificate rests with the applicant. As such, the applicant is responsible for the representations in the application. This is attested to as part of the application in the Certification of the applicant.

As part of the fact-finding, the consultant, Steve Love analyzed the application in its entirety with consultation from the financial analyst, Ryan Fitch, who evaluated the financial data, and the architect, Scott Waltz, who evaluated the architecturals and the schematic drawings as part of the application.

E. CONFORMITY OF PROJECT WITH REVIEW CRITERIA

The following indicate the level of conformity of the proposed project with the criteria and application content requirements found in Florida Statutes, sections 408.035, and 408.037; applicable rules of the State of Florida, Chapter 59C-1 and 59C-2 and Florida Administrative Code.


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

need pool? Or does the project proposed seek beds or services in excess of the fixed need pool? ss. 59C-1.008(2), Florida Administrative Code.

The Florida Legislature extended a moratorium until July 1, 2011 on the issuance of CONs for increases in the number of community nursing home beds around the state. Due to the moratorium, a fixed need pool was not published by the Agency and the number of community nursing home beds will remain constant statewide. The moratorium will allow the expansion of alternative and more cost-efficient programs. This project, if approved, will not impact the moratorium concerning total community nursing home beds.

b. If no Agency policy exists, the applicant will be responsible for demonstrating need through a needs assessment methodology, which must include, at a minimum, consideration of the following topics, except where they are inconsistent with the applicable statutory or rule criteria:

• Population demographics and dynamics;

• Availability, utilization and quality of like services in the district, subdistrict or both;

• Medical treatment trends; and

• Market conditions.

Population demographics and dynamics:

District 11, Subdistrict 1 (Miami-Dade) is comprised of 52 licensed community nursing home facilities. As of July 1, 2007, District 11, Subdistrict 1 had a total of 7,998 licensed and 420 CON approved community nursing home beds. For the most recent reporting period, July 2006-June 2007, the licensed beds within the district experienced an average occupancy rate of 90.97 percent and 91.47 percent for the subdistrict. The table below illustrates the annual utilization of the applicant’s St. Anne’s Nursing Center (the facility set to have 20 community nursing home beds delicensed and then transferred to the proposed site), the subdistrict and the district:


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Annual Utilization Total for the Applicant’s Sacrificing Facility, Subdistrict 1 and District 11

July 2006-June 2007 Facility Bed Days

Patient Days

Total Occup.

Medicaid Days

Medicaid Occup.

St. Anne’s Nursing Center, St. Anne’s Residence, Inc. 87,600 85,539 97.65% 51,399 60.09%

Subdistrict 1 2,917,722 2,668,778 91.47% 1,747,833 65.49%

District 11 3,005,322 2,734,074 90.97% 1,794,004 65.62% Source: AHCA’s publication of “Florida Nursing Home Utilization by District and Subdistrict July 2006-June 2007”.

The above table shows that St. Anne’s Nursing Center was highly utilized (above full capacity) for the period shown. St. Anne’s Nursing Center is located approximately 23.6 miles from the proposed project location1. The applicant anticipates a primarily elderly population in need of its services through this proposal. The applicant’s primary service area (PSA) is within a seven-mile radius of the proposed site (8850 N.W. 122nd Street, Hialeah Gardens, Florida 33018). The applicant does not specify the zip codes that fall within its PSA; however, it names seven nursing homes within the PSA that will be within relative geographic proximity, at least within a seven-mile radius. It is noted here that due to the benefits listed below (largely co-location) the applicant does not foresee direct competition with any of the seven nursing homes it lists as within the seven-mile radius. These facilities are as follows: Fair Havens Center; Heartland Health Care Center - Miami Lakes; Hialeah Convalescent Home; Hialeah Shores Nursing & Rehab Center; Palmetto Rehabilitation & Health Center; Susanna Wesley Health Center and Waterford Rehab & Nursing Center. Below is a map with the project location and the nursing homes within a seven-mile radius of the project location.

1 Per MapQuest at www.mapquest.com.


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Microsoft MapPoint Legend #1. Proposed Villa Maria Nursing and Rehabilitation Center (Villa Maria West SNF) #2. Susanna Wesley Health Center #3. Palmetto Rehabilitation & Health Center #4. Hialeah Shores Nursing & Rehab Center #5. Hialeah Convalescent Home #6 Heartland Health Care Center - Miami Lakes #7. Waterford Rehab & Nursing Center #8. Fair Havens Center

The utilization rates for these seven facilities ranged from a low of 81.72 percent at Hialeah Shores Nursing & Rehabilitation Center to a high of 99.61 percent at Fair Havens Center, with the latter having the highest total occupancy in the entire district. This was for the most recent reporting period (12 months ending June 30, 2007). Below is a table of the bed days, patient days, total occupancy and Medicaid occupancy rates of each facility. The applicant notes that it does not plan to seek


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Medicaid certification (CON #10008, page 14) for the 20-bed proposed facility because of a planned short average length of stay (ALOS) – less than 30 days.

Annual Utilization Total for Planned PSA Seven Mile Radius

Seven Nursing Home Facilities District 11; Subdistrict 1, Miami-Dade County

July 1, 2006 – June 30, 2007 Commun.

Nursing Home Bed Inventory Bed Days Pt. Days

Total Occupancy

Medicaid Occupancy

Fair Havens Center 269 98,185 97,802 99.61% 70.82% Heartland Hlth Care Center - Miami Lakes 120 43.800 40,295 92.00% 52.27% Hialeah Convalescent Home 276 100,740 95,043 94.34% 74.09% Hialeah Shores Nursing & Rehab Center 120 43,800 35,792 81.72% 78.87% Palmetto Rehabilitation & Health Center 90 32,850 31,547 96.03% 47.03% Susanna Wesley Health Center 120 43,800 40,162 91.69% 65.33% Waterford Rehab & Nursing Center 214 78,110 74,724 95.67% 76.36%

Seven PSA Facilities 1,209 441,285 415,365 94.13% 69.10%

Subdistrict 1 8,232 2,917,722 2,668,778 91.47% 65.49%

District 11 8,472 3,005,322 2,734,074 90.97% 65.62%

Source: AHCA’s publication of “Florida Nursing Home Utilization by District and Subdistrict July 2006-June 2007”.

The seven facilities within the applicant’s PSA had a total occupancy rate higher than the average for the subdistrict and the district. The utilization rates for District 11, Subdistrict 1 (Miami-Dade County) for all facilities ranged from a low of 48.08 percent at Berkshire Manor to a high of 99.61 percent at Fair Havens Center (as previously shown). This was for the most recent reporting period as stated above, with the lowest, highest and St. Anne’s Nursing Center bed days, patient days, total occupancy, Medicaid days and Medicaid occupancy rates shown below.

Annual Utilization Total for Select Facilities District 11; Subdistrict 1, Miami-Dade County

July 1, 2006 – June 30, 2007

Bed Days Pt. Days Total

Occupancy Medicaid Days

Medicaid Occupancy

Berkshire Manor 89,425 42,998 48.08% 38,145 88.71% Fair Havens Center 98,185 97,802 99.61% 69,263 70.82% Saint Anne's Nursing Center 87,600 85,539 97.65% 51,399 60.09%

Subdistrict 1 2,917,722 2,668,778 91.47% 1,747,833 65.49%

District 11 3,005,322 2,734,074 90.97% 1,794,004 65.62%

Source: AHCA’s publication of “Florida Nursing Home Utilization by District and Subdistrict July 2006-June 2007”.

The applicant states that the elderly are the most likely seekers of its proposed services. According to the applicant (CON #10008, page 16, Table 1 – PSA Historic and Projected Population), 2007 Claritas population data is showing that by April 1, 2010, the 65 to 74 age range population will grow at a rate of 4.7 percent while the 75+ age range


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population will grow at a 7.1 percent rate. The same source indicates the 15+ age range population will grow at a 2.4 percent age range. The applicant uses this data to support its contention that the elderly (age 65 to 74 and 75+ age range) population is growing faster than the adult population age 15 and over. Villa Maria states that there is a need for a post-acute step-down unit for residents discharged from the inpatient rehabilitation setting but not yet well enough to return home (CON #10008, page 10). The applicant cites the following advantages should the proposal be approved. These include: the co-location with the CMR facility; effecting seamless patient transfer; improved continuity of care; minimizing transfer errors involving medical records and decompression at St. Anne’s Nursing Center resulting in large common areas and more private rooms, due to conversion (some semi-private to private rooms at St. Anne’s Nursing Center). Availability, Utilization and Quality of Like Services:

As previously stated, the seven facilities within the applicant’s PSA, had a total occupancy rate higher than the average for the subdistrict and the district during the 12-month period ending June 30, 2007. Based on the total occupancy, the facility that could make the most compelling argument that it has substantial availability would be Hialeah Shores Nursing & Convalescent Center (81.7 percent total occupancy for the period). Hialeah Shores reported a 78.87 percent Medicaid occupancy rate for the period. The applicant previously stated it does not plan to seek Medicaid certification; therefore, the one facility (Hialeah Shores) mostly likely to have availability is not likely to be impacted to a large extent by approval of the project, as Villa Maria West SNF does not anticipate having any Medicaid patient days. Utilization was discussed above in detail. Although the above charts and reference (reported 2007 Claritas data), indicate that the elderly population will grow faster than the general adult population demand for community nursing home beds in the PSA is in all but one case above the district and subdistrict averages. St. Anne’s Nursing Center also has a very high total occupancy relative to the subdistrict and district. The utilization data indicates that within the PSA, the majority of facilities are highly utilized and accept patients covered under Medicaid. The applicant does not contest the quality of like services among any of the seven facilities in the PSA (CON #10008, page 17).


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Medical Treatment Trends: As stated previously, this application is in coordination with already approved CON #9722 (a 40-bed comprehensive medical rehabilitation [CMR] hospital – St. Catherine’s West Rehabilitation Hospital). St. Catherine’s West Rehabilitation Hospital is to be a specialty CMR hospital. The applicant states that St. Catherine’s West will also be an Inpatient Rehabilitation Facility (IRF). As an IRF, the facility from which the applicant plans to draw most of its patients must provide a minimum of 75 percent of their patient volume to Medicare cases, with a diagnosis of any one of 13 conditions (CON #10008, page 18). This minimum 75 percent patient population with a diagnosis/condition within any one of 13 federally mandated and approved illnesses or injuries is in compliance with 42 CFR 412.23(2)(b). St. Catherine’s West Rehabilitation Hospital must meet the minimum of 75 percent rule by federal fiscal year ending September 30, 2009. The applicant holds that the project is an alternative to the federally mandated downward pressure on inpatient rehabilitation utilization, relatively high total occupancies at the nursing homes within its PSA, an increasingly growing elderly population and the continued state legislated moratorium on nursing home bed additions statewide. The applicant provides no local, regional or national trending or emerging evidence to support a skilled nursing facility (post-acute step-down unit) being co-located with a CMR facility for residents discharged from the inpatient rehabilitation setting. Characteristically, comprehensive medical rehabilitation patients are discharged to community settings (most typically home and less frequently to an assisted living facility). The applicant does not demonstrate that the introduction of a skilled nursing facility in this scenario would be warranted. Market Conditions: The applicant indicates that current market conditions discourage, due to unprofitable or excessively costly expenditures, the development of sub-acute care units within acute care hospitals. The applicant contends that certain benefits will result if the project is approved. As previously stated, some of these benefits include the following: the co-location with the CMR facility effecting seamless patient transfer; improved continuity of care; minimizing transfer errors involving medical records and decompression at St. Anne’s Nursing Center resulting in large common areas and more private rooms, due to conversion (some semi-private to private rooms at St. Anne’s Nursing Center). According to the applicant, these market conditions are less likely and less realized in the current environment. The applicant states these more favorable


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circumstances are becoming less and less common due to changes in federal reimbursement rates and the proposal will help bring these benefits to fruition. Villa Maria also indicates it is already addressing the needs generated by existing and future market conditions and that the project will further expand the accommodation of these market conditions.

2. Agency Rule Preferences Does the project respond to preferences stated in Agency rules?

Please indicate how each applicable preference for the type of service proposed is met. Chapter 59C-1.031-.044, Florida Administrative Code.

Chapter 59C-1.036 of the Florida Administrative Code does not contain preferences relative to community nursing home beds nor does the Agency for Health Care Administration publish specific preferences for these facilities. However, the rule does contain standards the Agency utilizes in assessing the applicants’ ability to provide quality care to the residents. a. Geographically Underserved Areas. In a competitive

certificate of need review within the nursing home subdistrict as defined in 59C-2.200, Florida Administrative Code, the agency shall award a certificate of need if the applicant meets all applicable criteria for a geographically undeserved area as specified in subsection 408.032(18), Florida Statutes (Florida Statutes), and if the applicant meets the applicable statutory certificate of need review criteria specified in section 408.035, Florida Statutes, including bed need according to the relevant bed need formula contained in this rule. If the applicant is awarded a certificate of need based on the provisions of this paragraph, the applicant shall agree that the nursing facility will be located in a county without a nursing facility, or in the center of an area within the subdistrict of a radius of at least 20 miles which meets the definition of a geographically undeserved area. The center of the geographically undeserved area shall be the proposed nursing home location in the application.

The applicant is the sole applicant and this is not a competitive CON review.


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b. Proposed Services. Applicants proposing the establishment of Medicare-certified nursing facility beds to be licensed under Chapter 400, Florida Statutes, shall provide a detailed description of the services to be provided, staffing pattern, patient characteristics, expected average length of stay, ancillary services, patient assessment tools, admission policies, and discharge policies.

The applicant plans for Villa Maria West SNF to be a Medicare but not Medicaid-certified nursing home. According to the applicant, the facility will provide all services necessary to satisfy federal IRF requirements and also Center for Medicaid Services (CMS) requirements, pursuant to “CMS 13” (CON #10008, page 18). St. Catherine’s Rehabilitation Hospital plans to serve a minimum of 75 percent of its patient volume (by September 30, 2009) to Medicare cases treated for any one or a combination of 13 listed diagnoses. A total of 11 services are noted in the application, with five ancillary services (CON #10008, page #35). This minimum 75 percent patient population with a diagnosis/condition within any one of 13 federally mandated and approved illnesses or injuries is in compliance with 42 CFR 412.23(2)(b). The applicant encloses a series of policies and procedures (CON #10008, Tab 4) and a detailed description of its quality improvement program. Some of these address such topics as assessment tools, admission and discharge (CON #10008, page #36). Below is a representation of the applicant’s Schedule 6 – New Inpatient Health Care Facilities/Staffing Pattern.


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Villa Maria West SNF Staffing Patterns

For Year 1 and Year 2 of Operation Year 1 FTEs Year 1 Ending

9/30/09

Year 2 FTEs Year 2 Ending

9/30/10

ADMINISTRATION Administrator 0.33 0.33

Director of Nursing 0.33 0.33

Assistant Administrator 0.33 0.33

Financial Services 0.16 0.16

Receptionist 0.35 0.35

Medical Records Coordinator 0.17 0.17

Other (Community Liaison): 0.48 0.48 TOTAL 2.15 2.15

PHYSICIANS Unit/Medical Director 0.00 0.00 TOTAL 0.00 0.00

NURSING

RN 1.50 1.50

LPN 2.00 2.20

Nurse’s Aides 8.20 8.80

Other: Unit Secretaries 1.40 1.40

Other: MDS Coordinator 0.50 0.50

Other: Indirect Licensed 0.40 0.40

Other: Nursing Supervisors 0.73 0.73 TOTAL 14.73 15.53

ANCILLARY Physical Therapist 2.00 2.00

Speech Therapist 0.80 0.80

Occupational Therapist 0.50 0.50 TOTAL 3.30 3.30

DIETARY Dietary Supervisor 0.59 0.59

Cooks 1.06 1.06

Dietary Aides 1.59 1.70 TOTAL 3.24 3.35

SOCIAL SERVICES Social Service Director 0.00 0.00

Social Worker 1.00 1.00

Pastoral Care 0.33 0.33

Other: Admissions Clerk 0.24 0.24 TOTAL 1.57 1.57

HOUSEKEEPING

Housekeeping Supervision 0.00 0.00

Housekeepers 0.00 0.00 TOTAL 0.00 0.00

LAUNDRY

Laundry Supervisor 0.00 0.00

Laundry Aides 0.00 0.00 TOTAL 0.00 0.00

PLANT MAINTENANCE

Maintenance Supervisor 0.33 0.33

Maintenance Assistance 0.00 0.00

Security 0.50 0.50 TOTAL 0.83 0.83

GRAND TOTAL 25.80 26.72 Source: CON #10008, Financial Schedule 6


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In the notes to Schedule 6, the applicant states contractual services for the following: a consulting medical director; housekeeping; non-corporate legal and accounting services. Chapter 400.23, Florida Statutes, currently requires a minimum licensed nursing staffing of 1.0 hours of direct care for each resident per day and a minimum certified nursing assistant staffing of 2.9 hours of direct care for each resident per day. The calculations below are based on the applicant’s proposed staffing from Schedule 6 and projected occupancy from Schedule 5 of the application.

Villa Maria West SNF Minimum Staffing Requirements

FTE Nurses/Aides

Minimum Requirement

1st Year Ending 9/30/09

2nd Year Ending 9/30/10

Nurses

1.0 hours of direct care per resident

1.28 hours

1.27 hours

Aides

2.9 hours of direct care per resident

3.00 hours

3.02 hours

Sources: Schedule 5 & 6 of CON #10008

As shown in the above table, the applicant’s projected staffing patterns exceed the minimum requirements outlined in Section 400.23 (3)(a), Florida Statutes. Licensed nursing staff must be at least one per 40 residents and a minimum of one nurse aide for each 20 residents. The applicant’s projections are in compliance with these requirements. The applicant projects an average length of stay (ALOS) of 26.6 days (CON #10008, page 35). Villa Maria West SNF patients are anticipated to be Medicare-eligible, needing neither three hours of therapy per day, nor daily physician care. These patients are expected to need a relatively short stay in a sub-acute setting for recovery sufficient to return home, as opposed to long-term care or other institutional care. Patient diagnoses are not utterly unlike those stated in “CMS 13” (CON #10008, page 18) though some are different than stated under CMS 13, such as automobile accident victims, tracheotomy residents who have been stabilized and others.


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c. Quality of Care. In assessing the applicant’s ability to provide

quality of care pursuant to s. 408.035(1)[c], Florida Statutes, the Agency shall evaluate the following facts and circumstances:

1. Whether the applicant has had a Chapter 400, Florida

Statutes, nursing facility license denied, revoked, or suspended within the 36 months prior to the application.

The applicant has never had a nursing facility license denied, revoked, or suspended.

2. Whether the applicant has had a nursing facility placed

into receivership at any time during the period of ownership, management, or leasing of a nursing facility in the 36 months prior to the current application.

The applicant has never had a nursing facility placed into receivership.

3. The extent to which the conditions identified within

subparagraphs 1 and 2 threatened or resulted in direct, significant harm to the health, safety, or welfare of the nursing facility residents.

This provision is not applicable. 4. The extent to which the conditions identified within

subparagraph 3 were corrected within the time frames allowed by the appropriate state agency in each respective state and in a manner satisfactory to the agency.

This provision is not applicable.

(4) (f) Harmful Conditions. The Agency shall question the ability of the applicant to provide quality of care within any nursing facility when the conditions identified in subparagraph (e) 1 and (e) 2 result in the direct, significant harm to the health, safety, or welfare of a nursing facility resident, and were not corrected within the time frames allowed by the appropriate state agency in each respective state and in a manner satisfactory with the Agency.

This provision is not applicable.


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(5) Utilization Reports. Within 45 days after the end of each calendar quarter, facilities with nursing facility beds licensed under Chapter 400, Florida Statutes shall report to the Agency, or its designee, the total number of patient days, which occurred in each month of the quarter, and the number of such days that were Medicaid patient days.

The applicant states it will provide the required utilization data to the Agency, as required. The applicant elects to respond to additional criteria - the Health Care Access Criteria, as stated in Chapter 59C-1.030(2). Below are the applicant’s volunteered responses. (a) The need that the population served or to be served has for

the health or hospice services proposed to be offered or changed, and the extent to which all residents of the district, and in particular low income persons, racial and ethnic minorities, women, handicapped persons, other underserved groups and the elderly are likely to have access to those services.

In its discussion of need and the history of its management partner (Catholic Health Services [CHS], sponsored by the Archdiocese of Miami) the applicant explains its reasoning. The applicant states a need for a post-acute step-down unit for residents discharged from the inpatient rehabilitation setting but not yet well enough to return home. It also stresses the benefit of co-location of the CMR with the SNF and contends that this produces better health care outcomes: more seamless patient transfer; improved continuity of care; fewer transfer errors and reduced travel time in transit between facilities. Villa Maria states medical trends and conditions are favorable for its proposal. The applicant quotes what it calls the CHS charitable admissions policy, “To fulfill the mission of Catholic Health Services, each facility will be able to provide charity care to those truly in need who have proven their eligibility, based on the facility’s operational and clinical ability to provide such care”.


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(b) The extent to which that need will be met adequately under a

proposed reduction, elimination or relocation of a service, under a proposed substantial change in admissions policies or practices, or by alternative arrangements, and the effect of the proposed change on the ability of members of medically underserved groups which have traditionally experienced difficulties in obtaining equal access to health services to obtain needed health care.

The applicant states this in not applicable as it does not anticipate the proposal will impact any of these criteria.

(c) The contribution of the proposed service in meeting the health

needs of members of such medically underserved groups, particularly those needs identified in the applicable local health plan and State health plan as deserving of priority.

The applicant affirms that local health plans are no longer a part of CON review and neither are state health plans. However, the applicant anticipates that 100 percent of Villa Maria West SNF patient days will be Medicare-sponsored (including Medicare HMO) [CON #10008, page #54]. The applicant previously stated it does not intend to seek Medicaid certification. There is no commitment to a given Medicaid, indigent care or charity percentage to be served; however, it is stated that Villa Maria West SNF will provide services regardless of payer source, or “in some instances”, in light of the absence of a payer source.

(d) In determining the extent to which a proposed service will be

accessible, the following will be considered:

1. The extent to which medically underserved individuals

currently use the applicant’s services, as a proportion of the medically underserved population in the applicant’s proposed service area(s), and the extent to which medically underserved individuals are expected to use the proposed services, if approved;

Per the applicant, CHS, the umbrella management partner, attributed 26.2 percent of its gross revenues to Medicaid recipients (in fiscal year 2006 this is reported to be $19,592,000). The applicant also references Section E.3.g.


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2. The performance of the applicant in meeting any

applicable Federal regulations requiring uncompensated care, extent to which medically underserved individuals currently use the applicant’s services, as a proportion of the medically underserved population in the applicant’s proposed service area(s), and the extent to which medically underserved individuals are expected to use the proposed services, if approved;

Per the applicant, this is not applicable.

3. The extent to which Medicare/Medicaid and medically

indigent patients are served by the applicant; and

There is no commitment from the applicant to a given Medicaid, indigent care or charity percentage to be served; however, it is stated that Villa Maria West SNF will provide services regardless of payer source, or “in some instances”, in light of the absence of a payer source. Schedule 7A projects 100.0 of the project’s patient days will be Medicare and Medicare HMO. The applicant references Section E.3.g.

4. The extent to which the applicant offers a range of

means by which a person will have access to its services.

As with questions 1 and 3 immediately above, the applicant again references Section E.3.g.

(e) In any case where it is determined that an approved project

does not satisfy the criteria specified in paragraphs (a) through (d), the Agency may, if it approves the application, impose the condition that the applicant must take affirmative steps to meet those criteria.

The applicant states this is not applicable.

(f) In evaluating the accessibility of a proposed project, the accessibility of the current facility as a whole must be taken into consideration. If the proposed project is disapproved because it fails to meet the need and access criteria specified herein, the Agency will so state in its written findings.

The applicant states this is not applicable.


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(4)(d) Proposed Services, (e) Quality of Care, and (f) Harmful Conditions.

The applicant references Section E.3.b for this response. (5) Utilization Reports. Within 45 days after the end of each

calendar quarter, facilities with nursing facility beds licensed under Chapter 400, Florida Statutes shall report to the Agency, or its designee, the total number of patient days, which occurred in each month of the quarter, and the number of such days that were Medicaid patient days.

The applicant agrees to provide timely utilization reports.

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

efficiency, accessibility and extent of utilization of existing health care facilities and health services in the applicant's service area? ss. 408.035(2), 408.035(7), Florida Statutes.

The applicant summaries again the high utilization among existing nursing home facilities within the seven-mile radius (14-mile diameter) of the PSA and that few acute care hospitals provide skilled nursing units, due to changes in and less advantageous federal Medicare reimbursements. The applicant anticipates 100 percent of patient days to be compensated through Medicare and the applicant has previously stated a relatively higher percentage of elderly patients are projected to be in the PSA (using reported 2007 Claritas data). The applicant does not contest the quality of care provided at existing facilities that might be alternatives to its proposal. Villa Maria states that its major impetus is enhanced or improved continuity of care and improved quality in post-acute step-down care for residents who have been discharged from a co-located inpatient CMR facility (CON #9722) who are not yet medically ready to return home.

The project calls for delicensure of 20 community nursing home beds from St. Anne’s Nursing Center, where plans are to convert some semi-private rooms to private and enlarge existing common areas, as a result of this proposal, if approved.


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b. Does the applicant have a history of providing quality of care and

has the applicant demonstrated the ability of providing quality care? ss. 408.035(3) 408.035(12), Florida Statutes. The applicant's designation as a Gold Seal Program nursing facility pursuant to ss. 400.235, when the applicant is requesting additional nursing home beds at that facility. ss 408.035(10), Florida Statutes.

The applicant includes current accreditation documentation for the Villa Maria Nursing Center and St. Catherine’s Rehabilitation Hospital from the Joint Commission on Accreditation of Healthcare Organizations [JCAHO] in Tab 1 of the application. The applicant expects Villa Maria West SNF to also have JCAHO accreditation. The applicant also claims licensure by the Agency, to be in good standing with the Medicare and Medicaid programs and that it has never had a license denied, revoked or suspended, or had a facility placed in receivership. CON #10008, Tab 4 includes numerous policies that relate to the operations of Villa Maria Nursing Center. The first is entitled an Organizational Performance Improvement Plan. The applicant states that a governing board requires the monitoring, assessing and evaluating of resident safety, resident care and opportunities for improvement. Committees that relate to such topics as resident safety meet monthly to review data, evaluate results and plan improvements. Among others, a Risk Management Surveillance Team is also mentioned. An overall Performance Improvement Committee oversees and coordinates the sub-committees. Agency records indicate two confirmed complaints at Villa Maria Nursing Center, as of the three-year period ending January 14, 2008. The confirmed complaints are as follows: dietary (one) and resident rights (one). St. Anne’s Nursing Center, St. Anne’s Residence, Inc., as of the three-year period ending January 14, 2008 has three confirmed complaints. The confirmed complaints are as follows: plan of care (one), lack of assessment (one) and call lights (one). Villa Maria Nursing Center does not enjoy the state Gold Seal. As of the on-line run date of January 23, 2008, it had an Agency overall inspection rating of one of a possible five stars. St. Anne’s Nursing Center has a two star rating and had a conditional license from May 14, 2007 through August 28, 2007 or for 11.6 percent of the time from July 23, 2005 to January 23, 2008. Both facilities presently have standard licenses.


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c. What resources, including health manpower, management personnel

and funds for capital and operating expenditures, are available for project accomplishment and operation? ss. 408.037(6), Florida Statutes.

This review is for Villa Maria Nursing and Rehabilitation Center, Inc., (also known as Villa Maria West SNF) applying to transfer 20 skilled nursing beds to the third floor of a 40-bed comprehensive medical rehabilitation hospital (CMR) in District 11, Miami-Dade County, Florida. The CMR facility is currently under construction and was approved in CON #9722. The 20 skilled nursing beds will be transferred from St. Anne’s Nursing Center, an affiliated facility. The financial impact of the project will include the project cost of $6,940,804 and incremental year two operating costs of $2,824,573. The applicant is a not-for-profit Florida corporation established under the sponsorship of the Archdiocese of Miami. The applicant is a member of the “Obligated Group” which includes several affiliated Catholic Health facilities. The audited financial statements of the applicant for the periods ending September 30, 2005 and 2006 were analyzed for the purpose of evaluating the applicant’s ability to provide the capital and operational funding necessary to implement the project.

Short-Term Position:

The applicant’s current ratio of 1.3 indicates current assets are slightly greater than current obligations; this is below average and a moderately weak but adequate position. The working capital (current assets less current liabilities) of $1.3 million is a measure of excess liquidity that could be used to fund capital projects. The ratio of cash flow to current liabilities of 0.3 is below average and a weak position. Overall the applicant has a moderately weak but adequate short-term position. (See Table below). Long-Term Position:

The applicant’s long-term debt to net asset ratio of 3.0 indicates the applicant is highly leveraged. This is a weak position and may impair the applicant’s ability to acquire future long-term debt at reasonable rates. The most recent year had $386,333 in operating income, which resulted in an operating margin of 1.3 percent. Overall, the applicant has a weak long-term position. (See Table below).


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VILLA MARIA NURSING AND REHABILITATION CENTER, INC.

9/30/2006 9/30/2005

Current Assets (CA) $6,237,367 $5,141,598

Cash and Current Investment $1,913,906 $1,588,698

Beneficial Interest in Net Assets of Foundation $624,403 $611,528

Total Assets (TA) $19,574,280 $18,275,357

Current Liabilities (CL) $4,964,614 $3,847,600

Total Liabilities (TL) $15,894,355 $15,061,727

Net Assets (NA) $3,679,925 $3,213,630

Total Revenues (TR) $28,740,232 $26,766,659

Interest Expense (Int) $690,590 $577,279

Excess of Revenues Over Expenses (ER) $386,333 $822,346

Cash Flow from Operations (CFO) $1,367,465 $2,333,881

Working Capital $1,272,753 $1,293,998

FINANCIAL RATIOS

9/30/2006 9/30/2005

Current Ratio (CA/CL) 1.3 1.3

Cash Flow to Current Liabilities (CFO/CL) 0.3 0.6

Long-Term Debt to Net Assets (TL-CL/NA) 3.0 3.5

Times Interest Earned (ER +Int/Int) 1.6 2.4

Net Assets to Total Assets (NA/TA) 18.8% 17.6%

Operating Margin (ER/TR) 1.3% 3.1%

Return on Assets (ER/TA) 2.0% 4.5%

Operating Cash Flow to Assets (CFO/TA) 7.0% 12.8%

Capital Requirements:

Schedule 2 listed capital projects totaling $25.9 million which includes $14.4 million for the 40-bed CMR approved in CON #9722.

Available Capital:

The applicant provided a copy of a bond-offering dated October 18, 2007, in the amount of $48.6 million. The bonds are secured by the “Obligated Group” of which the applicant is a member. The purpose of the proceeds in the bond offering includes a description of this project. As discussed above, the applicant has working capital of $1.3 million and $386,333 in operating income. In addition, cash flow from operations was $1.4 million. Staffing:

Schedule 6 indicates, by September 30, 2009 (the first year of the proposed project), the applicant forecasts 25.8 FTEs as follows: administrator, director of nursing and assistant administrator (0.33


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FTEs each); financial services director (0.16 FTEs); receptionist (0.35 FTEs); medical records coordinator (0.17 FTEs); community liaison (0.48 FTEs); registered nurses [RNs] (1.5 FTEs); licensed practical nurses [LPNs], (2.0 FTEs); nurse’s aides (8.2 FTEs); other nursing staff (3.03 FTEs); physical therapists (2.0 FTEs); speech therapists (0.8 FTEs); occupational therapists (0.5 FTEs); dietary supervisor (0.59 FTEs); cooks (1.06 FTEs); dietary aides (1.59 FTEs); social worker (1.0 FTEs); pastoral care (0.33 FTEs); admissions clerk (.24 FTEs); maintenance supervisor (0.33 FTEs) and security (0.5 FTEs). This total FTE count for the proposed site increases to 26.2 for year two (ending September 30, 2010) – a difference of 0.92 FTEs. The FTEs remain the same in all categories except for the following changes: LPNs (2.2 FTEs); nurses aides (8.8 FTEs) and dietary aides (1.7 FTEs). In the notes to Schedule 6, the applicant asserts the staffing mix and FTEs are based on the experienced of management on operating other SNFs. The following are provided contractually: housekeeping; non-corporate legal and accounting services and a consulting medical director.

The applicant claims support from Catholic Health Services (CHS), under the sponsorship of the Archdiocese of Miami, in the recruitment, training, compensation and employee relations of staff. The applicant further claims to attract local and regional candidates for many of the needed planned positions at the site. In order to meet the needs of the Spanish-speaking Northwestern Miami-Dade community, it plans to employ a “large” number of a bi-lingual candidates (English/Spanish). However, no target percentage is offered. It asserts that in 2002, CHS received the third highest job satisfaction score (third of 733 eligible organizations). The applicant does not state the geographic spread of these 733 organizations, how many were in Miami-Dade County, etc. or whether they were in the same or a like industry. It is further stated CHS was recognized by HR Solutions as being “a cut above the rest” but gives no further detail about this recognition and does not include a copy in its application. Conclusion:

The applicant has secured funding for this project through a tax-exempt bond issue. In addition, funding for working capital should be available as needed.

d. What is the immediate and long-term financial feasibility of the proposal? ss. 408.037(8), Florida Statutes.

This project is dependent on the development and profitable operation of the 40-bed CMR approved in CON #9722. Although the 40-bed CMR project was approved in CON #9722, the financial portion of the review


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raised questions about the projected profitability. In addition, that review was completed back in late 2003. Therefore, the Agency reviewed the projected operations of both the 40-bed CMR and the 20 skilled nursing unit. A comparison of the applicant’s estimates to the control group values provides for an objective evaluation of financial feasibility, (the likelihood that the services can be provided under the parameters and conditions contained in Schedules 7 and 8), and efficiency, (the degree of economies achievable through the skill and management of the applicant). In general, projections that approximate the median are the most desirable, and balance the opposing forces of feasibility and efficiency. In other words, as estimates approach the highest in the group, it is more likely that the project is feasible, because fewer economies must be realized to achieve the desired outcome. Conversely, as estimates approach the lowest in the group, it is less likely that the project is feasible, because a much higher level of economies must be realized to achieve the desired outcome. These relationships hold true for a constant intensity of service through the relevant range of outcomes. As these relationships go beyond the relevant range of outcomes, revenues and expenses may, either go beyond what the market will tolerate, or may decrease to levels where activities are no longer sustainable. The 40-bed CMR unit will be compared to Peer Group 18 (CMR Hospital Group). This group contains CMR hospital data reported with a fiscal year ending 2006. Per diem rates are projected to increase by an average of 3.3 percent per year. Inflation adjustments were based on the new CMS Market Basket, third Quarter, 2007. CMR Revenue: Projected net revenue per adjusted patient day (NRAPD) of $1,094 in year one and $1,129 in year two is between the median and highest values of $882 and $1,259 in year one and $905 and $1,292 in year two. With NRAPD between the median and highest values, the facility is expected to consume health care resources in proportion to the services provided. (See Table below). Based on the above, projected CMR revenues appear reasonable. Skilled Nursing Revenue: The applicant indicates that the skilled nursing facility beds will be used as a step down unit from the CMR hospital. Based on this, the applicant is projecting that 100 percent of it patient days will come from Medicare and that these patients would fall into the rehab patient category. Therefore, the Agency compared projected net Medicare revenue to the Medicare rehab RUG III utilization rates for Miami-Dade County. Projected net Medicare revenue per


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adjusted patient day (NRAPD) of $394 in year one and $406 in year two approximate the median Medicare RUG III rehab category rates. (See Tables below). Skilled nursing facility revenue appears reasonable.

MEDICARE RUG III REHAB CATEGORIES (Urban 2007-2008)

Values Adjusted for Inflation

2008 2009 2010

Projected $394.20 $406.03

Highest $601.98 $620.04 $636.17

Median $386.89 $398.50 $408.86

Lowest $246.98 $254.39 $261.01

CMR Expenses: Anticipated costs per adjusted patient day (CAPD) of $976 in year one and $961 in year two is between the control group median and highest values of $812 and $1,137 in year one and $833 and $1,167 in year two. With CAPD falling between the median and lowest values, costs appear reasonable. (See Table below). Skilled Nursing Staffing: Section 400.23(3)(a)(2), Florida Statutes, specifies a minimum certified nursing assistant staffing of 2.9 hours of direct care per resident per day and a minimum licensed nursing staffing of 1.0 hour of direct resident care per resident day. Based on the information provided in Schedule 6, the applicant’s projected certified and licensed nursing staffing exceeds the minimum level required in year two. Profitability: The skilled nursing facility operations are projected to add an incremental operating loss in year two of $428,972. As discussed above, this project is dependent on the profitable operations of the CMR facility. The year two operating profit for the CMR hospital (without the skilled nursing facility) of $1.95 million computes to an operating margin per patient day of $167 which is between the peer group median and highest vales of $108 and $251. The overall profitability of the CMR facility appears reasonable and appears sufficient to absorb the operating loss of the skilled nursing facility.


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40-bed CMR ONLY REVIEW FOR USE

IN CON #10008 Sep-10 YEAR 2 VALUES ADJUSTED

2006 DATA Peer Group 18 YEAR 2 ACTIVITY FOR INFLATION

ACTIVITY PER DAY Highest Median Lowest

ROUTINE SERVICES 30,218,508 2,587 1,534 485 297

INPATIENT AMBULATORY 0 0 12 0 0

INPATIENT SURGERY 0 0 0 0 0

INPATIENT ANCILLARY SERVICES 7,039,882 603 2,188 832 462

OUTPATIENT SERVICES 0 0 407 134 11

TOTAL PATIENT SERVICES REV. 37,258,390 3,190 3,553 1,429 900

OTHER OPERATING REVENUE 0 0 24 3 1

TOTAL REVENUE 37,258,390 3,190 3,554 1,431 902

DEDUCTIONS FROM REVENUE 24,076,813 2,061 0 0 0

NET REVENUES 13,181,577 1,129 1,292 905 549

EXPENSES

ROUTINE 3,750,102 321 440 156 87

ANCILLARY 3,519,942 301 314 195 121

AMBULATORY 0 0 0 0 0

TOTAL PATIENT CARE COST 7,270,044 622 0 0 0

ADMIN. AND OVERHEAD 2,142,722 183 0 0 0

PROPERTY 1,815,696 155 0 0 0

TOTAL OVERHEAD EXPENSE 3,958,418 339 651 457 270

OTHER OPERATING EXPENSE 0 0 0 0 0

TOTAL EXPENSES 11,228,462 961 1,167 833 478

OPERATING INCOME 1,953,115 167 251 108 -403

14.8%

PATIENT DAYS 11,680

ADJUSTED PATIENT DAYS 11,680

TOTAL BED DAYS AVAILABLE 14,600 VALUES NOT ADJUSTED

ADJ. FACTOR 1.0000 FOR INFLATION

TOTAL NUMBER OF BEDS 40 Highest Median Lowest

PERCENT OCCUPANCY 80.00% 91.6% 58.5% 35.4%

PAYER TYPE PATIENT

DAYS % TOTAL

SELF PAY 117 1.0%

MEDICAID 701 6.0% 7.8% 2.6% 0.1%

MEDICAID HMO 0 0.0%

MEDICARE 8,048 68.9% 82.1% 72.9% 38.0%

MEDICARE HMO 2,464 21.1%

INSURANCE 350 3.0%

HMO/PPO 0 0.0% 33.8% 16.1% 5.8%

OTHER 0 0.0%

TOTAL 11,680 100%


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MEDICARE RUG III REHAB CATEGORIES (Urban 2007-2008) MIAMI DADE-COUNTY WAGE INDEX (1.0002)

RUG III Category Labor

Component Wage Index

Adjusted Wage Amount

Unadjusted Component Payment Rate

RUX $422.24 1.0002 $422.32 $179.66 $601.98

RUL $370.82 1.0002 $370.89 $157.77 $528.66

RVX $320.13 1.0002 $320.19 $136.21 $456.40

RVL $298.53 1.0002 $298.59 $127.02 $425.61

RHX $271.38 1.0002 $271.43 $115.46 $386.89

RHL $266.23 1.0002 $266.28 $113.28 $379.56

RMX $310.67 1.0002 $310.73 $132.18 $442.91

RML $284.95 1.0002 $285.01 $121.24 $406.25

RLX $220.55 1.0002 $220.59 $ 93.84 $314.43

RUC $358.47 1.0002 $358.54 $152.52 $511.06

RUB $328.64 1.0002 $328.71 $139.83 $468.54

RUA $313.21 1.0002 $313.27 $133.27 $446.54

RVC $288.25 1.0002 $288.31 $122.64 $410.95

RVB $273.85 1.0002 $273.90 $116.52 $390.42

RVA $246.08 1.0002 $246.13 $104.70 $350.83

RHC $250.81 1.0002 $250.86 $106.71 $357.57

RHB $239.49 1.0002 $239.54 $101.90 $341.44

RHA $222.00 1.0002 $222.04 $ 94.46 $316.50

RMC $230.44 1.0002 $230.49 $ 98.04 $328.53

RMB $224.27 1.0002 $224.31 $ 95.42 $319.73

RMA $219.12 1.0002 $219.16 $ 93.23 $312.39

RLB $203.07 1.0002 $203.11 $86.40 $289.51

RLA $173.24 1.0002 $173.27 $73.71 $246.98

Conclusion: This project appears to be financially feasible.

e. Will the proposed project foster competition to promote quality and cost-effectiveness? ss. 408.035(9), Florida Statutes.

Competition to promote quality and cost-effectiveness is driven primarily by the best combination of high quality and fair price. Competition forces healthcare facilities to increase quality and reduce charges/costs in order to remain viable in the market. The health care industry has several factors that limit the impact competition has on promoting quality and cost-effectiveness. These factors include a “disconnect” between the payer and the end user of health care services, and a lack of consumer friendly quality measures and information. These factors make it difficult to measure the impact this project will have on competition to promote quality and cost-effectiveness. However, the Agency can measure the potential for competition to exist in a couple of areas.


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Provider-Based Competition:

This application is for a transfer of 20 skilled nursing facility beds in District 11. The beds are intended to be utilized as a step-down unit from the CMR facility. Considering this project is not adding beds to the district, this project is not likely to have a material impact on provider-based competition. Price-Based Competition:

The impact of the price of services on consumer choice is limited to the payer type. Most consumers do not pay directly for hospital services rather they are covered by a third-party payer. The impact of price-based competition would be limited to third-party payers that negotiate price for services, namely managed care organizations. Therefore, price competition is limited to the share of patient days that are under managed care plans. The applicant is projecting 50 percent of its patient days from managed care payers (Medicare HMO). Therefore, the potential for price-based competition exists among 50 percent of the applicant’s projected patient days. Conclusion: This project is not likely to have a material impact on provider-based competition; however, the potential for price-based competition exists for 50 percent of the applicant’s projected patient days.

f. Are the proposed costs and methods of construction reasonable? Do

they comply with statutory and rule requirements? ss. 408.035(10), Florida Statutes; Ch. 59A-3 or 59A-4, Florida Administrative Code.

The applicant proposes to transfer 20 skilled nursing beds from St. Anne's Nursing Center in Miami to Villa Maria West SNF. The facility (Villa Maria West SNF) will be a new skilled nursing home located on the third floor of St. Catherine’s West Rehabilitation Hospital. St. Catherine’s West was previously approved under CON #9722 and is currently under construction. The transferred beds would be located on the third floor of the facility in an area previously designed for assisted living residents. The construction type is not listed on the schematic floor plan, but the facility is located in a building which has recently been approved by the Agency as a rehabilitation hospital so the construction type should meet the minimum requirements for a nursing home. Smoke barriers are not identified on the plans, but cross-corridor doors are shown in locations that would indicate smoke compartmentation.


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All required functional space have been provided and are adequately sized and located. A second remotely located exit access door will need to be added to the dining room to comply with the egress requirements of the Life Safety Code and the Florida Building Code. All skilled nursing beds are located in private rooms with attached private toilet rooms. All resident bedrooms and toilet rooms are designed to be accessible. There is an existing shower room on the floor which is not being modified. There are two additional accessible shower/toilet rooms for residents who require assistance. The project summary on the plan indicates the applicant agrees to compliance with current codes. Some additional architectural, mechanical and electrical physical plant standards will need to be addressed in greater detail as the project is developed, but the physical constraints of the spaces should accommodate these requirements. The resident rooms are generously sized and the facility should be able to meet or exceed all code requirements. Based on the analysis of actual cost data of a similar project, the estimated construction costs appear to be within the expected range. The information provided in the project completion forecast appears to be reasonable. The architectural review of the application shall not be construed as an in-depth effort to determine complete compliance with all applicable codes and standards. The final responsibility for facility compliance ultimately rests with the owner.

g. Does the applicant have a history of and propose the provision of health services to Medicaid patients and the medically indigent?

ss. 408.035(11), Florida Statutes.

The following table compares annual occupancy rates for the St. Anne’s Nursing Center, the Villa Maria Nursing Center, District 11, Subdistrict 1, Miami-Dade County, and the state during the period July 1, 2006 through June 30, 2007.


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July 2006 – June 2007 Occupancy Rates

Total Medicaid

St. Anne’s Nursing Center 97.65% 60.09%

Villa Maria Nursing Center 95.62% 53.77%

Subdistrict 1 91.47% 65.49%

District 11 90.97% 65.62%

State 88.18% 60.78% Source: Florida Nursing Home Utilization by District and Subdistrict,

July 1, 2006 – June 30, 2007 published 10/06/07.

The applicant's Medicaid care provision is below the subdistrict, district and state. The same is true for the sacrificing facility (St. Anne’s Nursing Center, the SNF from which the 20 community nursing beds are to be delicensed). St. Anne’s averaged 60.09 percent Medicaid occupancy and is conditioned for 47.35 percent Medicaid in the 240 bed facility. However, the applicant does not propose any conditions to serve Medicaid, charity or indigent care patients.

F. SUMMARY

Villa Maria Nursing and Rehabilitation Center, Inc. (CON# 10008) proposes to transfer 20 community skilled nursing home beds to the third floor of the St. Catherine’s West (CON #9722) site through the delicensure of an equal number of community nursing home beds from St. Anne’s Nursing Center, all located in District 11, Subdistrict 1 (Miami-Dade County, Florida). The project involves a combined total of 20,743 gross square feet (GSF) of new construction at a total construction cost of $6,653,092. The total cost of the project is $6,940,804. Villa Maria West SNF proposes a single condition – the facility physical location of 8850 N.W. 122nd Street, Hialeah Gardens, Florida 33018. Need:

• Need analysis includes population growth within the primary service

area (PSA) with particular attention to the 64 to 74 and 75+ age range population, stating these population segments are growing faster than the 15+ population.

• The applicant indicates that numerous operating and patient care efficiencies, greater continuity of care and improved health care outcomes are needed and foreseen with the project.


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• The applicant plans to move beds from a highly utilized facility (97.65 percent total occupancy and 60.09 percent Medicaid occupancy) to create a new 20-bed SNF for CMR step-down with no Medicaid-certified beds.

• The applicant does not demonstrate that 20 skilled nursing beds to be utilized as a step-down unit for a 40-bed CMR facility is a good use of health care resources. CMR patients are typically discharged to home, as the purpose of CMR is to rehabilitate the patient.

Quality of Care:

• The applicant plans to seek Joint Commission on Accreditation of Healthcare Organizations certification for the project and provides a copy of its JCAHO accreditation for Villa Maria Nursing Center and St. Catherine’s Rehabilitation Hospital.

• The applicant has a history in operating a similar skilled nursing facility (SNF)/comprehensive medical rehabilitation(CMR) arrangement at Villa Maria Nursing Center and St. Catherine’s Rehabilitation Hospital.

• Agency records indicate two confirmed complaints at Villa Maria Nursing Center, as of the three year period ending January 14, 2008. The confirmed complaints are as follows: dietary (one) and resident rights (one).

• As of a January 15, 2008 on-line run date, Villa Maria Nursing Center has one of a possible five-star overall inspection rating, as issued by the Agency.

Financial Feasibility/Availability of Funds:

• The applicant has an overall “moderately weak but adequate” short-term position and overall a “weak” long-term position.

• The applicant has secured funding for this project through a tax-exempt bond issue. In addition, funding for working capital should be available as needed.

• This project appears to be financially feasible, provided that the proposal’s patient days and payer mixes are realized.

• This project is not likely to have a material impact on provider-based competition; however, the potential for price-based competition exists for 50 percent of the applicant’s projected patient days.

Medicaid/Charity Care:

• The applicant is projecting that Medicare & Medicare HMO will comprise 100.0 percent of total patient days in year one and two of the proposed project. The 20 SNF beds to be moved from St. Anne’s


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Nursing Center are part of a 240 bed facility that averaged 60.09 percent Medicaid occupancy during the 12 months ending June 30, 2007.

• The applicant does not propose any conditions regarding Medicaid, charity or indigent care patient days even though the 20 beds to be moved from St. Anne’s Nursing Center are conditioned to 43.75 percent Medicaid as part of the total 240 bed facility’s condition under CON #8158.

Architectural:

• This is a third floor facility of 20 private rooms for nursing home residents on the top floor of the previously CON approved (CON #9722) St. Catherine’s Rehabilitation Hospital.

• A second remotely located exit access door will need to be added to the dining room to comply with the egress requirements of the Life Safety Code and the Florida Building Code.

• The project summary on the plan indicates the applicant agrees to compliance with current codes. Some additional architectural, mechanical and electrical physical plant standards will need to be addressed in greater detail as the project is developed, but the physical constraints of the spaces should accommodate these requirements.

• Based on the analysis of actual cost data of a similar project, the estimated construction costs appear to be within the expected range and the project completion forecast appears to be reasonable.

G. RECOMMENDATION

Deny CON #10008.


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AUTHORIZATION FOR AGENCY ACTION Authorized representatives of the Agency for Health Care Administration adopted the recommendation contained herein and released the State Agency Action Report. DATE: James B. McLemore Health Services and Facilities Consultant Supervisor Certificate of Need

Jeffrey N. Gregg

Chief, Bureau of Health Facility Regulation

state agency action report on application … · community nursing home beds at st. anne’s...

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