STATE AGENCY ACTION REPORT ON APPLICATION FOR CERTIFICATE ...ahca.myflorida.com/MCHQ/CON_FA/Batching/pdf/10164.pdf · STATE AGENCY ACTION REPORT ON APPLICATION FOR CERTIFICATE OF

STATE AGENCY ACTION REPORT

ON APPLICATION FOR CERTIFICATE OF NEED

A. PROJECT IDENTIFICATION 1. Applicant/CON Action Number

HealthSouth Rehabilitation Hospital of Polk County, LLC/ CON #10162 505 East Huntland Drive, Suite 270 Austin, Texas 78752 Authorized Representative: Dr. Ronald Luke

(512) 371-8166

Haines City HMA, LLC d/b/a Heart of Florida Regional Medical Center/CON #10163 40200 US Highway 27 North Davenport, Florida 33837 Authorized Representative: Mr. Donnie Breeding

(863) 419-2259

Lakeland Regional Medical Center, Inc./CON #10164 1324 Lakeland Hills Boulevard Lakeland, Florida 33805

Authorized Representative: Dr. Elaine C. Thompson

President and CEO (863) 687-1295

Sebring Hospital Management Associates, LLC d/b/a Highlands Regional Medical Center/CON #10165 3600 South Highlands Avenue Sebring, Florida 33870

Authorized Representative: Mr. Brian Hess, CEO

(863) 385-6101

CON Action Numbers: 10162-10165

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2. Service District/Subdistrict

District 6 (Hardee, Highlands, Hillsborough, Manatee, and Polk Counties)

B. PUBLIC HEARING

A public hearing was requested and held on Wednesday, October 24, 2012 at 9600 Koger Boulevard, Madison Building, Conference Room, 2nd Floor, St. Petersburg, Florida 33702. The hearing was conducted by Barbara Martinez, Hearing Officer, Health Council of West Central Florida, Inc. Below is a brief summary of comments made by the presenters. CON application #10162 Mr. Andy Ward, Vice President of Development, HealthSouth Corporation stated that HealthSouth is the most experienced provider of inpatient rehabilitation services in the country, with 23 percent of the U.S. market share (based on all inpatient rehabilitation hospital discharges). Mr. Ward stated HealthSouth has 99 hospitals in the U.S., nine of these in Florida and HealthSouth has CONs for three new Florida hospitals that are currently under development. He concluded by stating that the project is to be located in Lakeland and will serve residents of Polk County, Florida. Marcus Braz, MD, CEO, HealthSouth Rehab Hospital of Sarasota discussed HealthSouth’s quality of care and stated that HealthSouth consistently exceeds the functional gains shown in the Uniform Data System (UDS) for medical rehabilitation. Dr. Braz stated that by using unparalleled rehabilitation technology such as the auto-ambulator, HealthSouth ensures patient improvement at a lower cost than other freestanding facilities or rehabilitation units. He indicated that HealthSouth has many “robust” clinical education and affiliation programs, with various rehabilitation program-specific certifications for employees as well as clinical education programs that are available to the communities served. Affiliations for rehabilitation and various allied-health programs with the University of South Florida, University of Central Florida, University of Florida, Florida State University, University of Miami and Nova Southeastern University were all mentioned.


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Dr. Braz reported various liaison practitioners go out into the community (seeking potential patients and families) as part of HealthSouth’s continuum of care practices, so that patients are assessed to see if they meet HealthSouth’s admission criteria. For patients that meet the criteria, development and elements of an individualized treatment plan was discussed. Physicians on-staff at HealthSouth hospitals were reported as having privileges at multiple hospitals. Dr. Braz stated that HealthSouth ensures continuous communication with relevant partners (referring physicians, family and patient, etc.) and a return to an acute care hospital from a HealthSouth facility is “rare”. However, if it happens, the referring physician is notified quickly. Dr. Braz stated that HealthSouth provides post-discharge coordination with appropriate providers, such as outpatient and home health providers. Per Dr. Braz, the HealthSouth facility will have an electronic health record (HL7 System was mentioned), which will provide a “seamless flow of information” from acute care to HealthSouth’s pre-assessment. He stated that HealthSouth holds over 120 disease-specific certifications from The Joint Commission and that HealthSouth accounts for approximately 80 percent of the hospitals with such certifications. Per Dr. Braz, HealthSouth’s charity policy is to admit patients regardless of ability to pay and the policy is applied uniformly. Randy Braddom MD, MS, a physiatrist, who stated he is an independent consultant retained by HealthSouth, discussed what he called two major models of inpatient rehabilitation—a freestanding rehabilitation hospital and the in-hospital rehabilitation unit. Dr. Braddom stated he has been a medical director at four in-hospital rehabilitation units and one freestanding hospital, in addition to being the CEO of a “large teaching hospital” and associate dean of a medical school. Dr. Braddom stated the only major disadvantage of a freestanding rehab hospital is that it can lack immediate access to acute hospital services; however, this can be “well managed by careful coordination” and is less of a problem now due to instantaneous communication. Advantages of freestanding rehabilitation hospitals were stated to be: The freestanding rehab hospital has volume large enough to provide

specialized programs (having a “critical mass” of patients adequate to draw high-quality specialized programs),

cost-effectiveness of specialized programs (smaller units often cannot afford these),

having an administrator (who is not distracted by non-rehabilitation issues), and is often specialized in rehabilitation administration,

central administration benefits through a large rehabilitation chain with experts (such as the applicant’s parent),


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a totally focused rehab staff that is not distracted or drawn to other parts of a hospital, in which medical rehabilitation is but one part of a larger whole,

a freestanding independently owned hospital “tends to neutralize hospital politics and hospital rivalries”,

a freestanding rehab hospital is not locked into hospital services designed for the general hospital in total to which an in-hospital rehabilitation unit must accommodate,

financial and architectural efficiency due to economies of scale (with lower direct and indirect costs, is more barrier-free and avoids retro-fitting challenges),

more medical director time (CMS rules require an acute rehab unit to have a physician present 20 hours a week versus 40 hours per week for a freestanding facility), and

freestanding facilities tend to have an open-staff policy, with easier access for physicians, generally on a single story-one floor facility, which maximizes local physician participation.

John Hoppe of Peterson & Meyers, P.A., general counsel for Lakeland Regional Medical Center, spoke in opposition to HealthSouth’s project. He stated the following reasons for the opposition: CON application #10162 does not provide the continuity of care

Lakeland Regional (CON application #10164) can provide, the discharge from an acute care hospital to a rehab hospital and on to outpatient care “is not as smooth as it sounds” as it is disruptive and interrupts continuity of care;

Lakeland Regional Medical Center’s patient mix is “different” with a higher level of complexity to cases and an older population that needs access to specialists, subspecialists and services. Lakeland Regional Medical Center could provide needed professionals who are on-staff and on-premises with services readily available;

CON application #10164 relieves financial access barriers, whereas a for-profit freestanding inpatient facility, “in all reality is going to be cherry picking patients” and will not meet the needs of the Medicaid, self-pay and charity care patients in the Lakeland area in a cost-effective manner, and

the specialty hospital minimum of 60 CMR beds1 is not met.

1 CMR specialty hospital size is addressed in Rule 59C-1.039(3)(c), Florida Administrative Code.


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In closing, Mr. Hoppe stated Lakeland Regional Medical Center treats a “substantial” number of patients with CMR-related injuries/illnesses consistent with its application (CON application #10164), serves as the safety-net hospital in Polk County, provides the most Medicaid and charity care in Polk County and has the expertise (as the only Level II Trauma Center in the area), to provide inpatient rehab services. Mr. Ward, HealthSouth’s Vice President of Development, spoke in rebuttal and stated: the Agency and DOAH have approved numerous projects of under 60

beds, including projects that HealthSouth currently has underway; with regard to financial barriers to access, it is HealthSouth’s policy to

take “all patients” (payer sources, if any, notwithstanding); and why is rehab “suddenly important” to Lakeland Regional Medical

Center when it has not been before.

Dr. Braz indicated HealthSouth’s project will be more conducive to accepting patients from all area acute care providers as well as assisted living facilities and other settings. In addition, he reiterated some of the comments he made in his original support presentation. Mr. Ward concluded HealthSouth’s rebuttal to Lakeland Regional by stating that CMS data indicates freestanding rehab hospitals have a lower per-patient cost than units, with HealthSouth at the “lower end” at roughly $13,000 per discharge. CON application #10163 Geoffrey Smith of Smith & Associates, Attorneys and Counselors At Law, representing Health Management Associates (HMA) hospitals Heart of Florida Regional Medical Center and Highlands Regional Medical Center commented that the intensity of interest in CMR projects in District 6 (particularly Polk and Highlands Counties) is evidenced by so many attendees at the public hearing and a testament to CMR bed need in the area. Mr. Smith also stated that District 6 has the lowest use rate for CMR beds in Florida, because patients are not going to more distant, big, freestanding centers but are ending up without care or seeking care at local skilled nursing facilities, assisted living facilities or other outpatient rehab and as a result, are not getting needed services. Mr. Smith indicated the Heart of Florida Regional Medical Center (CON application #10163) and Highlands Regional Medical Center proposals (CON application #10165) are “very modest” and “conservative” models, designed to capture internally generated demand.


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Further, Mr. Smith stated that HealthSouth hospitals are around for patients and physicians that choose to use that model of care but there are some advantages to serving people in their own communities and in the hospitals where they are already being served. Per Mr. Smith, an average length of stay of approximately 11 to 15 days, which is “a lengthy hospital stay” has an impact on family interaction when distance is a factor. While Mr. Smith conceded there were some advantages to freestanding regional centers, he also stated some of those advantages may be overstated. He stated that: qualified, dedicated rehab administrator positions are planned for in

the HMA projects; qualified, professional clinical staff would devote their full time and

attention to rehabilitation services patients and needs; and HMA’s projects would cost about $1 million in capital outlay

compared to the HealthSouth project’s estimated $10-$15 million. In closing, Mr. Smith stated the freestanding model of transferring patients to a freestanding provider from an in-hospital setting is not working for patients. Patricia Greenberg of National Healthcare Associates indicated the three dominant/major hospitals in Polk County are Lakeland Regional Medical Center, Winter Haven Hospital and Heart of Florida Regional Medical Center and that these hospitals have “fairly distinct markets though some do overlap”. Ms. Greenberg provided in greater detail some of the distance challenges and stated that neither CON application #10162 nor CON application #10164 will meet the CMR needs of the applicant’s service area, within Polk County. Both programmatic and geographic barriers were mentioned as reasons why existing CMR providers are not practical options for most area patients. Ms. Greenberg stressed that patients in the area will not travel great distances for needed CMR care. She also noted that Heart of Florida Regional Medical Center is a designated Primary Stroke Center. Ms. Greenberg explained the methodology of how CON application #10163’s proposed bed count was determined. She stated that because Heart of Florida Regional Medical Center is an HMA hospital, it would realize the advantages, economies of scale and quality measures commensurate with a large chain. Ms. Greenberg stated the project would not be a “stepchild” but rather “true programming” of the hospital.


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Don Breeding, Administrator, Heart of Florida Regional Medical Center, stated he was a trauma flight nurse for 20 years at a Level I Trauma Center in Tennessee, and has seen CMR “on all sides”. Mr. Breeding mentioned Heart of Florida’s recent Joint Commission recognition as a top quality performer and stated the facility would seek stroke designation for rehab. Heart of Florida’s recent “A” Leapfrog quality rating was also mentioned. Mr. Breeding stated that Heart of Florida is a chest pain center and plans to become an open heart facility early next year, which would likely bring more patients in need of CMR. He reported Heart of Florida had over 1,400 orthopedic cases last year and 291 met the criteria for rehabilitation services, yet only three chose to receive CMR at Winter Haven Hospital. Mr. Breeding stated that Winter Haven is closer to Heart of Florida than Lakeland Regional Medical Center and emphasized that Heart of Florida patients do not wish to be transferred to another CMR provider. He concluded that Heart of Florida patients want CMR services at Heart of Florida and approval of the project would allow these patients to stay with their current medical team. Aktab Kahn, MD, Board Certified in Internal Medicine, referred to himself as the “patient’s advocate”, with most of his patients being Medicare patients. Dr. Kahn reported he has been in the Davenport, Florida area for the past 10 years. He stated if the project is approved, he can see patients daily and know their problems, promoting continuity of care. Dr. Kahn also indicated his patients cannot travel long distances and currently if they receive rehabilitation services, it is in a nursing home setting. Susan Smith of Smith & Associates, Attorneys and Counselors At Law, repeated that only three CMR eligible patients from Heart of Florida Regional Medical Center “received the care that they need”. She also stated that she hoped all the other providers that want this kind of program at their hospital would stand beside the applicant and not challenge the project, recognizing that the project would not have an impact on other hospitals. Ms. Smith further commented that only a handful of physicians overlap between Lakeland Regional Medical Center, Heart of Florida and Winter Haven. She also stated that during the last five years, the Agency has approved CMR projects for units below the 20-bed minimum rule and freestanding facilities below the 60-bed minimum rule. Also, some of the facilities that were approved were located within 19 to 35 miles of the nearest existing CMR facilities. Ms. Smith concluded that cost-efficiency and health care economics overall are very important in the context of hospital readmissions and considering that there will be penalties for re-admits to hospitals, CMR would prevent such re-admits (possibly brought on by inferior/subpar care).


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Andrea Hixon, PhD, RN, CNAA, CPHQ and Vice President of Winter Haven Hospital, stated that her hospital’s 24-bed CMR unit has an ADC of 16.8 and if a candidate is appropriate, her facility is “certainly open for referrals”. Per Dr. Hixon, approximately 26 percent of Winter Haven Hospital’s patients are from the same service area as Heart of Florida Regional Medical Center. Dr. Hixon commented that “in this day and age of cost containment, we cannot duplicate programs like this every 20 miles”. She concluded that per the CMS data base, Heart of Florida had 730 stroke discharges and 19 referrals yet only three patients were referred to her facility which is located 17 miles from Heart of Florida. John Hoppe of Peterson & Meyers, P.A., general counsel for Lakeland Regional Medical Center, spoke next and restated some of the same objections to this project that he had regarding CON application #10162. Don Breeding, Administrator, Heart of Florida Regional Medical Center, spoke next in rebuttal and stated “when it’s broke—fix it” and that “it’s never too late to do the right thing”. He stated that for whatever reason, CMR eligible patients at his facility are not utilizing out-of-area CMR services and Heart of Florida’s project would address that issue. Geoffrey Smith of Smith & Associates, spoke in response to Dr. Hixon’s comment about the 26 percent resident overlap between Winter Haven Hospital’s and Heart of Florida Regional Medical Center’s service area, stating that 74 percent of Winter Haven Hospital’s and Heart of Florida Regional Medical Center’s service area population does not overlap. CON application #10164 Elaine Thompson, PhD, President and CEO, Lakeland Regional Health System/Lakeland Regional Medical Center and a Florida licensed physical therapist stated she has been at Lakeland Regional Medical Center for two years and among other various affiliations is currently on the faculty at the University of South Florida’s (USF’s) School of Physical Therapy in the College of Medicine. Regarding previous “why now” comments made by other presenters, Dr. Thompson indicated Lakeland Regional Medical Center’s Board of Directors has reached out in an 18-point process to make sure all health care community needs are being met and that lead to the current application. Dr. Thompson stated the proposal uses a “best of both worlds (CMR unit & freestanding facility)” strategy and promoted the project as follows:


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Respect for the continuity of care when patients are being seen by in-house physicians, with some 500 in-house physicians at Lakeland Regional Medical Center, “all the time”, a Level II Trauma Center with numerous 24-hour specialists on-site and outpatient rehab;

A robust, talented unit that will have an administrator dedicated to the unit and a CEO (Dr. Thompson) who has dedicated many years to advancing rehabilitation;

Support/collaboration from and with the USF Health System; Lakeland Regional serves as the safety-net provider for Polk County;

and the neurosurgical program Lakeland Regional Medical Center and

USF (three full time neurosurgeons on-campus) started on September 1, 2012.

Dr. Thompson concluded that reasons to approve the project include Lakeland Regional’s level of sophisticated services, the size of the organization, the unmet need for CMR services and the passion of the CEO. Olumide Sobowale, MD, Lakeland Regional Medical Center’s Level II Trauma Center Director, board-certified by the American Board of Surgery and the American Board of Surgery/Surgical Critical Care Certification, commented on financial barriers and the uninsured/ underinsured status for many trauma patients in the area. Per Dr. Sobowale, in many cases there is nowhere to refer trauma or other patients for rehabilitation when the acute care crisis has passed. The result is they sometimes stay in acute care and/or discharged to families, without the rehabilitative care that they need. Dr. Sobowale indicated Lakeland Regional admits about 1,200 trauma patients a year. He stated that “nothing beats” having these patients in the same hospital for rehabilitative care with ready access to on-site services if complications occur. Anne Frick, MSW, LCSW, Social Work Manager, Lakeland Regional Medical Center, indicated her unit is responsible for all discharge planning and commented that as a matter of cost containment, many insurance plans do not cover CMR, though they may cover skilled nursing. In answering the “why now” question posed by earlier presenters, Ms. Frick indicated it is due to demand, with more and more patients that her unit cannot place (due to uninsured/underinsured or other financial barriers). Ms. Crick indicated that these patients may linger in acute care beds or be discharged without needed CMR services because of a lack of placement options. Laura Meadows, BSW, a social worker at Lakeland Regional Medical Center, spoke next and made comments similar to Ms. Frick.


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Michael Carroll, FACHE, Managing Director, Tribrook Healthcare Consultants, indicated that Lakeland Regional Medical Center’s size (851 beds, the 5th largest hospital in Florida), patient volume (most active single-site ED in the state—171,000 ED visits in FYE 9/30/12), and the enhancement of Lakeland Regional’s continuity and continuum of care that will result from the project, supports the need for the 32-bed CMR unit. He cited Lakeland Regional’s safety net provider status and scope of commitment to Medicaid (53 percent of Polk County hospitals total Medicaid patient days) and charity care patients (67 percent of total Polk County hospitals charity volume). Mr. Carroll indicated Lakeland Regional’s affiliation with USF Health for graduate medical education will offer 200 new residency positions. He also stated that the project will address existing barriers to access for patients, respond to the increasing acuity and medical complexity of patients requiring intensive rehab and provide patients an optimal level of care and rehabilitation. The project will also position Lakeland Regional for changes in the delivery system by addressing bundled payment and episodes of care because the facility will be able to manage the patient through the full continuum of care. Geoffrey Smith indicated while not in opposition, he made the comment that for the same reasons Lakeland Regional Medical Center wishes to serve its existing patients, his clients wish to do the same. CON application #10165 Geoffrey Smith stated that Highlands Regional Medical Center’s project is needed based on many of the same reasons that the previous speakers stated in support of their in-hospital projects. He stated that another major reason Highlands Regional Medical Center’s project is needed is that the facility is “isolated” from the nearest sources of CMR providers. HMA’s Seven Rivers Medical Center was highlighted as a parallel (as a rural facility and relatively few CMR beds) upon which to model this application. Mr. Smith stated that using the usage rates as presented, the Agency could approve all in-hospital applicants (CON application #s10163, 10164 and 10165) and still be within a statewide average use rate. Patricia Greenberg of National Healthcare Associates indicated there is no service area overlap in Highlands’ market and travel distances are doubled or tripled relative to CON applications 10163 and 10164. Approximately 90 percent of Highlands Regional’s patients are Highlands County residents. Ms. Greenberg stated the reasons that support need for this project were similar to those for CON application #10163, except in some cases more extreme due to Highlands County’s greater travel distance and more elderly, smaller population. Ms. Greenberg emphasized that approximately one-third of the Highlands area is elderly and growing.


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Brian Hess, CEO, Highlands Regional Medical Center, stated Highlands has high rates of uninsured and underinsured residents, placement complications, greater travel distance barriers and patient apprehension regarding transfer compared to the other small in-hospital co-batched applicants. He commented on Highlands Regional’s quality, noting that the facility was cited by The Joint Commission as a top performing hospital during 2012 and 2011. Per Mr. Hess, Highlands Regional’s smaller patient base should not mean his patients have any less access to needed CMR care. John Hoppe, general counsel for Lakeland Regional Medical Center, restated that CON application #10164 is “superior” to the other co-batched applications, including this one. Written Materials submitted at the public hearing for CON applications #10162, #10163, #10164 and #10165 Andy Ward, Vice President of Development, HealthSouth Corporation (CON application #10162) submitted a 22-page document titled “Written Comments on Behalf of HealthSouth Rehabilitation Hospital of Polk County Public Hearing, St. Petersburg, Florida, October 24, 2012”. This document covered the following:

HealthSouth’s Experience; HealthSouth is Proactive Not Reactive; HealthSouth’s Continuity of Care; Comparative Analysis; HealthSouth’s Educational Affiliations; Service to Medicaid and Self Pay Commitments; and CARF Accreditation.

Mr. Ward also submitted the written version of the PowerPoint presentation that had the following headings:

Project Overview-Why HealthSouth; Our Company; Our Existing Florida Locations; HealthSouth’s Proposed Rehabilitation Hospital for Polk County; Performance-Our Quality; Our Cost-Effectiveness; Rehabilitation Technology; Robust Clinical Education; Clinical Affiliations; Continuum of Healthcare Services and the Continuity of Care;


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HealthSouth Holds More Than 120 Disease-Specific Certifications from the Joint Commission;

CARF vs. Joint Commission Accreditation; HealthSouth’s Discharges to Community; and Charity Care.

Randall Braddom, MD, MS, (HealthSouth’s CON application #10162) submitted the written version of his PowerPoint presentation that had the following headings:

Models of Inpatient Rehabilitation (Freestanding Hospital

vs. In-Hospital Units); My Vantage Point; Disadvantage; o Freestanding Rehabilitation Hospital Lack of Immediate physical access to acute hospital services Advantages; o Freestanding Rehabilitation Hospital Large enough to permit specialized programs Administrator focused on rehabilitation Central administration benefits Totally focused rehab staff Neutralize office politics Not “locked-in” to hospital services Financial Efficiency Architectural efficiency Increased medical director time and Maximizes local physician participation.

Susan Smith, on behalf of Heart of Florida Regional Medical Center (CON application #10163) and Highlands Regional Medical Center (CON application #10165), submitted the following chart:


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AHCA CMR Approvals

Aug-2006 Through Aug-2011 (5 Years) Where Minimum Unit Size Was Not Met And

Providers Were Located Within 2-Hour Drive Time to Proposed Facility

CON #

Dist.

Applicant

Need

Type Minimum Unit Size

Closest Existing

Decision

10128 7/4 Central Florida No 13 bed in acute No 23 Miles Approved 10118 9 HealthSouth No 34 bed specialty No 19 Miles Approved 10097 3 HealthSouth(1) No 40 bed specialty No(2) 32 Miles Approved 9933 3 Citrus HMA No 16 bed in acute No 35 Miles Approved(3)

(1) There are several HealthSouth applications filed in consecutive batching cycles that were for various reasons successfully challenged by existing providers, but in each instance, AHCA continued to preliminarily approve HealthSouth under these basic facts. Ultimately, HealthSouth was approved and was able to triumph over the existing provider’s challenge.

(2) The application did not meet the minimum unit size of 60 for a freestanding CMR specialty hospital; however, it was approved over a competing application for a 20-bed CMR unit in an acute care hospital that did meet the minimum unit size.

(3) SAAR recommended denial shortly thereafter AHCA entered into a settlement agreement with the applicant to award the CON to Citrus HMA without the need for a hearing.

Elaine Thompson, PhD, President and CEO, Lakeland Regional Health System/Lakeland Regional Medical Center (CON application #10164) submitted a written summary of reasons she stated in her presentation support the project. Dr. Thompson’s written materials also included reasons why the inpatient CMR project is “good for patients”. These include: Enhances continuity of care; Encourages patients to reach optional recovery; There is an increasing acuity and medical complexity of patients

requiring intensive rehab; and Addresses existing barriers to access for patients.

Michael Carroll, FACHE, Managing Director, Tribrook Healthcare Consultants, submitted the written version of the PowerPoint presentation for CON application #10164 (Lakeland Regional) that covered the following: Lakeland Regional Medical Center (current hospital’s characteristics); Lakeland Regional Medical Center (current project’s characteristics); Comparison of Hospitals in Polk County-District 6/Sub-district 2; 2011 CMR Use Rate-Patent Days/1,000 pop. for Each of Florida’s 11

districts and statewide; October 2012 CMR Beds/10,000 Age 65+ pop. for Each of Florida’s

11 districts and statewide; Project’s Demand Projections; Comparison of Applicants for CMR Services-District 6 (utilization

data, including emergency department visits, Medicaid patient days and charity care for each of the co-batched applicants); and

Project Support Characteristics.


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Letters of Support: HealthSouth Rehabilitation Hospital of Polk County, LLC (CON #10162) included eight letters of support dated during August 31, 2012 through October 10, 2012. Maureen S. Kelly, President and CEO of the West Central Florida Area Agency on Aging, Inc., states that her agency “is aware of three (CON) applications for inpatient medical rehabilitation beds in Polk County and we support the addition and visible promotion of this level of post-acute care in our community.” She indicates that “if HealthSouth is the chosen provider, (her agency would) enthusiastically engage with them in collaborative partnerships together and with other agencies to address the unmet needs”.2 Stacy Campbell-Domineck, President and CEO of the Polk County Workforce Development Board, Inc., maintains that the proposed project will have significant economic impact on her community. She notes that “our unemployment rate is currently at 10.2%, with an estimated 28,000 unemployed residents in our region”. Alice O’Reilly, President of Volunteers in Service to the Elderly (VISTE) says of HealthSouth, “The organization’s sole focus is rehabilitation, the majority of their patients are of Medicare age and the majority of the conditions they treat (neurological conditions, stroke, fractures and joint replacements) are what our patients must overcome to go home. We share the #1 mission of returning patients to the community, and VISTE supports such a new community partner”. She also indicates that a free-standing rehabilitation hospital is more advantageous to the community because it will be more accessible and bring greater economic development to the community. Dan Ryan, Program Director for the Center for Independent Living, states, “We currently do not work directly with any of the Health South rehab units in that area and there are possibilities for interfacing and collaborating in the discharge process to help patients transition more successfully into the community”. Rebecca McDonnell, Campus President of Keiser University-Lakeland, asserts that the proposed rehabilitation hospital will be beneficial to her students. She adds, “Students in disciplines such as Physical Therapy Assisting, Nursing, Dietetics/Nutrition and Medical Assisting would gain valuable exposure in this type of clinical environment.” Eileen Holden, President of Polk State College states that the proposed unit, “would also be an ideal multi-disciplinary site for Polk State Health Sciences students and, ultimately, job opportunities for our graduates.”

2 Ms. Kelly also submitted a letter of support for Lakeland Regional Medical Center (CON application 10163).


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Two members of the community wrote letters of support for the proposed project. Bill LePere, Sr. states, “As stroke becomes a more common event in our aging population, I believe a free-standing rehabilitation hospital will help give support endeavors a significant boost. HealthSouth will invest in the marketing and educational efforts that provide the public awareness of the specialized rehabilitation for stroke that currently does not exist among the general population.” Betsy Brown adds, “The need for more in-depth comprehensive medical rehabilitation with medical supervision is not being addressed in the community where I live.” Haines City HMA, LLC (CON #10163) submitted seven letters of support dated during September 18, 2012 through October 4, 2012. Representative John Wood, District 65 of the Florida House of Representatives, indicates that the proposed program will enhance care for patients in Haines City and the surrounding communities. He adds, “The development of a hospital inpatient rehabilitation unit will provide patients with greater access to aggressive rehabilitation treatment that will optimize recovery”. City Manager Ken Sauer, Haines City, states, “Heart of Florida has provided us with excellent medical care and the addition on an inpatient rehabilitation service will further enhance the comprehensive range of medical services it currently offers.” Paul Senft, President of the Haines City Economic Development Council, adds “Having these beds at the Heart of Florida Regional Medical Center will contribute to the Economic Development of the area by providing jobs for the graduates of the medical training nursing, lab, x-ray, medical record and physical therapy training programs at Polk State College”. Drs. Nathan Hill, D. Chad Lamoreaux and Samuel S. Messieh, all orthopedic surgeons, maintain, “If Heart of Florida establishes an inpatient medical rehabilitation unit, this would enhance the availability of quality care for Polk County residents, especially in the northern region of the county. This will offer the community an alternative rehabilitation facility, the competition for which will help foster superior nursing care, a dedicated clinical staff, top notch specialists and subspecialist and a comprehensive range of medical services.” Dr. Geoffrey Stewart, orthopedic spine surgeon, indicates, “Without a medical rehabilitation unit at Heart of Florida, there is an access and availability issue relative to my patients’ ability to receive this level of treatment in a reasonably accessible location.”

Lakeland Regional Medical Center, Inc. (CON #10164) submitted 22 letters of support dated during September 24, 2012 through October 5, 2012.


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Former Senator Paula Dockery, representative of the 15th District in the Florida Senate, indicates that Lakeland residents have difficulty receiving the necessary rehabilitative services as these services are not available in Lakeland. She states, “By adding an Inpatient Rehabilitation Unit, LRMC will be able to extend its quality of care to help patients reduce physical and mental limitations”. Representative Kelli Stargel, District 64 of the Florida House of Representatives, states, “It is a logical conclusion that this facility currently treating orthopedic, neurological and multi-system injuries, should offer a first rate Inpatient Rehabilitation unit”. Representative Seth McKeel, District 63 of the Florida House of Representatives, echoes Senator Dockery’s support. Gow B. Fields, Mayor of the City of Lakeland, states, “The lack of a local comprehensive rehabilitation center hinders continuity of care, results in delay of rehabilitation and creates significant hardships for those who sometimes must travel a long distance to participate in the care of their family members”. Eight members of the LRMC staff wrote letters of support for the proposed unit. Dr. J.S. Swygert, Chairman of Medicine, states “We have a significant population that requires inpatient rehabilitative services. When this need occurs, these patients are either transferred out of town, or admitted to a nursing facility for a lower level of care”. Dr. Olumide Sobowale, Medical Director of Trauma Services, indicates that “The expertise available at Lakeland Regional, its position as the only Level II Trauma Center in the area and the acuity of our patient population indicate a logical conclusion that this facility should offer its patients the continuity of care they deserve with a first rate inpatient rehabilitation unit”. Janine Curlutu, Trauma Program Manager, echoes Dr. Sobowale’s sentiment. Maria Sanchez, Senior Social Worker in the Trauma Intensive Care Unit, asserts that patients are being denied acute service due to lack of insurance or payer coverage. She states, “It is a tragedy that some will never reach their full restoration because they were not able to receive the acute rehabilitation services they require”.

Anne T. Frick, Manager of the Social Work department, which coordinates the discharge plans at LRMC, cites two reasons for the proposed unit: There is no CMR in Lakeland. The closest is 16 miles away in Winter

Haven, the next is 37 miles away in Tampa. The distance is a barrier.

There have been many instances when there were delays in obtaining a rehabilitation bed or none available at all—especially for those who are under or unfunded.


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Desda Hughes, a social worker working primarily on the orthopedic unit (but also with head injured and stroke patients), indicates the need for the proposed program because, “Being close to the patient would make it easier for the families to participate in their loved ones’ rehabilitation program as many families may not have the resources or flexibility to travel to an acute rehab center outside of Lakeland.” Laura Meadows, a social worker on the stroke floor, notes a recent patient who needed acute rehab placement, but due to limited funding, the patient refused transfer outside Polk County and decided to discharge to his home. Paige M. Mulrenin, Supervisor of Social Work at Lakeland Regional, states that the lack of CMR services at LRMC is frustrating as, “the patients do so well in physical, occupational and speech therapies while her at the hospital but will not get the services they need at discharge because they are not available here in Lakeland”. Ms. Mulrenin mentions that a few scholarships are available for indigent patients, but that these patients were discharged to Georgia for treatment. Gaye Williams, CEO of Central Florida Health Care Inc., maintains that patients in the area are having difficulties receiving extensive rehabilitation services and that, “all too often, these patients have to be admitted to a nursing facility or transferred out of town”. Dr. Stephen K. Klasko, CEO and Senior Vice President of USF Health, Dean of Morsani College of Medicine, states that the University of South Florida recently announced partnership with LRMC will in essence be an operational and management merger between USF Health and LRMC. He also states that “as part of the new collaboration with LRMC, USF Health is committed to supporting LRMC in the development of its inpatient rehabilitation program”. Dr. Klasko indicates that the proposed unit “would establish a platform for USF Health to expand its residency training in post-graduate physical medicine and rehabilitation, in turn providing a resource for all CMR programs in our region and across the state in the recruitment of specialists.” Dr. Michael Campanelli of the Department of Neurosurgery and Brain Repair at USF adds, “I feel that the lack of a local comprehensive rehabilitation center definitely hinders continuity of care, results in delayed initiation of rehabilitation and creates significant hardships for patients/families.” Dr. Anne B. Kerr, President of Florida Southern College, maintains that her college and LRMC have a long history of collaboration in the field of nursing education. She adds, “The establishment of an inpatient rehabilitation unit at LRMC will provide expanded opportunities for nursing education, and will also provide advance training for our students in physical therapy and rehabilitation.”


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Maureen S. Kelly, President and CEO of the West Central Florida Area Agency on Aging, Inc. notes that Lakeland Regional Medical Center is the area’s Level II trauma center, provides tertiary services and is a designated primary stroke center. She indicates that the lack of comprehensive inpatient rehab services in Lakeland causes many patients to be admitted to nursing homes or transferred out of town. Ms. Kelly states this “results in delay of rehabilitation and creates significant hardships for those who sometimes must travel a long distance to participate in the care of their family members”. She concludes that because of LMRC’s expertise and the services it provides as stated above, “it is a logical conclusion that LMRC…should offer the continuity of care with a first rate inpatient rehabilitation unit”. Mr. Robert L. Yates Jr., President and CEO of Lakeland Volunteers in Medicine, states “LRMC has always shown a commitment to the underserved population in our community. LRMC’s desire to establish an inpatient rehabilitation unit is just another example of its commitment to ensure that all residents of this community have access to the highest and best levels of care.”

Two members of the community, one a former patient, state their support for the proposed unit indicating the need for continuity and consistency in care—especially the need for a seamless transition from the Level II trauma center to inpatient rehabilitation care.

Sebring Hospital Management Associates, LLC (CON #10165) submitted four letters of support dated during October 2, 2012 and October 3, 2012. Denise Grimsley, District 77 Florida House of Representatives, states that the proposed unit “would offer the opportunity to provide inpatient rehabilitation with superior specialists, thus eliminating the need for my constituents to travel out of town, which creates a burden on their families.”

Mary Kay Burns, Administrator of the DeSoto County Health Department and Interim Administrator of the Highlands County Health Department, indicates that there is a gap in CMR services in Highlands County. She states, “There are zero inpatient beds in Highlands County. This is a much needed level of care that would benefit the community.”


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Dr. Robert Midence, Medical Director of Highlands Medical Group,3 maintains that “many of my patients frequently bypass the aggressive rehabilitation treatment required for optimizing their recovery, which often leads to decreased functional condition and other clinical problems.” He states that “If Highlands Regional Medical Center establishes an inpatient medical rehabilitation unit, my patients’ outcomes would improve and functionality would be restored to a greater level in a more rapid time frame.” Dr. Tahir Chaudhri, also of Highlands Medical Group, adds “if Highlands Regional Medical Center is approved for a medical rehabilitation unit, continuity of care would be enhanced as I can follow my patients through that course of treatment”.

C. PROJECT SUMMARY

HealthSouth Rehabilitation Hospital of Polk County, LLC, (CON #10162) proposes to establish a 50-bed comprehensive medical rehabilitation (CMR) hospital in Polk County. The applicant’s parent, HealthSouth Corporation has three CONs approved to establish CMR hospitals: CON #10097 for a 50-bed facility in Marion County (District 3), CON #10118 for a 34-bed facility in Martin County (District 9) and CON #10127 for a 50-bed facility in Seminole County (District 7).4

The project involves 53,192 gross square feet (GSF) of new construction. The construction cost is $12,273,312. Total project cost is $25,103,896. Project cost includes land, building, equipment, project development, and start-up costs. The applicant indicates that it plans to locate the proposed hospital in the vicinity of the City of Lakeland, in western Polk County, although the exact site has not been determined. The applicant proposes the following conditions to CON approval on CON #10162’s Schedule C: The hospital will provide 1.5 percent of patient days to Medicaid

patients and 1.0 percent 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 7.5

3 Highlands Medical Group is a multi-specialty group of 12 physicians located in Sebring, Florida. 4 CON #10097 was deemed under construction on April 6, 2012. 5 The applicant states District 7 in its Schedule C conditions but the proposed unit would be located in District 6.


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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.

The hospital will institute a brain injury rehabilitation program when it opens and will obtain specialty certification from The Joint Commission in stroke rehabilitation prior to the third year of operation.

The hospital will be accredited by The Joint Commission. HealthSouth will seek accreditation from The Joint Commission accreditation within the first year of operation.

The medical director of the hospital will be a board-certified or board-eligible physiatrist with at least two years of experience in the medical management of inpatients requiring rehabilitation services.

The hospital will provide, at no charge to the community, education programs on disabilities and their caretakers. The hospital will make existing conference spaces available to support group meetings and for community education programs developed by HealthSouth and others.

HealthSouth will provide $5,000 annually for three years ($15,000 total commitment) to sponsor community education programs jointly with disability advocacy groups located in the service area. The following groups may serve as partners with HealthSouth on community education programs: o Volunteers in Service to the Elderly o Polk County Caregivers o Polk County Parks and Recreation Department.

HealthSouth will provide $10,000 annually for three years ($30,000 total commitment) for scholarships for nursing or allied health professionals at educational institutions in the service area. In order to qualify for scholarships, students will have to meet the following criteria: o Must be a Polk County resident o Must be registered in a degree program in nursing or a

rehabilitation therapy o Must maintain a 3.0 GPA.


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The hospital will provide an Auto Ambulator and the other equipment described below as part of a technology package 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 function. o Auto Ambulator o ReoGoAmbulator o Balance System SD o Saebo Hand Unit o VitalStim o Bioness o Adnodyne Unit

Haines City HMA, LLC d/b/a Heart of Florida Regional Medical Center (Heart of Florida) (CON #10163) proposes to establish a 14-bed CMR unit at Heart of Florida in Davenport, (Polk County) Florida. Heart of Florida has a total licensed bed complement of 193 acute care beds.6 The applicant has notification #0900040 to add 96 acute care beds. Heart of Florida provides Level I adult cardiovascular services and is a primary stroke center. The project involves 6,944 GSF of renovation. The construction cost is $661,213. Total project cost is $1,158,914. Project cost includes building, equipment, project development and start-up costs. The applicant proposes the following conditions to CON approval on CON #10163’s Schedule C: Heart of Florida will provide seven percent of its patient days to a

combination of Medicaid, Medicaid HMO and charity care (including self-pay) patients.

Heart of Florida will offer a comprehensive outpatient rehabilitation program for all patients discharged from the CMR unit at the hospital.

Heart of Florida will maintain its Joint Commission accreditation. Heart of Florida will seek Joint Commission accreditation as a

designated stroke rehabilitation provider. The medical director of the CMR unit will be a board-certified or

board-eligible physiatrist with at least two years of experience in the medical management of all inpatients requiring rehabilitation services.

Therapy services will be readily available to all CMR patients seven days a week.

6 Heart of Florida (Notification #120026) delicensed one acute care bed effective June 22, 2012.


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Patients will be evaluated and admitted to the CMR unit seven days a week.

The CMR program at Heart of Florida will have an activities of daily living suite for occupational therapy.

Lakeland Regional Medical Center (LRMC), Inc. (CON #10164) proposes to establish a 32-bed CMR unit at its facility located in Lakeland, Polk County, Florida. LRMC is an acute care general hospital with 851 total licensed beds, including: 768 acute care beds, 15 Level II NICU beds, 46 adult psychiatric beds, eight child/adolescent and 14 adult substance abuse beds. The facility also has notifications/ exemptions to add 104 acute care beds (N0700016), nine adult psychiatric beds (E0500014) and 18 Level III NICU beds (E0900015). LRMC provides Level II adult cardiovascular services and is a primary stroke center. The facility is also a Level II trauma center. The project involves 31,472 GSF of renovation. The construction cost is $7,252,880. Total project cost is $11,906,880. Project cost includes building, equipment, project development and start-up costs. The applicant proposes the following conditions to CON approval on CON #10164’s Schedule C: The site of the project will be LRMC (1324 Lakeland Hills Boulevard,

Lakeland, Florida 33805) as a 32-bed CMR unit created through the delicensure of 32 acute care beds.

A minimum of 6.0 percent of the total annual patient days provided in the 32-bed CMR unit will be to Medicaid and charity care, combined.

LRMC will offer comprehensive outpatient programs to meet the specific needs of the post-discharge rehabilitative patient as part of LRMC’s outpatient physical, occupational and speech/language therapy services.

LRMC will seek CARF accreditation for the CMR within the first 12 months of operation of the unit.

Sebring Hospital Management Associates, LLC d/b/a Highlands Regional Medical Center (HRMC), (CON #10165) proposes to establish a seven-bed comprehensive medical rehabilitation unit at Highlands Regional in Sebring, Highlands County. HRMC is an acute care hospital with 126 licensed acute care beds. The project involves 4,400 GSF of renovation. The construction cost is $814,000. Total project cost is $1,062,205. Project cost includes building, equipment, project development and start-up costs.


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The applicant proposes the following conditions to CON approval on CON #10165’s Schedule C: HRMC will provide 10 percent of its patient days to a combination of

Medicaid, Medicaid HMO and charity care (including self-pay) patients.

HRMC will offer a comprehensive outpatient rehabilitation program for all patients discharged from the CMR unit at the hospital.

HRMC will maintain its Joint Commission accreditation. The medical director of the CMR unit will be a board-certified or

board-eligible physiatrist with at least two years of experience in the medical management of all inpatients requiring rehabilitation services.

Therapy services will be readily available to all CMR patients seven days a week.

Patients will be evaluated and admitted to the CMR unit seven days a week.

The CMR program at HRMC will have an activities of daily living suite for occupational therapy.

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 and accreditation will not be cited as conditions to approval. The CMR medical director is required by administrative rule and as such does not require a report. Should a project be approved, the applicant’s conditions would be reported in the annual condition compliance report as required by Rule 59C-1.013 (3) Florida Administrative Code.

D. REVIEW PROCEDURE

The evaluation process is structured by the certificate of need review criteria found in Section 408.035, Florida Statutes; and applicable rules of the State of Florida, Chapters 59C-1 and 59C-2, Florida Administrative Code. 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.


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Applications are analyzed to identify strengths and weaknesses in each proposal. If more than one application is submitted for the same type of project in the same district, applications are comparatively reviewed to determine which applicant(s) best meets the review criteria. Rule 59C-1.010 (3) (b), Florida Administrative Code, prohibits any amendments once an application has been deemed complete. The burden of proof to entitlement of a certificate rests with the applicant. As such, the applicant is responsible for the representations in the application. This is attested to as part of the application in the Certification of the applicant. As part of the fact-finding, the consultant, Marisol Novak analyzed the application with consultation from the financial analyst, Derron Hillman, who reviewed the financial data and Said Baniahmad of the Office of Plans and Construction, who reviewed the application for conformance with the architectural criteria. Steve Love provided the public hearing information.

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) (a), Florida Statutes. Rule 59C-1.008(2), Florida Administrative Code and Rule 59C-1.039(5), Florida Administrative Code. In Volume 38, Number 29, dated July 20, 2012 of the Florida Administrative Weekly, a fixed need pool of zero beds was published for CMR beds in District 6 for the January 2018 planning horizon. District 6 has 141 licensed and zero approved CMR beds. District 6’s 141 licensed CMR beds experienced 65.87 percent utilization during the 12-month period ended December 31, 2011. The applicants are applying outside of the fixed need pool.


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b. According to Rule 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 6’s 141 licensed CMR beds experienced an occupancy rate of 65.87 percent during the 12-month period ending December 31, 2011. District 6’s last five years of utilization is illustrated below.

Comprehensive Medical Rehabilitation Bed Utilization District 6

January 2007-December 2011 Facility Beds CY 2007 CY 2008 CY 2009 CY 2010 CY 2011 Tampa General Hospital 59 69.41% 71.99% 67.26% 66.55% 67.56% Florida Hospital Tampa* 30 61.41% 61.47% 57.49% 60.04% 59.85% Blake Medical Center 28 60.37% 64.97% 57.88% 61.84% 69.78% Winter Haven Hospital 24 58.00% 55.29% 54.02% 47.96% 64.65% District 6 Total 141 63.99% 65.52% 61.06% 61.06% 65.87% *Formerly licensed as University Community Hospital, changed September 20, 2011. Source: Florida Hospital Bed Need Projections & Service Utilization by District for July 2007-2012.

The map below shows current District 6 CMR providers and three of the applicants’ locations. HealthSouth (CON application #10162) is not included as the applicant did not provide an address for the proposed facility.


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District 6 – Comprehensive Medical Rehabilitation Providers & CON Applications #10163, #10164 and #10165

Source: Microsoft MapPoint 2012.

MapQuest directions obtained September 17, 2012 indicate that the existing facilities are located within the following approximate drive times/miles from the applicants:


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Driving Distance in Miles—Existing Facilities and Proposed Sites

Facility

Heart of Florida

Regional Medical Center

Lakeland Regional Medical Center

Highlands Regional Medical Center

Tampa General Hospital

Florida Hospital Tampa

Blake Medical Center

Winter Haven

Hospital Heart of Florida Regional Medical Center (CON #10163)

28.40 miles

55.55 miles

61.97 miles

60.37 miles

96.62 miles

15.82 miles

Lakeland Regional Medical Center (CON #10164)

28.40 miles

63.36 miles

35.50 miles

33.91 miles

70.15 miles

17.23 miles

Highlands Regional Medical Center (CON #10165)

55.55 miles

63.36 miles

91.36 miles

96.34 miles

81.72 miles

47.57 miles

Tampa General Hospital

61.97 miles

35.50 miles

91.36 miles

11.80 miles

50.24 miles

51.90 miles

Florida Hospital Tampa

60.37 miles

33.91 miles

96.34 miles

11.80 miles

55.93 miles

51.13 miles

Blake Medical Center

96.62 miles

70.15 miles

81.72 miles

50.24 miles

55.93 miles

86.47 miles

Winter Haven Hospital

15.82 miles

17.23 miles

47.57 miles

51.90 miles

51.13 miles

86.47 miles

Source: MapQuest Note: HealthSouth Rehabilitation Hospital of Polk County, LLC (CON application #10162) indicates that the facility will be in the vicinity of Lakeland in western Polk County.

The table below shows Polk County resident CMR admissions in Calendar Year 2011.

Polk County Residents

CMR Admissions Calendar Year 2011

Facility Name

Total Discharges

% of Polk Resident

Total Discharges

Total

Patient Days

% of Polk Resident

Total Patient Days

Winter Haven Hospital 369 76.72 4,809 75.04 Tampa General Hospital 30 6.24 511 7.97 Orlando Regional Medical Center 24 4.99 301 4.70 Florida Hospital Tampa 11 2.29 155 2.42 Brooks Rehabilitation Hospital 10 2.08 160 2.50 Winter Park Memorial Hospital 10 2.08 117 1.83 HealthSouth Rehabilitation Hospital of Sarasota 9 1.87 108 1.69 Four Other HealthSouth Facilities 5 1.04 78 1.22 All Other Facilities* 13 2.70 170 2.65 Total 481 100.00 6,409 100.00 *This includes seven different CMR providers. Source: Florida Center for Health Information and Policy Analysis CY 2011 database.

The table below shows Highlands County resident CMR admissions in Calendar Year 2011.

Highlands County Residents CMR Admissions

Calendar Year 2011 Facility Name

Total Discharges

%

Total Patient Days

%

HealthSouth Rehabilitation Hospital of Sarasota 46 44.23 659 44.35 Tampa General Hospital 20 19.23 352 23.68 Winter Haven Hospital 13 12.50 149 10.03 All Other Facilities (16 Florida Facilities) 25 24.04 326 21.94 Total 104 100.00 1,486 100.00 Source: Florida Center for Health Information and Policy Analysis CY 2011 database.


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The reviewer notes that according to data from the Florida Center for Health Information and Policy Analysis: Heart of Florida had three discharges in calendar year 2011 to

inpatient rehabilitation facilities Lakeland Regional Medical Center had 139 discharges in calendar

year 2011 to inpatient rehabilitation facilities Highlands Regional Medical Center had nine discharges in calendar

year 2011 to inpatient rehabilitation facilities

c. Other Special or Not Normal Circumstances

HealthSouth Rehabilitation Hospital of Polk County LLC (CON #10162) notes that the fixed need pool does not identify need for additional rehabilitation beds anywhere in the state and has not for the past 12 batching cycles. The applicant contends that a major factor explaining the lack of formula need is the change in Medicare payment policy that took place in 1994—this slowed development of new CMR programs in Florida for many years7.

The applicant maintains that beds should no longer be the controlling factor in determining need because existing providers can add beds via exemption. HealthSouth asserts that the focus of a CON proposal for a new CMR program should be whether quality of care and access would be materially improved.

The applicant indicates that it had Cynthia M. Toth, MBA, MHS, serve as HealthSouth’s Community Liaison to assess Polk County’s need for CMR services. During August 27 through October 5, 2012, Ms. Toth contacted a broad group in the community, including: 16 health care providers (non-MD), executives and professionals 10 physicians, physician groups or associations Five support groups and advocacy organizations Seven government officials and agency representatives Three educators Two business leaders Three patients/families.

HealthSouth indicates that the goal of this community outreach was to identify factors explaining the proposed service area’s low CMR use rate despite the apparent availability of beds in Polk County.

7 HealthSouth is actually referring to CMS’ Inpatient Rehabilitation Facility rule with “new” list of “qualifying conditions” that 75 percent of ITF admissions were required to have diagnosis in 13 CMR categories that took effect July 1, 2004. The rule was changed to 60 percent in 2007.


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HealthSouth identifies three major “not normal” circumstances that justify approval of the proposed facility in the absence of published need: Unreasonably low rates of discharges from Polk County general

hospitals to CMR services Hesitance of providers to refer patients to CMR units at competing

general hospitals Failure of Polk County general hospitals to offer CMR services

Low rates of discharge to CMR services The applicant states that Polk County is an acute care medical market that has a sufficient number of acute care discharges to support a CMR specialty hospital. HealthSouth indicates that the Agency’s hospital discharge data for the service area’s acute care hospitals by age group for 2009-2011 demonstrates that the service area residents utilize CMR services at a rate significantly less than Floridians as a whole in all age groups. In addition, HealthSouth asserts that there is a direct correlation between the presence of a freestanding in-county CMR provider and the CMR use rate in that county. The applicant states that counties with only a freestanding provider of CMR or with a freestanding and a hospital-based CMR, have CMR rates that are nearly 177 percent that of counties with only a hospital-based CMR provider. HealthSouth notes that the only CMR beds in Polk County are contained in a hospital-based unit. See the table below.

Three-Year (CY 2009-2011)

Average CMR Discharge Ratios in Service Area and State Relevant Discharges Discharged to CMR

Per 100 Relevant Discharges Facility County Designation 0-17 18-44 45-64 65-74 75+ Total No IRF 0.00 0.11 0.25 0.39 0.46 0.32 Hospital Unit Only 0.15 0.58 1.00 1.69 2.05 1.30 Freestanding Only 0.44 0.79 1.52 2.89 4.10 2.28 Freestanding & Unit 0.18 0.65 1.62 3.05 4.05 2.30 Freestanding (only or with a unit) 0.26 0.70 1.58 2.97 4.07 2.30 Florida Total 0.20 0.59 1.19 2.11 2.80 1.66 Polk County 0.07 0.32 0.55 0.79 1.00 0.68 Source: CON application #10162, page 44.

The applicant also provides utilization data during CY 2008-2011 for the CMR unit at Winter Haven Hospital. HealthSouth contends that the low referral rates to CMR from general acute providers indicate that area hospitals will not routinely discharge their acute care patients to CMR units in competing general hospitals. See the table below.


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Utilization for the CMR Unit

Winter Haven Hospital Calendar Year 2008-2011

CY 2008 CY 2009 CY 2010 CY 2011 Licensed Beds 24 24 24 24 Bed Days 8,784 8,760 8,760 8,760 Patient Days 4,857 4,732 4,201 5,663 Occupancy 55.29% 54.02% 47.96% 64.65% Source: CON application #10162, page 44.

HealthSouth maintains that bringing a new freestanding CMR provider into the area would increase utilization rates by increasing outreach and education to area medical providers and patients while offering a place of service that is not in direct competition with area acute care providers. The applicant provided population estimates for 2011-2018 in Polk County by age group. See the table below.

Polk County Population by Age Group Age Cohort 2011 2012 2013 2014 2015 2016 2017 2018

0-17 141,651 142,846 145,912 147,911 150,620 153,243 155,536 157,616 18-44 198,408 200,683 204,596 209,066 213,174 216,733 219,818 222,591 45-64 155,406 157,719 161,337 165,418 169,238 171,352 173,074 174,534 65-74 62,121 63,788 66,009 68,455 71,189 74,661 78,058 81,427 75+ 48,270 49,300 50,747 52,356 53,996 55,647 57,206 58,712 Total 605,856 614,336 627,881 643,206 657,217 671,636 683,692 697,880

Source: CON application #10162, page 45.

HealthSouth projected the number of CMR beds needed for Polk County by relevant acute care discharges by age group from Polk County hospitals from 2011 to 2018 based solely on the change in population by age group. The applicant indicates that the average ratio of relevant acute care patients discharged to inpatient rehabilitation programs is 0.68 per 100 relevant discharges. See the tables below.

Polk County Hospitals

Calendar Year 2011 & Three-Year Average Discharge Ratios To CMR Per 100 Relevant Acute Care Discharges

Age Cohort 0-17 18-44 45-64 65-74 75+ Total CY 2011 Ratio 0.04 0.25 0.60 0.86 1.04 0.71 Three Year Average Ratio 2009-2011 0.07 0.32 0.55 0.79 1.00 0.68 Source: CON application #10162, page 47.


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Service Area Relevant Discharges by Age Group*

CY 2011 & Projected 2012-2018 Age

Cohort

CY 2011

CY 2012

CY 2013

CY 2014

CY 2015

CY 2016

CY 2017

CY 2018 0-17 2,696 2,719 2,763 2,815 2,867 2,917 2,960 3,000 18-44 8,828 8,929 9,103 9,302 9,485 9,643 9,781 9,904 45-64 18,065 18,334 18,754 19,229 19,673 19,919 20,119 20,288 65-74 12,482 12,817 13,263 13,755 14,304 15,002 15,684 16,361 75+ 17,448 17,820 18,343 18,925 19,518 20,115 20,678 21,222

Total 59,519 60,619 62,228 64,026 65,846 67,595 69,222 70,776 Source: CON application #10162, page 46. Note: *HealthSouth indicates that CY 2011 actual relevant discharges exclude obstetrics, normal newborns, NICU, mental health, substance abuse and all patients discharged to death or hospice.

The applicant contends that with the approval of the proposed project, the CMR referral rate for Polk County general hospitals should increase to the average for Florida counties with freestanding CMR facilities. Using the Florida counties with freestanding CMR average use rate by Polk County’s projected relevant discharges by age HealthSouth calculated the projected number of CMR patients that would be generated in each year through 2018. According to the applicant’s projections, the proposed facility will generate 1,156 additional CMR patients in 2015 with a growing number thereafter. See the tables below.

Service Area CMR Discharges by Age Group with and without HealthSouth Presence*

Without HealthSouth Pop./Age CY 2011 CY 2012 CY 2013 CY 2014 CY 2015 CY 2016 CY 2017 CY 2018 0-17 1 2 2 2 2 2 2 2 18-44 22 29 29 30 30 31 31 32 45-64 109 101 103 106 108 110 111 112 65-74 107 102 105 109 114 119 124 130 75+ 182 177 183 188 194 200 206 211 Total 421 410 422 435 448 462 474 486

With HealthSouth Pop./Age CY 2012 CY 2013 CY 2014 CY 2015 CY 2016 CY 2017 CY 2018 0-17 7 7 7 7 8 8 8 18-44 63 64 65 67 68 69 70 45-64 289 296 303 310 314 317 320 65-74 381 394 409 425 446 466 487 75+ 725 746 770 794 819 842 864 Total 1,465 1,508 1,555 1,604 1,654 1,702 1,748 Source: CON application #10162, pages 47 and 49. Note: *HealthSouth indicates that CY 2011 is actual CMR discharges. “Without HealthSouth” projections utilize Polk County facilities three year (CY 2009-2011) average ratio of relevant discharges to CMR by age group. “With HealthSouth” projections utilize the three year (CY 2009 -2011) average ratio of relevant discharges to CMR by age group for counties in Florida with a freestanding CMR facility (with or without a hospital CMR unit in the county).

HealthSouth indicates that using the projected discharges with the proposed facility, it is possible to project the number of beds needed using these assumptions:


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The discharges to CMR generated by the current referral rate will continue to go to Winter Haven and other facilities and not to the proposed facility.

Because approximately five percent of total patients at freestanding CMR facilities do not come directly from acute care hospitals, the projected number of admissions from acute care hospitals is divided by 0.95.

The average length of stay (ALOS) is 13.8 days. This number is lower than the current ALOS in HealthSouth’s Florida facilities, which has been declining. It is also conservative compared to the average length of stay for other freestanding CMR facilities in Florida.

The targeted occupancy rate is 0.85, taken from the Agency for Health Care Administration fixed need formula for CMR beds.

Service Area CMR Discharges by Age Group with HealthSouth

CY 2012

CY 2013

CY 2014

CY 2015

CY 2016

CY 2017

CY 2018

Difference (Zero Impact) 1,055 1,086 1,120 1,156 1,193 1,228 1,261 Additional 5% from other sources 56 57 59 61 63 65 66 Total additional discharges at freestanding ratio

1,111

1,143

1,179

1,217

1,255

1,292

1,328

Total additional days at freestanding ration (ALOS = 13.8)

15,327

15,775

16,274

16,791

17,325

17,832

18,322

Average Daily Census 42.0 43.2 44.6 46.0 47.5 48.9 50.2 Additional bed need at freestanding ratio, 85% occupancy

49.4

50.8

52.5

54.1

55.8

57.5

59.1


The applicant contends that while it expects to increase the demand for CMR services in Polk County, the actual utilization of the proposed facility is expected to grow slower than the projected demand. The applicant expects that it will be able to achieve 83 percent occupancy by the third year of operation in 2018. HealthSouth indicates that the gap between the CMR discharge rate in counties with freestanding CMR providers and Polk County’s current rate means that the proposed 50-bed CMR facility can be developed without having an adverse impact on existing providers. The applicant asserts that the approval of the proposed CMR facility should have no material impact on the utilization of the existing CMR units because most of the admissions to the proposed facility should be persons who would have been discharged to SNFs or a setting other than a CMR program. The applicant notes that Winter Haven Hospital served 377 Polk County discharges, accounting for slightly over 76 percent of all Polk County resident discharges to CMR. The applicant proposes to increase the use rate for CMR services primarily by offering education to discharge planners and physicians at area hospitals. HealthSouth states that it will employ multiple FTE rehabilitation liaisons, with clinical backgrounds, to maintain these


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relationships as well as provide continuing education programs.8 The applicant contends that often without the knowledge and training provided by rehabilitation liaisons, hospital discharge planners and even physicians may be unsure whether a patient would be eligible for CMR services. HealthSouth indicates that its clinical staff facilitates the patient’s reconnecting with his/her physician upon discharge and typically schedules a post-discharge appointment with the patient’s physician. Further, community physicians, regardless of their acute care affiliation, can apply for consulting or admitting privileges at HealthSouth hospitals, thereby having the ability to admit their patient and follow the patient’s care.

HealthSouth notes that one of the themes of the Patient Protection and Affordable Care Act legislation was for greater communication and clinical integration among providers for the overall improvement of clinical outcomes and the prevention of medical errors. The applicant maintains that by working in conjunction with physicians and acute care providers, HealthSouth will collaborate with all area acute care hospitals to support the implementation of clinical pathways for disease specific categories such as stroke rehabilitation and traumatic brain injury. The applicant states that with the passing of the Patient Protection and Affordable Care Act, HealthSouth it has prepared itself to be the rehabilitation hospital partner of choice for hospitals, systems and physicians. HealthSouth states that it is a low cost, high quality provider of rehabilitation services with quality statistics that beat expected national benchmarks and costs/payments that are lower compared to other freestanding or distinct unit CMR programs. The applicant indicates that in addition to being a quality and efficient post-acute provider, HealthSouth has prepared itself to participate in Accountable Care Organizations (ACOs) by developing a care management program with trained personnel who can work with discharge planners and physicians to assess a patient and recommend the best post-acute setting within the continuum for that patient regardless of setting. HealthSouth has developed a rehab-specific electronic medical record that can interface with the EMRs of other providers to make seamless transfer of information possible with a goal of reducing cost, errors and readmissions. The applicant maintains that it is extremely well positioned to be chosen to participate in ACOs and other bundling initiatives.

8 Two point five FTEs are allocated to rehabilitation liaisons in the applicant’s year one Schedule 6 and three FTEs are allocated in the applicant’s year two and three Schedule 6s.


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HealthSouth asserts that it will make family involvement in recovery a priority as it is important that spouses and family members are prepared to care for the patient. The applicant states that it has found that daily family involvement in care and training directly impacts the patients’ ability to return to the community as opposed to an institutional setting. Furthermore, the presence of family can provide reassurance to patients aiding in cognition and providing a feeling of security. HealthSouth states that it is often able to make accommodations for family members to stay overnight.

The applicant maintains that comprehensive medical rehabilitation is a distinct level of care, quite different from long-term acute care, skilled nursing or short-term acute care. HealthSouth provides a partial list of differences in CMR and skilled nursing facility (SNF) level of care: Patient diagnoses are limited in CMR Sites from which patients can be admitted Length of stay is shorter in CMR Interdisciplinary team approach Attending physician visits Medical director specialty Registered nurse availability Multiple and intensive therapy Physician must evaluate patient within 24 hours in CMR Individualized overall plan of care required within four days of

admission in CMR CMRs are required to monitor rehabilitation outcomes Specialized teams can be can be developed in CMRs SNFs have higher mortality rate than CMRs CMRs have more specialized rehabilitation equipment.

HealthSouth notes that Florida recognizes two settings for providing CMR services: a freestanding CMR hospital or a rehabilitation unit located in a general acute care hospital. The applicant states that while there are advantages and disadvantage to both, the benefits of CMR hospital make it the superior setting for markets large enough to support one. HealthSouth provides a chart with a summary comparison of CMR hospitals and unit across several metrics. See the table below.


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Comparison of CMR Hospitals and CMR Units

Metric CMR Hospital CMR Unit Achieves Economies of Scale Yes In some instances Lower Average Cost of Discharge Yes Lower Direct and Indirect Costs Yes Better Cost Management Yes Staff’s Time Fully Committed to CMR Yes Medical Director’s CMR Time 40 hours/week 20 hours/week Patient Volume to Support Diagnosis-Specific Programs Yes Architectural Design Specific for CMR Services Yes In some instances Immediate Access to Acute Care Services Yes Does Not Compete with Referring Hospital Yes In some instances Source: CON application #10162, page 58.

The applicant maintains that one of the largest benefits of a CMR hospital’s economies of scale can be seen in the lower costs as compared with CMR units. HealthSouth states that both direct and indirect costs per case are lower for CMR hospitals than CMR units. The applicant notes that in 2010, MedPAC concluded that freestanding CMRs were better than hospital-based units at “managing their costs” and reported that CMR hospitals had significantly lower average adjusted costs per discharge as compared to CMR units9. See the table below.

2010 Costs per Discharge and Case

By Provider Type Mean Adjusted Cost

per Discharge Direct Costs per

Case Indirect Costs per

Case All CMRs $15,205 Units $15,940 $11,311 $5,981 Hospitals $12,050 $7,889 $5,334 Source: CON application #10162, page 59.

HealthSouth indicates that general acute care hospitals are constantly competing for patients and may be unwilling to refer a patient to another general hospital for CMR services. The applicant states that CMR hospitals that are not affiliated with a local hospital system are typically considered neutral and not part of any competitive friction. HealthSouth notes that the refusal of general hospitals to refer patients to CMR units at competing hospitals is particularly apparent in Polk County as Polk County hospitals do not refer many patients to Winter Haven Hospital and instead refer many CMR appropriate patients to skilled nursing facilities. The applicant states that while both Heart of Florida Regional Medical Center and Lakeland Regional Medical Center have submitted letters of intent to apply for CMR beds, these hospitals have never before shown

9The Medicare Payment Advisory Commission (MedPAC) is an independent US federal body established by the Balanced Budget Act of 1997 whose primary role is to advise the US Congress on issues affecting the administration of the Medicare program. Specifically the commission's mandate is to advise the US Congress on payments to private health plans participating in Medicare and health providers serving Medicare beneficiaries.


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any interest or effort to meet Polk County’s need for CMR inpatient services. Furthermore, HealthSouth asserts that neither general hospital has any experience or expertise in providing inpatient CMR services, indicating that the submitted grace period letters of intent are not the result of any in-depth plans. HealthSouth specifically notes that LRMC received state approval to become a Level II trauma center in 1998 and as part of the standards for certification it was required to “establish injury categories to identify trauma patients as candidates for rehabilitative services”. The applicant contends that although LRMC has been providing initial acute care treatment for patients who were suitable for CMR upon discharge for over 10 years, it only applied for beds to provide CMR treatment after HealthSouth filed its letter of intent. HealthSouth maintains that Heart of Florida Hospital has been an AHCA certified primary stroke center for nearly four years and has not made a commitment to providing the full continuum of care for stroke patients at its facility.

Haines City HMA, LLC (CON #10163) states that the proposed program is in response to special not normal circumstances related to the lack of available and accessible CMR beds in its defined service area. The applicant notes that the Agency for Health Care Administration has approved multiple CON applications for new CMR beds in situations where an applicant has shown the ability to support a new CMR unit based on an internally generated volume of patients and a long distance to transfer to another available hospital. Heart of Florida maintains that the following specific arguments warrant approval of CON application #10163:

There are only 24 licensed CMR beds in the entire county of 467,045

adults, and all 24 are located within one acute care hospital and generally utilized by that hospital’s acute care patients. This is a ratio of just one CMR bed per 19,460 Polk County adult residents.

CMR beds are geographically and programmatically inaccessible to residents of the Heart of Florida service area. There are no CMR beds in Heart of Florida’s service area and the closest CMR beds are 23 minutes (17 miles) away and highly occupied. The other CMR units are between 68 and 107 minutes away.

Clinical continuity between acute care providers and programming as well as post-acute providers and programming is imperative, but is, unfortunately, not the case for many service area residents. As the case mix index (severity rating) of patients admitted to CMR programs continues to increase, rehabilitation appropriate patients at Heart of Florida always experience a break in continuity of care as this level of care is not currently available in-house.


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District 6 has one of the highest CMR occupancy rates of any district in the state, and it has the single lowest CMR discharge use rate per 1,000 population age 65 and older. District 6’s 141 CMR beds averaged 65.87 percent occupancy during CY 2011, the states’ 4th highest rate; however, 48 beds were available on any given day.

As a designated stroke center, Heart of Florida is committed to fulfilling the continuum of care for its stroke patients in the post-acute setting of a CMR program, and being accredited as a stroke rehabilitation program.

There is a large percentage of elderly population in the Heart of Florida service area compared to the state average.

There is a gap in Heart of Florida’s continuum of care—the missing component is inpatient rehabilitation. In light of the Affordable Healthcare Act, the applicant must position itself for the future so that Heart of Florida will be able to offer a full array of services to compete effectively in providing quality services.

Heart of Florida is able to fully support a CMR program based on its own internal volume of rehabilitation appropriate patients.

The applicant notes that Heart of Florida Regional Medical Center is located at 40100 US Highway 27, Davenport, Florida 33837 on a major north-south roadway in northern Polk County, west of the Osceola County line, north of Haines City and Winter Haven and just east of I-4. Heart of Florida states that the total population of Polk County is 616,599 and the adult population is 467,045. The applicant also states that Polk County has several population centers, unlike Orange and Hillsborough Counties where Orlando and Tampa are synonymous with their counties. The applicant indicates that Polk County acute care hospitals predominately serve their home town—Davenport and Haines City served by Heart of Florida, Winter Haven by Winter Haven Hospital, Lake Wales by Lake Wales Medical Center, Bartow by Bartow Regional and Lakeland by Lakeland Regional Medical Center. Polk County nearly borders Orange County and does border nine counties, including: Lake, Osceola, Okeechobee, Highlands, Hardee, Manatee, Hillsborough, Sumter and Pasco. Heart of Florida states that it is located in the northeast region of Polk County, which is considered to be a part of Greater Orlando. The applicant contends that despite its proximity to the major central Florida population centers, Polk County is a distinct medical market, with 84 percent of all 2011 acute care hospital discharges by Polk County residents from Polk County hospitals. Heart of Florida notes that it is the only acute care hospital in northern Polk County and the only hospital in Davenport.


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The applicant indicates that 90 percent of its patients reside in Polk County with 69 percent coming from a 12 zip code service area that has approximately 23 percent of Polk County’s total population. See the table below.

Heart of Florida Regional Medical Center

Service Area Adult Population Calendar Year 2012

Zip Code

City

Ages 18-64

Ages 65+

Total Population Ages 18+

33837 Davenport 12,005 3,666 15,671 33844 Haines City 19,411 7,715 27,216 33850 Lake Alfred 3,707 1,249 4,956 33896 Davenport 6,057 1,712 7,769 33897 Davenport 8,946 3,230 12,176 33898 Lake Wales 10,242 4,534 14,776 34759 Kissimmee 19,670 4,243 23,913 33838 Dundee 1,961 696 2,657

Service Area 81,999 27,045 109,044 Source: CON application #10163, page 8.

The applicant states that older adults are the greatest users of inpatient rehabilitation services and Heart of Florida’s service area population age 65 years and over is expected to grow from 27,045 in CY 2012 to 30,465 in CY 2015 or by 12.65 percent. The table below shows year one and two population projections for the applicant’s eight zip code service area.


Service Area Adult Population Calendar Years 2014 and 2015

Zip Code

Calendar Year 2014 Calendar Year 2015 Ages 18-64

Ages 65+

Ages 18+ Total

Ages 18-64

Ages 65+

Ages 18+ Total

33837 12,441 4,019 16,460 12,658 4,196 16,854 33844 19,661 8,072 27,733 19,787 8,250 28,037 33850 3,755 1,313 5,068 3,779 1,344 5,123 33896 6,411 1,910 8,321 6,589 2,009 8,598 33897 9,470 3,630 13,101 9,733 3,831 13,563 33898 10,121 4,698 14,819 10,061 4,780 14,841 34759 21,112 4,971 26,083 21,833 5,335 27,168 33838 1,976 712 2,688 1,983 720 2,703 Service Area 84,948 29,325 114,273 86,422 30,465 116,887 Source: CON application #10163, page 8.

The applicant indicates that by 2015 (second year of the proposed project), the adult population is expected to grow by nearly 8,000 new residents from 2012, a growth rate of 7.2 percent, with the greatest population increase in zip code 34759 (Kissimmee) which spans the Osceola/Polk County line. Heart of Florida asserts that both the current and forecasted service area population is sufficient to support the need for a 14-bed CMR unit. See the table below.


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Service Area Adult Population Percent Growth From 2012 to 2015

Zip Code Ages 18-64 Ages 65+ Ages 18+ Total 33837 5.4% 14.5% 7.6% 33844 1.9% 6.9% 3.4% 33850 1.9% 7.6% 3.4% 33896 8.8% 17.3% 10.7% 33897 8.8% 18.6% 11.4% 33898 (1.8%) 5.4% 0.4% 34759 11.0% 25.7% 13.6% 33838 1.1% 3.4% 1.7% Service Area 5.4% 12.6% 7.2% Source: CON application #10163, page 9.

The applicant states Heart of Florida’s proposed program will address the needs of its patients after a traumatic and life-changing injury or illness. Heart of Florida maintains that the closest hospital (Winter Haven Hospital) with CMR services is 17 miles away and is highly utilized and generally inaccessible to residents of its service area. The applicant contends that the next closest hospital with CMR services is more than 60 miles away. The reviewer notes that Orlando Regional Medical Center (in District 7), which served 24 Polk County residents in CY 2011, is 32.44 miles from Heart of Florida.

The applicant indicates that CON #10163 and Highlands Regional’s (CON #10165) are parts of (their parent) HMA’s district wide mission to enhance access to CMR services. The enhanced availability and accessibility of CMR services for District 6 residents will result in better patient outcomes and enhance quality of care/life, according to the applicant.

Heart of Florida states that there are 1,658 acute care beds in Polk County but only 24 CMR beds—one CMR bed per 19,460 Polk County residents. The applicant contends that a CMR bed to resident ratio of 1:19.460 is drastically low and evidence of an underserved community. Heart of Florida indicates that using the standard ratio for calculating the need for CMR beds at a minimum of 10 beds per 100,000 residents—Polk County’s 2012 adult population of 616,599 results in a County wide need for 62 beds. Using this same ratio, the applicant states that for its 2015 service area population of 154,436 adults, there is a need for 16 CMR beds. Heart of Florida contends that Polk County’s bed inventory is unbalanced with all beds situated within Winter Haven Hospital’s one unit, which is 17 miles (23 minutes) south of Heart of Florida. The applicant indicates that Winter Haven Hospital’s beds are intended to predominantly serve the post-acute care needs of Winter Haven


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Hospital’s patients. Heart of Florida asserts that utilizing another acute care hospital’s CMR services can break the continuity of care and states that there are no CMR beds in its service area. The applicant notes that Winter Haven Hospital’s CMR unit had an average occupancy rate of 64.7 percent in 2011, with an occupancy rate of 66.5 percent in the second quarter—meaning that, at its peak, the unit only had eight vacant beds, four if the Agency’s 85 percent occupancy capacity standard is considered. Heart of Florida asserts that four vacant beds are too few to accommodate the need generated by its service area residents. However, eight vacant beds would be available.

The applicant states that when CMR is available in a particular geographic area, residents utilize it and when it is not available, CMR is generally not provided despite clinical indications of medical necessity. Heart of Florida indicates that CMR services primarily serve elderly persons and are most effective when family members have access to and participate in some of the rehabilitation programs to enable the patient to mainstream back into the home then continue with outpatient rehabilitation programs.

Heart of Florida contends that the three other CMR units in District 6 are not geographically accessible to residents of its service area, as they range from 60 to 96 miles away. The applicant maintains that the proposed 14-bed CMR unit would be geographically accessible to all residents within its service area. Rehabilitation appropriate patients from the service area would utilize this level of care and ultimately benefit from improved patient outcomes and greater functional improvements with less debility in the future. Heart of Florida states that District 6, as a whole, has the lowest rehabilitation discharge use rate per 1,000 population of any district in the State of Florida. The applicant notes that District 6’s 65+ rehabilitation discharge use rate is the absolute lowest in the state, 4.86 rehabilitation discharges per 1,000 population. Heart of Florida contrasts this number versus District 2’s 19.73 rehabilitation discharges per 1,000. See the table below.


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State of Florida by District

Rehabilitation Discharge Use Rate per 1,000 Population Calendar Year 2011

District Ages 18-64 Ages 65+ District 1 0.66 4.92 District 2 1.22 19.73 District 3 0.83 5.88 District 4 0.84 7.27 District 5 0.87 8.02 District 6 0.69 4.86 District 7 0.55 5.43 District 8 0.81 6.43 District 9 0.65 6.02 District 10 1.29 13.21 District 11 1.01 11.29 Florida Total 0.84 7.67 Source: CON application #10163, page 15.

The applicant maintains that District 6’s 65+ age cohort had a rehabilitation discharge use rate that is the lowest in the entire state and is 58 percent lower that the statewide average use rate—more than four times lower than the highest use rate in the state, District 2. Heart of Florida indicates that the users of CMR services are most often the elderly, who suffer the most from the inaccessibility of this level of care. Often, this age cohort foregoes the inpatient rehabilitation level of care for suboptimal but more accessible modalities of care that impact the ultimate outcome and often result in suboptimal recovery and increased healthcare costs.

The applicant states that the case mix index (severity rating) of patients admitted to CMR programs has increased over the past decade. The average CMR patient has more co-morbid conditions that need to be medically managed along with their physical disability. Heart of Florida indicates that a patient who is treated at an acute care hospital will gain the direct benefit of having the continuity of care, specifically the same physician manage their medical care in conjunction with a physiatrist. Heart of Florida states that its patients are rarely discharged to Winter Haven Hospital or another CMR unit in the district for inpatient rehabilitation. The applicant contends that this is evidence that its patients are not accessing CMR services despite considerable CMR appropriate patients admitted to its facility each year. See the table below.


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Discharges to Rehabilitation Facility CY 2009 CY 2010 CY 2011

Total Discharges* 9,550 9,730 9,755 Rehabilitation Discharges 0 0 3 Percent 0.00% 0.00% 0.02%** * Discharges are for those 18 years of age and older and exclude MDC 14,15, 19 and 20. **This number should be 0.03% Source: CON application #10163, page 16.

The applicant maintains that it is able to fully support a CMR program based on its own internal volume of rehabilitation appropriate patients—its current gap is the lack of inpatient rehabilitation. Also, in light of the Affordable Care Act, the applicant asserts that it must position itself with the ability to offer a full array of services in order to compete effectively in providing quality services. Heart of Florida indicates that the proposed unit would ensure its patients are privy to seamless, uninterrupted care by their team of physicians—particularly important in the event of a serious medical emergency as Heart of Florida is a tertiary care facility with an emergency department. In addition, patients will have the shortest amount of time between acute care discharge and admission to the CMR facility. The applicant states that it is a designated stroke center with a considerable number of patients that are rehabilitation appropriate—yet only three patients in the past three years were discharged to rehabilitation services. Heart of Florida maintains that it is clear that its facility has the internal patient volume to support not only a CMR unit, but one that will obtain stroke rehabilitation certification. The applicant notes that there are no Stroke Rehabilitation programs in all of District 6. See the table below.


Stroke Discharges CY 2009 CY 2010 CY 2011

Stroke Discharges 237 252 241 Source: CON application #10163, page 17.

Heart of Florida maintains that approval of the proposed program will have no impact on existing CMR providers but will benefit the service area population. There are four existing hospitals with CMR beds in District 6, none of which are geographically or programmatically accessible to the service area. See the table below.


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District 6 CMR Providers

Bed Inventory and Distance from Heart of Florida

Hospital

CMR Beds

Distance from Heart of Florida Miles Minutes

Winter Haven Hospital 24 17 23 Blake Medical Center 28 96 107 Tampa General Hospital 59 62 71 Florida Hospital Tampa 30 60 68 Source: CON application #10163, page 18.

The applicant states that at least three, if not all four, of the above CMR programs are geographically inaccessible to the Heart of Florida CMR patients and their family members. The applicant states in numerous instances at other parts of the application that these programs are not geographically accessible. Heart of Florida states that each of the abovementioned hospital units are meant to serve the inpatient rehabilitation needs of predominately their own patients. In addition, the applicant maintains that the distinct physician practice community supports the establishment of a CMR unit at Heart of Florida to provide continuity of care.

Heart of Florida notes that District 6’s CY 2011 CMR occupancy rate was 65.9 percent, the fourth highest in the State of Florida. See the table below.

Occupancy Rates by District

Calendar Year 2011 District Occupancy Rates District 4 75.7% District 3 71.5% District 10 68.5% District 6 65.9% District 2 63.0% District 7 62.2% District 8 61.8% District 11 61.8% District 5 53.5% District 9 44.6% District 1 40.7% State 61.1% Source: CON application #10163, page 19.

The applicant states that Medicare has long distinguished CMR as a unique service: It has a distinct qualifying admission criteria to certain diagnoses It limits the number of persons who may be admitted which do not

have those qualifying diagnoses It requires patients be able to tolerate a minimum of three hours per

patient day of rehabilitation services


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It requires patients to demonstrate functional improvement It requires daily physician contacts It has a distinct reimbursement category to manage its finances.

Heart of Florida maintains that other levels of care are not substitutes for appropriately prescribed CMR services. The applicant provides a table summarizing the varying characteristics between inpatient rehabilitation, skilled nursing and long-term acute care services.

Post-Acute Characteristics

Characteristics Inpatient Rehabilitation Skilled Nursing LTAC Admission Criteria

60% of admissions must come from CMS 13

categories

Medically necessary, follows a three day acute

care stay

Medically complex

ALOS

13 to 16 days

30+ days

Greater than 25 days

Attending Physician Visits 4+ times per week* At least every 30 days Daily Multi-Disciplinary Team Approach

Required

Not required

Required

Medical Director Specialty

Physical Medicine and Rehabilitation or Internal

Medicine

Family Practice, Internal

Medicine

Hospitalist, Critical Care or Intensivist

RN Overnight/Availability

24 hours per day/ seven days per week

Eight consecutive hours per day

24 hours per day/ seven days per week

Nursing Hours per Patient Day

6.0 to 8.0 hours 2.5 to 4.0 hours 7.0 to 9.0 hours

Therapy

Three hours per day minimum

No minimum

No minimum

Source: CON application #10163, page 21. Note: A minimum of three rehabilitation physician visits with the patient per week is required in inpatient

rehabilitation facilities per 42 CFR 412.622(a)(3)(iv).

The applicant notes that CMR is distinct level of care, different from long-term acute care, skilled nursing or short term acute care. Heart of Florida states that the proposed unit will focus on rehabilitating the patient by re-teaching valuable everyday tasks through the most appropriate, safe, patient-centered environment—placing value on quality integrity, cost-effectiveness and respect. Heart of Florida employed two different need methodologies to prove that sufficient demand for a 14-bed CMR unit exists—both methodologies arrive at the same conclusion. The first methodology, the hospital based need methodology, is based on the applicant’s historical rehabilitation appropriate cases and the relationship between total rehab appropriate cases and total cases that were discharged to rehabilitation from hospital-based CMR units across the State of Florida. The second methodology, the resident based need methodology, applies an average statewide resident use rate of hospital-based CMR discharges to the service area population.


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Hospital Based Need Methodology The applicant states that to qualify for an acute care rehabilitation designation, a minimum of 60 percent of all patients admitted must have a primary diagnosis within one of 13 medical conditions. Based on ICD-9 codes and MS-DRGs available, it was determined that the applicant discharged between 492 and 496 patients who met the “60 percent rule” and were therefore potentially suitable for inpatient rehabilitation. In calendar year 2011, the applicant states that five percent of its total discharges met the requirement set forth by CMS for the appropriate medical conditions for CMR services. The applicant used all hospitals with their own rehabilitation units as a benchmark comparison. See the table below.

Rehabilitation Appropriate Discharges by Category*

Calendar Year 2011

CMS Category

Heart of Florida Discharges

Florida Hospitals with Hospital-Based CMR Units

Discharges Amputation 7 509 Brain Injury 37 10,105 Burn 1 303 Hip Fracture 92 8,443 Joint Replacement, Age 85+ 23 1,405 Neuro 52 3,893 Rheumatoid Arthritis 5 246 Spinal Cord 33 3,358 Stroke 241 13,607 Trauma 1 107 CMS-13 Total 492 41,976 Total Discharges 9,755 461,095 Rehabilitation Admissions Unknown 16,316 Rehabilitation Admissions as a Percent of Total Hospital Admissions

Unknown

3.5%

Source: CON application #10163, pages 23 and 24. Note: The applicant indicates that all discharges exclude obstetrics/gynecology, newborns, psychiatry, substance

abuse and ages 0-17. Heart of Florida’s three discharges in CY 2011 to CMR, as reported to the Florida Center for Health Information and Policy Analysis Bureau is 0.03 percent of its (9,755) total shown above.

The applicant notes that 3.5 percent or 16,316 of the 461,095 discharges during CY 2011 from hospitals that had CMR units were rehab admissions in these hospitals or at other CMR providers in the state. Applying the same 3.5 percent ratio to Heart of Florida’s total of 9,755 patient discharges, the applicant estimates there were 345 potential CMR admissions for 2011. The applicant presents the forecasted rehabilitation admissions for CY 2015 noting that the service area population aged 65 years and over is expected to increase by 12.6 percent between 2012 and 2015, which it projects will result in at least 10 additional rehab admissions per year. See the table below.


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Heart of Florida CMR Bed Need Calendar Years 2011 and 2015

2011 2015 Forecasted Admissions 345 396 Average Length of Stay 13.3 Total Patient Days 4,589 5,267 Average Daily Census 12.5 14.4 Bed Need at 85% Occupancy 15 17 Source: CON application #10163, page 25.

Resident Based Need Methodology Heart of Florida evaluated rehabilitation cases on a district wide basis to calculate rehabilitation discharge use rate per 1,000 population. The applicant contends that while the variance in the district and statewide use rate may appear to be insignificant, particularly amongst the 18 to 64 age cohort, the difference is material. The statewide use rate applied to District 6’s 2011 population would have resulted in 1,253 total additional rehabilitation cases. See the tables below.


0.69

4.86

0.84

7.67

Ages 18‐64 Ages 65+

CMR Discharge Use Rates

District 6 Florida


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District 6 Actual and Restated Rehabilitation Discharges

Calendar Year 2011 Ages 18-64 Ages 65+ Total Adult

Population Actual 2011 Rehabilitation Cases 970 1,812 2,782 2011 Population 1,397,350 372,987 1,770,337

Statewide Discharge Use Rate 0.84 7.67 --

Restated Rehab Cases at Statewide Rate 1,174 2,861 4,035 Unmet Demand 204 1,049 1,253 Source: CON application #10163, page 27.

The applicant maintains that application of statewide use rates to its service area population results in 296 and 306 total rehabilitation discharges from the service area in 2014 and 2015, respectively—resulting in a bed need of approximately 14 beds. Heart of Florida provides a forecasted utilization table for the proposed facility. See the table below.

Heart of Florida Service Area Forecasted CMR Utilization

Years One and Two Calendar Year 2014 Calendar Year 2015

Ages 18-64

Ages 65+

Total Ages 18-64

Ages 65+

Total

Service Area Population 84,948 29,325 114,273 86,422 30,465 116,887 Statewide Use Rate 0.84 7.67 -- 0.84 7.67 -- Forecasted Rehab Cases 71 225 296 73 234 306

Average Length of Stay 13.3 13.3

Total Patient Days 3,947 4,080

Average Daily Census 10.8 11.2

Bed Need at 85% Occupancy 12.7 13.2 Source: CON application #10163, page 29.

Heart of Florida states that it recognizes that the proposed CMR program will not achieve stabilized occupancy upon opening—it will take up to six months to achieve such level. The applicant indicates that it will need to educate/enhance awareness of CMR services throughout the community and consider seasonality to accurately forecast the proposed program’s volume. Heart of Florida provides the following utilization forecast taking seasonality and education into consideration. See the table below.


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Heart of Florida 14-Bed CMR Unit

Forecasted Utilization Years One and Two

Admissions

Year One with Ramp Up Adjustment

Year Two

Quarter One 27 86 Quarter Two 50 77 Quarter Three 65 67 Quarter Four 74 77 Total Admissions 216 306 Patient Days 2,881 4,080 Average Daily Census 7.9 11.2 Occupancy Rate 56.4% 79.8% Source: CON application #10163, page 30.

The applicant concludes by stating that it has received many letters from physicians, community leaders and elected officials in favor of establishing the proposed program, thus demonstrating that this service area is significantly underserved in terms of inpatient rehabilitation. The reviewer notes that Heart of Florida submitted seven letters of support for the proposed project, one from an elected official, one from a city manager, one from an economic development council and four from physicians. Lakeland Regional Medical Center, Inc. (CON #10164) indicates that there are several special “not normal” circumstances that justify the proposed program, including: Given the size and scope of services provided by LRMC’s 851-bed

hospital, including a Level II trauma center, LRMC can support the efficient utilization of a major CMR unit.

Barriers to acute inpatient rehabilitation access facing LRMC patients, including non-clinical access issues for patients and their families as well as placement difficulties for Medicaid and unfunded patients.

LRMC serves as the safety-net provider for Polk County residents, providing the greatest percentage of indigent and charity care to residents compared to other providers.

The extraordinary gap between the expected versus actual demand for CMR beds in District 6 compared to the state average

There is an even greater gap in the age-adjusted use rate when comparing actual utilization to expected demand.

There has not been a published need for CMR beds in the past several years as existing CMR providers can add beds through the exemption process.

CMS policy changes have had a dramatic impact of inpatient rehabilitation facility admission criteria and resultant demand. Following the most recent policy clarifications in 2010, growth in demand for CMR services is anticipated to resume.


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Because of its size, and given that 95 percent of inpatient rehabilitation facility referrals come directly from the acute setting, LRMC’s proposed unit will be supported by LRMC’s own patients, mitigating impact on current providers.

The applicant maintains that the proposed unit will not only address the identified need presented in CON application #10164 but it is also a critical piece in the continuum of services in tomorrow’s health care delivery system. LRMC states that its size, scope of services and the recently announced graduate medical education affiliation with USF Health all will serve as resources to support the proposed unit. LRMC contends that while District 6 CMR utilization was flat/declined from 2008 through 2010, 2011 utilization increased by 7.9 percent reflecting stabilization following the impact of the 2010 CMS-13 policy clarifications on admission criteria. The applicant notes that all four of the existing District 6 CMR providers are hospital-based units. LRMC maintains that the hospital-based approach positions the rehab program for the evolving health care delivery system of tomorrow—emphasizing continuity of care and seamless transitions in the settings of care. The applicant contends that hospital-based CMR units are the best positioned to handle the increasingly complex and higher acuity of today’s intensive rehab patient especially with its 24/7 availability of hospitalists and intensivists—services not provided by a freestanding CMR unit. LRMC indicates that an analysis of utilization trends for CMR services requires an overview of Medicare regulations and payment practices. The applicant states that Florida inpatient discharge data reveals that in 2011, 75 percent of all CMR discharges statewide were Medicare patients (28,001 patients of a total 37,314). Accordingly, regulations and payment practices established by Medicare have significant impact upon the total utilization of CMR facilities. The applicant cites Medpac’s most recent report summarizes the impact CMS policy and regulatory changes have had on Medicare fee-for-service inpatient rehabilitation facility utilization:10 Inpatient rehabilitation facility volume declined after 2004, when

enforcement of the compliance threshold was renewed

10 MedPAC—A Data Book—Health Spending and the Medicare Program, page 129, June 2012.


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In 2010, the number of inpatient rehabilitation facility cases declined slightly, by 1.3 percent. This decline may in part be due to the revised coverage criteria for an inpatient rehabilitation facility stay that went into effect in January 2010. The revised coverage criteria did not change, but more clearly defined, which Medicare beneficiaries are appropriate for inpatient rehabilitation facilities.

LRMC maintains that following the 2010 policy “clarifications” by CMS, occupancies of inpatient rehabilitation facilities have begun to stabilize and expectations are for increasing demand for intensive rehabilitative care as the population grows and ages. The applicant contends that under current CMS policy, demand for CMR services is again increasing and District 6 is unquestionably the most underserved in terms of CMR beds/Medicare population. LRMC states that the I-4 interstate provides access to Tampa for those residents with a car and those un-intimidated by freeway speeds and heavy traffic congestion—but for those with limited comfort with freeways (common with the elderly) or no vehicle, there is no reasonable public transportation option. The applicant contends that driving issues in Tampa complicate already difficult situations for elderly patients and their family members. The applicant maintains that growth in the age 65 and over population is a key determinant of future demand for inpatient rehabilitation care. LRMC notes that in calendar year 2011, over 75 percent of all discharges from Florida CMR facilities were Medicare patients. The applicant provides the projected growth in the age 65+ population across the state and District 6 for 2012-2018.


51

Population Growth By District and County

January 2012-2018 Patient District Age 65+ Total Age 65+

(percent) Total

(percent) District 1 20,171 36,894 19.8% 5.3% District 2 24,089 42,615 24.7% 5.9% District 3 95,864 221,017 25.1% 13.6% District 4 84,058 213,189 27.6% 10.9% District 5 45,929 72,136 15.3% 5.2% District 6 82,126 263,643 21.8% 11.4% Hardee 413 627 11.3% 2.3% Highlands 3,828 7,935 12.0% 8.0% Hillsborough 37,066 141,510 24.3% 11.3% Manatee 14,722 33,618 19.0% 10.2% Polk 26,097 79,953 23.4% 13.1% District 7 78,991 284,889 24.9% 11.8% District 8 83,277 202,079 19.5% 12.7% District 9 75,489 201,506 17.4% 10.4% District 10 49,605 58,890 19.0% 3.4% District 11 53,189 134,596 14.0% 5.2% Florida 692,788 1,731,454 20.5% 9.1% Source: CON application #10164, pages 24-25.

LRMC concluded the following from the population data: The District 6 age 65+, as well as the District’s total population, is

anticipated to grow at a higher rate than the state average. Within District 6, Polk County is projected to grow more rapidly than

Highlands, Hardee, Manatee and Hillsborough. Polk County’s age 65+ population is projected to increase by 23.4

percent by 2018.

The applicant contends that there is a dramatic variance in the 2011 CMR use rate in terms of intensive rehab patient days per 1,000 population among the 11 health care districts. See the table below.

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53

The applicant maintains that there is a strong desire among rehabilitation patients to stay as close to home as possible. Therefore, LRMC expects that the majority of CMR cases in the proposed unit will be residents of Lakeland and the surrounding areas of Polk County and that approximately 95 percent of cases will be direct referral from LRMC medical/surgical units.11 The applicant indicates that direct transfer from the acute care setting is consistent with: LRMC’s goals of enhancing continuity of care, Requests from patients and family to minimize disruptive transfers to

unfamiliar facilities; and Enhances the therapeutic approach by making it easier for the care-

giver to be part of the therapy team.

The applicant notes that the District 6 age 65-74 CMR use rate is nearly 27 percent below the state average and the 75+ use rate for District 6 is the lowest in the state. See the table below.

2011 CMR Use Rates by Age Cohort by District of Residence

Patient District

Use Rate per 100,000 Age 0-14 Ages 15-64 Age 65-74 Age 75+ Total

District 1 0.8 63.4 313.3 736.3 114.3 District 2 8.1 115.3 1,100.8 3,101.4 338.2 District 3 2.4 79.9 341.4 905.2 186.2 District 4 10.7 80.5 472.1 1,050.3 167.7 District 5 0.5 85.5 423.0 1,207.5 226.8 District 6 1.1 68.1 342.9 682.8 124.7 District 7 2.5 53.4 328.9 817.2 108.0 District 8 1.3 79.9 373.7 991.0 223.8 District 9 2.5 56.8 308.4 853.6 167.0 District 10 2.2 122.0 701.1 1,954.9 275.4 District 11 11.7 96.5 660.3 1,643.0 229.6 Florida 4.8 84.3 467.8 1,184.9 197.1 Source: CON application #10164, page 29.

Furthermore, LRMC asserts that within District 6, Polk County has the lowest overall use rate for CMR services. See the table below.

2011 CMR Discharges by Age Cohort for District 6

Patient County Age 0-14 Ages 15-64 Age 65-74 Age 75+ Total Manatee 1.8 140.8 675.5 1,436.9 327.8 Highlands 0.0 55.5 135.4 322.0 102.3 Hillsborough 1.2 59.8 328.0 595.2 95.0 Hardee 15.6 56.8 191.8 520.5 83.2 Polk 0.0 51.4 206.0 356.3 81.5 District 6 1.1 68.1 342.9 682.8 124.7 Source: CON application #10164, page 29.

11 The applicant cites MedPAC-Report to Congress-Inpatient Rehabilitation Facility Services March 2012, page 236 as the basis of this approximation.


54

The applicant contends that the unusually low CMR use rate in District 6 and Polk County demonstrates that patients who could benefit from intensive rehabilitation are being discharged to Medicare skilled nursing facilities and home health programs due to a variety of reasons, including: access, capacity and acuity. LRMC states that given the importance of the age 65 and over population on the demand for CMR services, it made a comparison of the supply of CMR beds to the elderly population. The purpose of this is to underscore the importance of access to the patient and their caregiver. The applicant notes that elderly care givers who either do not have transportation or are challenged in traveling in highly congested areas constitute another barrier to access as the patient requiring rehabilitation services often refuses to leave the community for care due to the driving distance burden on their caregiver. See the table below.

CMR Beds per 65+ Population by District

Patient District

Licensed and

Approved CMR Beds

Age 65+

Population

CMR Beds per 10,000 for Age 65+ Population

District 1 78 100,374 7.77 District 2 151 95,843 15.75 District 3 198 376,685 5.26 District 4 252 300,199 8.39 District 5 210 296,639 7.08 District 6 141 372,987 3.78 District 7 236 312,318 7.56 District 8 264 423,034 6.24 District 9 334 430,725 7.75 District 10 305 257,774 11.83 District 11 372 375,945 9.90 Florida 2,541 3,342,523 7.60 Source: CON application #10164, pages 30.

The applicant states that the District 6 supply of CMR beds per 10,000 for the age 65+ population is the lowest in the state and less than half the state average. LRMC contends that there is no data to suggest that Polk County or District 6 residents are healthier or recover quicker than the elderly in other parts of the state. The applicant concludes that, therefore, District 6 is underserved by CMR beds for the age 65+ population.

LRMC used three different approaches to calculate demand for the proposed CMR unit: Conversion of Medicare acute inpatient discharges to inpatient

rehabilitation facility admissions following national trends and using actual District 6 experience as a conservative basis for the calculations.


55

Calculating the expected versus actual CMR discharges in Polk County based on the overall state use rate.

Gill inpatient rehabilitation facility methodology using clinical algorithms based on actual detailed patient data.

The applicant states that the city of Lakeland accounts for nearly 70 percent of all patients seen at LRMC. For purposes of CON application #10164, Polk County will serve as the anticipated initial service area for the proposed program. The applicant goes into great detail explaining each of the methodologies used to determine the potential number of additional CMR beds needed in District 6. LRMC asserts that each of these methodologies underscore the unusually low comprehensive medical rehabilitation use rate in Polk County/District 6 when compared to Florida averages, national medians and expert opinions of best practices. A summary of each projection methodology follows: Medicare inpatient to IRF methodology projects 38 to 40 CMR beds

needed for LRMC based on a three-year trend of District 6 CMR providers in the conversion of Medicare discharges into CMR cases measure against national norms.

Expected versus actual CMR use rate methodology projects 31 to 42 CMR beds for the District based on the average statewide demand rate for CMR services compared to the actual District 6 utilization in 2011.

Gill IRF demand methodology projects 36 to 42 CMR beds for LRMC based on clinical algorithms analyzing LRMC’s actual discharges in 2011 and factoring key variables as predictors of likely cases for intensive rehabilitation care.

LRMC contends that the request for the proposed unit is not based solely on potential projected demand, but it is based on a conservative approach due to: LRMC’s sensitivity to the fact that historic referral patterns and

practices do not change easily. Facility focus on a functional layout for the CMR unit for both patient

rooms and therapy space. Opportunity to expand CMR services in the future with completion of

the Phase One Patient Tower, should demand and patient needs warrant.


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Impact on Existing Providers The applicant notes that only one of the four existing CMR units is within a reasonable distance from LRMC—posing a barrier to the continuum of care due to lack of transportation. LRMC contends that traveling to another community within the Polk County area can be a barrier to access in terms of elderly driving/lack of public transportation in conjunction with the loss of continuity with the patient’s key medical provider. LRMC cites that admitting unfunded and complicated medical cases have been an ongoing issue at the Joy-Fuller Rehabilitation Center at Winter Haven Hospital. The applicant states that it has agreed to re-admit rehab transfers that ultimately do not meet intake criteria, are unable to continue intensive therapy or become a placement problem upon completion of rehabilitation therapy. LRMC includes a letter from Winter Haven Hospital dated June 17, 2010, which it states as “referencing the now standard transfer agreement back to LRMC”. The applicant contends that the CMR unit at Winter Haven Hospital has an actual operating bed capacity of 19 beds semi-private rooms. Further, staffing is set for 19 beds because semi-private rooms are operated as a single room for isolation cases, and in particular, for stroke and traumatic brain injury cases. LRMC staff feedback is that only two of the CMR rooms at Winter Haven are private. The applicant indicates that Winter Haven’s 2011 CMR occupancy leveling off at 64-65 percent suggests that actual bed capacity is 19 beds (80 percent of the ADC for 2011). Agency data indicates Winter Haven reported 5,663 CMR days in CY 2011, which for a 19 bed unit would result in 81.65 percent occupancy. LRMC indicates that this explains Winter Haven Hospital’s reluctance to take unfunded and medically complicated cases. Currently, the Winter Haven CMR intake team does not offer to work with LRMC case managers on pre-discharge planning and rehab appropriateness evaluations.

In addition, LRMC states that over 84 percent of Winter Have rehab patients are drawn from Winter Haven and surrounding areas. The applicant maintains that Winter Haven and Lakeland are routinely viewed as very separate communities by most of their residents.

LRMC states that Medicare skilled nursing facilities will continue to play a vital role in post-acute rehabilitative care even with the proposed unit as a post-acute follow-up after intense rehabilitation therapy. However, the intensive therapy that will be provided by the proposed unit is the best solution for optimizing patient recovery in order to speed recovery, minimize disability and maintain the continuity of care. LRMC maintains that it is committed to continue to work closely with Medicare skilled nursing facilities in the community and the presence of


57

rehabilitation specialists and the potential for a physical medicine and rehabilitation residency rotation can only further enhance both the quality and continuity of care for improved patient outcomes both in the acute and post-acute rehabilitation setting.

LRMC indicates that given the current CMR capacity constraints, the need to provide resources for the Medicaid and uninsured patient population requiring rehabilitation, and LRMC’s intent to work with local Medicare skilled nursing facilities to identify appropriate rehabilitation placement—the project will have minimal impact on other acute and long-term rehab providers. The applicant restates that Polk County and District 6 are well below the state average CMR use rate. LRMC contends that providing additional needed CMR resources at LRMC will result in increased demand and any short-term shift in referrals will be offset by overall growth in demand for rehab care.

LRMC indicates the project will enhance its ability to provide seamless delivery of care and that rehab placement of vulnerable patients is evidence of a critical link vital for LRMC to provide a continuum of care to the neediest patient population. The applicant provides a summary of 20 separate cases “over recent months” it states was prepared by LRMC case managers to support this contention. LRMC concludes that there are significant placement challenges for the following patient populations: Medicaid/Potentially Medicaid Eligible Uninsured Patients who have exhausted benefits or without coverage for

intensive rehab Medically complicated cases/severe trauma Patients and families facing hardships in placement outside the

community.

LRMC states that it is “a Level II Trauma Center and safety-net provider to Polk County, committed to meeting the needs of this vulnerable patient population requiring rehab care”.

LRMC states that for-profit freestanding rehabilitation hospitals will claim that they can accommodate the vulnerable patient population. Further, there is no report or formal documentation that a HealthSouth rehabilitation hospital refused a transfer request of an indigent patient. However, LRMC contends that often:


58

The uninsured/complicated rehabilitation referrals do not meet

medical criteria. The rehabilitation hospital does not have a vacancy for the care the

specific patient requires. Further documentation is required, delaying the transfer and

necessitating a follow-up intake evaluation.

The applicant contends that the CMS preadmission inpatient rehabilitation facility patient assessment instrument provides ample flexibility to deny/delay a rehabilitation transfer request without specifically stating: Patient has no third-party insurance coverage and rehabilitation care

will be uncompensated. Patient requires extensive medical and support resources exceeding

any potential reimbursement.

LRMC states that the average HealthSouth rehabilitation hospital in Florida reports only two percent of patient days are Medicaid—hospital-based CMRs in Florida report an average 8.4 Medicaid days. The applicant indicates that HealthSouth rehabilitation hospitals report average charity care of under $277,000 compared to the average of hospital-based units that separately report CMR charity care of over $1,250,000 (a rate 4.5 times larger than HealthSouth facilities). The applicant maintains that it is not surprising that HealthSouth can boast about remarkable operating margins and an impressive rate of return on “de-novo” hospital projects.12 In addition, LRMC contends that despite its “typical” claims about higher quality outcome and assurance that HealthSouth’s proposed Polk County CMR hospital will pursue CARF accreditation, historically HealthSouth has not committed to the rigorous standards by which CARF measure rehabilitation facilities. See the table below.

12 LRMC states that HealthSouth reported operating margins of 14.1 to 28.2 percent in its AHCA FY 2011 reports and a 15.5 percent return rate on investment during investor conference presentations.


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CARF Accreditation of CMR Programs

Facility

County

CARF Accreditation Yes No

HealthSouth Sunrise Rehabilitation Hospital Broward X HealthSouth Rehab Hospital of Miami Miami-Dade X HealthSouth Rehab Hospital of Sarasota Sarasota X HealthSouth Treasure Coast Rehabilitation Hospital Indian River X HealthSouth Rehabilitation Hospital Tallahassee Leon X HealthSouth Sea Pines Rehabilitation Hospital Brevard X HealthSouth Rehabilitation Hospital Pinellas X HealthSouth Emerald Coast Rehab Hospital Bay X HealthSouth Rehabilitation Hospital of Spring Hill Hernando X Source: CON application #10164, page 57.

The applicant indicates that statewide 69 percent of CMR programs are CARF accredited, but only 22 percent of HealthSouth facilities are accredited—75 percent of all CMR programs excluding HealthSouth programs are accredited. LRMC states that HealthSouth frequently quotes statistics such as “percent of patients discharged to the community/home was higher than expected”. The applicant maintains that it is unclear what “higher” than expected community/home placement represents when comparing HealthSouth rehabilitation discharge placement to non-HealthSouth CMR provider discharge placement. See the table below.

Placement of Rehabilitation Patients

Discharged from Florida CMR Programs—CY 2011 Comparison of HealthSouth with Non-HealthSouth Providers

Discharged to:

HealthSouth

Non-HealthSouth CMR Providers

Home 15.5% 27.8% Medicare SNF 15.7% 12.6% Home Health Care 55.0% 45.9% Back to Acute Care Hospital 11.8% 11.3% All other placements 2.0% 2.4% Source: CON application #10164, page 58.

LRMC contends that the above chart demonstrates that HealthSouth does not do a good job in returning the rehab patient home. The applicant notes, for both HealthSouth and non-HealthSouth CMR providers, that more than one out of ten rehabilitation patients are readmitted to the acute care setting. LRMC states that there are two key points to remember: Readmission rates are now a significant quality performance measure

for hospitals and have financial implications. For the 11 to 12 percent of rehabilitation patients requiring

readmission to the acute setting, the hospital-based CMR unit provides the advantage of immediate access to medical and surgical specialists with trained critical care staff.


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Sebring Hospital Management Associates, LLC (CON #10165) states that the proposed program is in response to special not normal circumstances related to the lack of available and accessible CMR beds in its defined service area. The applicant indicates that CON #10165 is part of its parent company’s (HMA) district wide mission to enhance access to CMR services in conjunction with Heart of Florida’s application for a 14-bed CMR unit in this batching cycle. The joint effort is to enhance the availability and accessibility of CMR services for District 6 residents and to develop greater outcomes and enhance quality of care/life. HRMC maintains that the following specific arguments warrant approval of CON application #10165: District 6 has one of the highest CMR occupancy rates of any district

in the state and it has the single lowest CMR discharge use rate per 1,000 population age 65+.

CMR beds are between 50 and 92 miles from HRMC and 67 and 115 minutes of driving time. Polk County’s CMR provider is the closest to Highlands Regional Medical Center, though it is still more than an hour drive (67 minutes), 50 miles away and highly utilized.

A seamless uninterrupted continuity of care from the acute care setting to the post-acute CMR setting is not an option available to residents of the service area. This is particularly important in the event of a serious medical emergency as it is less disruptive to the patient in their recovery process and optimizes probability of better outcomes.

There is a large percentage of elderly population in Highlands County compared to the state average.

There is a gap in HRMC’s continuum of care; the missing component is inpatient rehabilitation. In light of the Affordable Healthcare Act, the applicant must position itself for the future where HRMC will be able to offer a full array of services to compete effectively in providing quality services.

HRMC is able to fully support a CMR program based on its own internal volume of rehabilitation appropriate patients.

There are zero existing CMR beds in Highlands County.

The applicant notes that it is located at 3600 South Highlands Avenue, Sebring, Highlands County, Florida 338704 at the intersection of US Highway 27 and Highlands Avenue in northern Highlands County. HRMC states that the total population of Highlands County is 100,265 with an adult population of 81,336. The applicant indicates that Highlands County has one the oldest populations in the state, with 31.4 percent being 65 years of age or older.


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HRMC indicates that 90 percent of its patients reside in Highlands County with more than 70 percent coming from a five zip code service area containing approximately 54 percent of Highlands County’s total population. See the table below.


Service Area Population Age 18 and Older Calendar Year 2012

Zip Code

City

Ages 18-64

Ages 65+

Total Population Ages 18+

33857 Lorida 896 411 1,307 33870 Sebring 11,076 7,731 18,807 33872 Sebring 5,392 5,469 10,861 33875 Sebring 5,551 3,439 8,990 33876 Sebring 2,597 1,561 4,158

Service Area 25,512 18,611 44,123 Source: CON application #10165, page 7.

The applicant states that older adults are the greatest users of inpatient rehabilitation services and that the service area population of those aged 65+ is expected to grow during the first two years of the proposed project. See the table below.


Service Area Population Age 18 and Older Calendar Years 2014 and 2015

Zip Code


Ages 65+

Ages 18+ Total

Ages 18-64

Ages 65+

Ages 18+ Total

33857 886 422 1,309 882 428 1,309 33870 10,982 7,881 18,863 10,935 7,955 18,890 33872 5,430 5,803 11,234 5,450 5,971 11,420 33875 5,520 3,610 9,130 5,505 3,696 9,201 33876 2,571 1,662 4,233 2,557 1,713 4,270 Service Area 25,390 19,379 44,768 25,328 19,762 45,091 Source: CON application #10165, page 7.

The applicant indicates that by 2015 (year two of the proposed project), the adult population is expected to grow by 968 new residents from 2012, a growth rate of 2.2 percent, with the greatest population increase in zip code 33872, a 5.1 percent increase. HRMC maintains that because of its unique service area, all the population growth will be within the 65+ age cohort, a 6.2 percent growth rate between 2012 and 2015. HRMC asserts that even though the projected growth in the service area is not projected to be “astounding”, the current and forecasted service area population is sufficient to support the need for a seven-bed CMR unit. See the table below.


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Service Area Population Age 18 and Older Percent Growth From 2012 to 2015

Zip Code Ages 18-64 Ages 65+ Ages 18+ Total 33857 (1.6%) 4.1% 0.2% 33870 (1.3%) 2.9% 0.4% 33872 1.1% 9.2% 5.1% 33875 (0.8%) 7.5% 2.3% 33876 (1.5%) 9.7% 2.7% Service Area (0.7%) 6.2% 2.2% Source: CON application #10165, page 8.

The applicant states that when CMR services are available in a particular geographic area, residents utilize it and when it is not available, these services are generally not provided despite clinical indications of medical necessity. HRMC indicates that CMR services primarily serve elderly persons and are most effective when family members have access to and participate in some of the rehabilitation programs enabling the patient to mainstream back into the home and then continue with outpatient rehabilitation programs. The applicant reiterates that Highlands County has one of oldest populations in the state with 31.4 percent of its population being elderly. HRMC states that District 6, as a whole, has the lowest rehabilitation discharge use rate per 1,000 population of any district in the State of Florida. The applicant notes that District 6’s 65+ rehabilitation discharge use rate is the absolute lowest in the state, 4.86 rehabilitation discharges per 1,000 population. HRMC contrasts this number versus District 2’s 19.73 rehabilitation discharges per 1,000. See the table below.





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The applicant maintains that District 6’s 65+ age cohort had a rehabilitation discharge use rate that is the lowest in the entire state and is 58 percent lower that the statewide average use rate—more than four times lower than the highest use rate in the state, District 2. HRMC states that there are 318 acute care beds in Highlands County but zero CMR.13 The applicant indicates, that using the standard ratio for calculating the need for CMR beds at a minimum of 10 beds per 100,000 residents—Highlands County’s 2012 adult population of 100,265 would result in a county wide need for 10 beds. The applicant maintains that the proposed seven-bed CMR unit would be geographically accessible to all residents within its service area. Rehabilitation appropriate patients from the service area would utilize this level of care and ultimately benefit from improved patient outcomes and greater functional improvements with less debilities in the future.

CMR services are not geographically accessible to Highlands County residents as evidenced by distance to the four licensed CMR providers, asserts HRMC. The applicant indicates that CMR services primarily serve elderly persons and are most effective when family members have access to and participate in some of the rehabilitation programs to enable the patient to mainstream back into the home and then continue with outpatient rehabilitation programs. If these services are geographically difficult to access, whether its roadway patterns, travel time or other, then the patient often opts for an alternative and less optimal forms of rehabilitation therapy. HRMC indicates that CMR beds are between 50 and 92 miles from HRMC with Winter Haven Hospital’s unit in Polk County being the closest. The applicant notes that Winter Haven Hospital’s CMR unit had an average occupancy rate of 64.7 percent in 2011, with an occupancy rate of 66.5 percent in the second quarter—meaning that, at its peak, the unit only had eight vacant beds, four if the Agency’s 85 percent occupancy capacity standard is considered. HRMC asserts that four vacant beds are too few to accommodate the need generated by its service area residents.

The applicant contends that the three other CMR units in District 6 are not geographically accessible to residents of its service area, as they are nearly a two hour drive. HRMC maintains that the elderly suffer the most due to “exorbitant” drive times and distances. Often, this age cohort foregoes the inpatient rehabilitation level of care for suboptimal

13 According to the Florida Hospital Bed Need Projections & Service Utilization by District (7/20/2012) publication there are 306 acute care beds in Highlands County.


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but more accessible modalities of care impacting the ultimate outcome and often resulting in suboptimal recovery and increased healthcare costs.

HRMC states that the case mix index (severity rating) of patients admitted to CMR programs has increased over the past decade. The average CMR patient has more co-morbid conditions that need to be medically managed along with their physical disability. HRMC indicates that a patient who is treated at an acute care hospital will gain the direct benefit of having the continuity of care, specifically the same physician manage their medical care in conjunction with a physiatrist.

The applicant notes that HRMC patients are rarely discharged to Winter Haven Hospital or another CMR unit. HRMC contends that this is evidence that its patients are not accessing CMR services despite considerable CMR appropriate patients admitted to its facility each year. See the table below.

HRMC

Discharges to Rehabilitation Facility CY 2009 CY 2010 CY 2011

Total Discharges* 4,066 4,296 3,783 Rehabilitation Discharges 0 0 9 Percent 0.00% 0.00% 0.2% *Discharges are for those 18 years of age and older and exclude MDC 14, 15, 19 and 20. Source: CON application #10165, page 14.

The applicant maintains that it is able to fully support a CMR program based on its own internal volume of rehabilitation appropriate patients—its current gap is the lack of inpatient rehabilitation. Also, in light of the Affordable Care Act, the applicant asserts that it must position itself with the ability to offer a full array of services in order to compete effectively in providing quality services. HRMC indicates that the proposed unit would ensure its patients will have seamless, uninterrupted care by their team of physicians—particularly important in the event of a serious medical emergency as HRMC is a hospital with an emergency department. In addition, patients will have the shortest amount of time between acute care discharge and admission to the CMR facility. The applicant maintains that the proposed unit is a less disruptive recovery process for a patient and far superior to the current alternative—going without CMR services. The applicant asserts that approval of the proposed program will have no impact on existing CMR providers but will benefit the service area population. There are four existing hospitals with CMR beds in District 6, none of which are geographically or programmatically accessible to the service area. See the table below.


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District 6 CMR Providers

Bed Inventory and Distance from HRMC Hospital

CMR Beds

Distance from Heart of Florida Miles Minutes

Winter Haven Hospital 24 50 67 Blake Medical Center 28 92 110 Tampa General Hospital 59 94 115 Florida Hospital Tampa 30 90 109 Source: CON application #10165, page 15.

The applicant states that none of the above CMR programs are geographically accessible to the HRMC CMR eligible patients or their family members. HRMC notes that the District 6 occupancy rate for 2011 was 65.9 percent, the fourth highest in the State of Florida. See the table below.

Comprehensive Medical Rehabilitation

Occupancy Rates by District Calendar Year 2011

District Occupancy Rates District 4 75.7% District 3 71.5% District 10 68.5% District 6 65.9% District 2 63.0% District 7 62.2% District 8 61.8% District 11 61.8% District 5 53.5% District 9 44.6% District 1 40.7% State 61.1% Source: CON application #10165, page 16.

The applicant notes that Medicare has long distinguished CMR as a unique service because it:

has distinct qualifying admission criteria to certain diagnoses. limits the number of persons who may be admitted which do not have

those qualifying diagnoses. requires patients be able to tolerate a minimum of three hours per

patient day of rehabilitation services. requires patients to demonstrate functional improvement requires daily physician contacts. has a distinct reimbursement category to manage its finances.

HRMC maintains that other levels of care are not substitutes for appropriately prescribed CMR services. The applicant provides a table summarizing the varying characteristics between inpatient rehabilitation, skilled nursing and long-term acute care services.


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Post-Acute Characteristics Characteristics Inpatient Rehabilitation Skilled Nursing LTAC

Admission Criteria

60% of admissions must come

from CMS 13 categories

Medically necessary, follows a three day acute

care stay

Medically complex ALOS

13 to 16 days

30+ days

Greater than 25 days

Attending Physician Visits 4+ times per week* At least every 30 days Daily Multi-Disciplinary Team Approach

Required

Not required

Required

Medical Director Specialty

Physical Medicine and Rehabilitation or Internal

Medicine

Family Practice, Internal

Medicine

Hospitalist, Critical Care or Intensivist

RN Overnight/Availability

24 hours per day/ seven days

per week

Eight consecutive hours

per day

24 hours per day/ seven days per

week Nursing Hours per Patient Day

6.0 to 8.0 hours 2.5 to 4.0 hours

7.0 to 9.0 hours

Therapy

Three hours per day minimum

No minimum

No minimum

Source: CON application #10165, page 18. Note: A minimum of three rehabilitation physician visits with the patient per week is required in inpatient

rehabilitation facilities per 42 CFR 412.622(a)(3)(iv).

Highlands Regional states that the proposed unit will focus on rehabilitating the patient by re-teaching valuable everyday tasks through the most appropriate, safe, patient-centered environment—placing value on quality integrity, cost-effectiveness and respect.

The applicant employed two methodologies to prove that sufficient demand for a seven-bed CMR unit exists. The first is the hospital-based need methodology, which is based on Highlands Regional’s historical rehab appropriate cases and the relationship between total rehab appropriate case and total cases that were discharged to rehabilitation from hospital-based CMR units across the State of Florida. The second methodology, the resident based need methodology, applies the average statewide resident use rate of hospital-based CMR discharges to the service area population.

Hospital-Based Need Methodology The applicant states that to qualify for an acute care rehabilitation designation, a minimum of 60 percent of all patients admitted must have a primary diagnosis within one of 13 medical conditions. Based on ICD-9 codes and MS-DRGs available, it was determined that during CY 2011, Highlands Regional discharged 227 patients (six percent of its 3,783 total discharges) who met the “60 percent rule” and were therefore potentially suitable for inpatient rehabilitation. The applicant used all Florida hospitals with their own rehabilitation units as a benchmark comparison. See the table below.


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Rehabilitation Appropriate Discharges by Category*

Calendar Year 2011

CMS Category

Highlands Regional

Medical Center Discharges

Florida Hospitals with Hospital-Based CMR

Units Discharges Amputation 3 509 Brain Injury 10 10,105 Burn 1 303 Hip Fracture 78 8,443 Joint Replacement, Age 85+ 17 1,405 Neuro 16 3,893 Rheumatoid Arthritis 4 246 Spinal Cord 5 3,358 Stroke 93 13,607 Trauma 0 107 CMS13-Total 227 41,976 Total Discharges 3,783 461,095 Rehabilitation Admissions Unknown 16,316 Rehabilitation Admissions as a Percent of Total Hospital Admissions

Unknown

3.5%

Source: CON application #10165, pages 19 and 20. Note: The applicant indicates that all discharges exclude obstetrics/gynecology, newborns, psychiatry,

substance abuse and ages 0-17. Highlands Regional’s nine discharges in CY 2011 to CMR, as reported to the Florida Center for Health Information and Policy Analysis Bureau is 0.24 percent of its (3,783) total shown above.

The reviewer notes that the applicant does not use the 3.5 percent benchmark set by Florida hospitals with hospital-based CMR units. HRMC states that because of its largely rural county and the similarities between Citrus County and Highlands County, it has looked to its sister facility, Seven Rivers Regional Medical Center, for its respective utilization of rehabilitative services. The applicant states that in 2011, Seven Rivers Regional Medical Center had 6,198 discharges (excluding MDC 14, 15, 19 and 20) of which 384 were rehabilitation appropriate. Seven Rivers Regional Medical Center had 301 admitted rehabilitation cases in 2011. HRMC applied a similar use rate to its rehabilitation appropriate cases resulting in an estimated 178 potential CMR admissions. See the table below.

HRMC and Seven Rivers Regional Medical Center Potential/Estimated Rehabilitation Admissions

Calendar Year 2011 Hospital Discharges Seven Rivers Regional Medical Center Rehabilitation Appropriate Cases 384 Actual Discharges from Seven Rivers Rehabilitation Program 301 Ratio of Discharges as a Percent of Rehab Appropriate 78.4% HRMC Rehabilitation Appropriate Cases 227 Ratio of Discharges as a Percent of Rehab Appropriate 78.4% Potential/Estimated Rehabilitation Admissions 178 Source: CON application #10165, page 22.


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Adjusting for some deviation between Seven Rivers Regional Medical Center and the rest of the hospital-based CMR units in the state, the applicant estimates that Highlands Regional had 156 potential CMR admissions for 2011. The applicant presents the following historical and forecasted rehabilitation admissions noting that the 65+ population is expected to increase 6.2 percent between 2012 and 2015 will result in slightly higher admissions. See the table below.


CMR Bed Need Calendar Years 2011 and 2015

2011 2015 Forecasted Admissions 156 164 Average Length of Stay 13.3 Total Patient Days 2,075 2,181 Average Daily Census 5.7 6.0 Bed Need at 85% Occupancy 7 7 Source: CON application #10165, page 23.

Resident Based Need Methodology Highlands Regional evaluated rehabilitation cases on a District wide basis to calculate rehabilitation discharge use rate per 1,000 population. The applicant contends that while the variance in the district and statewide use rate may appear to be insignificant, particularly amongst the 18 to 64 age cohort, the difference is material. The statewide use rate applied to District 6’s population would have resulted in 1,253 total additional rehabilitation cases for CY 2011. See the tables below.


0.69

4.86

0.84

7.67

Ages 18‐64 Ages 65+

CMR Discharge Use Rates

District 6 Florida


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District 6 Actual and Restated Rehabilitation Discharges

Calendar Year 2011

Ages 18-64

Ages 65+ Total Adult Population

Actual 2011 Rehabilitation Cases 970 1,812 2,782 2011 Population 1,397,350 372,987 1,770,337 Statewide Discharge Use Rate 0.84 7.67 -- Restated Rehab Cases at Statewide Rate 1,174 2,861 4,035 Unmet Demand 204 1,049 1,253 Source: CON application #10165, page 25.

The applicant maintains that application of statewide use rates to its service area population results in 170 and 173 total service area rehabilitation discharges in 2014 and 2015, respectively. HRMC provides a forecasted utilization table for the proposed facility. See the table below.


Forecasted Service Area CMR Utilization Years One and Two


Ages 65+

Total

Ages 18-64

Ages 65+

Total

Service Area Population 25,390 19,379 44,768 25,328 19,762 45,091 Statewide Use Rate 0.84 7.67 -- 0.84 7.67 -- Forecasted Rehab Cases 21 149 170 21 152 173 Average Length of Stay 13.3 13.3 Total Patient Days 2,264 2,303 Average Daily Census 6.2 6.3 Bed Need at 85% Occupancy 7.3 7.4 Source: CON application #10165.

HRMC maintains that the above forecast “does not just reflect HRMC’s utilization within the service area but it also does not include any in-migration from outside the service area.” The applicant states that it has decided to implement a seven-bed CMR program by “taking into context the selected patient unit for the CMR program” and physical plant capacity for code compliance. HRMC states that it recognizes that the proposed CMR program will not achieve stabilized occupancy upon opening, which will take up to six months to achieve. The applicant indicates that it will need to educate physicians, discharge planners and patients and their families of the benefits of inpatient rehab compared to other levels of care. HRMC states it considered the need to educate/enhance awareness of CMR services throughout the community and seasonality to accurately forecast the proposed program’s volume. HRMC provides the following utilization forecast in the table below.


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HRMC Seven Bed CMR Unit

Forecasted Utilization Years One and Two

Admissions

Year One, with Ramp Up Adjustment

Year Two

Quarter One 15 44 Quarter Two 25 40 Quarter Three 39 39 Quarter Four 41 41 Total Admissions 119 164 Patient Days 1,589 2,184 Average Daily Census 4.4 6.0 Occupancy Rate 62.9% 85.5% Source: CON application #10165, page 27.

The applicant concludes by stating that it has received many letters from physicians and community leaders in favor of establishing the proposed program demonstrating that this service area is significantly underserved in terms of inpatient rehabilitation. The reviewer notes that HRMC submitted four letters of support for the proposed project, one from an elected official, one from an interim administrator of the county Health Department and two from physicians.

2. Agency Rule Criteria:

Please indicate how each applicable preference for the type of service proposed is met. Refer to Chapter 59C-1.039, Florida Administrative Code, for applicable preferences.

3. General Provisions:

(a) Service Location. The CMR inpatient services regulated under this

rule may be provided in a hospital licensed as a general hospital or licensed as a specialty hospital.

HealthSouth Rehabilitation Hospital of Polk County LLC (CON #10162) states that it will provide CMR inpatient services in a hospital licensed as a specialty hospital. Haines City HMA, LLC (CON #10163) is licensed as a general acute care hospital with 193 acute care beds. Lakeland Regional Medical Center, Inc. (CON #10164) is licensed as a general acute care hospital with 768 acute care beds, 15 Level II NICU beds, 46 adult psychiatric beds, eight child/adolescent psychiatric beds, and 14 adult substance abuse beds for a total of 851 beds.


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The applicant has licensed programs such as a Level II adult cardiovascular services and is a primary stroke center. LRMC is a Department of Health designated Level II trauma center. The applicant states that its dedicated emergency department (ED) is the largest single-site ED in the state with over 172,000 visits in FY 2012. Sebring Hospital Management Associates, LLC (CON #10165) is licensed as a general acute care hospital with 126 acute care beds.

(b) Separately Organized Units. CMR inpatient services shall be

provided in one or more separately organized units within a general hospital or specialty hospital.

HealthSouth Rehabilitation Hospital of Polk County LLC (CON #10162) indicates that the proposed hospital will be dedicated to providing CMR inpatient services and the entire proposed facility will be solely dedicated to CMR services. The applicant states that the proposed facility will be freestanding. Haines City HMA, LLC (CON #10163) states that the proposed unit will be located in a recently vacated unit on the third floor which previously housed labor and delivery. The unit will contain private rooms. Lakeland Regional Medical Center, Inc. (CON #10164) is proposing a hospital-based separately organized CMR unit to be located on the sixth floor east, west and north units.

Sebring Hospital Management Associates, LLC (CON #10165) indicates that the proposed unit will be located on a separately organized unit of approximately 4,400 GSF on the second floor. All seven patient rooms will be private, single-bed rooms with private bathrooms designed to accommodate those in wheelchairs or limited mobility.

(c) Minimum Number of Beds. A general hospital providing comprehensive medical rehabilitation inpatient services should normally have a minimum of 20 comprehensive medical rehabilitation inpatient beds. A specialty hospital providing CMR inpatient services shall have a minimum of 60 CMR inpatient beds.

HealthSouth Rehabilitation Hospital of Polk County LLC (CON #10162) maintains that a 50-bed specialty CMR hospital is the appropriate size for a new entrant in the market. The applicant notes that the Agency for Health Care Administration has previously approved CON applications for CMR facilities with fewer than 60 beds.


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The applicant indicates that it currently operates numerous hospitals that have 50 beds or fewer. HealthSouth maintains that as the nation’s largest operator of CMR specialty hospitals, its experience is that facilities with fewer than 60 beds can be both economically feasible and provide high quality programs.

Haines City HMA, LLC (CON #10163) maintains that the proposed 14-bed CMR unit is appropriately sized to meet the demands of the rehabilitation appropriate patients cared for at Heart of Florida and the residents of its service area. The applicant asserts that establishing a 20-bed unit would be unnecessary when 14 beds meet the defined demand. Heart of Florida states that it will maintain cost effectiveness, appropriate staffing levels and the highest quality of care in its 14-bed unit. In addition, the applicant notes that there have been several previous instances where the Agency for Health Care Administration has approved CMR beds with fewer beds than meets the minimum requirement set forth by the above criterion. Lakeland Regional Medical Center, Inc.’s (CON #10164) proposed 32-bed unit is in compliance with this criterion.

Sebring Hospital Management Associates, LLC (CON #10165) maintains that the proposed seven-bed CMR unit is appropriately sized to meet the demands of the rehabilitation appropriate patients cared for at HRMC and the residents of its service area. The applicant asserts that establishing a 20-bed unit would be unnecessary when seven beds meet the defined demand. HRMC states that it will maintain cost-effectiveness, appropriate staffing levels and the highest quality of care in its seven-bed unit.

In addition, the applicant notes that there have been several previous instances where the Agency for Health Care Administration has approved CMR beds with fewer beds than meets the minimum requirement set forth by the above criterion.

(d) Medicare and Medicaid Participation. Applicants proposing to Establish a new comprehensive medical rehabilitation inpatient service shall state in their application that they will participate in the Medicare and Medicaid programs. HealthSouth Rehabilitation Hospital of Polk County LLC (CON #10162) conditions this application on participation in the Medicare and Medicaid programs. The applicant indicates that all of its rehabilitation hospitals in Florida participate in both programs.


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Haines City HMA, LLC (CON #10163) states that it is a full service hospital provider and a participant in the Medicare and Medicaid programs. The applicant maintains that it will ensure the provision of care to underserved/underprivileged persons by conditioning approval of CON #10163 to a combined seven percent of patient days to Medicaid and charity care patients. Lakeland Regional Medical Center, Inc. (CON #10164) states that it participates in the Medicare and Medicaid programs and will continue to do so in the proposed unit. The proposed CMR program will be a provider-based unit for reimbursement purposes—billing under the hospital’s existing provider number. Sebring Hospital Management Associates, LLC (CON #10165) states that it is a full service hospital provider and a participant in the Medicare and Medicaid programs. The applicant maintains that it will ensure the provision of care to underserved/underprivileged persons by conditioning approval of CON #10165 to a combined 10 percent of patient days to Medicaid and charity care patients.

(4) Required Staffing and Services.

(a) Director of Rehabilitation. CMR inpatient services must be provided

under the medical director of rehabilitation who is a board-certified or board-eligible physiatrist and has had at least two years of experience in the medical management of inpatients requiring rehabilitation services.

HealthSouth Rehabilitation Hospital of Polk County LLC (CON #10162) agrees that CMR services in the proposed facility will be provided under a medical director of rehabilitation who is a board-certified or board-eligible physiatrist with at least two years of experience in the medical management of inpatient requiring rehabilitation services. The applicant indicates that it will recruit from outside of the county if necessary to avoid disrupting services at any other programs. HealthSouth states that it will fill the medical director position prior to the hospital accepting patients. The applicant also states that the position will be contracted on an hourly basis.

Haines City HMA, LLC (CON #10163) indicates that the medical director of the proposed unit will be a board-certified or board-eligible physiatrist with at least two years of experience in the medical management of inpatients requiring rehabilitation services. The applicant states that the administrative policy and procedures used by


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Seven Rivers Regional Medical Center will be adopted and these specifically address the requirements of a medical director of rehabilitation.14

Lakeland Regional Medical Center, Inc. (CON #10164) states that a board-certified physiatrist licensed to practice in the state of Florida will medically manage the proposed rehabilitation unit. The applicant indicates that USF Health will assist in identifying and placing the medical director, who may be a member of the USF faculty, with the goal to eventually train physical medicine and rehabilitation residents at LRMC. Sebring Hospital Management Associates, LLC (CON #10165) indicates that the medical director of the proposed unit will be a board-certified or board-eligible physiatrist with at least two years of experience in the medical management of inpatients requiring rehabilitation services. The applicant states that the administrative policy and procedures used by Seven Rivers Regional Medical Center, which specifically address the requirements of a medical director of rehabilitation will be adopted.15

(b) Other Required Services. In addition to the physician services, CMR

inpatient services shall include at least the following services provided by qualified personnel: 1. Rehabilitation nursing 2. Physical therapy 3. Occupational therapy 4. Speech therapy 5. Social services 6. Psychological services 7. Orthotic and prosthetic services HealthSouth Rehabilitation Hospital of Polk County LLC (CON #10162) states that it will provide all of the above services plus respiratory services. The applicant provides a brief description of each CMR inpatient service on pages 70-73 of CON application #10162. Haines City HMA, LLC (CON #10163) will provide all of the identified services. The applicant indicates that therapy staff is budgeted to achieve a minimum of three hours of therapy per day and that respiratory staff will be added to support the unit on a full-time basis.

14 Seven Rivers’ administrative policies and procedures were included in Tab 11 of the Supporting Documents Volume of CON application #10163. 15 These were included in Tab 11 of the Supporting Documents Volume of CON application #10165.


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Orthotics and prosthetic services are specialized areas of care that will be utilized on a contractual basis as necessary. The applicant provides a brief description of each CMR inpatient service on pages 38-41 of CON application #10162. Lakeland Regional Medical Center, Inc. (CON #10164) indicates that all of these services will be available to patients at LRMC’s proposed CMR unit. Each of these services will be provided by individuals employed by the organization with the exception of orthotic and prosthetic services that will be provided by local area providers on a contracted basis. Sebring Hospital Management Associates, LLC (CON #10165) will provide all of the identified services. The applicant indicates that therapy staff is budgeted to achieve a minimum of three hours of therapy per day and that respiratory staff will be added to support the unit on a full-time basis. Orthotics and prosthetic services are specialized areas of care that will be utilized on a contractual basis as necessary. The applicant provides a brief description of each CMR inpatient service on pages 34-37 of CON application #10165.

(5) Criteria for Determination of Need:

(a) Bed Need. A favorable need determination for proposed new expanded comprehensive medical rehabilitation inpatient services shall not normally be made unless a bed need exists according to the numeric need methodology in 59C-1.039(5)(c), Florida Administrative Code. The applicants are applying in the absence of need and all contend “not normal” circumstances justify approval of their projects.

(b) Most Recent Average Annual District Occupancy Rate. Regardless of whether bed need is shown under the need formula in paragraph (5) (c), no additional comprehensive medical rehabilitation inpatient beds shall normally be approved for a district unless the average annual occupancy rate of the licensed comprehensive medical rehabilitation inpatient beds in the district was at least 80 percent for the 12-month period ending six months prior to the beginning date of the quarter of the publication of the fixed bed need pool.


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District 6’s CMR occupancy rate was 65.87 percent for the 12-month period ending December 31, 2011. As presently stated, all applicants contend “not normal” circumstances justify approval of their projects.

(c) Priority Considerations for Comprehensive Medical Rehabilitation

Inpatient Services Applicants. In weighing and balancing statutory and rule review criteria, the Agency will give priority consideration to: 1. An applicant that is a disproportionate share hospital as

determined consistent with the provisions of section 409.911, Florida Statutes.

HealthSouth Rehabilitation Hospital of Polk County LLC (CON #10162) is not a disproportionate share hospital. The applicant notes that it cannot meet this preference factor as the facility will be designated as a Class III freestanding CMR hospital. The applicant states that the proposed hospital will participate in indigent care through the indigent care assessment and, as a for-profit organization, will provide the community at large as well as the states with tax revenues with which to provide programs and services to underserved persons. In addition, HealthSouth has a “No Insurance Discount Policy” which is applicable to all existing hospitals and will be adopted at the proposed facility. Haines City HMA, LLC (CON #10163) is not a disproportionate share hospital. However, the applicant indicates that it maintains an indigent care policy and provides services to patients who are financially unable to pay for their care. Heart of Florida’s policy is to write off a patient’s entire account balance for indigent care patients—this policy will extend to patients admitted to the proposed CMR unit. The applicant states that it provided $9,031,776 in indigent/charity care in 2011.

Lakeland Regional Medical Center, Inc. (CON #10164) is not a disproportionate share hospital. The applicant states that LRMC’s affiliation with USF Health for graduate medical education training will result in LRMC being designated as a statutory teaching hospital. LRMC anticipates qualifying as a Medicaid disproportionate share hospital based on the patient population drawn to a teaching hospital.


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Sebring Hospital Management Associates, LLC (CON #10165) is not a disproportionate share hospital. However, the applicant indicates that it maintains an indigent care policy and provides services to patients who are financially unable to pay for their care. HRMC’s policy is to write off a patient’s entire account balance for indigent care patients—this policy will extend to patients admitted to the proposed CMR unit. The applicant states that it provided $699,622 in indigent/charity care in 2011.

2. An applicant proposing to serve Medicaid-eligible persons. HealthSouth Rehabilitation Hospital of Polk County LLC (CON #10162) indicates that all HealthSouth rehabilitation hospitals in Florida participate in the Medicaid program and the proposed facility will serve Medicaid patients. The applicant states that it will condition the approval of CON application #10162 on providing a minimum of 1.5 percent of patient days to Medicaid patients.

Haines City HMA, LLC (CON #10163) maintains that it cares for all patients regardless of their ability to pay. The applicant states that it provided $9,031,776 in indigent/charity care, $15,841,759 in conventional Medicaid and $9,773,154 in care for Medicaid HMO patients. Per its 2011 AHCA financial report, 22.5 percent of its admissions were Medicaid/Medicaid HMO. Heart of Florida asserts that it will continue to serve indigent/charity care and Medicaid patients and will apply the same practices to its CMR unit.

Lakeland Regional Medical Center, Inc. (CON #10164) states that it is currently a Medicaid program provider and the proposed program will be included as part of this commitment. The applicant also conditioned approval of the project on the provision of 6.0 percent of the CMR unit’s total annual patient days to Medicaid and charity care patients.

Sebring Hospital Management Associates, LLC (CON #10165) maintains that it cares for all patients regardless of their ability to pay. The applicant states that it provided $699,622 in indigent/charity care, $4,274,882 in conventional Medicaid and $759,939 in care for Medicaid HMO patients. Per its 2011 AHCA financial report, 21 percent of its admissions were Medicaid/ Medicaid HMO. HRMC asserts that it will continue to serve indigent/charity care and Medicaid patients and will apply the same practices to its CMR unit.


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3. An applicant that is a designated trauma center, as defined in Rule 64J-2.011, Florida Administrative Code. HealthSouth Rehabilitation Hospital of Polk County LLC (CON #10162) is not a designated trauma center. The applicant notes that it cannot qualify for trauma center status as the proposed facility will be a specialty hospital. HealthSouth maintains that it will work with hospitals in Polk County with trauma status to provide post-acute care for trauma patients. Haines City HMA, LLC (CON #10163) is not a designated trauma center. Lakeland Regional Medical Center, Inc. (CON #10164) is a designated Level II trauma center. Sebring Hospital Management Associates, LLC (CON #10165) is not a designated trauma center.

(6) Access Standard. Comprehensive medical rehabilitation inpatient

services should be available within a maximum ground travel time of two hours, under average travel conditions, for at least 90 percent of the district’s total population.

The reviewer notes that the access standard is currently met for District 6 CMR services. HealthSouth Rehabilitation Hospital of Polk County LLC (CON #10162) maintains that this access standard has been met for all districts since 1991 and is only a worst case criterion without regard to the actual dynamics of patient referrals for CMR services. The applicant states that patients needing CMR services generally seek to remain in the county where they received acute care hospital services because of age, medical fragility and a desire for continuity of care.

The applicant contends that if CMR services are not offered in Polk County in a freestanding hospital that is not affiliated with an acute care hospital, many patients will not have reasonable access to CMR services regardless of driving times. Haines City HMA, LLC (CON #10163) asserts that CMR beds are geographically inaccessible to residents of the Heart of Florida service area. The applicant indicates that when CMR services are available in a particular geographic area, residents utilize it and when not available, such services are generally not provided to patients despite their clinical indications of medical necessity for CMR services.


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The applicant does note that the Winter Haven Hospital CMR unit is in Polk County and within a two-hour drive for service area residents but that this unit has very few vacant beds and only a handful of Heart of Florida’s physicians admit patients to Winter Haven Hospital. The three other District 6 facilities are between 68 and 107 minutes from the service area. Heart of Florida maintains that travel of this distance can be traumatic for elderly residents. Heart of Florida states that the 120-minute travel standard is outdated. The applicant indicates that in today’s technological advances relative to rehabilitation services, requirement for family and caregiver participation are necessity. Heart of Florida asserts that accessing a CMR service 120 minutes away is impractical, illogical and extremely poor health planning.

The applicant maintains that the proposed 14-bed CMR unit would be geographically accessible to all residents within its service area. Rehabilitation appropriate patients from the service area would utilize this level of care and ultimately benefit from improved patient outcomes and greater functional improvements with less debility in the future. Lakeland Regional Medical Center, Inc. (CON #10164) states “While the statutory access standards have been met in District 6, the special challenges impacting elderly drivers has been previously noted in the application under barriers to access”. Sebring Hospital Management Associates, LLC (CON #10165) asserts that CMR beds are geographically inaccessible to residents of the HRMC service area. The applicant indicates that when CMR services are available in a particular geographic area, residents utilize it and when not available, such services are generally not provided to patients despite their clinical indications of medical necessity for CMR services. The applicant notes that the Winter Haven Hospital CMR unit is within a two hour drive for service area residents (approximately 50 miles or 67-minute drive). The three other District 6 facilities are between 109 and 115 minutes from the service area. HRMC maintains that travel of this distance can be traumatic for elderly residents. HRMC states that the 120-minute travel standard is outdated. The applicant indicates that in today’s technological advances relative to rehab services, requirement for family and caregiver participation are a necessity. HRMC asserts that accessing a CMR service 120 minutes away is impractical, illogical and extremely poor health planning.


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The applicant maintains that the proposed seven-bed CMR unit would be geographically accessible to all residents within its service area. Rehabilitation appropriate patients from the service area would utilize this level of care and ultimately benefit from improved patient outcomes and greater functional improvements with less debility in the future.

(7) Quality of Care.

(a) Compliance with Agency Standards. Comprehensive medical

rehabilitation inpatient series shall comply with the agency standards for program licensure described in section 59A-3, Florida Administrative Code. Applicants who submit an application that is consistent with the Agency licensure standards are deemed to be in compliance with this provision.

HealthSouth Rehabilitation Hospital of Polk County LLC (CON #10162) states that all of HealthSouth’s Florida hospitals are in substantial compliance with Agency standards for program licensure as described by Section 59A-3, Florida Administrative Code. The applicant maintains that it has invested in state-of- the-art quality measurement systems to carefully monitor processes and outcomes, allowing each facility to maintain the highest possible levels of quality. Procedures and outcomes are regularly measured at every HealthSouth hospital and this policy will be implemented at the proposed facility. The applicant provides a brief summary of its quality and clinical excellence program on pages 78-80 of CON application #10162. Haines City HMA, LLC (CON #10163) indicates that its mission is to provide high quality compassionate health care services to the communities it serves. The applicant states that it, along with all HMA hospitals in the State of Florida, operate in compliance with licensure standards described in section 59A-3, Florida Administrative Code. Heart of Florida has existing policies and procedures specific to its Department of Rehabilitation Services and its whole hospital which will be modified as necessary to incorporate the requirements and expectations of the CMR program and its staff. The applicant states that it will look to Seven Rivers Regional Medical Center for CMR related policies, procedures and protocols. Heart of Florida supplied copies of its policies and procedures manual (index only) as well as Seven Rivers Regional Medical Center’s CMR policies and procedures manual in tabs six and 11 of the Supporting Documents volume of CON application #10163.


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Lakeland Regional Medical Center, Inc. (CON #10164) directly addresses this criterion presenting a page and a half discussion including its quality performance improvement program, current accreditations and certifications, and its proposed program development committee to oversee CMR program implementation. LRMC stated that it will seek CARF accreditation as a Comprehensive Integrated Inpatient Rehabilitation Program as well as a Stroke Specialty Program and Joint Commission certification for its Stroke Rehabilitation Program. The applicant also indicates it will use the Uniform Data System for Medical Rehabilitation (UDSMR) to measure rehabilitation patient outcomes. Sebring Hospital Management Associates, LLC (CON #10165) indicates that its mission is to provide comprehensive, compassionate, quality health care for the needs of its expanding community. HRMC commits to consistently striving toward meeting goals to its patients, physicians, employees and its community. The applicant states that it, along with all HMA hospitals in the State of Florida, operate in compliance with licensure standards described in section 59A-3, Florida Administrative Code. HRMC has existing policies and procedures specific to its Department of Rehabilitation Services and its hospital which will be modified as necessary to incorporate the requirements and expectations of the CMR program and its staff. The applicant states that it will look to Seven Rivers Regional Medical Center for CMR related policies, procedures and protocols. HRMC supplied copies of its policies and procedures manual (policy index only) as well as Seven Rivers Regional Medical Center’s CMR policies and procedures manual in tabs six and 11 of the Supporting Documents volume of CON application #10165.

(8) Services Description. An applicant for comprehensive medical

rehabilitation inpatient services shall provide a detailed program description in its certificate of need application including:

(a) Age group to be served.

HealthSouth Rehabilitation Hospital of Polk County LLC (CON #10162) states that it will provide CMR services to patients of all ages.


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Haines City HMA, LLC (CON #10163) states that the predominant age groups to be served within the proposed unit are patients in the 65+ age cohort with all patients being at least 18 years of age. The applicant asserts that it will serve all patients without regard to race, creed, color, sex, age or national origin as long as they meet admission criteria. Lakeland Regional Medical Center, Inc. (CON #10164) indicates that it will serve adults in the proposed CMR unit. The applicant states that pediatrics (0-15 years of age) will be served on a case by case basis. Sebring Hospital Management Associates, LLC (CON #10165) states that the predominant age groups to be served within the proposed unit are patients in the 65+ age cohort with all patients being at least 18 years of age. The applicant asserts that it will serve all patients without regard to race, creed, color, sex, age or national origin as long as they meet admission criteria.

(b) Specialty inpatient rehabilitation services to be provided, if

any (e.g. spinal cord injury; brain injury)

HealthSouth Rehabilitation Hospital of Polk County LLC (CON #10162) supplied a description of the following specialty programs it proposes to provide:

Stroke Rehabilitation Program Traumatic Brain Injury Program Lymphedema Management Program Neurological Rehabilitation Program Arthritis Program Wound Care Program Spinal Cord Injury Program Orthopedic Rehabilitation Program Spasticity Management Program Hand Rehabilitation Treatment Balance and Vestibular Program Fibromyalgia Rehabilitation Program Chronic Pain Management Program.


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Haines City HMA, LLC (CON #10163) indicates that the proposed program will be focused on the CMS 13 diagnosis as the majority of its patients to be admitted to the unit. Programs for these patients will be specifically designed to assure appropriate treatment and optimal outcomes and FIM gains in the shortest period of time. Heart of Florida will also seek specialty certification by The Joint Commission for its stroke rehabilitation program. Lakeland Regional Medical Center, Inc. (CON #10164) states that the proposed program will be designed to provide intensive rehabilitation therapy in a resource intensive inpatient 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 team approach to the delivery of rehabilitation care. The applicant maintains that based on the tertiary nature of its patient base and the high volume of trauma patients admitted through the emergency room the proposed unit will have an emphasis on neurological and severe orthopedic impairments. The primary focus of the rehabilitation program will be the treatment of patients who have experienced one or more of the following conditions:

Stroke Brain injury (traumatic and non-traumatic) Spinal cord injury (traumatic and non-traumatic) Major multiple trauma Neurological conditions Lower extremity fracture Other orthopedic conditions Amputation Arthritis Chronic pain Cardiac conditions Oncology Pulmonary conditions Other disabling conditions.

LRMC indicates that it will develop a stroke specialty program that will provide a seamless transition for patients admitted to the primary stroke center who require additional care following their acute care stay. The applicant states that LRMC provides physical, occupational and speech/language therapy services and


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“has a long history of providing high quality outpatient rehabilitation therapy service to both its current inpatient population as well as to patients being served by its outpatient therapy clinics”. Sebring Hospital Management Associates, LLC (CON #10165) indicates that the proposed program will be focused on the CMS 13 diagnosis as the majority of its patients to be admitted to the unit. Programs for these patients will be specifically designed to assure appropriate treatment and optimal outcomes and FIM gains in the shortest period of time.

(c) Proposed staffing, including qualifications of the medical

director, a description of staffing appropriate for any specialty program, and a discussion of the training and experience requirements for all staff who will provide comprehensive medical rehabilitation inpatient services.

HealthSouth Rehabilitation Hospital of Polk County LLC (CON #10162): Schedule 6 indicates that during year two (2016) of operation, the applicant plans to have the following staff:

Administration (21.25 FTEs) Nursing Staff (50.68 FTEs) includes 2.0 FTE unit secretaries Ancillary (26.03 FTEs) Dietary (7.71 FTEs) Social Services (2.0 FTEs) Housekeeping (6.17 FTEs) Laundry (by contract, no stated FTE) Plant Maintenance (2.5 FTEs).

The applicant states that the medical director will be contracted on an hourly basis and will be a board-certified or board-eligible physiatrist with at least two years of experience in the medical management of inpatients requiring rehabilitation services. HealthSouth maintains that the proposed facility will be fully staffed with trained, qualified professionals. The applicant indicates that it will recruit employees from other HealthSouth Florida facilities to commence operations of the proposed facility. HealthSouth asserts that policies and procedures across facilities are consistent and that high quality care will be provided to patients and their families at the proposed facility.


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The applicant maintains that it will train all medical staff and employees on the significance of a culture of safety. HealthSouth also offers both classroom and online course to expand knowledge and skills on subjects such as cultural competency, expanding career opportunities, management skills and medical training. Haines City HMA, LLC (CON #10163): Schedule 6 indicates that during year two (2015) of operation, the applicant plans to add the following staff: Administration (1.0 FTE) Nursing Staff (21.90 FTEs) Ancillary (9.0 FTEs).

The applicant notes that this staffing schedule is based upon actual staffing patterns at its sister facility, Seven Rivers Regional Medical Center. Therapy staff is budgeted to achieve a minimum of three hours of therapy per day. Lakeland Regional Medical Center, Inc. (CON #10164): Schedule 6 indicates that during year two (ending June 2015) of operation, the applicant plans to have added the following staff: Program Director (0.5 FTE) Administration (5 FTEs) Nursing Staff (26.4 FTEs) includes 2.8 FTEs for unit secretary Ancillary (11.5 FTEs) Dietary (3.1 FTEs) Social Services (1.5 FTEs) Housekeeping (3.1 FTEs) Laundry (2.2 FTEs) Plant Maintenance (1.0 FTE).

As stated previously, the proposed unit will be medically managed by a board-certified physiatrist. The applicant indicates that USF Health will assist in identifying and placing the medical director, who may be a member of the USF faculty. The reviewer notes that a medical director was not noted in the applicant’s Schedule 6 but was identified in the Schedule 6 notes, stating “the medical director will be a physical medicine and rehabilitation specialist assigned for at least 20 hours per week for medical management and supervision of the CMR unit.” The applicant states that the medical director will work in conjunction with the program director to maintain the proposed unit.


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The applicant provides a detailed explanation of the roles and training requirements for the members of the CMR team on pages 59-62 of CON application #10164.

Sebring Hospital Management Associates, LLC (CON #10165): Schedule 6 indicates that during year two (2015) of operation, the applicant plans to add the following staff:

Administration (1.0 FTE) Nursing Staff (19.15 FTEs) Ancillary (5.0 FTEs).

The applicant notes that this staffing schedule is based upon actual staffing patterns at its sister facility, Seven Rivers Regional Medical Center. Therapy staff is budgeted to achieve a minimum of three hours of therapy per day.

(d) A plan for recruiting staff, showing expected sources of staff.

HealthSouth Rehabilitation Hospital of Polk County LLC (CON #10162) states that it is prepared to put forth special efforts to attract quality staff required for its rehabilitation programs and has initiated a number of innovative approaches to recruit and retain staff throughout its Florida facilities as well as throughout its corporate structure. Methods of staff recruitment include: In-house job posting Corporate recruiting Employment open house Professional recruitment firms Participation in local job fairs Referral bonuses for select positions Advertising in local newspapers, specialty newsletter magazines Advertising in colleges that have specialty programs Strong clinical affiliations program with allied health fields with

a wide variety of universities Participation in professional conferences and educational events

on a local and regional level HealthSouth Corporation clinical travelers Hard to fill positions are advertised in specialty journals Flyers mailed to home addresses from nationwide mailing lists.

HealthSouth has residency programs with several schools of allied health, actively participates in professional organizations, both locally and nationally, and if necessary offers a sign-up bonus to attract high quality personnel. HealthSouth also has established


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affiliations with health professional education programs including medical schools, schools of nursing, local vocational/technical schools and graduate programs for psychologists, physical therapy, occupational therapy, speech therapy and therapeutic recreation. The applicant states that in addition to local recruitment efforts, it can rely on support HealthSouth’s corporate recruiting department to assist in recruitment of all professional areas. Retention activities include providing benefits such as corporate sponsored continuing education capabilities (rehabilitation training network), generous continuing education allowances, reimbursement for professional licenses, reimbursement of national dues, annual merit pay increases, medical and dental insurance coverage, paid holidays and sick leave, flexible spending accounts, 401-K retirement investment plan, life insurance, employee stock benefit plan, various employee recognition programs and activities, management development programs, mentoring programs, tuition reimbursement assistance for staff attending relevant courses/seminars and a scholarship program. The applicant states it will have an ongoing human resources program to coordinate the needs of its personnel. Haines City HMA, LLC (CON #10163) indicates that it is a full service hospital with appropriately qualified and credentialed staff providing all of its medical/surgical services, including rehabilitation services. Heart of Florida supplied its strategy for recruiting additional staff for the proposed CMR program: In-house job posting HMA corporate recruiting Other HMA hospitals around the country Employment open house Professional recruitment firms Participation in local job fairs Referral bonuses for select positions Advertising in local newspapers, specialty newsletter/magazines Advertising in colleges that have specialty programs Strong clinical affiliations program with Allied Health fields with


on a local and regional level Hard to fill positions are advertised in specialty journals.


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The applicant states that ongoing retention activities include: reimbursement for professional licenses, reimbursement of national dues, annual merit pay increases, medical/dental insurance coverage, paid holidays/sick leave, retirement savings plan (401-K), life insurance, accident insurance, leadership development opportunities, leadership retreats and a “buddy/peer” program. Heart of Florida asserts that it will continue to provide the necessary resources for coordinating the needs of its personnel. Lakeland Regional Medical Center, Inc. (CON #10164) maintains that it has an 80-year history of recruiting and retaining highly qualified health care personnel. LRMC is the seventh largest employer in the Tampa Bay area with over 4,000 employees. The applicant was awarded Best Places to Work by Polk Works WorkForce for 2010. LRMC employs a Nursing Governance Structure to allow nurses the opportunity to participate through unit and hospital wide councils providing structural empowerment. LRMC indicates that its recruitment plan is developed and managed by its HR department and traditionally, LRMC has staffed units through outside hiring and promotion and/or transfer of qualified employees whenever possible. Furthermore, LRMC states that it encourages and supports employees in efforts to obtain post-graduate sub-specialty certifications in individual professions. Nurses assigned to the proposed rehabilitation unit will be encouraged to obtain their certification in rehabilitation nursing. The applicant’s “Education Assistance” policy for providing financial assistance to employees is included in CON application #10164, Volume 2 – LRMC Policies.

Additional means for recruiting staff include partnering with schools and institutions specializing in the particular field for which positions are being recruited. LRMC states that it has contracts with a significant number of universities, including: Nova Southeastern University, Fort Lauderdale, Florida University of South Florida, Tampa University of St. Augustine, St. Augustine, Florida Wheeling Jesuit University, Wheeling, West Virginia


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Polk State College, Winter Haven South University, Tampa Keiser University, Tampa Florida Southern College, Lakeland.

Sebring Hospital Management Associates, LLC (CON #10165) indicates that it is a full service hospital with appropriately qualified and credentialed staff providing all of its medical/surgical services, including rehabilitation services. HRMC supplied its strategy for recruiting additional staff for the proposed CMR program: In-house job posting

HMA corporate recruiting Other HMA hospitals around the country Employment open house Professional recruitment firms Participation in local job fairs Referral bonuses for select positions Advertising in local newspapers, specialty newsletter/magazines Advertising in colleges that have specialty programs Strong clinical affiliations program with Allied Health fields with


on a local and regional level Hard to fill positions are advertised in specialty journals.

The applicant states that ongoing retention activities include: reimbursement for professional licenses, reimbursement of national dues, annual merit pay increases, medical/dental insurance coverage, paid holidays/sick leave, retirement savings plan (401-K), life insurance, accident insurance, leadership development opportunities, leadership retreats and a “buddy/peer” program. HRMC states that it will continue to provide the necessary resources for coordinating the needs of its personnel.


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(e) Expected sources of patient referrals.

HealthSouth Rehabilitation Hospital of Polk County LLC (CON #10162) states that the primary source of patient referrals will be through area health care providers. The applicant indicates that since it does not operate any acute care general hospitals, it can expect to receive patient referrals from general hospitals in the area. HealthSouth’s past experience has shown this to be true. The applicant maintains that it has a track record of successfully developing freestanding CMR hospitals in medical markets where multiple acute care hospitals have CMR units. As a national provider of inpatient rehabilitation, HealthSouth asserts that is has successfully developed a regional presence at the majority of facilities it operates. HealthSouth states that other referral resources include nursing homes, physicians, assisted living facilities, home health agencies and word of mouth. Furthermore, a small number of patients may live out of state. Haines City HMA, LLC (CON #10163) expects referrals to come primarily from the hospital’s medical/surgical patients being discharged from another unit within the hospital. The applicant indicates that some patients may be admitted from a short-term stay in a nursing home with that stay having been post-hospitalization and geared to strengthening the patient sufficient to tolerate the aggressiveness of a CMR program. Lakeland Regional Medical Center, Inc. (CON #10164) contends that it submitted CON application #10164 based on the need demonstrated within its own patient base and with the expectation that the inpatient side will be the primary referral source for the proposed unit. Sebring Hospital Management Associates, LLC (CON #10165) expects referrals to come primarily from the hospital’s medical/surgical patients being discharged from another unit within the hospital. The applicant indicates that some patients may be admitted from a short-term stay in a nursing home with that stay having been post-hospitalization and geared to strengthening the patient sufficient to tolerate the aggressiveness of a CMR program.


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(f) Projected number of comprehensive medical rehabilitation

inpatient services patient days by payer type, including Medicare, Medicaid, private insurance, self-pay and charity care patient days for the first two years of operation after completion of the proposed project.

HealthSouth Rehabilitation Hospital of Polk County LLC (CON #10162) indicates that the 50-bed facility will achieve 83 percent occupancy in the third-year of operation. The projected patient days reflect a payer mix of 75.7 percent Medicare and Medicare managed care, 1.8 percent Medicaid/Medicaid HMO, 21.5 percent commercial managed care/other and 1.0 percent charity care as defined by Florida Statutes. See the table below.

HealthSouth Rehabilitation Hospital of Polk County

Projected CMR Payer Mix: Years Ending 2015 and 2016

Payer

Year One Year Two Days Percent Days Percent

Medicare 6,984 73.8% 9,428 73.8% Medicare HMO 178 1.9% 243 1.9% Medicaid 85 0.9% 115 0.9% Medicaid HMO 85 0.9% 115 0.9% Commercial Managed Care 1,627 17.2% 2,197 17.2% Other 407 4.3% 549 4.3% Self-Pay/Charity 95 1.0% 128 1.0% Total 9,461 100.0% 12,775 100.0%

Source: CON application #10162, Schedule 7.

Haines City HMA, LLC (CON #10163) provided the following table.

Heart of Florida Forecasted Patient Days by Payer

Year One and Two of Operation 2014 2015 Medicare 1,534 2,173 Medicare HMO 658 931 Medicaid 63 89 Medicaid HMO 125 177 Insurance 10 14 Other Managed Care 282 399 Self-Pay 115 163 Other 94 133 Total 2,881 4,080


The applicant states that the projected patient days reflect a payer mix of 76 percent Medicare/Medicare HMO, approximately 10.5 percent Medicaid/Medicaid HMO/charity care (self-pay) combined and 10 percent commercial insurance/HMO/PPO with the balance being other payers.


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Lakeland Regional Medical Center, Inc. (CON #10164) provided the following table.


Projected CMR Payer Mix: Years Ending June 30, 2015 and June 30, 2016

Payer

Year One Year Two Days Percent Days Percent

Medicare 3,225 47.6% 3,892 47.6% Medicare HMO 1,389 20.5% 1,676 20.5% Medicaid 481 7.1% 580 7.1% Medicaid HMO 108 1.6% 131 1.6% Commercial Managed Care 1,253 18.5% 1,513 18.5% Other 149 2.2% 180 2.2% Self-Pay/Charity 169 2.5% 204 2.5% Total 6,775 100.0% 8,176 100.0%

Source: CON application #10164, Schedule 7.

Sebring Hospital Management Associates, LLC (CON #10165) provided the following table.

HRMC Forecasted Patient Days by Payer

Year One and Two of Operation 2014 2015 Medicare 11,281 11,845 Medicaid 2,457 2,580 Medicare/Medicaid HMO 2,325 2,441 Commercial Insurance 2,741 2,878 Self-Pay/Charity 776 815 Total 19,580 20,559


The reviewer notes that in examining the applicant’s Schedule 7, it appears that HRMC has incorrectly reproduced the entire hospital’s forecasted patient days for 2014-2015. The reviewer has reproduced the pertinent data below from the applicant’s Schedule 7B.

HRMC Forecasted Patient Days by Payer

Year One and Two of Operation 2014 2015 Medicare 816 1,122 Medicaid 236 324 Medicare/Medicaid HMO 236 323 Commercial Insurance 217 300 Self-Pay/Charity 84 115 Total 1,589 2,184

Source: CON application #10165, Schedule 7B.


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The applicant states that the projected patient days reflect a payer mix of 57.6 percent Medicare, approximately 16.5 percent Medicaid/Medicaid HMO/charity care (self-pay) combined and 25.9 percent commercial insurance/HMO/PPO. The reviewer notes that this is incorrect based upon the applicant’s Schedule 7B, the accurate payer mix is as follows: 62.4 percent Medicare, 23.9 percent Medicaid/Medicaid HMO/charity care (self-pay) combined and 13.7 percent commercial insurance.

(g) Admission policies of the facility with regard to charity care

patients.

HealthSouth Rehabilitation Hospital of Polk County LLC (CON #10162) indicates that it will not discriminate against any person and will treat all patients regardless of their ability to pay should those patients meet the clinical admission requirements. The applicant restates it proposed conditions to provide 1.5 percent of the facility’s total annual patient days to Medicaid patients and 1.0 percent to charity care patients as defined by Florida Statutes. HealthSouth states that uninsured patients that do not qualify for charity care receive a discount from billed charges for prompt pay. The reviewer provides the payer types for Polk County residents discharged from inpatient rehabilitation facilities in the table below.

Total Polk County Discharges by Payer From Inpatient Rehabilitation Facilities

Calendar Year 2011 Payer Type

Average Length of Stay

Patient Days Discharges Total % Total %

Commercial Insurance 13.49 2,372 12.30 165 12.59 Commercial Liability Coverage 14.52 500 2.59 34 2.59 Medicaid 32.75 131 0.68 4 0.31 Medicaid Managed Care 16.1 378 1.96 25 1.91 Medicare 13.20 14,734 76.41 1,000 76.28 Medicare Managed Care 15.23 833 4.32 54 4.12 Non-Payment 13.375 69 0.36 5 0.37 Other State & Local Govt. 10.67 126 0.65 12 0.91 Self-Pay/Under-Insured 10.75 43 0.23 4 0.31 Workers’ Compensation 12.125 97 0.50 8 0.61 Total 13.85 19,283 100.00 1,311 100.00 Source: Florida Center for Health Information and Policy Analysis CY 2011 database.


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Haines City HMA, LLC (CON #10163) states that it maintains a charity care policy and provides services to patients who are financially unable to pay for their care. The policy and practice at Heart of Florida is to write off a patient’s entire account balance for charity and indigent care patients. The applicant indicates that it provided more than nine million in indigent/charity care. The applicant presents its Medicaid contractual allowances to demonstrate its historical provision of care to underserved groups. Heart of Florida notes that in fiscal year 2011, it provided more than $162 million in uncompensated Medicaid/Medicaid HMO/charity care services. See the table below.

Heart of Florida

Medicaid and Charity Deductions from Revenue Fiscal Year 2011

Medicaid $83,106,543 Medicaid HMO $69,982,872 Charity Care $9,031,776 Total $162,121,191 Source: CON application #10163, page 55.

Heart of Florida asserts that its commitment to serving the medically underserved will continue with the implementation of the proposed program. The applicant notes that it will condition CON #10163 on the provision that it will provide seven percent of its total patient days to a combination of Medicaid, Medicaid HMO and charity care (including self-pay) patients. The reviewer notes the actual payer types for Polk County residents discharged from inpatient rehabilitation facilities. See the table below.







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Lakeland Regional Medical Center, Inc. (CON #10164) states that its current admission criteria for charity care patients will remain unchanged as a result of the proposed unit. The applicant includes a copy of its financial assistance policy in CON application #10164, Volume 2, LRMC Policies. The applicant contends that among Polk County hospitals, it provides the majority of Medicaid patient days and accounts for over two thirds of the charity care provided by hospitals in Polk County. Accounting for over twice the volume of Medicaid days and three times the amount of charity care of the next highest provider in Polk County, LRMC contends that there is a clear indication of its role as the safety-net provider to residents. See the table below.

Comparison of Hospitals in Polk County District 6, Subdistrict 2

Fiscal Year 2011 Based on FHURS Definitions

Polk County Hospitals

Control

Licensed Beds

Utilization Data

Admissions

Patient Days

ED

Visits

Medicaid Patient Days

Charity

Care (000’s) Lakeland Regional Medical Center

NFP

851

37,099

176,656

156,630

27,417

$165,042.5

HMA-Bartow Regional Medical Center

FP

72

5,076

19,969

30,916

2,947

$7,113.5

HMA-Heart of Florida Regional Medical Center

FP

194

11,907

42,411

49,106

8,518

$9,031.8

CHS-Lake Wales Medical Center

FP

160

5,709

22,380

23,390

2,548

$13,909.5

Winter Haven Hospital NFP 527 15,319 68,647 60,736 10,712 $52,436,.30 Total 1,804 75,110 330,063 320,778 52,142 $247,533.5 LRMC as % of Total 47.2% 49.4% 53.5% 48.8% 52.6% 66.7% Source: CON application #10164, page 64.

The reviewer notes the actual payer types for Polk County residents discharged from inpatient rehabilitation facilities. See the table below.


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Sebring Hospital Management Associates, LLC (CON #10165) states that it maintains a charity care policy and provides services to patients who are financially unable to pay for their care. The policy and practice at HRMC is to write off a patient’s entire account balance for charity and indigent care patients. The applicant indicates that it provided more than $700,000 in indigent/charity care. The applicant presents its Medicaid contractual allowances to demonstrate its historical provision of care to underserved groups. Heart of Florida notes that in fiscal year 2011, it provided more than $31.5 million in uncompensated Medicaid/Medicaid HMO/charity care services. See the table below.

HRMC


Medicaid $27,286,692 Medicaid HMO $3,563,169 Charity Care $699,622 Total $31,549,483 Source: CON application #10165, page 51.

HRMC asserts that its commitment to serving the medically underserved will continue with the implementation of the proposed program. The applicant notes that it will condition CON #10165 on the provision that it will provide 10 percent of its total patient days to a combination of Medicaid, Medicaid HMO and charity care (including self-pay) patients.

The reviewer notes the actual payer types for Highlands County residents discharged from inpatient rehabilitation facilities. See the table below.


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Total Highlands County Discharges by Payer

From Inpatient Rehabilitation Facilities Calendar Year 2011

Payer Type



Commercial Insurance 8.75 81 5.45 9 8.65 Commercial Liability Coverage 12.33 45 3.03 4 3.85 Medicaid 19.29 135 9.08 7 6.73 Medicaid Managed Care 14.5 29 1.95 2 1.92 Medicare 14.69 1,094 73.62 76 73.08 Medicare Managed Care 22.25 89 5.99 4 3.85 Self-Pay/Under-Insured 5 5 0.34 1 0.96 Workers’ Compensation 8 8 0.54 1 0.96 Total 14.59 1,486 100.00 104 100.00 Source: Florida Center for Health Information and Policy Analysis CY 2011 database.

(9) Utilization Reports. Facilities providing licensed comprehensive

medical rehabilitation inpatient services shall provide utilization reports to the Agency or its designee, as follows:

(a) Within 45 days after the end of each calendar quarter,

facilities shall provide a report of the number of comprehensive medical rehabilitation inpatient services discharges and patient days which occurred during the quarter.

(b) Within 45 days after the end of each calendar year, facilities shall provide a report of the number of comprehensive medical rehabilitation inpatient days which occurred during the year, by principal diagnosis coded consistent with the International Classification of Disease (ICD-9).

HealthSouth Rehabilitation Hospital of Polk County LLC (CON #10162) states that it will participate in the Agency’s data collection activities and with the local health council in accordance with Chapter 408 of the Florida Statutes. Haines City HMA, LLC (CON #10163) indicates that as an existing acute care hospital, it complies and will continue to comply with all the reporting requirements of the Agency for Health Care Administration and the local health council. Lakeland Regional Medical Center, Inc. (CON #10164) indicates that it currently reports inpatient acute care discharge data to the Agency and its designee consistent with this provision. The applicant commits to collect and report data for patients discharged from the proposed inpatient rehabilitation unit.


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Sebring Hospital Management Associates, LLC (CON #10165) indicates that as an existing acute care hospital, it complies and will continue to comply with all the reporting requirements of the Agency for Health Care Administration and the local health council.

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

accessibility and extent of utilization of existing health care facilities and health services in the applicant’s service area? ss. 408.035(1)(a) and (b), Florida Statutes.

District 6 has 141 licensed and zero approved CMR beds. District 6’s 141 licensed CMR beds experienced 65.87 percent utilization during the 12-month period ended December 31, 2011. The applicants are applying outside of the fixed need pool.

HealthSouth Rehabilitation Hospital of Polk County LLC (CON #10162) contends that because of circumstances in Polk County’s medical market, residents do not have reasonable access to CMR service. The applicant maintains that the lack of reasonable access to CMR services reduces the quality of health care and worsens patient outcomes. The applicant indicates that there is friction amongst the acute care hospitals in Polk County as demonstrated by low referral rates to the Winter Have CMR unit. HealthSouth contends that both Heart of Florida and LRMC have not made a commitment to providing patients a full continuum of rehabilitative care until this current batching cycle. In addition, the applicant asserts that both hospitals have acute care services that demand both capital and management attention, leaving fewer resources for CMR inpatient services. HealthSouth indicates that skilled nursing facilities (SNFs) have been used as a substitute for CMR services in Polk County as these do provide certain (less intense) rehabilitation services and because of area acute care hospitals’ hesitancy to discharge to a CMR unit in a competitor hospital.


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The applicant notes that there are numerous situations in which SNF-level care cannot be substituted for CMR-level care referring to MedPAC data that shows readmission to acute care from SNF is 22 percent compared to a 9.4 percent readmission rate for inpatient rehabilitation providers. HealthSouth details 14 major differences in the two settings, these differences are listed below: Patient diagnoses are limited in CMR Sites from which patients can be admitted Length of stay is shorter in CMR Interdisciplinary team approach Attending physician visits Medical director specialty Registered nurse availability Multiple and intensive therapy Physician must evaluate patient within 24 hours in CMR Individualized overall plan of care required within four days of

admission in CMR CMRs are required to monitor rehabilitation outcomes Specialized teams can be developed in CMRs SNFs have higher mortality rate than CMRs CMRs have more specialized rehabilitation equipment.

HealthSouth also included a comparison chart of CMR and SNF setting, it is recreated below.


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HealthSouth Rehabilitation Hospital of Polk County, LLC (CON #10162)

Comparison of CMR and SNF Settings



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The applicant notes that Polk County’s 24 nursing homes containing 2,945 total licensed community nursing home beds averaged 86.94 percent utilization for calendar year 2011. HealthSouth expects that nursing homes are expected to be fully utilized by the time the proposed facility is in operation because of the need for SNF beds for long-term care. In addition, the applicant contends that the ability and willingness of nursing homes to provide rehabilitation services to Medicare patients will be reduced going forward due to changes to the Medicare payment system. HealthSouth maintains that approval of CON #10162 is consistent with the availability and extent of utilization of existing CMR and SNF programs. The applicant maintains that the proposed facility will ensure that Polk County patients have the opportunity for reasonably accessible CMR services. The applicant states that its corporate entity has a track record of successfully developing freestanding CMR hospitals in medical markets where multiple acute care hospitals have CMR units. HealthSouth indicates that if a CMR program is located in a specialty hospital that does not compete with for acute care patients, physicians aligned with that acute care hospital will be freer to exercise their medical judgment to maximize the recovery of a patient in need of rehabilitation. HealthSouth indicates that its case managers can work collaboratively with the discharge planners at all acute care hospitals in Polk County. The applicant states that Polk County hospitals are not referring patients to the Winter Haven CMR at the expected rate because of area competition for acute care services. HealthSouth contends that because of this competition, the need for additional CMR beds can only be met by a freestanding hospital that is not involved in the market’s acute care competition.

The applicant indicates that part of its corporate-wide mission is that it is paramount to provide its patients with the finest clinicians, technology, facilities and programs available. HealthSouth states that it sets only the highest standards of performance and continually strives to uphold and improve its reputation for excellence. Additionally, the applicant indicates that it has invested in state-of-the-art quality measurement systems to carefully monitor processes and outcomes allowing each facility to maintain the highest possible level of quality. HealthSouth states that the proposed facility will be developed in an efficient manner in that the project will be accomplished within two years of approval and is projected to commence operations at the


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beginning of 2015. In addition to providing care in an accessible, acceptable and effective manner—the applicant asserts that the proposed facility will also be an efficient/cost-effective provider of comprehensive medical rehabilitation services. The applicant illustrates, using data from the Centers for Medicare and Medicaid Services, that its hospitals have lower costs per discharge and lower payment per discharge than other programs. HealthSouth provided the table below to illustrate this point.

CMS FY 2012 IRF Rate Setting File Analysis

Freestanding Non-

HealthSouth

Units

HealthSouth

Hospitals

Total Number of IRFs 136 920 96 1,152 Average # of Discharges per IRF 593 247 932 345 Average Estimated Total Payment per Discharge for FY 2011*

$18,111

$17,820

$16,800

$17,649

Average Estimated Cost per Discharge for FY 2011* $16,274 $18,522 $13,002 $16,824 Source: CON application #10162, page 119. * The chart label and narrative indicates that this chart refers to 2012 data, although these lines refer to 2011 data.

The applicant concludes by stating HealthSouth is one of the most highly qualified providers of CMR services in the country, providing CMR services in a cost-effective fashion.

Haines City HMA, LLC (CON #10163) states that there are 1,658 acute care beds in Polk County but only 24 CMR beds—one CMR bed per 19,460 Polk County residents. The applicant contends that a CMR bed to resident ration of 1:19.460 is drastically low and evidence of an underserved community.

The applicant maintains that there are zero existing CMR beds in the defined service area. Heart of Florida indicates, that using the standard ratio for calculating the need for CMR beds at a minimum of 10 beds per 100,000 residents—Polk County’s 2012 adult population of 616,599 would result in a County wide need for 62 beds. Using this same ratio, the applicant states that for its 2015 service area population of 154,436 adults, there is a need for 16 CMR beds. Heart of Florida states that District 6 has the lowest rehabilitation discharge use rate per 1,000 population of any district in the State of Florida. The applicant notes that District 6’s 65+ rehabilitation discharge use rate is the absolute lowest in the state, 4.86 rehabilitation discharges per 1,000 population. Heart of Florida contrasts this number versus District 2’s 19.73 rehabilitation discharges per 1,000. See the table below.


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The applicant maintains that District 6’s 65+ age cohort had a rehabilitation discharge use rate that is the lowest in the entire state and is 58 percent lower that the statewide average use rate—more than four times lower than the highest use rate in the state, District 2. Heart of Florida indicates that the users of CMR services are most often the elderly, 65 years of age and older, and therefore they suffer the most from the inaccessibility and general unavailability of this level of care. Often, this age cohort foregoes the inpatient rehabilitation level of care for suboptimal but more accessible modalities of care impacting the ultimate outcome and often resulting in suboptimal recovery and increased health care costs. The applicant maintains that approval of the proposed program will enhance the geographic accessibility of inpatient rehabilitation beds for residents, specifically elderly residents of the defined service area. The applicant restates that when CMR services are available in a particular geographic area, resident utilize it and when it is not available, these services are generally not provided despite clinical indications of medical necessity. Heart of Florida states that while Winter Haven Hospital CMR unit is in Polk County, this unit has very few vacant beds and only a handful of Heart of Florida’s physicians admit patients to Winter Haven Hospital. The three other District 6 facilities are between 68 and 107 minutes from the service area. Heart of Florida maintains that travel of this distance can be traumatic for elderly residents.


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The applicant indicates that with today’s technological advances relative to rehabilitation services, the requirement for family and caregiver participation is a necessity. Heart of Florida asserts that accessing a CMR service 120 minutes away is impractical, illogical and extremely poor health planning.

Heart of Florida contends that the proposed CMR program will enhance quality of care as patients will experience improved outcomes. The applicant maintains that after completing rehabilitation, patients will have greater functional independence, lowering their chance of future debilities and improved quality of life. In addition, the applicant asserts that it will be an efficient and cost-effective provider of CMR services. Heart of Florida indicates that it has the ability to effectuate the proposed program without any financial difficulty and has the backing of its parent, HMA. The applicant states that HMA is one of the most highly qualified hospital providers in the country, providing CMR services in a cost-effective fashion. Heart of Florida concludes by stating that the benefits derived by patients far exceed the resources to be utilized for the proposed program. Lakeland Regional Medical Center, Inc. (CON #10164) indicates that there are four applicants in District 6 seeking approval for CMR programs in the current batching cycle under “not normal” circumstances. The applicant provided the following comparison based on AHCA Prior Year reports for fiscal 2011. It was noted that the average for all nine of the HealthSouth’s existing Florida freestanding rehabilitation hospitals were used for comparison purposes. See the table below.

Comparison of District 6 Applicants for CMR Services

Fiscal Year 2011 Based on FHURS Definitions

District 6

Applicant for CMR Services

Control

Licensed Beds

Utilization Data

Admissions

Patient Days

ED

Visits

Medicaid Patient Days

Charity Care

(000’s) Lakeland Regional Medical Center

NFP

851

37,099

176,656

156,630

27,417

$165,042.5

HMA-Heart of Florida Regional Medical Center

FP

194

11,907

42,411

49,106

8,518

$9,031.8

HMA-Highlands Regional Medical Center

FP

126

4,474

18,532

17,371

2,535

$669.6

HealthSouth Facilities (Florida Avg.)

FP

85

1,470

20,559

0

417

$276.7

Total 1,256 54,950 258,158 223,107 38,887 $175,020.5 LRMC as % of Total 67.8% 67.5% 68.4% 70.2% 70.5% 94.3%



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The applicant contends that the following can be drawn from the above comparison: LRMC compared to the other CMR applicants

o 67.8 percent of the licensed beds o 67.5 percent of inpatient admissions o 68.4 percent of inpatient days o 70.5 percent of Medicaid patient days o 94.3 percent of the amount of Charity Care provided o 70.2 percent of emergency care services and the only Trauma

Center HealthSouth freestanding hospitals do not provide emergency

care Significance of comparison

o CMR providers are dependent upon referrals from acute medical/surgical hospitals

o Size and scope of services (trauma, neurosurgery, neurology, orthopedic and cardiovascular cases) are key determinants of current and future needs for rehab care.

o Hospital-based CMR units receive the majority of rehab referrals from their own hospital For existing District 6 CMR providers-over 82 percent of rehab

referrals were from their own hospitals in 2011

The applicant notes that its LRMC/USF Health affiliation through the Morsani College of Medicine will result in the only teaching hospital among the applicants. The GME programs will mean additional complex cases needing transition to intensive rehab coming to LRMC. LRMC contends that the future development of a physical medicine and rehabilitation residency will further increase demands for rehab care. LRMC indicates that the discussion of whether Medicare skilled nursing facilities (SNF) can serve as a viable alternative to inpatient rehabilitation facilities has been ongoing for some time. The applicant provides a chart prepared by the American Hospital Association citing the clear distinctions between rehabilitation provided in a nursing home compared to care provided in a hospital based inpatient rehabilitation facility. LRMC contends that there is a difference in the care provided in a typical nursing home compared to the intensive therapy of an inpatient rehabilitation facility.16 Specifically for cerebrovascular stroke patients, rehabilitation in an inpatient rehabilitation facility resulted in higher functional outcomes compared to skilled nursing facility-based rehabilitation care. See the table below.

16 Inpatient rehabilitation facilities are analogous to Florida CMR inpatient facilities.


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Inpatient Rehabilitation Hospitals/Units vs. Skilled Nursing Facilities Required by Medicare

Inpatient Rehab

Facilities

Skilled Nursing

Facilities Close medical supervision by a physician with specialized training Yes No 24-hour rehabilitation nursing Yes No Patients must require hospital-level care Yes No Physician approval of preadmission screen and admission Yes No Medical care and therapy provided by a physician-led multidisciplinary medical team including specialty trained registered nurses

Yes

No 3 hours of intensive therapy per day, five days a week Yes No Readmission rates to general acute hospitals 9.5% 22.0% Discharge rate to community 81.1% 45.5% 2010 Medicare fee for service spending $6.4 billion $26.4 billion Increase in Medicare FFS spending from 2004 to 2010 No increase 52.5% increase Source: CON application #10164, page 66.

The applicant maintains that while there has been some overlap between skilled nursing facility and CMR providers in the past, patients that are currently appropriate for a CMR setting are more medically acute than those traditionally cared for in a skilled nursing facility. There are three factors that are responsible for this change: The 2007 CMS policy changes regarding the CMS-13 criteria have

shifted most joint replacement patients from the inpatient rehabilitation facility setting to either Medicare skilled nursing facilities of home health placement.

Both Medicare and commercial payers are focusing on medical necessity criteria for admission to a CMR and denying claims on patients that could have been effectively treated in a lower, less costly level of care.

Continued pressure on reducing the length of stay in the acute medical/surgical setting has resulted in rehabilitation patients moving to the CMR while still requiring multiple medical services.

LRMC indicates that the leveling of CMR utilization is evidence of Medicare changes in policy and regulations. Further, LRMC case management staff information indicates that the increasing acuity, complexity and comorbidities of both elderly patients and younger trauma patients presents particularly challenging post-acute discharge planning issues. The applicant states that in Polk County, Medicare skilled nursing facilities play an important role for residents in need of rehabilitation care. LRMC indicates that it discharges over 4,100 patients annually to local area nursing homes, and for 83 percent of these referrals this is an appropriate discharge placement. However, for the remaining 17 percent of patients currently discharged to a Medicare skilled nursing facility, a CMR setting is the more clinically appropriate placement. The


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applicant contends that this placement is not possible due to insurance issues, capacity issues at existing CMR facilities or family concerns with discharge placements outside the community.

LRMC concludes that while selected Medicare skilled nursing facilities play an important role in the post-acute continuum of care, the increasing patient acuity and need for multiple medical services, combined with continued pressure to reduce inpatient length of stays, makes a hospital-based CMR unit an essential component in providing a continuum of care to ensure quality outcomes. Sebring Hospital Management Associates, LLC (CON #10165) states that there are 306 acute care beds in Highlands County but zero CMR beds.17 HRMC states that District 6, has the lowest rehabilitation discharge use rate per 1,000 population of any district in the State of Florida. The applicant notes that District 6’s 65+ rehabilitation discharge use rate is the absolute lowest in the state, 4.86 rehabilitation discharges per 1,000 population. HRMC contrasts this number versus District 2’s 19.73 rehabilitation discharges per 1,000. See the table below.



District Ages 18-64 Ages 65+ District 1 0.66 4.92 District 2 1.22 19.73 District 3 0.83 5.88 District 4 0.84 7.27 District 5 0.87 8.02 District 6 0.69 4.86 District 7 0.55 5.43 District 8 0.81 6.43 District 9 0.65 6.02 District 10 1.29 13.21 District 11 1.01 11.29 Florida Total 0.84 7.67


The applicant maintains that District 6’s 65+ age cohort had a rehabilitation discharge use rate that is the lowest in the entire state and is 58 percent lower that the statewide average use rate—more than four times lower than the highest use rate in the state, District 2.

17 Earlier in the application, HRMC states that there are 318 acute care beds in Highlands County. According to the Florida Hospital Bed Need Projections & Service Utilization by District (7/20/2012) publication there are 306 acute care beds in Highlands County.


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HRMC indicates that the users of CMR services are most often the elderly, 65 years of age and older, and therefore they suffer the most from the inaccessibility and general unavailability of this level of care. Often, this age cohort foregoes the inpatient rehabilitation level of care for suboptimal but more accessible modalities of care impacting the ultimate outcome and often resulting in suboptimal recovery and increased health care costs. The applicant maintains that approval of the proposed program will enhance the geographic accessibility of inpatient rehabilitation beds for residents, specifically elderly residents of the defined service area.

The applicant states that when CMR services are available in a particular geographic area, resident utilize it and when it is not available, these services are generally not provided despite clinical indications of medical necessity. HRMC states that while Winter Haven Hospital CMR unit is 50 miles from the service area, this unit has very few vacant beds and is the only provider in Polk County. The applicant asserts that the three other District 6 facilities are nearly a two-hour drive from HRMC. The applicant maintains that travel of this distance can be traumatic for elderly residents.

The applicant indicates that in today’s technological advances relative to rehabilitation services, requirement for family and caregiver participation are necessity. HRMC asserts that accessing a CMR service 120 minutes away is impractical, illogical and extremely poor health planning.

HRMC maintains that the proposed unit would be geographically accessible to all residents within its services area. The applicant maintains that after completing rehabilitation, patients will have greater functional independence, lowering their chance of future debilities and improved quality of life.

In addition, the applicant asserts that it will be an efficient and cost-effective provider of CMR services. HRMC indicates that it has the ability to effectuate the proposed program without any financial difficulty and has the backing of its parent, HMA. The applicant states that HMA is one of the most highly qualified hospital providers in the country, providing CMR services in a cost-effective fashion. HRMC concludes by stating that the benefits derived by patients far exceed the resources to be utilized for the proposed program.


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

the applicant demonstrated the ability to provide quality care? ss. 408.035(1)(c), Florida Statutes.

HealthSouth Rehabilitation Hospital of Polk County LLC (CON #10162) states that it has no current operations or operating history. The applicant indicates that the proposed quality care will be based on HealthSouth Corporation’s experience, knowledge and accreditation principals. HealthSouth will seek Joint Commission accreditation and implement appropriate protocols to maintain a superior quality of care upon licensure. The applicant will also seek disease-specific certification in stroke rehabilitation and traumatic brain injury from the Joint Commission within the first three years of operation.

The applicant indicates that during 2010, HealthSouth Rehabilitation Hospitals began utilizing Press Ganey, a leading healthcare research firm, to measure patients’ experience. This information is evaluated to help patients reach their goals for maximum independence. Further, HealthSouth Corporation devotes significant resources to developing, implementing and maintain state-of-the-art systems and technology which enables HealthSouth facilities to provide the highest quality of patient care. Examples of HealthSouth systems and technology include: Risk Management Reporting System Equipment (with embedded technology) Rehabilitation Technologies (e.g. AutoAmbulator) Automated Medical Records System Computerized Order Entry System Clinical Education

The corporate parent of the applicant has 99 rehabilitation hospitals (12 in Florida), 26 outpatient satellite clinics and 25 licensed hospital-based home health agencies serving people in 27 states and Puerto Rico.18 Agency data indicates that the nine HealthSouth Hospitals (763 total beds) had a total of 11 substantiated complaints during the three-year period ending September 5, 2012. A single complaint can encompass multiple complaint categories. The table below has these listed by complaint categories.

18 Agency for Health Care Administration data shows that HealthSouth has nine licensed and three CON approved hospitals in the State of Florida.


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HealthSouth Substantiated Complaint Categories for the Past 36 Months

Complaint Category Number Substantiated Quality of Care/Treatment 8 Nursing Services 7 Resident/Patient/Client Rights 2 Resident/Seclusion General 2 Resident/Patient/Client Assessment 1 Dietary Services 1 Physical Environment 1 Source: Agency for Health Care Administration complaint records.

Haines City HMA, LLC (CON #10163) indicates that it has a history or providing quality care and will continue to do so with the implementation of the proposed program, which will be developed within existing infrastructure. Heart of Florida is Joint Commission accredited and will similarly seek accreditation for the proposed unit as well as Joint Commission Disease-Specific Certification of its stroke rehabilitation program. The applicant notes that it was recently recognized as a Top Performers on Key Quality Measures by the Joint Commission for 2011. According to the Joint Commission, hospitals recognized as Top Performers met two 95 performance thresholds on 2011 accountability measure data. A 95 percent score means a hospital provided an evidence-based practice 95 times out of 100 opportunities. Heart of Florida states that the proposed CMR unit will be included in its performance improvement plan. The purpose of this plan is to assure delivery of the highest quality patient care and provides a method where personnel can assess, evaluate and improve the quality/cost-effectiveness of patient care. The applicant states that the CMR interdisciplinary team will have available member of the following: occupational therapy, physical therapy with speech/language pathology, certified orthotics, certified prosthetics and case/management/social services as needed. Additional services may include dietician services, respiratory therapy and psychology/neuropsychology. Heart of Florida indicates that it will utilize the Uniform Data System to track functional outcomes using a standard instrument (Functional Independence Measure or FIM) capture from the patient assessment instrument submitted to CMS from approximately 1,000 CMR programs in the United States. The applicant states that results will be shared with referral sources, insurance companies/HMOs, the general public, hospital administration/board of directors, physicians and the rehabilitation unit staff members.


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The applicant notes that activities of daily living (ADL) training activities will be coordinated through occupational therapy services. These services will include evaluation and program planning for individual patients to optimize their functional skill in daily living. Heart of Florida indicates that ADLs will be addressed through interdisciplinary goals and interventions which will include patient and family input. The applicant maintains that this comprehensive program is different than what is currently available in the service area and will result in optimum outcomes.

Heart of Florida had eight substantiated complaints during the three year period ending September 5, 2012. A single complaint can encompass multiple complaint categories. The table below has these listed by complaint categories.

Heart of Florida Substantiated Complaint Categories

for the Past 36 Months Complaint Category Number Substantiated Quality of Care/Treatment 5 Nursing Services 3 Resident/Patient/Client Assessment 3 Dietary Services 1 Admission, Transfer & Discharge Rights 1 Administration/Personnel 1 State Licensure 1 Source: Agency for Health Care Administration complaint records.

HMA has 23 licensed hospitals in Florida with a total of 3,036 beds. Agency data indicates that HMA affiliated hospitals had 83 substantiated complaints during the three year period ending September 5, 2012. A single complaint can encompass multiple complaint categories. The table below has these listed by complaint categories.


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HMA Substantiated Complaint Categories

in the Past 36 Months Complaint Category Number Substantiated Quality of Care/Treatment 44 Nursing Services 21 Resident/Patient/Client Assessment 15 Administration/Personnel 11 Resident/Patient/Client Rights 10 Emergency Access 9 Admission, Transfer & Discharge Rights 8 Physician Services 6 Infection Control 4 EMTALA 3 Resident/Patient/Client Abuse 2 State Licensure 2 Unqualified Personnel 2 Medicine Prob/Errors/Formulary 2 Physical Environment 2 Discharge Planning 1 Dietary Services 1 Falsification of Records/Reports 1 Pressure Sores 1 Restraints/Seclusion General 1

Source: Agency for Health Care Administration complaint records.

Lakeland Regional Medical Center, Inc. (CON #10164) states that it holds a current Florida Agency for Health Care Administration license. The applicant is also fully accredited by The Joint Commission including its primary stroke center.

LRMC had 18 substantiated complaints during the three-year period ending September 5, 2012. A single complaint can encompass multiple complaint categories. The table below has these listed by complaint categories.

Lakeland Regional Medical Center Substantiated Complaint Categories

Past 36 Months Complaint Category Number Substantiated Quality of Care/Treatment 11 Nursing Services 5 Resident/Patient/Client Rights 4 Admission, Transfer & Discharge Rights 3 Physician Services 2 Emergency Access 1 Infection Control 1 Resident/Patient/Client Assessment 1 Unqualified Personnel 1 Source: Agency for Health Care Administration complaint records.

Sebring Hospital Management Associates, LLC (CON #10165) indicates that it has a history of providing quality care and will continue to do so with the implementation of the proposed program, which will be developed within existing infrastructure. HRMC is Joint Commission accredited and will similarly seek accreditation for the proposed unit.


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The applicant notes that it was recently recognized as a Top Performers on Key Quality Measures by the Joint Commission for 2011. According to the Joint Commission, hospitals recognized as Top Performers met two 95 performance thresholds on 2011 accountability measure data. A 95 percent score means a hospital provided an evidence-based practice 95 times out of 100 opportunities. HRMC states that the proposed CMR unit will be included in its Performance Improvement Plan after the unit’s implementation. The purpose of this plan is to assure delivery of the highest quality patient care and provides a method where personnel can assess, evaluate and improve the quality/cost-effectiveness of patient care. The applicant states that the CMR interdisciplinary team will have available member of the following: occupational therapy, physical therapy with speech/language pathology, certified orthotics, certified prosthetics and case/management/social services as needed. Additional services may include dietician services, respiratory therapy and psychology/neuropsychology.

HRMC indicates that it will utilize the Uniform Data System to track functional outcomes using a standard instrument (Functional Independence Measure or FIM) capture from the patient assessment instrument submitted to CMS from approximately 1,000 CMR programs in the United States. The applicant states that results will be shared with referral sources, insurance companies/HMOs, the general public, hospital administration/board of directors, physicians and the rehabilitation unit staff members.

The applicant notes that ADL training activities will be coordinated through occupational therapy services. These services will include evaluation and program planning for individual patients to optimize their functional skill in daily living. HRMC indicates that ADLs will be addressed through interdisciplinary goals and interventions which will include patient and family input. The applicant maintains that this comprehensive program is different than what is currently available in the service area and will result in optimum outcomes. Highlands Regional had eight substantiated complaints during the three year period ending September 5, 2012. A single complaint can encompass multiple complaint categories. The table below has these listed by complaint categories.


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Highlands Regional Substantiated Complaint Categories

for the Past 36 Months Complaint Category Number Substantiated Quality of Care/Treatment 6 Nursing Services 4 Resident/Patient/Client Assessment 4 Infection Control 2 Dietary Services 1 Resident/Patient/Client Rights 1 Administration/Personnel 1 Physician Services 1 Source: Agency for Health Care Administration complaint records.

HMA has 23 licensed hospitals in Florida with a total of 3,036 beds. Agency data indicates that HMA affiliated hospitals had 83 substantiated complaints during the three-year period ending September 5, 2012. A single complaint can encompass multiple complaint categories. The table below has these listed by complaint categories.

HMA Substantiated Complaint Categories

in the Past 36 Months Complaint Category Number Substantiated Quality of Care/Treatment 44 Nursing Services 21 Resident/Patient/Client Assessment 15 Administration/Personnel 11 Resident/Patient/Client Rights 10 Emergency Access 9 Admission, Transfer & Discharge Rights 8 Physician Services 6 Infection Control 4 EMTALA 3 Resident/Patient/Client Abuse 2 State Licensure 2 Unqualified Personnel 2 Medicine Prob/Errors/Formulary 2 Physical Environment 2 Discharge Planning 1 Dietary Services 1 Falsification of Records/Reports 1 Pressure Sores 1 Restraints/Seclusion General 1

Source: Agency for Health Care Administration complaint records.


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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. 408.035(1) (d), Florida Statutes.

HealthSouth Rehabilitation Hospital of Polk County LLC (CON #10162) is a development stage company which was created primarily for the purpose of obtaining a CON for a CMR hospital in Polk County, Florida. The applicant is a wholly owned subsidiary of HealthSouth Corporation (Parent). The applicant provided a copy of the December 31, 2011, 10-K for its parent. These statements were analyzed for the purpose of evaluating the parent’s ability to provide the capital and operational funding necessary to implement the project. Short-Term Position - Parent: The parent’s current ratio of 1.2 is below average and indicates current assets are approximately 1.2 times current liabilities, an adequate position. The working capital (current assets less current liabilities) of $77.8 million is a measure of excess liquidity that could be used to fund capital projects. The ratio of cash flow to current liabilities of 1.1 is above average and a good position. Overall, the parent has an adequate short-term position. (See Table 1). Long-Term Position - Parent: The ratio of long-term debt to net assets of 2.3 is well above average and indicates that long-term debt exceeds equity. With long-term debt exceeding equity, the applicant may have difficulty acquiring future debt in an arms-length transaction. The ratio of cash flow to assets of 15.1 percent is above average and a good position. The most recent year had revenues in excess of expenses of $254.6 million which resulted in a 12.6 percent operating margin. Overall, the parent has an adequate long-term position. (See Table 1).

Capital Requirements: The applicant indicates on Schedule 2 capital projects totaling $25.3 million which includes this project and capital equipment purchases in years one, two and three of the project. In addition, the applicant is projecting a year one operating loss of $1,348,042. The applicant will have to fund this loss until profitability can be achieved.


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Available Capital: The applicant indicates on Schedule 3 that funding for the project will be provided by the parent. A letter from the parent’s treasurer in support of the related company financing was included. The parent’s 2011, 10-K report shows $77.8 million in working capital and $342.7 million in cash flow from operations.

TABLE 1 HealthSouth Rehabilitation Hospital of Polk County, LLC 10162

HealthSouth(Parent) HealthSouth(Parent) 12/31/11 12/31/10

Current Assets (CA) $391,000,000 $406,200,000 Cash and Current Investment $30,100,000 $48,300,000 Total Assets (TA) $2,271,200,000 $2,372,100,000 Current Liabilities (CL) $313,200,000 $359,300,000 Goodwill $421,700,000 $420,300,000 Total Liabilities (TL) $1,682,200,000 $1,986,900,000 Net Assets (NA) $589,000,000 $385,200,000 Total Revenues (TR) $2,026,900,000 $1,877,600,000 Interest Expense (Int) $119,400,000 $125,600,000 Excess of Revenues Over Expenses (ER) $254,600,000 $939,800,000 Cash Flow from Operations (CFO) $342,700,000 $331,000,000 Working Capital $77,800,000 $46,900,000

FINANCIAL RATIOS

12/31/11 12/31/10 Current Ratio (CA/CL) 1.2 1.1 Cash Flow to Current Liabilities (CFO/CL) 1.1 0.9 Long-Term Debt to Net Assets (TL-CL/NA) 2.3 4.2 Times Interest Earned (ER+Int/Int) 3.1 8.5 Net Assets to Total Assets (NA/TA) 25.9% 16.2% Operating Margin (ER/TR) 12.6% 50.1% Return on Assets (ER/TA) 11.2% 39.6%

Operating Cash Flow to Assets (CFO/TA) 15.1% 14.0%

Conclusion: Funding for this project and the entire capital budget should be available as needed.

Haines City HMA, LLC (CON #10163) is a 194-bed acute care hospital, trying to establish a 14-bed CMR unit in Polk County, Florida. The applicant is a wholly owned subsidiary of Health Management Associates, Inc. (Parent).

The applicant provided a copy of the December 31, 2010, and 2011, audited financial statements of its parent. These statements were analyzed for the purpose of evaluating the parent’s ability to provide the capital and operational funding necessary to implement the project.


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Short-Term Position - Parent: The parent’s current ratio of 2.9 is above average and indicates current assets are approximately 2.9 times current liabilities, a good position. The working capital (current assets less current liabilities) of $235.1 million is a measure of excess liquidity that could be used to fund capital projects. The ratio of cash flow to current liabilities of 2.3 is above average and a good position. Overall, the parent has a good short-term position. (See Table 1). Long-Term Position - Parent: The ratio of long-term debt to net assets of 0.1 is well below average and indicates that long-term debt is less than equity, a good position. The ratio of cash flow to assets of 11.4 percent is above average and a good position. The most recent year had revenues in excess of expenses of $188.6 million which resulted in a 9.9 percent operating margin. Overall, the parent has a good long-term position. (See Table 1). Capital Requirements: The applicant indicates on Schedule 2 capital projects totaling $1.2 million which includes this project. Available Capital: The applicant indicates on Schedule 3 that funding for the project will be provided by the parent. A letter from the parent’s chief financial officer in support of the related company financing was included. The parent’s 2011, audited financial statements shows $235.1 million in working capital and $275.3 million in cash flow from operations.


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TABLE 1

Haines City HMA, LLC 10163

Health Mgt

(Parent) Health Mgt

Parent) 12/31/11 12/31/10

Current Assets (CA) $355,760,147 $357,354,185 Cash and Current Investment $4,164,461 $1,723,054 Total Assets (TA) $2,425,088,460 $2,285,302,067 Current Liabilities (CL) $120,657,335 $115,170,031 Goodwill $281,701,968 $283,895,482 Total Liabilities (TL) $400,107,089 $429,056,172 Net Assets (NA) $2,024,981,371 $1,856,245,895 Total Revenues (TR) $1,909,115,226 $1,591,946,643 Interest Expense (Int) $2,426,387 $2,362,147 Excess of Revenues Over Expenses (ER) $188,636,326 $164,801,822 Cash Flow from Operations (CFO) $275,297,269 $161,077,131 Working Capital $235,102,812 $242,184,154

FINANCIAL RATIOS



Conclusion: Funding for this project and the entire capital budget should be available as needed. Lakeland Regional Medical Center, Inc. (CON #10164) is a 851-bed hospital, including 768 acute medical/surgical beds, 15 Level II neonatal intensive care beds, 46 adult and eight child/adolescent psychiatric beds, and 14 adult substance abuse beds, trying to establish a 32-bed CMR unit in Polk County, Florida. The applicant is a wholly owned subsidiary of Lakeland Regional Health Systems, Inc. (Parent).

The applicant provided a copy of the September 30, 2010, and 2011, audited financial statements of its parent. These statements were analyzed for the purpose of evaluating the parent’s ability to provide the capital and operational funding necessary to implement the project.

Short-Term Position - Parent: The parent’s current ratio of 1.8 is slightly below average and indicates current assets are approximately 1.8 times current liabilities, an adequate position. The working capital (current assets less current


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liabilities) of $79.4 million is a measure of excess liquidity that could be used to fund capital projects. The ratio of cash flow to current liabilities of 0.5 is below average and an adequate position. Overall, the parent has an adequate short-term position. (See Table 1).

Long-Term Position - Parent: The ratio of long-term debt to net assets of 0.5 is slightly below average and indicates that long-term debt is less than equity, a good position. The ratio of cash flow to assets of 6.7 percent is below average and a slightly weak position. The most recent year had revenues in excess of expenses of $9.0 million which resulted in a 1.4 percent operating margin. Overall, the parent has an adequate long-term position. (See Table 1).

Capital Requirements: The applicant indicates on Schedule 2 capital projects totaling $196.2 million which includes this project, Phase 1 tower project, renovations, equipment, and other capitalization.

Available Capital: The applicant indicates on Schedule 3 that funding for the project will be provided by the parent. A letter from the applicant’s chief financial officer in support of the related company financing was included. However, no letter from the parent guaranteeing funding was provided. Given that the applicant is a wholly owned subsidiary of the parent, it is likely that the parent will make funding available for this project. The parent’s 2011, audited financial statements shows $79.4 million in working capital and $49.7 million in cash flow from operations.


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TABLE 1 Lakeland Regional Medical Center, Inc. 10164

Lakeland Regional Health System (Parent) (Parent) 09/30/11 09/30/10

Current Assets (CA) $178,092,000 $161,834,000 Cash and Current Investment $34,935,000 $35,272,000 Total Assets (TA) $736,792,000 $724,180,000 Current Liabilities (CL) $98,726,000 $77,150,000 Goodwill $0 $0 Total Liabilities (TL) $319,137,000 $312,867,000 Net Assets (NA) $417,655,000 $411,313,000 Total Revenues (TR) $628,983,000 $612,505,000 Interest Expense (Int) $9,226,000 $9,291,000 Excess of Revenues Over Expenses (ER) $8,998,000 $2,623,000 Cash Flow from Operations (CFO) $49,709,000 $14,732,000 Working Capital $79,366,000 $84,684,000

FINANCIAL RATIOS




Sebring Hospital Management Associates, LLC (CON #10165) is a 126-bed acute care hospital, trying to establish a seven-bed CMR unit in Highlands County, Florida. The applicant is a wholly owned subsidiary of Health Management Associates, Inc. (Parent). The applicant provided a copy of the December 31, 2010, and 2011, audited financial statements of its parent. These statements were analyzed for the purpose of evaluating the parent’s ability to provide the capital and operational funding necessary to implement the project.

Short-Term Position - Parent: The parent’s current ratio of 2.9 is above average and indicates current assets are approximately 2.9 times current liabilities, a good position. The working capital (current assets less current liabilities) of $235.1 million is a measure of excess liquidity that could be used to fund capital projects. The ratio of cash flow to current liabilities of 2.3 is above average and a good position. Overall, the parent has a good short-term position. (See Table 1).


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Long-Term Position - Parent: The ratio of long-term debt to net assets of 0.1 is well below average and indicates that long-term debt is less than equity, a good position. The ratio of cash flow to assets of 11.4 percent is above average and a good position. The most recent year had revenues in excess of expenses of $188.6 million which resulted in a 9.9 percent operating margin. Overall, the parent has a good long-term position. (See Table 1).

Capital Requirements: The applicant indicates on Schedule 2 capital projects totaling $9.1 million which includes this project and capital expenditures. Available Capital: The applicant indicates on Schedule 3 that funding for the project will be provided by the parent. A letter from the parent’s chief financial officer in support of the related company financing was included. The parent’s 2011, audited financial statements shows $235.1 million in working capital and $275.3 million in cash flow from operations.

TABLE 1 Sebring Hospital Management Associates, LLC 10165

HMA (Parent) HMA (Parent) 12/31/11 12/31/10

Current Assets (CA) $355,760,147 $357,354,185 Cash and Current Investment $4,164,461 $1,723,054 Total Assets (TA) $2,425,088,460 $2,285,302,067 Current Liabilities (CL) $120,657,335 $115,170,031 Goodwill $281,701,968 $283,895,482 Total Liabilities (TL) $400,107,089 $429,056,172 Net Assets (NA) $2,024,981,371 $1,856,245,895 Total Revenues (TR) $1,909,115,226 $1,591,946,643 Interest Expense (Int) $2,426,387 $2,362,147 Excess of Revenues Over Expenses (ER) $188,636,326 $164,801,822 Cash Flow from Operations (CFO) $275,297,269 $161,077,131 Working Capital $235,102,812 $242,184,154

FINANCIAL RATIOS




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d. What is the immediate and long-term financial feasibility of the

proposal? ss. 408.035(1)(f), Florida Statutes.

A comparison of the applicants’ 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.

HealthSouth Rehabilitation Hospital of Polk County LLC (CON #10162): The applicant will be compared to hospitals in the Rehabilitation Hospital Group (Group 18). We do not have case mix data available for rehabilitation hospitals so an intensity factor of 0.9807 was calculated for the applicant by taking the projected average length of stay indicated and dividing it by the weighted average length of stay for the peer group. This methodology is used to adjust the group values to reflect the intensity of the patient as measured by length of stay. Per diem rates are projected to increase by an average of 2.8 percent per year. Inflation adjustments were based on the new CMS Market Basket, 2nd Quarter, 2012.

Gross revenues, net revenues, and costs were obtained from Schedules 7 and 8 in the financial portion of the application and compared to the control group as a calculated amount per adjusted patient day.


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Projected net revenue per adjusted patient day (NRAPD) of $1,105 in year one and $1,186 in year two is between the control group median and highest values of $979 and $1,320 in year one and $1,006 and $1,356 in year two. With net revenues falling between the median and highest level, the facility is expected to consume health care resources in proportion to the services provided. (See Tables 2 and 3). Anticipated costs per adjusted patient day (CAPD) of $1,246 in year one and $1,102 in year two is between the control group median and highest values of $797 and $1,349 in year one and $819 and $1,386 in year two. With projected cost between the median and highest level, costs appear reasonable. (See Tables 2 and 3). The applicant is projecting a decrease in CAPD between year one and year two of $144, or 11.5 percent. It should be noted that this application is for a new facility. The first year of operation has a below average occupancy rate. The low occupancy rate decreases economies of scale and as the occupancy rate increases, CAPD would be expected to decrease.

The year two projected operating income for the project of $1.1 million computes to an operating margin per adjusted patient day of $84 or 7.1 percent which is between the control group lowest and median values of negative $23 and $214.


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TABLE 2 HealthSouth Rehabilitation Hospital of Polk County

CON #10162 Dec-15 YEAR 1 VALUES ADJUSTED

2011 DATA Peer Group 18 YEAR 1 ACTIVITY FOR INFLATION

ACTIVITY PER DAY Highest Median Lowest

ROUTINE SERVICES 17,019,508 1,783 1,437 560 457

INPATIENT AMBULATORY 0 0 5 0 0

INPATIENT SURGERY 0 0 0 0 0

INPATIENT ANCILLARY SERVICES 0 0 1,401 809 710

OUTPATIENT SERVICES 129,996 14 490 97 0

TOTAL PATIENT SERVICES REV. 17,149,504 1,796 2,353 1,537 1,266

OTHER OPERATING REVENUE 25,623 3 66 2 0

TOTAL REVENUE 17,175,127 1,799 2,385 1,538 1,269

DEDUCTIONS FROM REVENUE 6,627,537 694 0 0 0

NET REVENUES 10,547,590 1,105 1,320 979 879

EXPENSES ROUTINE 3,316,684 347 414 149 133 ANCILLARY 2,447,312 256 321 188 158 AMBULATORY 0 0 0 0 0

TOTAL PATIENT CARE COST 5,763,996 604 0 0 0

ADMIN. AND OVERHEAD 4,053,667 425 0 0 0 PROPERTY 2,077,969 218 0 0 0

TOTAL OVERHEAD EXPENSE 6,131,636 642 736 424 316

OTHER OPERATING EXPENSE 0 0 0 0 0

TOTAL EXPENSES 11,895,632 1,246 1,349 797 699

OPERATING INCOME -1,348,042 -141 330 214 -23 -12.8%

PATIENT DAYS 9,461 ADJUSTED PATIENT DAYS 9,548 TOTAL BED DAYS AVAILABLE 18,250 VALUES NOT ADJUSTED ADJ. FACTOR 0.9909 FOR INFLATION TOTAL NUMBER OF BEDS 50 Highest Median Lowest PERCENT OCCUPANCY 51.84% 88.5% 73.7% 55.1%

PAYER TYPE PATIENT DAYS % TOTAL SELF PAY 95 1.0% MEDICAID 85 0.9% 7.8% 2.1% 0.0% MEDICAID HMO 85 0.9% MEDICARE 6,984 73.8% 86.1% 77.4% 45.8% MEDICARE HMO 178 1.9% INSURANCE 1,126 11.9% HMO/PPO 501 5.3% 47.9% 16.0% 6.8% OTHER 407 4.3%

TOTAL 9,461 100%


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TABLE 3 HealthSouth Rehabilitation Hospital of Polk County CON #10162 Dec-16 YEAR 2 VALUES ADJUSTED 2011 DATA Peer Group 18 YEAR 2 ACTIVITY FOR INFLATION

ACTIVITY PER DAY Highest Median Lowest ROUTINE SERVICES 23,672,710 1,836 1,477 576 470 INPATIENT AMBULATORY 0 0 6 0 0 INPATIENT SURGERY 0 0 0 0 0 INPATIENT ANCILLARY SERVICES 0 0 1,440 831 730 OUTPATIENT SERVICES 178,484 14 504 100 0



TOTAL REVENUE 23,886,659 1,853 2,451 1,580 1,304

DEDUCTIONS FROM REVENUE 8,597,754 667 0 0 0

NET REVENUES 15,288,905 1,186 1,356 1,006 903




TOTAL OVERHEAD EXPENSE 7,022,890 545 756 435 325


TOTAL EXPENSES 14,207,893 1,102 1,386 819 719

OPERATING INCOME 1,081,012 84 330 214 -23 7.1%


PAYER TYPE PATIENT DAYS % TOTAL SELF PAY 128 1.0% MEDICAID 115 0.9% 7.8% 2.1% 0.0% MEDICAID HMO 115 0.9% MEDICARE 9,428 73.8% 86.1% 77.4% 45.8% MEDICARE HMO 243 1.9% INSURANCE 1,520 11.9% HMO/PPO 677 5.3% 47.9% 16.0% 6.8% OTHER 549 4.3%

TOTAL 12,775 100%


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Conclusion: This project appears to be financially feasible.

Haines City HMA, LLC (CON #10163): Comparative data were derived from hospitals in peer groups that reported data in 2011; the applicant will be compared to the hospitals in Peer Group 3 (small suburban hospital group). Peer Group 3 has a total of 34 facilities including the applicant. Per diem rates are projected to increase by an average of 2.8 percent per year. Inflation adjustments were based on the new CMS Market Basket, 2nd Quarter, 2012. Gross revenues, net revenues, and costs were obtained from Schedules 7 and 8 in the financial portion of the application and compared to the control group as a calculated amount per adjusted patient day. Projected net revenue per adjusted patient day (NRAPD) of $2,211 in year one and $2,171 in year two is between the control group median and highest values of $1,886 and $2,812 in year one and $1,938 and $2,889 in year two. With net revenues falling between the median and highest level, the facility is expected to consume health care resources in proportion to the services provided. (See Tables 2 and 3). Anticipated cost per adjusted patient day (CAPD) of $1,567 in year one and $1,642 in year two is between the control group lowest and median values of $1,338 and $1,704 in year one and $1,375 and $1,750 in year two. With projected cost between the lowest and median level, costs appear reasonable. (See Tables 2 and 3). The applicant is projecting a decrease in CAPD between year one and year two of $75, or 4.8 percent. The year two projected operating income for the project of $37.7 million computes to an operating margin per adjusted patient day of $530 or 24.4 percent which is higher than the highest value of $500. With operating margin above the highest value, operating margin may be overstated. (See Table 3).


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TABLE 2

Haines City HMA, LLC




ROUTINE SERVICES 89,462,215 1,293 1,536 853 250



INPATIENT ANCILLARY SERVICES 742,570,984 10,731 9,084 4,163 1,895

OUTPATIENT SERVICES 408,000,000 5,896 10,269 3,824 2,077

TOTAL PATIENT SERVICES REV. 1,240,033,199 17,920 19,271 9,726 5,646


TOTAL REVENUE 1,240,733,199 17,930 19,291 9,780 5,672

DEDUCTIONS FROM REVENUE 1,087,728,756 15,719 0 0 0

NET REVENUES 153,004,443 2,211 2,812 1,886 1,351




TOTAL OVERHEAD EXPENSE 32,499,414 470 1,345 784 520

OTHER OPERATING EXPENSE 9,269,386 134 0 0 0

TOTAL EXPENSES 108,426,389 1,567 2,624 1,704 1,338




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TABLE 3

Haines City HMA, LLC CON #10163 Dec-15 YEAR 2 VALUES ADJUSTED 2011 DATA Peer Group 3 YEAR 2 ACTIVITY FOR INFLATION

ACTIVITY PER DAY Highest Median Lowest ROUTINE SERVICES 92,255,464 1,298 1,578 877 257 INPATIENT AMBULATORY 0 0 795 239 116 INPATIENT SURGERY 0 0 0 0 0 INPATIENT ANCILLARY SERVICES 760,529,000 10,697 9,334 4,277 1,948 OUTPATIENT SERVICES 408,646,000 5,748 10,551 3,929 2,134



TOTAL REVENUE 1,262,140,464 17,752 19,821 10,049 5,828


NET REVENUES 154,382,674 2,171 2,889 1,938 1,389


TOTAL PATIENT CARE COST 71,843,030 1,010 0 0 0




TOTAL EXPENSES 116,717,215 1,642 2,696 1,750 1,375



Conclusion: This project appears to be financially feasible. Lakeland Regional Medical Center, Inc. (CON #10164) Comparative data were derived from hospitals in peer groups that reported data in 2011; the applicant will be compared to the hospitals in Peer Group 7 (large urban hospital group). Peer Group 7 has a total of 15 facilities including the applicant. Per diem rates are projected to increase by an average of 2.8 percent per year. Inflation adjustments were based on the new CMS Market Basket, 2nd Quarter, 2012.


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Gross revenues, net revenues, and costs were obtained from Schedules 7 and 8 in the financial portion of the application and compared to the control group as a calculated amount per adjusted patient day. Projected net revenue per adjusted patient day (NRAPD) of $1,816 in year one and $1,873 in year two is between the control group lowest and median values of $1,746 and $1,953 in year one and $1,794 and $2,007 in year two. With net revenues falling between the lowest and median level, the facility is expected to consume health care resources in proportion to the services provided. (See Tables 2 and 3).

Anticipated costs per adjusted patient day (CAPD) of $1,735 in year one and $1,793 in year two is between the control group lowest and median values of $1,639 and $1,848 in year one and $1,684 and $1,899 in year two. With projected cost between the lowest and median level, costs appear reasonable. (See Tables 2 and 3). The applicant is projecting an increase in CAPD between year one and year two of $58, or 3.4 percent.

The year two projected operating income for the project of $25.6 million computes to an operating margin per adjusted patient day of $80 or 4.3 percent which is between the control group lowest and median values of negative $43 and $84. (See Table 3).


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TABLE 2


CON #10164 Jun-15 YEAR 1 VALUES ADJUSTED



ROUTINE SERVICES 1,587,329,330 5,012 2,010 1,030 566



INPATIENT ANCILLARY SERVICES 0 0 6,623 4,321 3,035

OUTPATIENT SERVICES 1,146,529,137 3,620 4,535 3,617 2,088


OTHER OPERATING REVENUE 6,621,839 21 153 40 13

TOTAL REVENUE 2,740,480,306 8,654 13,502 8,921 6,961


NET REVENUES 575,193,074 1,816 3,469 1,953 1,746

EXPENSES ROUTINE 105,838,722 334 454 338 276 ANCILLARY 200,385,088 633 893 725 555 AMBULATORY 26,255,609 83 0 0 0





TOTAL EXPENSES 549,441,088 1,735 2,833 1,848 1,639




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TABLE 3

Lakeland Regional Medical Center CON #10164 Jun-16 YEAR 2 VALUES ADJUSTED 2011 DATA Peer Group 7 YEAR 2 ACTIVITY FOR INFLATION

ACTIVITY PER DAY Highest Median Lowest ROUTINE SERVICES 1,671,261,636 5,206 2,066 1,058 582 INPATIENT AMBULATORY 0 0 444 150 17 INPATIENT SURGERY 0 0 0 0 0 INPATIENT ANCILLARY SERVICES 0 0 6,805 4,440 3,118 OUTPATIENT SERVICES 1,203,855,593 3,750 4,660 3,716 2,146


OTHER OPERATING REVENUE 6,688,057 21 157 42 13

TOTAL REVENUE 2,881,805,286 8,977 13,873 9,166 7,153


NET REVENUES 601,224,471 1,873 3,564 2,007 1,794

EXPENSES ROUTINE 109,035,343 340 467 347 283 ANCILLARY 208,139,506 648 918 745 571 AMBULATORY 27,043,277 84 0 0 0





TOTAL EXPENSES 575,610,444 1,793 2,911 1,899 1,684




Sebring Hospital Management Associates, LLC (CON #10165): Comparative data were derived from hospitals in peer groups that reported data in 2011; the applicant will be compared to the hospitals in Peer Group 3 (small suburban hospital group). Peer Group 3 has a total of 34 facilities including the applicant. Per diem rates are projected to increase by an average of 2.8 percent per year. Inflation adjustments were based on the new CMS Market Basket, 2nd Quarter, 2012.


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Gross revenues, net revenues, and costs were obtained from Schedules 7 and 8 in the financial portion of the application and compared to the control group as a calculated amount per adjusted patient day. Projected net revenue per adjusted patient day (NRAPD) of $1,617 in year one and $1,580 in year two is between the control group lowest and median values of $1,270 and $1,772 in year one and $1,305 and $1,821 in year two. With net revenues falling between the lowest and median level, the facility is expected to consume health care resources in proportion to the services provided. (See Tables 2 and 3). Anticipated cost per adjusted patient day (CAPD) of $1,472 in year one and $1,413 in year two is between the control group lowest and median values of $1,258 and $1,601 in year one and $1,292 and $1,645 in year two. With projected cost between the lowest and median level, costs appear reasonable. (See Tables 2 and 3). The applicant is projecting a decrease in CAPD between year one and year two of $58, or 4.0 percent.

The year two projected operating income for the project of $7.3 million computes to an operating margin per adjusted patient day of $167 or 10.5 percent which is between the control group median and highest values of $163 and $500. (See Table 3).


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TABLE 2

Sebring Hospital Management Associates, LLC




ROUTINE SERVICES 17,125,944 416 1,443 802 235



INPATIENT ANCILLARY SERVICES 192,962,673 4,686 8,537 3,912 1,781

OUTPATIENT SERVICES 198,307,225 4,816 9,650 3,593 1,952



TOTAL REVENUE 408,670,842 9,924 18,129 9,191 5,330

DEDUCTIONS FROM REVENUE 342,086,634 8,307 0 0 0

NET REVENUES 66,584,208 1,617 2,643 1,772 1,270

EXPENSES ROUTINE 16,493,616 401 336 242 168 ANCILLARY 16,161,860 392 884 539 351 AMBULATORY 589,058 14 0 0 0





TOTAL EXPENSES 60,597,455 1,472 2,466 1,601 1,258




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TABLE 3

Sebring Hospital Management Associates, LLC CON #10165 Dec-15 YEAR 2 VALUES ADJUSTED 2011 DATA Peer Group 18 YEAR 2 ACTIVITY FOR INFLATION

ACTIVITY PER DAY Highest Median Lowest ROUTINE SERVICES 20,360,129 462 1,483 824 241 INPATIENT AMBULATORY 0 0 747 224 109 INPATIENT SURGERY 0 0 0 0 0 INPATIENT ANCILLARY SERVICES 212,258,940 4,813 8,771 4,019 1,830 OUTPATIENT SERVICES 218,137,947 4,947 9,916 3,692 2,005



TOTAL REVENUE 451,032,016 10,228 18,627 9,444 5,477

DEDUCTIONS FROM REVENUE 381,356,304 8,648 0 0 0

NET REVENUES 69,675,712 1,580 2,715 1,821 1,305

EXPENSES ROUTINE 16,942,433 384 345 249 172 ANCILLARY 16,652,931 378 909 553 361 AMBULATORY 604,962 14 0 0 0





TOTAL EXPENSES 62,327,635 1,413 2,533 1,645 1,292





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e. Will the proposed project foster competition to promote quality and cost-effectiveness? ss. 408.035(1)(e) and (g), Florida Statutes.

All applicants The applicants are applying to establish a new CMR hospital or new CMR units in District 6. There are four existing CMR programs in District 6 with a total of 141 licensed CMR beds. There is one existing CMR program in Polk County, with 24 licensed CMR beds and no existing CMR program in Highlands County.

General economic theory indicates that competition ultimately leads to lower costs and better quality. However, in the health care industry there are several significant barriers to competition:

Price-Based Competition is Limited - Medicare and Medicaid account for 69.9 percent of CMR hospital charges in Florida, while HMO/PPOs account for approximately 23.9 percent of charges. While HMO/PPOs negotiate prices, fixed price government payers like Medicare and Medicaid do not. Therefore price-based competition is limited to non-government payers. Price-based competition is further restricted as Medicare reimbursement in many cases is seen as the starting point for price negotiation among non-government payers.

The User and Purchaser of Health Care are Often Different – Roughly 93.8 percent of CMR hospital charges in Florida are from Medicare, Medicaid, and HMO/PPOs. The individuals covered by these payers pay little to none of the costs for the services received. Since the user is not paying the full cost directly for service, there is no incentive to shop around for the best deal. This further makes price based competition irrelevant.

Information Gap for Consumers – Price is not the only way to compete for patients, quality of care is another area in which hospitals can compete. However, there is a lack of information for consumers and a lack of consensus when it comes to quality measures. In recent years there have been new tools made available to consumers to close this gap. However, transparency alone will not be sufficient to shrink the information gap. The consumer information must be presented in a manner that the consumer can easily interpret and understand. The beneficial effects of economic competition are the result of informed choices by consumers.

In addition to the above barriers to competition, a study presented in The Dartmouth Atlas of Health Care 2008 suggests that the primary cost driver in Medicare payments is availability of medical resources. The study found that excess supply of medical resources (beds, doctors, equipment, specialist, etc.) was highly correlated with higher cost per


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patient. Despite the higher costs, the study also found slightly lower quality outcomes. This is contrary to the economic theory of supply and demand in which excess supply leads to lower price in a competitive market. The study illustrates the weakness in the link between supply and demand and suggests that more choices lead to higher utilization in the health care industry as consumers explore all alternatives without regard to the overall cost per treatment or the quality of outcomes.

Conclusion (for all applicants): Due to the health care industry’s existing barriers in consumer based competition, the project will not likely foster the type competition generally expected to promote quality and cost-effectiveness.

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

Do they comply with statutory and rule requirements? ss. 408.035(1)(h), Florida Statutes. Ch. 59A-3, Florida Administrative Code.

The architectural review of the applications 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.

HealthSouth Rehabilitation Hospital of Polk County LLC (CON #10162) proposes to create a 50-bed CMR hospital in Polk County. The site for the new hospital has not been selected. The applicant acknowledges that Disaster Preparedness issue will be criteria in selecting a site, building design and construction.

The proposed hospital is divided into five smoke compartments. The patient rooms and support functions for the nursing unit is separate from the public, administration and outpatient areas. All patient rooms are ADA accessible private rooms with accessible toilet/shower rooms with visual privacy. The facility’s proposed dining, lounge and recreational areas meet the minimum requirement of 55 square feet of space per patient. All other required support spaces are provided and adequately sized and located. Occupational, physical therapy and outpatient rehabilitation services are incorporated into the therapy department, including a large therapy gym.

Plans submitted by the applicant indicate that the building will be fully sprinklered with construction type FBC Type II-A and NFPA 220 Type II(1,1,1). Both construction types are sufficient for the occupancy and building size. The project information on the plan indicates that the project will comply with current codes. According to the narrative, a generator will provide back-up energy with a capacity to support the proposed hospital.


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The estimated construction costs and project completion forecast appear to be reasonable. The design as presented does not indicate any major impediments that would prevent the design and construction of a code compliant facility.

Haines City HMA, LLC (CON #10163) proposes to create a 14-bed CMR unit at Heart of Florida Regional Medical Center in Davenport, Polk County. The new CMR unit would be created by renovating existing vacant area on the third floor of the hospital which previously was occupied by the mother/baby and OB department.

The patient bedrooms occupy one of the wings of the floor with support spaces located in the center and are shared with the other wings. All 14 patient rooms are private ADA accessible rooms with accessible toilet/shower rooms and visual privacy.

In the architectural narrative, the applicant proposes to provide patient living and activity (physical therapy/occupational therapy) areas. However, the submitted plans show that these areas are not separated. In addition, if dining is part of the proposed unit, additional space will need to be allocated for the patient living requirement of 55 square feet of space per patient. It is noted that the proposed project does meet the required 35 square feet per patient for living areas. All other required support space are provided and adequately sized and located.

The architectural narrative indicates that the project will comply with current codes. However, some modifications to the entrance of patient bedrooms will be needed to meet the maneuvering clearance of Florida Building Code - Accessibility requirements, but the physical constraints of the spaces should accommodate these changes.

The estimated construction costs and project completion forecast appears to be reasonable. The design as presented does not indicate any major impediments that would prevent the design and construction of a code compliant facility.

Lakeland Regional Medical Center, Inc. (CON #10164) proposes to establish 32-bed CMR unit at Lakeland Regional Medical Center in Lakeland, Polk County. The architectural plans and narrative submitted by the applicant indicates that the building is fully sprinklered, and that the existing construction type is listed as FBC, type IB. This construction type does not meet the requirements of the current Florida Building Code. During the renovation of the sixth floor, the fire protection on the structural frame and slabs must be upgraded to meet current building code standards.


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The 32 CMR beds will be located on the sixth floor of the facility and replace an area currently licensed as a medical/surgical nursing unit. All patient bedrooms would be private with a connecting toilet/shower room serving only one patient room. The plans and narrative indicate that all patient rooms and patient toilet/shower rooms will comply with the Florida Building Code-Accessibility requirements. The size of the patient bedrooms exceeds the minimum requirements of the Guidelines for Design and Construction of Health Care Facilities.

The architectural plans propose to provide patient living areas such as a day room and group activity within the unit. It is noted that the proposed project does meet the required 55 square feet per patient for patient living space for projects that include dining areas. Physical therapy/occupational therapy rooms are incorporated in the unit. All other required support space are provided and adequately sized and located.

The architectural plans and narrative indicates that the project will comply with current codes. The project area is divided into smoke compartments as required by the applicable codes. The estimated construction costs and project completion forecast appear to be reasonable. The project is well designed and should meet or exceed code requirements. Due to the day room’s size, an additional exit must be provided.

Sebring Hospital Management Associates, LLC (CON #10165) proposes to create a seven-bed CMR unit at Highlands Regional Medical Center in Sebring, Highlands County. The new CMR unit would be created by renovating an existing patient wing on the second floor of the hospital.

The patient bedrooms are private with toilet/shower rooms. The architectural narrative and plans indicate that only one ADA accessible room with toilet/shower is provided. However, Florida Building Code accessibility requires all CMR patient bedrooms to be ADA accessible.

The applicant’s architectural plans and narrative do not propose to provide patient living areas such as day room, group activity and dining within the unit, which is required by the Guidelines for Design and construction of Health Care Facilities. Additional space will need to be allocated for patient living requirement of 55 square feet of space per patient. A physical therapy/occupational therapy room is incorporated in the unit. All other required support space are provided and adequately sized and located.


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The architectural narrative indicates that the project will comply with current codes. The current egress corridors and smoke compartments will be maintained. The nurse station has visual control of the corridors and the elevators.

The design as presented has some deficiencies, and modifications will be needed to meet current code requirements, but the physical constraints of the spaces should be able to accommodate these changes. The estimated construction costs and project completion forecast appear to be reasonable.

g. Does the applicant have a history of providing health services to

Medicaid patients and the medically indigent? Does the applicant propose to provide health services to Medicaid patients and the medically indigent? ss. 408.035(1)(i), Florida Statutes.

The table below illustrates the Medicaid/Medicaid HMO days and percentages as well as charity percentages provided by the applicable facilities to Fiscal Year 2010 data Florida Hospital Uniform Reporting System.

Medicaid, Medicaid HMO and Charity Data

District 6 and Applicable Facilities Fiscal Year 2010

Applicant

Medicaid and Medicaid HMO

Days

Medicaid and Medicaid HMO

Percent

Percent of Charity Care

Percent Combined Medicaid,

Medicaid HMO and Charity Care

Heart of Florida 8,278 20.00% .76% 20.76% LRMC 28,499 15.43% 6.74% 22.17% Highlands Regional

2,993 14.01% .33% 14.34%

District Total 250,469 16.87% 5.05% 21.92% Source: Agency for Health Care Administration Florida Hospital Uniform Reporting System.

HealthSouth Rehabilitation Hospital of Polk County LLC (CON #10162) states that although it has no past or current operations, HealthSouth facilities have an extensive history of services to Medicaid patients and the medically indigent. The applicant provides a payer mix for the nine Florida HealthSouth facilities and notes the increasing number of self-pay and charity care patients over the last three years. The reviewer notes the decreasing number of Medicaid patients over the last three years. See the table below.


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HealthSouth Rehabilitation Hospitals of Florida Payer Mix for 2009-2011

Total Discharges Patient Days Payer 2009 2010 2011 2009 2010 2011 Medicare 10,939 10,496 10,914 156,770 150,669 152,219 Medicaid 393 313 288 5,720 5,084 4,107 Commercial 1,569 1,541 1,680 23,470 21,992 22,436 Self-Pay/Charity 67 77 140 953 1,613 2,266 Other 460 188 216 9,162 3,040 3,666 Total 13,428 12,615 13,238 196,075 182,398 184,694

Percentage of Total Discharges Percentage of Patient Days

2009 2010 2011 2009 2010 2011 Medicare 81.5% 83.2% 82.4% 80.0% 82.6% 82.4% Medicaid 2.9% 2.5% 2.2% 2.9% 2.8% 2.2% Commercial 11.7% 12.2% 12.7% 12.0% 12.1% 12.1% Self-Pay/Charity 0.5% 0.6% 1.1% 0.5% 0.9% 1.2% Other 3.4% 1.5% 1.6% 4.7% 1.7% 2.0% Source: CON application #10162, page 131.

HealthSouth proposes to provide service to Medicaid patients and the medically indigent. As a condition of approval of CON #10162, the applicant agrees to provide a minimum of 1.5 percent of patient days to Medicaid patients, including Medicaid HMO patients, and to provide a minimum of 1.0 percent of patient days to patients who meet the statutory definition of “charity care” patients. HealthSouth indicates that services to the latter category will include any professional fees for physiatrists overseeing the patient’s rehabilitation while at the proposed facility. Haines City HMA, LLC (CON #10163) presents its Medicaid contractual allowances to demonstrate its historical provision of care to underserved groups. Heart of Florida notes that in aggregate for fiscal year 2011, it provided more than $162 million in uncompensated Medicaid/Medicaid HMO/charity care services. See the table below.

Heart of Florida


Medicaid $83,106,543 Medicaid HMO $69,982,872 Charity Care $9,031,776 Total $162,121,191 Source: CON application #10163, page 55.

Heart of Florida asserts that its commitment to serving the medically underserved will continue with the implementation of the proposed program. The applicant notes that it will condition CON #10163 on the provision that it will provide seven percent of its total patient days to a combination of Medicaid, Medicaid HMO and charity care (including self-pay) patients.


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Based on the FHURS 2010 actual reports, Heart of Florida provided 20.00 percent (8,278 days) to Medicaid/Medicaid HMO and .76 percent of services to charity care. Heart of Florida is a low-income pool participating hospital. For fiscal year 2011-2012, OPMC’s total LIP allocation is $1,573,043. As of August 1, 2012, it has received $1,573,043 in LIP payments. Heart of Florida is not a disproportionate share hospital. According to Schedule 7B, approximately 6.53 percent of the total days provided in the proposed project will be Medicaid/Medicaid HMO days. The applicant has conditioned this project to 7.0 percent of total annual patient days to be provided to Medicaid and charity care (including self-pay) patients. Lakeland Regional Medical Center, Inc. (CON #10164) maintains that it currently participates in the Medicaid program and reported 27,417 (15.5 percent) Medicaid patient days in the AHCA prior year report for FY 2011. The applicant states that it will continue Medicaid participation in the proposed unit. LRMC states that the proposed program will be a provider-based unit for reimbursement purposes, billing under the hospital’s existing provider number. Based on the FHURS 2010 actual reports, LRMC provided 15.43 percent (28,499 days) to Medicaid/Medicaid HMO and 6.74 percent of services to charity care.

LRMC is a low-income pool participating hospital. For fiscal year 2011-2012, OPMC’s total LIP allocation is $281,272. As of August 1, 2012, LRMC has received $210,954 in LIP payments. LRMC is not a disproportionate share hospital. According to Schedule 7B, approximately 8.7 percent of the total days provided in the proposed project will be Medicaid/Medicaid HMO days. The applicant has conditioned this project to 6.0 percent of total annual patient days to be provided to Medicaid and charity care patients. Sebring Hospital Management Associates, LLC (CON #10165) presents its Medicaid contractual allowances to demonstrate its historical provision of care to underserved groups. HRMC notes that in aggregate for fiscal year 2011, it provided more than $31.5 million in uncompensated Medicaid/Medicaid HMO/charity care services. See the table below.


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Heart of Florida


Medicaid $27,286,692 Medicaid HMO $3,563,169 Charity Care $699,622 Total $31,549,483 Source: CON application #10163, page 55.

HRMC asserts that its commitment to serving the medically underserved will continue with the implementation of the proposed program. The applicant notes that it will condition CON #10165 on the provision that it will provide 10 percent of its total patient days to a combination of Medicaid, Medicaid HMO and charity care (including self-pay) patients. Based on the FHURS 2010 Actual Reports, Highlands Regional provided 14.01 percent (2,993 days) to Medicaid/Medicaid HMO and .33 percent of services to charity care. Highlands Regional is not a low-income pool participating hospital or a disproportionate share hospital. According to Schedule 7B, approximately 18.63 percent of the total days provided in the proposed project will be Medicaid/Medicaid HMO days. The applicant has conditioned this project to 10 percent of total annual patient days to be provided to Medicaid and charity care (including self-pay) patients.

F. SUMMARY

HealthSouth Rehabilitation Hospital of Polk County LLC (CON #10162) proposes to establish a 50-bed CMR hospital in Polk County.

The project involves 53,192 GSF of new construction. The construction cost is $12,273,312. Total project cost is $25,103,896.

HealthSouth proposes nine conditions to CON approval on CON application #10162’s Schedule C.

Haines City HMA, LLC (CON #10163) proposes to establish a 14-bed CMR unit at Heart of Florida Regional Medical Center in Polk County. The project involves 6,944 GSF of renovation. The construction cost is $661,213. Total project cost is $1,158,914.

Heart of Florida proposes eight conditions to CON approval on CON application #10163’s Schedule C.


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Lakeland Regional Medical Center, Inc. (CON #10164) proposes to establish an inpatient comprehensive medical unit of up to 32 beds.

The project involves 31,472 GSF of renovation. The construction cost is $7,252,880. Total project cost is $11,906,880.

LRMC proposes four conditions to CON approval on CON application #10164’s Schedule C. Sebring Hospital Management Associates, LLC (CON #10165) proposes to establish a seven-bed CMR unit at Highlands Regional Medical Center in Highlands County. The project involves 4,400 GSF of renovation. The construction cost is $814,000. Total project cost is $1,062,205. Highlands Regional proposes seven conditions to CON approval on CON application #10165’s Schedule C.

Need:

In Volume 38, Number 29, dated July 20, 2012 of the Florida Administrative Weekly, a fixed need pool of zero beds was published for CMR beds in District 6 for the January 2018 planning horizon. District 6 has 141 licensed and zero approved CMR beds. District 6’s 141 licensed CMR beds experienced 65.87 percent utilization during the 12-month period ended December 31, 2011. The applicants are applying outside of the fixed need pool.

HealthSouth Rehabilitation Hospital of Polk County LLC (CON #10162) provided seven letters of support indicating there is need for the proposed CMR facility in the service area.

HealthSouth identifies three major circumstances that justify approval of the proposed projects in the absence of published need. These include: Unreasonably low rates of discharges from Polk County general

hospitals to CMR services. Hesitance of providers to refer patients to CMR units at competing

general hospitals. Failure of Polk County general hospitals to offer CMR services.


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The applicant indicates that its data support a need for 55 CMR beds in 2015 and 60 CMR beds in 2018. HealthSouth maintains that service area residents utilize CMR services at a rate significantly less than Floridians as a whole in all age groups.

Haines City HMA, LLC (CON #10163) provided seven letters of support indicating there is need for the proposed CMR facility in the service area.

Heart of Florida identifies nine specific arguments that warrant approval of the proposed project in the absence of published need. These include: Polk County has a ratio of just one CMR bed per 19,460 Polk County

adult residents. CMR beds are geographically and programmatically inaccessible to

residents of the Heart of Florida service area. Rehabilitation appropriate patients at Heart of Florida always

experience a break in continuity of care as this level is not currently available in-house.

District 6 has one of the highest CMR occupancy rates and it has the single lowest CMR discharge use rate per 1,000 population age 65+.

Heart of Florida is a designated stroke center and is committed to fulfilling the continuum of care for its stroke patients in the post-acute setting of a CMR program.

There is a large percentage of elderly population in the Heart of Florida service area compared to the state average.

Due to the Affordable Care Act, the applicant must position itself to be able to offer a full array of services to compete effectively in providing quality services.

Heart of Florida is able to fully support a CMR program based on its own internal volume of rehabilitation appropriate patients.

There are zero existing CMR beds in Heart of Florida’s service area.

Heart of Florida indicates that its data support a need for between 14 and 17 CMR beds in 2015 depending on the methodology used.

Lakeland Regional Medical Center, Inc. (CON #10164) provided 22 letters of support indicating there is need for the proposed CMR facility in the services area.

LRMC identifies seven specific circumstances that justify approval of the proposed project in the absence of published need. These include: Given the size and scope of the hospital, including a Level II Trauma

center, LRMC can support the efficient utilization of a major CMR unit.


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LRMC rehabilitation appropriate patients and families have non-clinical access issues as well as placement difficulties for Medicaid and unfunded patients.

LRMC serves as the safety-net provider for Polk County residents. The large gap between the expected versus actual demand for CMR

beds in District 6 compared to the state average. An even greater gap in the age-adjusted use rate when comparing

actual utilization to expected demand. There has been no published need for CMR beds in the past several

years. CMS policy changes have had a dramatic impact of inpatient

rehabilitation facility admission criteria and resultant demand. LRMC’s proposed will be supported by LRMC’s own patients,

mitigating impact on current providers.

The applicant indicates that its data support a need for 40 CMR beds in 2016 and 41 CMR beds in 2018. LRMC maintains that District 6 is underserved by CMR beds for the age 65+ population. Sebring Hospital Management Associates, LLC (CON #10165) provided four letters of support indicating there is need for the proposed CMR facility in the service area.

HRMC identifies seven specific circumstances that justify approval of the proposed project in the absence of published need. These include: District 6 has one of the highest CMR occupancy rates of any district

in the state and has the single lowest CMR discharge use rate per 1,000 population age 65+.

CMR beds are between 50 and 92 miles from HRMC and between 67 and 115 minutes of driving time.

A seamless uninterrupted continuity of care from the acute care setting to the post-acute CMR setting is not an option available to residents of the service area.

There is a large percentage of elderly population in Highlands County compared to the state average.

Due to the Affordable Care Act, the applicant must position itself to be able to offer a full array of services to compete effectively in providing quality services.

HRMC is able to fully support a CMR program based on its own internal volume of rehabilitation appropriate patients.

There are zero existing CMR beds in Highlands County.

The applicant indicates that its data support the need for eight CMR beds in 2014 and 2015.


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Quality of Care:

HealthSouth Rehabilitation Hospital of Polk County LLC (CON #10162): Agency complaint records indicate that during the three-year period ending September 5, 2012 HealthSouth’s nine hospitals (763 beds) had a total of 11 substantiated complaints.

Haines City HMA, LLC (CON #10163): Agency complaint records indicate that during the three-year period ending September 5, 2012, Heart of Florida had eight substantiated complaints and HMA’s 23 hospitals (3,036 beds) had a total of 83 substantiated complaints.

Lakeland Regional Medical Center, Inc. (CON #10164): Agency complaint records indicate that during the three-year period ending September 5, 2012 that LRMC had 18 substantiated complaints.

Sebring Hospital Management Associates, LLC (CON #10165): Agency complaint records indicate that during the three-year period ending September 5, 2012, Highlands Regional had eight substantiated complaints and HMA’s 23 hospitals (3,036 beds) had a total of 83 substantiated complaints.

All four applicants demonstrate the ability to provide quality care.

Medicaid/Indigent Care:

HealthSouth Rehabilitation Hospital of Polk County LLC (CON #10162) conditions the proposed project to 1.5 percent of total annual patient days to be provided to Medicaid patients and 1.0 percent of total annual patient days to be provided to patients who meet the statutory definition of “charity care” patients.

Haines City HMA, LLC (CON #10163) conditions the proposed project to 7.0 percent of total annual patient days to be provided to Medicaid and charity care patients. Lakeland Regional Medical Center, Inc. (CON #10164) conditions the proposed project to 6.0 percent of total annual patient days to be provided to Medicaid and charity care (including self-pay) patients.

Sebring Hospital Management Associates, LLC (CON #10165) conditions the proposed project to 10.0 percent of total annual patient days to be provided to Medicaid and charity care (including self-pay) patients.


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Cost/Financial Analysis:

HealthSouth Rehabilitation Hospital of Polk County LLC (CON #10162): The applicant’s parent has an adequate short-term and long-term position. Funding for this project and the entire capital budget should be available as needed. The project appears to be financially feasible.

Haines City HMA, LLC (CON #10163): The applicant’s parent has a good short-term and long-term position. Funding for this project and the entire capital budget should be available as needed. The project appears to be financially feasible.

Lakeland Regional Medical Center, Inc. (CON #10164): The applicant’s parent has an adequate short-term and long-term position. Funding for this project and the entire capital budget should be available as needed. The project appears to be financially feasible.

Sebring Hospital Management Associates, LLC (CON #10165): The applicant’s parent has a good short-term and long-term position. Funding for this project and the entire capital budget should be available as needed. The project appears to be financially feasible.

Architectural Analysis: HealthSouth Rehabilitation Hospital of Polk County LLC (CON #10162): The estimated construction costs and project completion forecast appear to be reasonable. The design as presented does not indicate any major impediments that would prevent the design and construction of a code compliant facility. Haines City HMA, LLC (CON #10163): The estimated construction costs and project completion forecast appear to be reasonable. The design as presented does not indicate any major impediments that would prevent the design and construction of a code compliant project. However, additional space will need to be allocated for the patient living requirement and some modifications to the entrance of patient bedrooms will be needed. Lakeland Regional Medical Center, Inc. (CON #10164): The architectural plans and narrative indicates that the project will comply with current codes. The estimated construction costs and project completion forecast appear to be reasonable. The project is well designed and should meet or exceed code requirements.


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Sebring Hospital Management Associates, LLC (CON #10165): The design as presented has some deficiencies, and modifications will be needed to meet current code requirements—including having all CMR patient bedrooms to be ADA accessible and providing patient living areas within the unit. The physical constraints of the spaces should be able to accommodate these changes. The estimated construction costs and project completion forecast appear to be reasonable.

G. RECOMMENDATION

Approve CON #10164 to establish a 32-bed comprehensive medical rehabilitation unit in District 6, Polk County. The total project cost is $11,906,880. The project involves 31,472 GSF of renovation and a construction cost of $7,252,880. CONDITIONS: 1. The site of the project will be LRMC (1324 Lakeland Hills

Boulevard, Lakeland, Florida 33805) as a 32-bed CMR unit created through the delicensure of 32 acute care beds.

2. A minimum of 6.0 percent of the total annual patient days provided in the 32-bed CMR unit will be to Medicaid and charity care, combined.

3. LRMC will offer comprehensive outpatient programs to meet the specific needs of the post-discharge rehabilitative patient as part of LRMC’s outpatient physical, occupational and speech/language therapy services.

Deny CONs 10162, 10163 and 10165.


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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 Director, Florida Center for Health Information and Policy Analysis