STATE AGENCY ACTION REPORTahca.myflorida.com/MCHQ/CON_FA/Batching/pdf/9966.pdf · 2007. 2. 22. · 2 CON #9966 AHCA Form CON-1, Page 2-26, Letters of Intent to Contract for Inpatient

STATE AGENCY ACTION REPORT

ON APPLICATION FOR CERTIFICATE OF NEED

A. PROJECT IDENTIFICATION 1. Applicant/CON Action Number

Evercare Hospice of Collier County, Inc./CON #9965 601 Brooker Creek Boulevard Oldsmar, Florida 34677 Authorized Representative: Patricia Ford, Vice President of Operations (888) 437-4673 HCR Manor Care Services of Florida, Inc./CON #9966 333 North Summit Street Toledo, Ohio 43604 Authorized Representative: Bruce Schroeder, Assistant Vice President Heartland Home Health and Hospice (419) 252-5668 Hope of Southwest Florida, Inc./CON #9967 9470 Health Park Circle Fort Myers, Florida 33908 Authorized Representative: Samira Beckwith, President and

Chief Executive Officer (CEO) (239) 489-9140 Odyssey HealthCare of Collier County, Inc./CON #9968 717 North Harwood Street, Suite 1500 Dallas, Texas 75201 Authorized Representative: W. Bradley Bickham, Vice President and General Counsel (214) 245-3176

CON Action Number: 9965-9969

VITAS Healthcare Corporation of Florida/CON #9969 100 South Biscayne Boulevard Miami, Florida 33131 Authorized Representative: Patricia Greenberg National Healthcare Associates, Inc. (305) 444-5007

2. Service District/Subdistrict

District 8/Hospice Service Area 8B/Collier County B. PUBLIC HEARING

A public hearing was not held or requested regarding the five proposals to establish a hospice program in Hospice Service Area 8B. However, letters of support were submitted to the Agency for Health Care Administration (the Agency). The Agency received one generic letter of support from a medical doctor in Naples, Florida; this letter promotes another hospice option in Collier County but does not specify any particular one of the five applicants. A summary of the remaining letters, specific to each applicant, is discussed below. Evercare Hospice of Collier County, Inc. (CON #9965) (Evercare) submits several letters under multiple appendices1. Appendix J holds 15 letters of appreciation from prior service recipients in Evercare sister hospices. Appendix D includes three letters of thanks concerning services in February 2005 (though one of the three letters is not dated). Appendix E reflects two letters of thanks/commendation from collegiate partners (executives from Aging with Dignity and the National Hospice Foundation). Letters specifically recommending Evercare total 20. Of the 15 letters of appreciation in Appendix J, 13 are highly personal and handwritten notes or letters of thanks from family members whose loved ones were served by an apparent Evercare sister hospice. Nine of these are not dated, the remainder being current, ranging from February 2006 to October 2006. Of these 15 (Appendices J) letters, 10 have no address or other location identification and 10 make no specific reference to an Evercare sister provider or specifically mention Evercare by name. None of these 15 letters reveal a signature, though it appears signatures were either blocked or otherwise hidden, presumably to protect a patient’s

1 CON #9965 AHCA Form CON-1, Appendix D – Evercare Information, Appendix E – Letters of Support/Commendation and Appendix J – Letters of Commendation Written to Evercare Hospices.

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health information. Signatures were not blocked or otherwise hidden or protected regarding the three letters of thanks in Appendix D. None of the 20 letters commit to a contractual relationship concerning inpatient services should this applicant by awarded a CON; none are from local hospitals, nursing homes, adult living facilities (ALFs) or other related facilities or providers. HCR Manor Care Services of Florida, Inc. (CON #9966) (HCR Manor Care) submits two distinct letters of support sections2. This applicant includes four letters from local health care providers that commit to a contractual relationship to provide inpatient services, should this applicant be awarded a CON. These letters represent the most such contractual commitment of any of the five co-batched applicants. They are current, being dated December 2006 and all four are signed by senior executives, including the CEO of Collier Regional Medical Center (J. M. Mastej), and the CEO of Physicians Regional Medical Center (G. Moebius), two local hospitals, and the Director at ManorCare at Lely Palms (C. Byrne) and the Executive Vice President of Operations at Health Management Associates, Inc. (P. Lawson), these latter two operating skilled nursing facilities (SNFs) . All these facilities are located in Collier County. The remaining non-contractual letters of support total over 100. Representatives of the Florida Department of Children and Families’ (DCF) Naples Service Center and DCF’s Protective Services Unit staff in Naples also provide support as do employees/staff at the HCR ManorCare Nursing and Rehabilitation Center. Nine of the letters do not disclose a location or address. Three letters are from representatives of Heritage Healthcare and Rehabilitation Center, a licensed SNF in Naples and it is stated this facility will “work with” the applicant should it be awarded a CON but no contractual commitment is stated. An acknowledgement to “work with” the applicant is also made by senior staff at Winsor Place but again, no contractual commitment. There is also a letter from Whitsyms Nursing Services (a nursing recruiter), Homewatch International, Inc. (a provider of home care services) and also “Senior Bridge” (an at-home elder care provider). Support is also offered by the Florida Agriculture and Mechanical University’s (FAMU) Dean and Professor, Dr. D. Harris.

2 CON #9966 AHCA Form CON-1, Page 2-26, Letters of Intent to Contract for Inpatient Beds and Page 2-29, Letters of Support and Sources of Referrals

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This letter indicates the FAMU’s College of Allied Health has many students who are from the Collier County area and could benefit from internships through this applicant; however, no total number or range of students that might be impacted is offered. There are also some physicians, other health care providers and residents of Collier County that provide support and these letters are overall highly complimentary of this applicant. Hope of Southwest Florida, Inc. (CON #9967) (Hope) received over 100 letters of support, some submitted with its application and others submitted directly to the Agency. One of the letters submitted to the Agency is from Florida State Senator, the Honorable Dave Aronberg (District 27). Other letters include support from senior executives of an adult living facility (ALF), Lee Memorial Health System, publisher of Times of the Islands3 (a Lee County/Southwest Florida magazine that addresses issues of importance to the community), a real estate developer and the Island Coast AIDS Network. The magazine publisher (F. Jaeger) states, “no other not-for-profit organization in this area enjoys the reputation that Hope does.” Two Collier County physicians and the administrator (E. Sakmar) at Buena Vida Retirement and Assisted Living also submitted letters of support. The majority of the letters are current, having been dated November or December 2006. There is no date for 22 of these letters, no address or other location identification for 15 of the letters, one has no signature (K. Miller, MD). Two letters from Naples providers, Moorings Park and Bentley Village (Bentley Care Center), both being continuing care retirement communities that have licensed skilled nursing facilities (SNFs) and other arrangements in Naples, offer a contractual relationship should this applicant be awarded a CON. These two providers report in the letters combined populations of 1,450 residents. Other support is provided from senior executives of the Immokalee Chamber of Commerce, Collier County Council on Aging, Lehigh Regional Medical Center, other assisted living facilities, Lee Mental Health, United Way providers such as Boy Scouts of America Southwest Florida Council, the AIDS Resource Council of Southwest Florida, the Rand Corporation (Palliative Care Policy Center) and local churches. This is not an exhaustive list of supporters and many physicians and medical groups in both Naples and Fort Myers also state support for this applicant. Many if not all of these letters stress Hope’s local roots, local board and over 25 years of operation in Lee County and the resultant relationships,

3 http://www.toti.com/about/about.html

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http://www.toti.com/about/about.html


familiarity and cohesiveness due to longevity and working successfully with local partners throughout the years. One highlight that is frequently stated is Hope Life Care, in which Hope is an approved provider of the Department of Elder Affairs’ Long Term Care Diversion Program. Odyssey HealthCare of Collier County, Inc. (CON #9968) (Odyssey-Collier) submits five letters of support4. All but one of these letters lacks a date and an address or other means of identifying the authors’ locations and relationship to the Collier County or Southwest Florida area. Three letters are from physicians that reference the promptness of the three-hour admission time that is provided by the applicant’s parent. None of these letters state a contractual relationship, should this applicant be awarded a CON. None are from Collier County or nearby acute care hospitals or SNFs or ancillary providers. The Nova Southeastern University (NSU) has entered into a Memorandum of Understanding (MOU) to expand its clinical operations to dovetail with Odyssey-Collier’s operations, should it be awarded a CON. Similar to the FAMU letter of support, there is no estimate or range of students anticipated to be impacted. VITAS Healthcare Corporation of Florida (CON #9969) (VITAS) submits nine net letters of support. The Agency directly received one letter of support for this applicant (Catholic Hospice of Miami Lakes, Florida). This totals 10 support letters. Most of the letters are current, having been dated in December but some are dated in November 2006. Two of these letters agree to “enter into appropriate agreements” should this applicant be awarded a CON. Those supporters are senior executives of Collier Regional Medical Center (Collier Regional) and Physicians Regional Medical Center (Physicians), both located in the city of Naples, Collier County. Physicians’ CEO (G. Moebius) states that should this applicant be awarded a CON there would likely be less impact on the existing hospice in the area, as VITAS, being a for-profit provider, “will not compete for charitable contributions”. The letter from Collier Regional is not dated. The remaining letters are from medical staff and/or senior executives of primarily operations headquartered in the counties of Palm Beach, Broward or Miami-Dade.

4 CON #9968 AHCA Form CON-1, Attachment J – Letters of Support and one independently submitted

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Summary of Contractual Support Evercare and Odyssey submit no letters of contractual support. HCR Manor Care submits four current letters of contractual support; two are from executives of acute care hospitals and two are from skilled nursing facility operators, all located in Collier County. Hope submits two letters of contractual support from continuing care retirement communities, containing operational skilled nursing facilities. VITAS offers current support letters from the same two local acute care hospitals (Collier Regional Medical Center and Physicians Regional Medical Center) as co-batched applicant HCR Manor Care. Only co-batch applicants VITAS and HCR Manor Care receive contractual support commitments for in-patient services by Collier County acute care hospitals.

C. PROJECT SUMMARY

Evercare Hospice of Collier County, Inc. (CON #9965) proposes to establish a new hospice program in Hospice Service Area 8B, Collier County. No exact Collier County location is specified. The applicant and its parent, UnitedHealth Group, Inc. (United) state that United currently has no hospices in Florida, but an affiliate Evercare Hospice and Palliative Care, operations 10 hospice programs in eight states, with eight of the programs currently Medicare-certified. The nearest is located in Georgia. United claims other health care marketplace activity in Florida, claiming health care services to 2.4 million individuals, primarily in the Florida cities of Miami, Tampa, Jacksonville and Tallahassee. The applicant is proposing total project costs of $649,450; covered are building costs (leasehold improvements but no construction costs), development and pre-operational start-up costs. There are no land, equipment or financing costs. Evercare requests the CON be predicated on the following conditions: non-covered services, such as but not limited to, palliative radiation; palliative chemotherapy (related to the terminal illness); other therapies such as music, massage, aroma and other holistic treatments (not specified in greater detail) and at least 1.50 percent of care as indigent/charity care. Hospice programs are required by federal and state law to provide services to everyone requesting them and therefore the Agency would not place conditions on a program to provide legally required services. Although the applicant has indicated that palliative radiation and chemotherapy are non-covered services, they are covered if required by the patient.

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HCR Manor Care Services of Florida, Inc. (CON #9966), a Florida for-profit entity, proposes to establish a new hospice program in Hospice Service Area 8B, Collier County. No exact Collier County location is specified. The applicant and its parent, Manor Care, Inc. state that it currently has no hospices in Florida, but the parent operates over 100 hospices and home health agencies in 23 states, with six home health agencies in Florida and a hospice that is planned to be opened in the next few months (CON #9783, Heartland Hospice Services of Florida, Inc. – Duval County). Manor Care, Inc. also reports 300 nursing homes and assisted living facilities in 30 states, with 48 of them in Florida and two in Collier County. The parent claims operation of its Collier County nursing homes since 1982. The applicant is proposing total project costs of $305,771; covered are equipment, development and pre-operational start-up costs. There are no land or building costs. HCR Manor Care requests the CON be predicated on the following conditions: no estimated or predetermined Medicaid or charity care percentages; timely reporting of utilization rates to the applicable local health council (LHC) and the Department of Elder Affairs and any other conditions that the Agency may deem appropriate. Utilization reporting is required in regulations and therefore a CON condition to require the application to do something that is already required is unnecessary. It is noted that hospice admission data, which is required to be reported to the Agency by hospice programs, is reported directly to the Agency and not local health councils. Hope of Southwest Florida, Inc. (CON #9967), a Florida not-for-profit, 501(c)(3) charitable entity, proposes to establish a new hospice program in Hospice Service Area, Collier County. It states it’s the current provider of hospice services to the residents of Hospice Service Area 8C (Lee, Hendry and Glades Counties) and 6B (Polk, Hardee and Highlands Counties). The applicant is proposing total project costs of $369,597; covered are equipment, development and pre-operational start-up costs. There are no land or building costs. Hope requests the CON be predicated on the following conditions: it will establish an office in Naples and Immokalee and forward the business licenses and certificates of occupancy for those two offices to the Agency during the first year of operation as evidence of meeting a commitment to establish offices in this planning area; it will provide education and outreach programs in Collier County to enhance access to the population

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under 65 years of age and cancer patients who require palliative therapies and will send those materials to the Agency as evidence of meeting this condition; it will also forward attendance sheets of the aforementioned educational and outreach efforts and it will forward to the Agency its emergency preparedness plan for Hospice Service Area 8B. Odyssey HealthCare of Collier County, Inc. (CON #9968) is parented by Odyssey Healthcare, Inc. The applicant proposes to establish a new hospice program in Hospice Service Area 8B, Collier County. No exact office location is offered other than somewhere in Collier County. The parent, Odyssey Healthcare, Inc., reports 82 hospices in 30 states over the past 10 years. It operates two hospices in Florida, located in Hospice Service Area 4B and 11. The applicant is proposing total project costs of $464,720; covered are equipment, development and pre-operational start-up costs. There are no land or building costs. Odyssey-Collier requests the CON be predicated on the following conditions: non-covered services, such as but not limited to, palliative radiation; palliative chemotherapy (related to the terminal illness); other therapies such as music, massage, aroma and other holistic treatments; expenditure of at least $25,000 during the first two years on public education concerning end of life planning; any reporting to the Department of Elder Affairs will be disclosed to the Agency annually. As noted above under co-batched applicant, Evercare, although the applicant has indicated that palliative radiation and chemotherapy are non-covered services, they are covered if required by the patient. Additionally, as the applicant is not required to report data it reports to the Department of Elder Affairs to the Agency, this will be a listed condition should the CON be awarded. VITAS Healthcare Corporation of Florida (CON #9969) reports some 28 years of hospice experience, with 41 hospices in 16 states. This applicant is currently a provider of hospice services in the following Florida Hospice Service Areas: 4B, 7A, 7B, 7C, 9C, 10 and 11. The applicant is proposing total project costs of $238,375; covered are equipment, development and pre-operational start-up costs. There are no land or building costs. VITAS requests the CON be predicated on the following conditions5:

5 CON #9969 AHCA Form CON-1, Volume 1 – Tab 5/Schedule C Conditions

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Core services • Provide palliative radiation, chemotherapy and transfusions, as

appropriate for treating symptoms (measured by a signed declaratory statement which may be support by review of patient medical records).

• Provide hospice services 24 hours a day, seven days a week as indicated by the patient’s medical condition (measured by continued Medicare certification).

• Admit all eligible patients without regard to their ability to pay (measured by continued Medicare certification).

Non-core services

• Commit to having every patient be assessed by a physician upon admission (measured by a signed declaratory statement which may be supported by review of patient medical records).

• A physician will serve as a member on every care team with patient visits as required (measured via a signed declaratory statement which may be support via a review of patient medical records).

• On the first day of hospice care, all responsive patients will be assessed pursuant to the 0-10 World Health Organization pain scale, a patient pain history will be maintained (recorded in Vx via telephone calls using the telephone key pad for data entry) with extremely high levels of pain reduced to moderate or lower levels within 48 hours (greater than 60 percent of patients who report pain from seven to10 will report a reduction of paint to five or less within the 48 hours).

• Implementation of a pet therapy program immediately (measured by a signed declaratory statement).

Operational/Programmatic Conditions

• Establish satellite offices in Immokalee and Marco Island during the first year of operation (measured by submission of the office address and location to the Agency and publication of such addresses in the provider’s collateral material).

• Implement TeleCare immediately (measured by publication of the relevant collateral materials for the provider and patient community).

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• Establish a local ethics committee, beginning upon certification (measured by publication of the names and relevant information of the ethics committee members and the related schedule of meetings).

• By the end of the second year of operations implement CarePlanIT (a handheld bedside clinical information system) to be measured by the CarePlanIT budget on Schedule 2 of CON #9969 application and will be measured at the time of implantation via a signed declaratory statement).

• Offer educational programs to applicable Hospice of Naples, Inc. partners (staff, physicians and patients measured by publication of relevant materials and related communication between the applicant and Hospice of Naples, Inc.).

• Provide Hospice of Naples Foundation a list of the applicant’s patients and families that wish to make hospice contributions (measured by the applicant’s inclusion of Hospice of Naples Foundation information on the applicant’s collateral materials.

• Make a $20,000 charitable contribution to Hospice of Naples upon the applicant’s certification (measured by a signed declaratory statement and evidence of funds transfer).

• Serve 65 percent patients classified as non-cancer (measured via required annual submission to the Agency applicable submission data).

• Establish immediately a clinical pastoral education program (measured via publication of the relevant collateral materials for the pastoral community and identification of the pastoral interns who participate in the program each year).

VITAS notes a number of core services in its listing of CON conditions and has titled them “Core Services”. Hospice programs are required by federal and state law to provide certain core services to everyone requesting them and therefore the Agency would not place conditions on a program to provide legally required services. With the exception the condition to serve 65 percent non-cancer patients, the “Non-Core Services” and the “Operational/Programmatic Conditions” listed by the applicant will be placed on the CON should it be awarded to VITAS.

D. REVIEW PROCEDURE

The evaluation process is structured by the certificate of need review criteria found in Section 408.035, Florida Statutes, rules of the State of Florida, and 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

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compliance with the criteria. Analysis of an applicant's capability to undertake the proposed project successfully is conducted by evaluating the responses provided in the application and independent information gathered by the reviewer. Applications are analyzed to identify various strengths and weaknesses in each proposal. If more than one application is submitted for the same type of project in the same district (subdistrict or service planning area), applications are comparatively reviewed to determine which applicant best meets the review criteria. Section 59C-1.010(2)(b), Florida Administrative Code, prohibits any amendments once an application has been deemed complete. The burden of proof to entitlement of a certificate rests with the applicant. As such, the applicant is responsible for the representations in the application. This is attested to as part of the application in the certification of the applicant. As part of the fact-finding, consultant Steve Love analyzed the applications in their entirety with consultation from financial analyst John Williamson, who evaluated the financial data.

E. CONFORMITY OF PROJECT WITH REVIEW CRITERIA The following indicate the level of conformity of the proposed project with the review criteria and application content requirements found in Sections 408.035, and 408.037, and applicable rules of the State of Florida, Chapters 59C-1 and 59C-2, Florida Administrative Code.

1. Fixed Need Pool

Does the project proposed respond to need as published by a fixed need pool? Chapter 59C-1.008, Florida Administrative Code and Chapter 59C-1.0355, Florida Administrative Code.

In Volume 32, Number 40 of the Florida Administrative Weekly, dated October 6, 2006, a hospice program net need of one (1) was published for Hospice Service Area 8B for the January 2008 Hospice Planning Horizon. Hospice Service Area 8B is currently served by Hospice of Naples, Inc. Each co-batched applicant is applying in response to published need for a hospice program in Hospice Service Area 8B (Collier County). The following describes the area(s) in which each applicant believes unmet

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need or underserved populations exist in the county, with each applicant indicating that it will address the area(s) where it sees the greatest need. References to District 8 are for the following counties: (8A) Charlotte and Desoto; (8B) Collier; (8C) Glades, Hendry and Lee; (8D) Sarasota. Evercare Hospice of Collier County, Inc. (CON #9965) responds to Agency fixed need pool calculations and describes need in its application6. Through tables and exhibits, Evercare indicates the population growth rate in District 8 (6.1 percent) and the state growth rate (4.4 percent) are both under the anticipated population growth rate, through 2008, for Hospice Service Area 8B (8.3 percent). A similar scenario exists regarding the growth of the 65 and older and 75 and older population growth rate in Hospice Service Area 8B relative to the district and the state. The applicant reports cancer as the single most likely cause of death in Hospice Service Area 8B in 2004 but also sizable numbers of deaths from other chronic and debilitating illnesses. Evercare shows that particularly cancer patients and non-cancer patients, under the age of 65, are underserved in Hospice Service Area 8B. This is relative to the statewide average. This applicant agrees with the Agency fixed need pool calculation with utilization rates below that statewide averages regarding the following three categories: cancer patients under age 65, cancer patients 65 and older and non-cancer patients under age 65. The applicant believes the ranking means that cancer patients of all ages and younger non-cancer patients (those under age 65) are underserved in the current environment. It is noted that averages below the statewide average do not mean a patient population is underserved. To have an average, someone always must be below it. Without other evidence, the applicant has not demonstrated that this population is underserved. This applicant states factors that it believes distinguish it as the most suitable applicant to meet what it believes is the unmet need stated above. Though HCR Manor Care, Hope and VITAS report part-time in-house medical directors (at least for the first year with increasing FTEs in the second), only Evercare reports a full 1.0 FTE medical director in its Schedule 6A (year one and year two). Odyssey reports a contracted physician (not identified as a hospice employee on Schedule 6 [discussed under the Odyssey section of this review]). This applicant reports it accepts patients still undergoing aggressive and experimental anti-cancer therapies, tube feeding, dialysis, etc. This means the patient is not required to abandon curative and life-sustaining treatments as a condition of receiving the applicant’s hospice services. However, it is clear the Florida Legislature intended hospice care to be received by

6 CON #9965, AHCA Form CON-1, pages 32 – 56.

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patients not seeking curative treatment.7 Referrals are visited within three hours (unless otherwise requested), staff attendance at or immediate after a patient’s death is emphasized and while bereavement services are provided up to 13 months after the patient’s death, such services may be extended further when a determination is made that additional support is needed. This applicant reports and describes in this section a disaster preparedness strategy, arrangements for charitable contributions to 501(c)(3) organizations, reports the parent is a leading provider of Special Needs Plans (SNPs) and participates in Florida Nursing Home Diversion through Evercare Health and Home Connections. This is not an exhaustive list. Evercare forecasts 5,859 patients days with a 30-day average length of stay (ALOS) for year one [CY 2008]; it estimates 17,022 patient days with a 50-day ALOS for year two [CY 2009]. These generate 195 and 340 patients for year one and year two, respectively. HCR Manor Care Services of Florida, Inc. (CON #9966) responds to Agency fixed need pool calculations and describes need in its application8. HCR Manor Care reflects declining penetration rates in CY 1999 and 2005 in Hospice Service Area 8B relative to the state. A failure to keep pace with an incremental increase in Collier County population is described by HCR Manor Care as evidence that hospice need is growing. This applicant reports cancer as the leading cause of death in Collier County in CY 2005; heart disease is stated as the leading cause of death statewide, followed by cancer. This applicant finds the following diseases underrepresented in terms of hospice care in Hospice Service Area 8B relative to the state average: cancer, chronic lower respiratory disease and end stage renal disease. HCR Manor Care states patients in Collier County suffer these illnesses but receive hospice care for them at a lesser rate than on a statewide basis. It is patients with these illnesses that the applicant targets. As noted above for co-batched applicant Evercare, this

7 Florida Statutes Chapter 400.6005 Legislative findings and intent.--The Legislature finds that terminally ill individuals and their families, who are no longer pursuing curative medical treatment (emphasis added), should have the opportunity to select a support system that permits the patient to exercise maximum independence and dignity during the final days of life. The Legislature finds that hospice care provides a cost-effective and less intrusive form of medical care while meeting the social, psychological, and spiritual needs of terminally ill patients and their families. The intent of this part is to provide for the development, establishment, and enforcement of basic standards to ensure the safe and adequate care of persons receiving hospice services. Section 400.601(3), Florida Statutes defines "hospice" as a centrally administered corporation providing a continuum of palliative and supportive care for the terminally ill patient and his or her family and (4) defines "palliative care" as services or interventions which are not curative but are provided for the reduction or abatement of pain and human suffering. Section 400.601(3), Florida Statutes defines "hospice" as a centrally administered corporation providing a continuum of palliative and supportive care for the terminally ill patient and his or her family and (4) defines "palliative care" as services or interventions which are not curative but are provided for the reduction or abatement of pain and human suffering. 8CON #9966, AHCA Form CON-1, pages 1-1 to 1-25.

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by itself is not clear evidence of an unmet need or an underserved population. This applicant states factors that it believes distinguish it as the most suitable applicant. HCR Manor Care’s parent - Manor Care, Inc – has a current local presence in Collier County. HCR Manor Care reports that its parent began operations in 1982 in Hospice Service Area 8B. The parent is reported to have two skilled nursing facilities (SNFs) and two assisted living facilities (ALFs) in Collier County and a home health care agency physically located in Lee County that serves the entire district including Collier County. The applicant states its parent seeks to create a local continuum of care and seeks a hospice CON in markets where it already has existing local support networks (SNFs, ALFs, etc.). This applicant, similar to co-batched applicant Evercare, stresses the patient is not required to give up curative hope and does not have to have made a decision not to try and recover. However, it is clear the Florida Legislature intended hospice care to be received by patients not seeking curative treatment.9 In planning to build on existing local networks, HCR Manor Care believes it could most appropriately accommodate the existing need based on the factors noted. HCR Manor Care forecasts reaching 152 hospice patients in the first year of operations (CY 2008) and 263 the following year (CY 2009). HCR Manor Care expects the number of anticipated admissions for several reasons possibly the most striking being that it states in the past five years the Florida hospice first year admission average is 135 (median of 134) patients and no Florida hospice has had more than 216 admissions in its first year of operations. It anticipates its highest number of admissions, in both year one and year two, to be non-cancer patients over 65 years of age. Hope of Southwest Florida, Inc. (CON #9967) responds to Agency fixed need pool calculations and describes need in its application10. This applicant agrees with the Agency’s hospice fixed need pool calculation for an additional hospice program. Hope identifies four groups currently being underserved: cancer patients in need of palliative radiation and chemotherapy; patients under the age of 65; elderly residence of

9 Florida Statutes Chapter 400.6005 Legislative findings and intent.--The Legislature finds that terminally ill individuals and their families, who are no longer pursuing curative medical treatment (emphasis added), should have the opportunity to select a support system that permits the patient to exercise maximum independence and dignity during the final days of life. The Legislature finds that hospice care provides a cost-effective and less intrusive form of medical care while meeting the social, psychological, and spiritual needs of terminally ill patients and their families. The intent of this part is to provide for the development, establishment, and enforcement of basic standards to ensure the safe and adequate care of persons receiving hospice services. 10 CON #9967, AHCA Form CON-1, pages 42 – 81.

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Immokalee and patients in need of services during disasters or emergencies. Hope believes that need exists in the expenditure of palliative radiation and chemotherapy, stating that the existing hospice provider in Hospice Service Area 8B, Hospice of Naples, Inc., provides 57.72 percent of the radiation/chemo expenditure that Hope plans to provide. It is stated the four remaining co-batched applicants provide less palliative chemotherapy and radiation than Hope. The applicant makes this claim regarding the co-batch applicants11 and references Medicare cost reports as evidence. However, it was not demonstrated that patients under the care of the remaining co-batched applicants and those under the care of Hospice of Naples, Inc. are lacking adequate and appropriate symptom control. Hope also states that there is lower penetration rates among residents of the Immokalee area (Northeast Collier County) and believes that though these rural residents represent an underserved population. However, this was not demonstrated. Hope expressed concerned that no hospice patients were admitted by the existing Hospice Service Area 8B hospice provider during certain days relative to Hurricanes Wilma and Charley. The applicant states that this delay of admission was for a five-day period. Hope believes that it has plans and procedures in place to ensure that hospice patients will not have to wait for admission as discussed below. However, there is no evidence that patients needing hospice services while Collier County was recovering for the hurricanes were not timely admitted for services. Hope identifies that non-cancer patients under age 65 are underserved at a greater percentage than any other of the remaining categories (all patients with cancer and non-cancer patients over 65 years of age12). This is based on an estimate 70 percent increase in non-cancer under age 65 years of age admission estimate. This is the estimated single highest percentage increase. This applicant states factors that it believes distinguish it as the most suitable applicant to meet the unmet need stated above. It emphasizes its substantial expenditures for radiation/chemotherapy for palliative purposes13. No other co-batched applicant claims palliative radiation and palliative chemotherapy in expenditure terms in this fashion. Hope reflects high penetration rates among nearby rural counties (Glades and Hendry) and believes it is well experienced and successful in striving for and achieving nearby rural area hospice needs14. Hope reflects higher

11 Ibid, page #47, Table of Palliative Expenditures per Patient Day from Medicare Cost Reports 12 Ibid, page #43, Table of Comparison of Projected and Actual Hospice Admissions 13 CON #9967, AHCA Form CON-1, page #47, Table of Palliative Expenditures per Patient Day from Medicare Cost Reports 14 Ibid, page #26, Table of Hospice Penetration Rates and page #49, Table of Comparison of Hospice Penetration Rates

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penetration rates among both cancer and non-cancer patients compared to the state overall. Hope notes that it continued to admit patients during Hurricanes Wilma and Charley and that further, its inpatient facility in Lee County (Joanne’s House in Bonita Springs) is built as a hurricane shelter (with generator) and is available to Collier County hospice patients. Hope reports admission of 20 hospice patients in CY 2005 and 21 in CY 2004, during days immediately before, after and during named hurricanes. Hope plans to provide community education programs to help the existing social and health networks identify and refer patients in need of hospice care and this would include those under 65 years of age. In addition to having licensed hospice services in Lee County, this applicant states it has accreditation with the Community Health Accreditation Program (CHAP). Hope believes it could best accommodate the existing need based on the factors noted. Hope forecasts a 53-day average length of stay (ALOS) in the first year of operations (CY 2008) and 69-day ALOS in the second year. Total admissions are to go from 249 to 355 in the same period, respectively. It anticipates penetration rates, as percentages, to be highest among cancer patients under age 65, followed closely by cancer patients age 65 and older. Its single highest diagnosis category, for both years, is expected to be among non-cancer patients age 65 and older, followed by cancer patients age 65 and older. Odyssey HealthCare of Collier County, Inc. (CON #9968) responds to Agency fixed need pool agrees with the Agency’s hospice fixed need pool calculation showing need for an additional program. Odyssey-Collier states that the Hospice Service Area 8B hospice compound annual growth rate (CAGR) is lower than the state CAGR (4.9 percent compared to 5.4 percent, respectively). This applicant agrees that three out of four patient categories show lower utilization in Hospice Service Area 8B than in the state overall. Those three lower utilization rates are among the following patient categories: cancer patients (regardless of age) and non-cancer patients under age 65. Hospice Service Area 8B hospice services outperform the state utilization rate regarding cancer patients age 65 or older. Odyssey-Collier states this need service exists, “…because they do not know how or because their physician does not refer them to hospice care”15. However this is a conclusion not demonstrated by the applicant. Odyssey-Collier believes it is best prepared to meet the needs of this population. It believes that its operations in Hospice Service Area 4B and Hospice Service Area 11 reflect its parent’s (Odyssey Healthcare Inc.’s) ability to provide care. It plans to enhance public education and

15 Ibid, pages 51

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physician outreach; this is to be accomplished by community representatives and approaching community advocacy groups. However, this is not predicated on conditions placed on the CON if awarded, beyond expending at least $25,000, during the first two years, to provide or fund public education on end-of-life planning. While this applicant states it intends to utilize existing facilities (hospitals and nursing homes or related facilities) there are no support letters to verify local intention or commitment among those providers. It plans to operate as a community hospice as described by the Brown Study16. Briefly, the Brown Study describes a “Community Hospice” as a hospice that relies upon Medicare hospice revenues but in addition, provides services that reach a wider net of patients. This wider net probably includes patients that are not meeting Medicare hospice requirements, such as a six-month or less life expectancy. Under these conditions, a hospice may absorb patients earlier in the progression of a terminal or life-limiting illness and afford the patient a greater or higher quality of life. Generally, hospices that embrace successfully this “Community Hospice” model are hospices that are not solely dependent upon Medicare reimbursement to cover all of their costs and have other sources of revenue that will help off-set non-reimbursable charges. The applicant indicates it has intentions to operate in a “Community Hospice” environment and philosophy. This applicant forecasts 169 patient admissions the first year of operation and 265 in year two. It further estimates 85.2 percent of its first two years of operation will be patients 65 years of age or older (14.8 percent under 65 years of age). In rank order, its three highest admissions, for both years, are estimate to be cancer, heart disease and Alzheimer’s/dementia17. VITAS Healthcare Corporation of Florida (CON #9969) responds to Agency fixed need pool calculations and agrees with the Agency’s hospice fixed need pool calculation of need for an additional hospice program. Similar to the other co-batched applicants, VITAS concurs that three patient categories are not being adequately reached by virtue of the fact that their penetration rates in Hospice Service Area 8B are below the state average. Those three categories are as follows: cancer patients of all ages and non-cancer patients under 65 years of age. This is the only co-batched applicant that distinguishes that licensed acute care hospitals in Collier County (in CY 2005) discharged 32 (or less than 1/10th of one percent) patients to the existing Hospice Service Area 8B

16 The Florida Model of Hospice Care – A Report for Florida Hospices and Palliative Care, Inc. 2004, Brown University School of Medicine 17 CON #9968, AHCA Form CON-1, pages 59, Table 10

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hospice, though for each of the past three years the hospitals have experienced between 690 to 750 discharges due to death in the hospital (around two percent of total discharges). It is noted that a discharge of death does not indicate the length of time between hospital admission and death. Death could have been an automobile accident, a heart attack and occurred moments after hospital admission. In both cases hospice would not have been sought nor needed. There is no way to know, from death statistics alone, the number of people who were hospice appropriate or who would have chosen hospice even if they were hospice appropriate. VITAS states that continuous care days are usually problematic, stating many hospices, including the co-batched applicants, provide no or little continuous care, preferring inpatient admission in the event of this scenario. While this is claimed by the applicant, it is not demonstrated to be correct. A sizable number of U.S. military veterans die in Collier County (around 50 percent of all deaths) is reported by VITAS as another group in need of hospice care that are not receiving it. This applicant reports that Hispanics are more heavily concentrated in Collier County than in the state overall and that Hispanics are underrepresented in the hospice population. Therefore a need to reach Hispanics is identified as a substantial need. Co-batched applicant Hope is also sensitive to Hispanics in Collier County, particularly in the Immokalee area. VITAS also states that rural residents also experience a lack of hospice services. VITAS concludes that there are about 12,500 Jewish households in Collier County (per the Jewish Federation of Collier County) and this population does not currently receive hospice services that are culturally compatible with Jewish Tradition. ALF and SNF residents, reaching estimates of around 2,573 in Collier County, may also not be receiving hospice access, since in CY 2005, VITAS reports that only 41 percent of the patients in the existing licensed hospice in the county had admissions in such facilities. Although VITAS, like other co-batched applicants, has indicated it believes there are pockets of underserved patients, its claims were not demonstrated. VITAS plans to address what it considers to be hospice patient needs in numerous ways. First, VITAS plans to establish relationships with local hospitals and letters of support and contractual commitment confirm this. VITAS proposes 5.7 continuous care days in year one and 5.8 in year two. Outreach is to be conducted regularly (bi-monthly) at the local Veteran’s of Foreign Wars and American Legion chapters and also at the local VA medical center. VITAS states its parent trains staff to recognize needs of minority patients and their families, particularly noting Hispanic, African, Jewish and Muslim Americans and plans to extend this sensitivity to consumers of VITAS’ hospice services in Collier County. It also provides numerous internal brochures and booklets in different

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languages to describe its efforts in reaching minority populations. It states it plans to seek to meet rural needs as well by installing a phone line to reach hospice services, should a rural family lack a means of communication. VITAS outreach representatives will attend local meetings of organizations that represent SNFs and ALFs to ensure a cohesive outreach presence. It further plans to create a Long-Term Care Advisory Council in Hospice Service Area 8B and invite interested parties to attend. This applicant proposes 186 admissions in year one of operations and 354 by year two. Distinct from any other co-batched applicant, it breaks down these admissions on a month-by-month basis. For year one, it estimates cancer as the leading admission diagnosis, followed by Alzheimer’s disease/cerebral degeneration and then heart disease. By year two, these three illnesses will remain the leading three admission diagnoses. Patients over 65 years of age are expected to be the dominantly admitted age group. Summary HCR Manor Care has existing skilled nursing and assisted living facilities in Collier County and highlights its readiness to establish a continuum of care relative to its existing sister and complimentary facilities. Hope is an existing hospice provider in adjacent Hospice Service Area 8C and expects to extend its services into Collier County and gives weight to its experience in nearby rural counties, that it continued to admit patients during recent hurricanes, that its Joanne’s House in Bonita Springs is a hurricane shelter and will be available to hospice patients immediately. According to Mapquest, the distance between Naples (Collier County) and Bonita Springs (Lee County) is 14.14 miles and takes 22 minutes to travel by automobile. According to the same source, the same destination, from Marco Island (a more southern Collier County location) is 33.78 miles and 42 minutes. Odyssey-Collier focuses on its parent (Odyssey Healthcare, Inc.) and the parent’s hospice success in other hospice districts (Hospice Service Areas 4B and 11). VITAS draws attention to its parent’s existing facilities in three highly populated counties (Palm Beach, Broward and Miami-Dade) and places prominence on dedicating outreach representatives to organizations and groups that represent the particular groups it solely represented as needy, those being local acute care hospitals with higher death rates relative to the existing hospice, veterans and Jewish American households. Evercare and Odyssey offer no or few indicators of local support. HCR Manor Care has local commitment, through planned contractual agreements (at both skilled nursing facilities and locate acute care

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hospitals). Hope offers its own in-patient hospice facility (in southwestern-most Lee County) which is some distance from parts of Collier County, and shows support letter contractual plans with two continuous care retirement communities with skilled nursing facilities. VITAS has community support through two local acute care hospitals. VITAS integrates and agrees to condition award of the CON upon providing non-core services it believes are needed, including services to a number of culturally distinct populations. It is noted that recent changes to hospice licensing requirements tie the renewal of a hospice license to CON conditions, indicating that the Agency may deny a license to a hospice program that fails to meet any CON condition.18

Evercare and HCR Manor Care propose to target patients who want to receive curative treatment. However, hospice providers in Florida may offer palliative, not curative, care.19

Hope, VITAS and HCR Manor Care have provided evidence of their ability to contract for inpatient services: VITAS and HCR Manor Care with hospitals and Hope within continuing care retirement communities that operate skilled nursing facilities and HCR Manor Care with its affiliate skilled nursing facilities. For convenience and reference, below is a chart to reflect estimated patient admissions in the first and second years of operation.

Proposed Hospice Admissions Hospice Service Area 8B – Collier County

Proposer

First Year

Second Year

Evercare Hospice of Collier County, Inc./CON #9965 195 340

18 S. 400.060 (7), Florida Statutes. The Agency may deny a license to an applicant that fails to meet any condition for the provision of hospice care or services imposed by the Agency on a certificate of need by final Agency action, unless the applicant can demonstrate that good cause exists for the applicant's failure to meet such condition. 19 Florida Statutes Chapter 400.6005 Legislative findings and intent.--The Legislature finds that terminally ill individuals and their families, who are no longer pursuing curative medical treatment (emphasis added), should have the opportunity to select a support system that permits the patient to exercise maximum independence and dignity during the final days of life. The Legislature finds that hospice care provides a cost-effective and less intrusive form of medical care while meeting the social, psychological, and spiritual needs of terminally ill patients and their families. The intent of this part is to provide for the development, establishment, and enforcement of basic standards to ensure the safe and adequate care of persons receiving hospice services. Section 400.601(3), Florida Statutes defines "hospice" as a centrally administered corporation providing a continuum of palliative and supportive care for the terminally ill patient and his or her family and (4) defines "palliative care" as services or interventions which are not curative but are provided for the reduction or abatement of pain and human suffering.

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HCR Manor Care Services of Florida, Inc./CON #9966 152 263 Hope of Southwest Florida, Inc./CON #9967 249 355 Odyssey HealthCare of Collier County, Inc./CON #9968 169 265 VITAS Healthcare Corporation of Florida/CON #9969 186 354

Source: CON applications 9965, 9966, 9967, 9968 and 9969 Hope and VITAS propose the largest programs in response to the fixed need pool, which shows a projected 361 admissions for the January 2008 planning horizon.

2. Agency Rule Criteria and Preferences

a. Rule 59C-1.0355(4)(e) Preferences for a New Hospice Program. The Agency shall give preference to an applicant meeting one or more of the criteria specified in the below listed subparagraphs: (1) Preference shall be given to an applicant who has a

commitment to serve populations with unmet needs. None of the co-batched applicant clearly demonstrated that any population in the service area had unmet needs. Each applicant is responding to published need for an additional hospice program for the January, 2008 planning horizon. Although none of the applicants receive preference for this criterion because they have not clearly demonstrated there are populations of unmet need, each applicant has committed to serving the populations they believe to be underserved. Two of these applicants, Hope and VITAS, have shown that their commitments are measurable and expect them to be placed as CON conditions to be monitored annually. HCR Manor Care, Hope and VITAS, have also have shown that they have the community contacts necessary to meet their commitments as well as inpatient services. Of the five co-batched applicants, only VITAS has listed commitments as CON conditions that match the program it intends to implement and demonstrated that it has necessary community support to implement to proposed program.

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Evercare Hospice of Collier County, Inc. (CON #9965): This applicant calls attention to a lower hospice utilization rate in Collier County than the state overall and particularly stresses patients under 65 years of age (both cancer and non-cancer diagnoses). As noted in Section E. 1 above, the applicant has not clearly demonstrated any population with an unmet need. HCR Manor Care Services of Florida, Inc. (CON #9966) stresses what it believes is unmet need among the chronically ill and specifically identifies caner, chronic obstructive pulmonary disease (COPD) and end-stage renal disease (ESRD) as especially vulnerable. The applicant intends to seek coordination with local health care organizations (American Cancer Society, Heart Association, and others) to reach this population. As noted in Section E. 1 above, the applicant has not clearly demonstrated any population with an unmet need. Hope of Southwest Florida, Inc. (CON #9967) highlights patients under age 65 and those in need of palliative radiation and chemotherapy to relieve pain and symptoms to be at risk in Collier County. It also believes the northeast part of Collier County (Immokalee area) to be underserved. It demonstrates commitment primarily by stating it intends to make available three offices (Fort Myers administrative headquarters, which is not in Collier County, and offices in Immokalee and Naples) to establish a physical presence. One reason for an Immokalee office is to capture the needs of the Hispanic population. Hope will also apply its emergency/ disaster preparedness strategies and protocols to ensure uninterrupted service (continued admissions during hurricane or other disaster conditions). Its inpatient hospice facility in southeastern Lee County is highlighted as readily available to Collier County hospice patients.

Location of Collier County in Relation to Lee County

Source: http://ahca.myflorida.com/MCHQ/CON_FA/maps/hospice.jpg

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http://ahca.myflorida.com/MCHQ/CON_FA/maps/hospice.jpg


As noted in Section E. 1 above., the applicant has not clearly demonstrated any population with an unmet need. Odyssey HealthCare of Collier County, Inc. (CON #9968) focuses on cancer patients of all ages and non-cancer patients under 65 years of age. The applicant further believes that physician and general public familiarity with hospice services is another need. It shows its commitment primarily by dedicating staff and education efforts to reaching those unfamiliar with hospice services. As noted in Section E. 1 above, the applicant has not clearly demonstrated any population with an unmet need. VITAS Healthcare Corporation of Florida (CON #9969) states that it believes 50 percent of the need is for a non-cancer diagnosis and wishes to commit especially to this population. It also identifies the terminally ill in hospitals, ALFs and SNFs, veterans and Jewish persons as vulnerable populations. It identifies Hispanics also, just as co-batched applicant Hope does. It commits to marketing efforts to reach these groups. As noted in Section E. 1 above, the applicant has not clearly demonstrated any population with an unmet need.

(2) Preference shall be given to an applicant who proposes to provide the inpatient care component of the hospice program through contractual arrangements with existing health care facilities, unless the applicant demonstrates a more cost-efficient alternative.

None of the co-batched applicant are proposing a more cost-efficient alternative than contracting for services. Hope indicates that it will provide inpatient services in its existing Lee County freestanding inpatient hospice. It is noted that this does not fully address acute inpatient need for Collier County residents because of the geographic location of the Lee County facility. Evercare Hospice of Collier County, Inc. (CON #9965) states it intends to contract with licensed hospitals and SNFs to meet in-patient needs. It further states its parent (UnitedHealth Group, Inc.) has more than 300 such contractual relationships with Florida hospitals. Evercare’s support letters do not document any commitments to contract with this applicant, should it be awarded a CON. HCR Manor Care Services of Florida, Inc. (CON #9966) commits to contractual arrangements and has support letters from local

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hospitals and SNFs. This is the only applicant that states it will seek a second CON to establish an in-patient facility once “stabilized occupancy” has been reached. No exact date is offered and the applicant does not describe what it means by “stabilized occupancy”. The applicant did not agree to condition award of the CON upon its obtaining a second CON to establish an inpatient facility. Hope of Southwest Florida, Inc. (CON #9967) highlights willingness to contract with local providers for inpatient services. Its support letters verify that two local continuing care retirement communities with skilled nursing facilities are prepared to enter into contractual agreements should this applicant be awarded a CON. Hope also proposes immediate use of its own existing inpatient hospice facility (Joanne’s House) for Collier County hospice patients. Unlike co-batched applicant’s VITAS and HCR Manor Care, it did not provide commitments from local hospitals for inpatient beds. Odyssey HealthCare of Collier County, Inc. (CON #9968) states it will contract with local providers in obtaining in-patient services. However, its support letters are not local to Collier County and do not include evidence that any commitments have been made. VITAS Healthcare Corporation of Florida (CON #9969) notes support letters with existing Collier County acute care hospitals and its willingness to work with for-profit as well as not-for-profit entities to meet needs. However, unlike co-batched applicants Hope, and HCR Manor Care, VITAS has not obtained commitments from local nursing homes.

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(3) Preference shall be given to an applicant who has a

commitment to serve patients who do not have primary caregivers at home; the homeless; and patients with AIDS. Evercare Hospice of Collier County, Inc. (CON #9965) affirmatively states it accepts patients who do not have a primary caregiver at home, are homeless and those with AIDS. It references policy20 to affirm this. Though the applicant includes reference to Policy 3.02 – Continuous Care, this policy is not made available for Agency review. Evercare also presents a policy21 that addresses options when a primary caregiver is or is not readily presented by the applicant. The applicant is quite clear in policy that Evercare will not fulfill the role of a primary caregiver and admission will not proceed if the applicant and patients, who are in need of a caregiver but lacks one, cannot reach an agreement that will ensure patient safety and welfare. HCR Manor Care Services of Florida, Inc. (CON #9966) asserts that it does not discriminate against patients who do not have a primary caregiver at home, are homeless or those with AIDS. This applicant references a handbook 22 (the handbook). The applicable handbook and section do not mention whether a caregiver at home or whether illness diagnosis is a factor in the provision of care. A review of the application23 further indicates that these policies do not specifically address procedures identified for the homeless. Hope of Southwest Florida, Inc. (CON #9967) holds that it accepts patients who do not have a primary caregiver at home, are homeless and regardless of their HIV status. It references its application24 to affirm this claim. The caregiver policy was reviewed and indicates that Hope has procedures in place to address a lack of caregivers, should the need arise. The applicant does not reference a policy or procedure that specifically addresses the homeless.

20 CON #9965, Volume 1, Attachment G – Evercare Hospice: Policies and Procedures/Non-discrimination 21 Ibid, Potential Patients Lacking Primary Caregiver (Policy#5.04) 22 CON #9966, Volume 2, Attachment 10 - Heartland Hospice Patient Handbook/Patient Rights and Responsibilities 23 CON #9966, AHCA Form CON-1, page 2-28/Plan for Primary Caregiver and Intake Form 24 CON #9967, Supplemental Appendices, S-19/Caregiver Program

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Odyssey HealthCare of Collier County, Inc. (CON #9968) includes policies25 that specifically provide services regardless of diagnosis and place of residence, among other characteristics. Contingencies are prescribed, through policy, should the circumstance arise that caregivers are needed. This applicant specifically states that in the event a patient is homeless, there are procedures in place to address meeting patient needs, this may include inpatient admission to a hospital or long-term care facility. It is noted the applicant provides no written contractual agreements or commitments with such facilities.

VITAS Healthcare Corporation of Florida (CON #9969) does not reference a policy regarding a primary caregiver at home, homelessness or consideration of HIV status as an admission criteria. In its application26 VITAS states its intentions to accommodate those lacking a caregiver at home and patients with AIDS, stating its extensive work with AIDS patients in Africa. Its narrative in response to this question does not specifically mention or discuss the homeless.

(4) In the case of proposals for a hospice service area comprised of three or more counties, preference shall be given to an applicant who has a commitment to establish a physical presence in an underserved county or counties. Hospice Service Area 8B represents Collier County exclusively.

(5) Preference shall be given to an applicant who proposes to provide services that are not specifically covered by private insurance, Medicaid or Medicare.

Evercare Hospice of Collier County, Inc. (CON #9965) points

out that it has predicated its application on conditions27, stating it will provide non-covered services, such as but not limited to, palliative radiation and chemotherapy (related to the terminal illness) and other therapies: music; massage; aroma and other holistic treatments. However, as noted by VITAS, if needed, palliative radiation and chemotherapy are core services. The applicant includes the following services in this section: bereavement services for more than one year including “face-to-face” bereavement services (as opposed to only letters or telephone calls); working with Evercare nurse practitioners to ensure seamless care and to ensure continued involvement in

25 CON #9968, AHCA Form CON-1, page 53 and Volume 2, Attachment M - Access to Care 26 CON #9969, AHCA Form CON-1, pages 89 and 90 27 CON #9965, AHCA Form CON-1, page 58 and Schedule C

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patient/family care; the provision of educational in-services to the medical community regarding end-of-life care and attending all patient deaths (unless otherwise requested). As noted earlier, like co-batched applicant HCR Manor Care, the applicant also intends to target patients who want to receive curative care. Hospice is defined in the Florida Statutes as a centrally administered corporation providing a continuum of palliative and supportive care for the terminally ill patient and his or her family. Palliative care is defined as services or interventions which are not curative but are provided for the reduction or abatement of pain and human suffering. HCR Manor Care Services of Florida, Inc. (CON #9966) stresses that due to its philosophy to meet patients’ needs wherever they may be in the dieing process, this applicant does not require patients or families to abandon hope for a cure. If hope for a cure is held, HCR Manor Care helps provide options and agrees to cover the cost of care that the individual seeks as part of the exploration of options. The applicant, does not state a maximum cost it will absorb to meet patient/family expectations. It is again noted that curative care, even though the applicant will not bill Medicare for this care, is not defined as care provided by a hospice in Florida. The applicant also notes the following services: children’s grief camp “Camp Heartland” (ages three to 15); support for teens (retreat weekends); community educational events/seminars; distribution of hospice educational materials to schools and community agencies and workshops for volunteers.

However, no measurement was given to ensure that the applicant meets this commitment. Although the applicant notes that it will accept any condition placed upon it by the Agency, the Agency cannot set meaningful measurements for these commitments. Hope of Southwest Florida, Inc. (CON #9967) reports it currently provides numerous services that are non-reimbursable. These services include the following: massage, music, art, aroma and pet therapies; services outside the county of coverage (presumably to another hospice program’s patient, if a hospice patient is the recipient of the service) and bereavement service availability for those experiencing a loss even when the deceased was not in hospice (this could include sudden death and/or death due to crime or violence); chaplain services; consultation to patients facing a serious illness that are not yet appropriate for hospice; some non-health care items such as a hot water heater and telephone (telephone service is also offered by co-batched applicant VITAS); hospice services to persons with exhausted insurance

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benefits; recruitment, training and supervision of volunteers; services for children through the Florida Partners in Caring Program28 (a partnership between the Agency (Medicaid and KidCare), the Department of Health’s Children’s Medical Services Network (CNSN) for children with special health care needs and Florida Hospices and Palliative Care); camp for children; crisis counseling related to these topics and quality of life such as coordination of family events. The applicant has agreed and provided a method of measurement for that agreement, to condition award of the CON upon providing services that are not reimbursed by Medicare and Medicaid. The list of services covered by all private insurance companies who might insure a hospice patient was not provided, nor is it reasonable to expect that to be provided. Odyssey HealthCare of Collier County, Inc. (CON #9968) considers itself a “community hospice” pursuant to the Brown Study29 discussed previously. The applicant states the following non-covered services to all patients will be available, whether insured or not or whether or not the patient has the ability to pay: 13 months of bereavement; pet, music, massage and aroma therapies; dialysis and palliative radiation and palliative chemotherapy treatments. VITAS Healthcare Corporation of Florida (CON #9969) identifies non-core services it provides as follows: physician assessment upon initial admission and a physician on every care team with patient visits; within the first day of admission determination of a patient’s pain by a uniform World Health Organization (WHO) pain scale and in greater than 60 percent of patients, if severe pain is reported, this pain will be reduced to moderate or lower levels within 48 hours and immediate implementation of pet therapy.

28 http://www.cms-kids.com/CMSNPIC.html 29 The Florida Model of Hospice Care: A Report for Florida Hospice and Palliative Care, Inc. February 2004

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http://www.cms-kids.com/CMSNPIC.html


This applicant also states it may provide a telephone line at a patient’s home to maintain continuous contact (continuous telephone contact is also stated by co-batched applicant Hope). VITAS clearly states its program will serve those patients who are terminally ill and their families who select hospice care. The applicant has agreed and provided a method of measurement for that agreement, to condition award of the CON upon providing services that are not reimbursed.

b. Chapter 59C-1.0355, Florida Administrative Code contains the following general provisions and review criteria to be considered in reviewing hospice programs.

(1) Consistency with Plans (Rule 59C-1.0355(5), Florida

Administrative Code). An applicant for a new hospice program shall include evidence in the application that the proposal is consistent with the needs of the community and other criteria contained in the Local Health Council Plans. The application for a new hospice shall include letters from health organizations, social services organizations, and other entities within the proposed service area that endorse the applicant's development of a hospice program.

In 2004, CON preferences were removed from the criteria required for review; however, the applicant shall provide evidence that the proposal is consistent with criteria contained in the local health council plans. The Florida Department of Health, Office of Local Health Councils, is custodian of the contract between the state and the local health council - Health Planning Council of Southwest Florida, Inc. This organization, as with all Florida local health councils, is no longer required, by contract, to submit a local health plan for state review and consideration. Each applicant identified what it considers community needs in Hospice Service Area 8B (Collier County) which are discussed in section E.1 above and E.3 below.

(2) Required Program Description (Rule 59C-1.0355(6), Florida Administrative Code): An applicant for a new hospice program shall provide a detailed program description in its certificate of need application, including:

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(a) Proposed staffing, including use of volunteers. The following tables illustrate the total full-time equivalents (FTEs) and the total projected admissions proposed by each applicant for the first two years of program service:

Total Proposed FTEs By Applicant for Years One and Two

CON # Applicant Year One (2008)

FTEs Year Two (2009)

FTEs 9965 Evercare 12.40 21.3030

9966 HCR Manor Care 13.55 22.14 9967 Hope 18.94 31.11 9968 Odyssey-Collier 10.09 21.20 9969 VITAS 18.13 42.0731

Source: CON Applications 9965 - 9969

Total Projected Admissions By Applicant for Years One and Two

CON # Applicant Year One (2008)

FTEs Year Two (2009)

FTEs 9965 Evercare 195 340 9966 HCR Manor Care 15232 263 9967 Hope 249 355 9968 Odyssey-Collier 16833 265 9969 VITAS 186 354

Source: CON Applications 9965 - 9969 The FTE and admissions tables above are presented to illustrate the differences between the number of staff relative to the number of projected admissions. As noted earlier, Hope and VITAS propose the largest programs in response to need published by the Agency. As shown above, although both applicants essentially project the same number of admissions in year two, Hope with 355 and VITAS with 354, VITAS estimates approximately 10 more direct staff than Hope in year two.

30 CON #9965 Schedule 6A (page 2 of 2) reflects 21.3 FTEs by eliminating 0.8 FTEs under Nursing: other and 0.2 FTEs under Ancillary: other. This results in 22.3 FTEs the second year to be reduced by 1.0 FTEs the second year to arrive at 21.30 FTEs, all in the second year. Evercare does not offer an explanation for this 1.0 FTE discrepancy occurring within the second year of operation. 31 CON #9969 AHCA Form CON-1, page #93 and Schedule 6A both state a second year total FTE count of 42.09 but arithmetically the categories as presented total 42.07, both on page #93 and Schedule 6A. 32 CON #9966 AHCA Form CON-1, page 2-13 reports 151 admissions for the first year but arithmetically the distinct categories (Medicare, Medicaid, 3rd party insurance, self-pay and charity/other) total 152 admissions. 33 CON #9968 AHCA Form CON-1, page 58 reports 169 admissions for the first year but arithmetically the distinct categories (Medicare, Medicaid, self-pay and commercial insurance) total 168 admissions.

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Evercare Hospice of Collier County, Inc. (CON #9965) employs an in-house physician (1.0 FTEs for both first and second year of operation) in the interdisciplinary team, along with other staff. This team develops a comprehensive plan of care within seven days of patient admission. FTEs account for employees in the following categories: administration; physician; nursing; ancillary and social service. Volunteers may provide the following categories of service: direct care of patients and for families organizational and administrative functions and bereavement in the first year of loss. In its application34 this applicant describes its volunteer recruitment, orientation, training and retention strategies. Schedule 6A documents 0.4 and 0.7 volunteer coordinator FTEs, respectively, for the first and second year of operations; however, no exact volunteer ratio or volunteer-to-patient estimate is offered in this section. HCR Manor Care Services of Florida, Inc. (CON #9966) employs an in-house physician (0.5 FTEs for both the first and second year of operation), along with other staff. FTEs account for employees in the following categories: administration; physician; nursing and social service. Volunteers may provide direct care to patients or non-direct care, such as administrative or clerical assistance. In its application35 this applicant provides an extensive volunteer coordinator manual and a detailed orientation and training checklist. Schedule 6A documents a 1.0 FTE volunteer coordinator for the first and second year of operations; the applicant project a coordinator for every 100 volunteers which mirrors the estimated census count. Hope of Southwest Florida, Inc. (CON #9967) employs an in-house physician (0.75 FTE and 1.50 FTE, respectively, for the first and second year of operation), along with other staff. FTEs account for employees in the following categories: administration; physician; nursing; ancillary and social service. This is further itemized by its three service locations: Bonita Springs; Immokalee and Naples. Volunteers may provide administrative and patient support. In its application36 this applicant provides several volunteer services policies, such as orientation and training. Schedule

34 CON #9965, AHCA Form CON-1, page# 65 and Attachment G – Evercare Hospice Policies and Procedures/Policy 3.52 35 CON #9966, AHCA Form CON-1, page 2 -11 and Exhibit 2-5/Volunteer Training Topics 36 CON #9967, AHCA Form CON-1, page 68 and Supplementary Appendices S-1/Volunteer Services

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6A documents a 1.0 FTE volunteer coordinator for the first and second year of operations; however, no exact volunteer ratio or volunteer-to-patient estimate is offered in this section.

Odyssey HealthCare of Collier County, Inc. (CON #9968) is the only co-batch applicant that contracts a physician (no physician FTEs) and is the only co-batched applicant that provides a dietician (0.3 FTEs for both the first and second year of operation), pursuant to its Schedule 6A. FTEs account for employees in the following categories: administration; nursing; ancillary; and social service. Volunteers may provide office support, indirect support (such as giving caregivers a respite), or direct support (reading to patients or writing them letters). This applicant does not reference further volunteer sources or procedures in this section. Schedule 6A documents no volunteer coordinator for the first year but 0.5 FTEs for this position for the second year; Odyssey-Collier states it will document and maintain a volunteer staff sufficient to provide administrative or direct care to, at a minimum, equal five percent of the total patient care hours of all paid and contracted hospice staff. VITAS Healthcare Corporation of Florida (CON #9969) states that volunteer staff hours are expected to equate to a minimum of five percent employee time (similar to co-batched applicant Odyssey-Collier). VITAS employs an in-house physician (0.32 FTE and 0.82 FTE, respectively, for the first and second year of operation), along with other staff. FTEs account for employees in the following categories: administration; physician; nursing; ancillary and social service. VITAS does not go into detail regarding what activities or services volunteers are to provide. No additional references or attachments are offered for review in this section. Schedule 6A documents a volunteer/ bereavement 0.54 FTE and 1.0 FTE, respectively, for the first and second year of operation.

(b) Expected sources of patient referrals. Evercare Hospice of Collier County, Inc. (CON #9965) states it anticipates referrals from physicians, SNFs, ALFs, adult care centers, hospitals and other sources. None of the facilities, practices or individuals listed above provided support letters agreeing to a contractual relationship with

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this applicant for referral or other purposes. A summary of these letters is found in Public Hearing section of this review. HCR Manor Care Services of Florida, Inc. (CON #9966) states it anticipates referrals from physicians, discharge planners, social workers, SNFs, ALFs and home health agencies. This statement is supported by over 100 support letters with two acute care hospitals and two SNFs committing to a contractual relationship with this applicant. A summary of these letters is found in the Public Hearing section of this review. This applicant further lists 20 entities with which it states it has an established referral relationship. At least three of these health care providers specifically state they will “work with” HCR Manor Care should it be awarded a CON. Also, HCR Manor Care affirmatively states that patient and families may self-refer, provided there is support from an attending physician. Hope of Southwest Florida, Inc. (CON #9967) states it intends to seek referrals from the following historic referral sources hospitals; physicians; individuals and SNFs. Two SNFs in Collier County (continuous care retirement communities) have agreed to contract with Hope, should it be awarded a CON. This applicant received the most letters of support of any co-batched applicant, including letters from numerous private physicians or physician groups, which support its statements under this criterion. A summary of these letters is found in the Public Hearing section of this review. Odyssey HealthCare of Collier County, Inc. (CON #9968) reports it will seek referrals from the following sources: hospitals; physicians; patient self-referral; case managers; SNFs/ALFs; cancer care centers; home health agencies; continuing care retirement communities; families/neighbors of the terminally ill; places of worship and community service groups. Odyssey-Collier received the fewest letters of support of any co-batched applicant. None were local to Collier County or from the individuals or organizations in or near Collier County listed above. A summary of these letters is found in Public Hearing section of this review. This applicant has the least corroborating support for referral of any co-batched applicant. VITAS Healthcare Corporation of Florida (CON #9969) affirms it will seek referrals from such sources as physicians,

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hospitals, SNFs and other health care providers, family member and patients. Two local Collier County acute care hospitals agreed to “enter into appropriate agreements” with VITAS, should it be awarded a CON. However, no Collier County physicians provided letters of support, nor did any local SNFs or ALFs. A summary of these letters are found in Public Hearing section of this review.

(c) Projected number of admissions, by payer type,

including Medicare, Medicaid, private insurance, self-pay, and indigent care patients for the first two years of operation. As stated previously, the table below is duplicated, for convenience, to illustrate projected admissions for years one and two for each applicant.

Total Projected Admissions By Applicant for Years One and Two

CON # Applicant Year One

(2008) Year Two

(2009) 9965 Evercare 195 340 9966 HCR Manor Care 15237 263 9967 Hope 249 355 9968 Odyssey-Collier 16838 265 9969 VITAS 186 354

Source: CON Applications 9965 - 9969 Evercare Hospice of Collier County, Inc. (CON #9965) provides the following admissions by payer group:

Evercare Expected Admissions by Payer Type

Payer Type Year One Year Two Medicare 185 323 Medicaid 4 7 Self Pay or Uncompensated/ Charity 4 7 Commercial/3rd Party Insurance 2 3 Total 195 340

Source: CON application 9965

37 CON #9966 AHCA Form CON-1, page 2-13 reports 151 admissions for the first year but arithmetically the distinct categories (Medicare, Medicaid, 3rd party insurance, self-pay and charity/other) total 152 admissions. 38 CON #9968 AHCA Form CON-1, page 58 reports 169 admissions for the first year but arithmetically the distinct categories (Medicare, Medicaid, self-pay and commercial insurance) total 168 admissions.

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HCR Manor Care Services of Florida, Inc. (CON #9966) provides the following admissions by payer group:

Expected Admissions by Payer Type Payer Type Year One Year Two Medicare 135 234 Medicaid 6 10 Self- Pay or Uncompensated/Charity 6 11 Commercial/3rd Party Insurance 5 8 Total 15239 263

Source: CON application 9966 Hope of Southwest Florida, Inc. (CON #9967) provides the following admissions by payer group:

Hope Expected Admissions by Payer Type Payer Type Year One Year Two Medicare 224 320 Medicaid 12 18 All other (Commercial insurance/Self- Pay/or Uncompensated -Charity

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Total 249 355 Source: CON application 9967 Odyssey HealthCare of Collier County, Inc. (CON #9968) provides the following admissions by payer group:

Odyssey-Collier Expected Admissions by Payer Type Payer Type Year One Year Two Medicare 159 250 Medicaid 5 8 Self Pay or Uncompensated/Charity 3 5 Commercial Insurance 1 2 Total 16840 265

Source: CON application 9968

39 CON #9966 AHCA Form CON-1, page 2-13 reports 151 admissions for the first year but arithmetically the distinct categories (Medicare, Medicaid, 3rd party insurance, self-pay and charity/other) total 152 admissions. 40 CON #9968 AHCA Form CON-1, page 58 reports 169 admissions for the first year but arithmetically the distinct categories (Medicare, Medicaid, self-pay and commercial insurance) total 168 admissions.

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VITAS Healthcare Corporation of Florida (CON #9969) provides the following admissions by payer group:

VITAS Expected Admissions by Payer Type Payer Type Year One Year Two Medicare 145 301 Medicaid 12 25 Self Pay or Uncompensated/Charity 17 4 Commercial Insurance 12 25 Total 186 35541

Source: CON application 9969 All five co-batched applicant indicate they anticipate more

Medicare patients than any other payer type. (d) Projected number of admissions, by type of terminal

illness, for the first two years of operation. Evercare Hospice of Collier County, Inc. (CON #9965) provides the following projected number of admissions by diagnosis:

Projected Admissions by Diagnosis Diagnosis Year One Year Two Cancer 51 88 Non-Cancer/Other 144 252 Total 195 340

Source: CON Application 9965

HCR Manor Care Services of Florida, Inc. (CON #9966) provides the following projected number of admissions by age and diagnosis:

Projected Admissions by Diagnosis Diagnosis Year One Year Two Cancer 67 11542

Non-Cancer/Other 8543 14744

Total 152 26245


41 CON #9969 AHCA Form CON-1, page 94 reports 354 admissions for the second year but arithmetically the distinct categories (Medicare, Medicaid, indigent and insurance) total 355 admissions. 42 CON #9966 AHCA Form CON-1, page 2-14 shows 116 but arithmetically the categories as presented total 115. 43 CON #9966 AHCA Form CON-1, page 2-14 shows 85 but arithmetically the categories as presented total 86, because the total of cancer and non-cancer is shows as 152, 85 is shown in the chart above. 44 CON #9966 AHCA Form CON-1, page 2-14 shows 148 but arithmetically the categories as presented total 147. 45 CON #9966 AHCA Form CON-1, page 2-14 shows 263 but arithmetically the categories as presented total 262.

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Hope of Southwest Florida, Inc. (CON #9967) provides the following projected number of admissions by diagnosis:

Projected Admissions by Diagnosis Diagnosis Year One Year Two Cancer 94 131 Non-Cancer/Other 155 224 Total 249 355


Odyssey HealthCare of Collier County, Inc. (CON #9968) provides the following projected number of admissions by diagnosis:

Projected Admissions by Diagnosis

Diagnosis Year One Year Two Cancer 55 87 Non-Cancer/Other 113 179 Total 16846 26647


VITAS Healthcare Corporation of Florida (CON #9969) provides the following projected number of admissions by diagnosis:

Projected Admissions by Diagnosis

Diagnosis Year One Year Two Cancer 65 124 Non-Cancer/Other 121 230 Total 186 354


All five co-batched applicant indicate that they anticipate serving more non-cancer than cancer patients.

(e) Projected number of admissions, by two age groups, under 65 and 65 or older, for the first two years of operation.

46 CON #9968 AHCA Form CON-1, page#59 shows 169 but arithmetically the categories as presented total 168. 47 CON #9968 AHCA Form CON-1, page#59 shows 265 but arithmetically the categories as presented total 266.

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Evercare Hospice of Collier County, Inc. (CON #9965) provided the following projected number of admissions by age group:

Projected Admissions by Age Group

Age Group Year One Year Two Under 65 29 51 65 and Older 166 289 Total 195 340

Source: CON Application 9965 HCR Manor Care Services of Florida, Inc. (CON #9966) provides the following projected number of admissions by age group:


Age Group Year One Year Two Under 65 2348 3849

65 and Older 130 22450

Total 15351 26252

Source: CON Application 9966 Hope of Southwest Florida, Inc. (CON #9967) provides the following projected number of admissions by age group:



Source: CON Application 9967 Odyssey HealthCare of Collier County, Inc. (CON #9968) provides the following projected number of admissions by age group:




48 CON #9966 AHCA Form CON-1, page 2-14 shows 22 but arithmetically the cancer and non-cancer total for this age group as presented is 23. 49 CON #9966 AHCA Form CON-1, page 2-14 shows 9 but arithmetically the cancer and non-cancer total for this age group as presented is 38. 50 CON #9966 AHCA Form CON-1, page 2-14 shows 57 but arithmetically the cancer and non-cancer total for this age group as presented is 224. 51 CON #9966 AHCA Form CON-1, page 2-14 shows 152 but arithmetically the cancer and non-cancer total for both age groups totals 153. 52 CON #9966 AHCA Form CON-1, page 2-14 shows 263 but arithmetically the cancer and non-cancer total for both age groups totals 262.

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VITAS Healthcare Corporation of Florida (CON #9969) provides the following projected number of admissions by age group:



Source: CON Application 9969 All five co-batched applicants indicate that they anticipate serving more of the 65 and older population than those under 65 years of age.

To summarize: All five co-batched applicant have shown that they expect to admit more Medicare recipients age 65 and older with non-cancer diagnosis than other patient populations.

(f) Identification of the services that will be provided

directly by hospice staff and volunteers and those that will be provided through contractual arrangements. Evercare Hospice of Collier County, Inc. (CON #9965) reports minimal contractual arrangements. This may include the following: nutritionists; physical, speech or occupational therapists. This applicant reports that overall services will be provided by Evercare hospice staff and volunteers. It is noted that dietary counseling services must be directly provided by the hospice and cannot be contracted. However, on page 64 of the application, the applicant notes that it will employ a registered dietitian. HCR Manor Care Services of Florida, Inc. (CON #9966) reports its multidisciplinary team will include the following contractual services, if determined appropriate for patient need: physical, occupational and speech/language pathology therapists; pharmacists and durable medical equipment. A physician is not listed as a routine part of an interdisciplinary team and will apparently be determined on a case-by-case basis. The remainder of services are to be provided by HCR Manor Care hospice staff and volunteers.

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Hope of Southwest Florida, Inc. (CON #9967) identifies the following services as contractual: physical, occupational and speech therapy. Some inpatient services are anticipated to be contractual as well. Physician services are specifically mentioned as an in-house service. The remainder of services are to be provided by Hope hospice staff and volunteers. Hope notes on page 55 of its application that it will provide dietary directly. Odyssey HealthCare of Collier County, Inc. (CON #9968) affirms the following services as contractual: physicians; nutritionists; physical, speech and occupational therapists. The remainder of services are to be provided by Odyssey-Collier hospice staff and volunteers. It is noted that dietary counseling services must be directly provided by the hospice and cannot be contracted. However, on Schedule 6A the applicant notes that it will provide dietary services directly. VITAS Healthcare Corporation of Florida (CON #9969) anticipates durable medical equipment, supplies and pharmacy services to be the only services contracted. It is specifically stated that physician services are provided by in-house staff. This applicant states need may develop “from time to time”53 to contract for such functions as physical, speech-language pathology, message and occupational therapy. Vitas notes that it will provide dietary directly.

(g) Proposed arrangements for providing inpatient care. Evercare Hospice of Collier County, Inc. (CON #9965) notifies the Agency that its parent, UnitedHealth Group, Inc., has contracts with over 300 Florida hospitals and that contracts for inpatient services should be achievable “without difficulty”54. This applicant plans to contract with hospitals, SNFs and ALFs. It is noted that ALFs are not an option for inpatient services. However, support letters for Evercare do not include any references to contractual relationships of any kind. HCR Manor Care Services of Florida, Inc. (CON #9966) plans to initially contract with hospitals and SNFs. Support letters from two local acute care hospitals and SNFs support this claim. The applicant also indicates that it will seek CON

53 CON #9969 AHCA Form CON-1, page#95 54 CON #9965 AHCA Form CON-1, page#67

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approval in the future to establish an inpatient facility once “occupancy stabilizes”55. Hope of Southwest Florida, Inc. (CON #9967) makes available its three inpatient hospice houses to Collier County residents. It is noted that these three houses are located in Lee County, so distance from portions of Collier County could be problematic. This applicant states it will contract with SNFs and hospitals. The applicant has support letters from two continuous care retirement communities, with SNFs, to support this claim. This applicant goes on to state it will consider establishing a hospice facility at some point in the future, if needed, but offers no timeframe. Odyssey HealthCare of Collier County, Inc. (CON #9968) indicates it currently has no plans to construct a freestanding facility for inpatient services but has done so in other markets and could consider doing so in Hospice Service Area 8B (Collier County), provided that a need exists in the future. The current plan is to seek inpatient services through contractual relationships with existing hospitals and SNFs. None of this applicant’s support letters are from SNFs or hospitals, none are local and none commit to a contractual relationship of any kind. VITAS Healthcare Corporation of Florida (CON #9969) plans to have contracts for inpatient beds in Collier County SNFs and hospitals. Two acute care hospitals in Collier County affirm this claim by stating they will “enter into appropriate arrangements”56 with VITAS, should it be awarded a CON. This applicant claims contracts in its existing service areas.

(h) Proposed number of inpatient beds that will be located in a freestanding inpatient facility, in hospitals, and in nursing homes.

Evercare Hospice of Collier County, Inc. (CON #9965) commits to no given number of beds. However, in its application57, this applicant estimates 5,859 total patient days in the first year of operation and 17,022 in the second, the average length of stay (ALOS) is 30 days and 50 days, respectively for the same time period. Admissions, again for

55 does not provide an estimate or timeframe of when it anticipates closure on this determination. 56 CON #9969 AHCA Form CON-1, page#95 57 CON #9965 AHCA Form CON-1, page#51/Table 9 – Evercare Market Requirements

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the same time period, are estimated to be 195 and 340, respectively. HCR Manor Care Services of Florida, Inc. (CON #9966) commits to no given number of beds. However, in its application58, this applicant estimates 8,230 total patient days in the first year of operation and 18,299 in the second, the average length of stay (ALOS) is 62 days and 70 days, respectively for the same time period. Admissions, again for the same time period, are estimated to be 152 and 263, respectively. Hope of Southwest Florida, Inc. (CON #9967) commits to no given number of beds; however, it does estimate about six percent of its patient days will be inpatient days, at least during the first two years of operation. It further states this is around three to four beds. In its application59, this applicant estimates 13,270 total patient days in the first year of operation and 24,403 in the second, the average length of stay (ALOS) is 53 days and 69 days, respectively for the same time period. Admissions, again for the same time period, are estimated to be 249 and 355, respectively. This applicant also offers an average daily census (ADC), for the same two-year period, of 36 and 67, respectively. Odyssey HealthCare of Collier County, Inc. (CON #9968) commits to no given number of beds. However, in its application60, this applicant estimates 4,225 total patient days in the first year of operation and 6,624 in the second, the average length of stay (ALOS) is 25 days and 50, respectively for the same time period. Admissions, again for the same time period, are estimated to be 169 and 265, respectively.

58 CON #9966 AHCA Form CON-1, Schedule 5 59 CON #9967 AHCA Form CON-1, page#75 60 CON #9968 AHCA Form CON-1, page #60 and Schedule 5

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VITAS Healthcare Corporation of Florida (CON #9969) commits to no given number of beds. However, in its application61, this applicant estimates 7,326 total patient days in the first year of operation and 20,852 in the second. An average length of stay (ALOS) is not offered. However, admissions, again for the same time period, are estimated to be 186 and 355, respectively. Therefore, the ALOS is being shown at between 39 and 59 days.

(i) Circumstances under which a patient would be admitted to an inpatient bed. Evercare Hospice of Collier County, Inc. (CON #9965) states that patient need is the overriding determination. When possible, symptoms are controlled in the home setting. If continuous care is not an option due to a lack of caregivers or other factors determined relevant by the hospice, an inpatient bed may be the only remaining option. Though not mentioned or referenced in this section, the applicant submits a list of policies62 that pertain to continuous care services, inpatient status in home and inpatient status in facility. Only a copy of the inpatient status in facility policy was available for review. According to this policy, inpatient care is provided when pain or acute/chronic symptoms cannot be managed under what is called “routine” care. Inpatient care is provided only on a temporary basis.

HCR Manor Care Services of Florida, Inc. (CON #9966) states that patient or family need or wishes determine inpatient status. When possible, symptoms are controlled in the home setting. If caregiver or other relevant considerations are not adequate to meet need, inpatient options are considered and implemented, where applicable. HCR Manor Care provides no reference in this section to an inpatient admission policy. Hope of Southwest Florida, Inc. (CON #9967) describes that inpatient care may be for either of two reasons – general or respite care. General care pertains to inpatient services when pain or other acute or chronic conditions cannot be controlled in other settings. Respite care is offered on a short-term basis for relief to family members or other caregivers. Hope provides no reference in this section to an

61 CON #9969 AHCA Form CON-1, page#95 and Schedule 5 62 CON #9965 AHCA Form CON-1, Attachment G – Evercare Hospice: Policies and Procedures/Section III-Levels of Care

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inpatient admission policy. A review of the application in total reveals elsewhere in the application63 circumstances upon which a brief length of stay is justified. At least two of three conditions must be met that are identified. Odyssey HealthCare of Collier County, Inc. (CON #9968) reports that it strictly follows Medicare criteria in certifying inpatient or continuous care and makes applicable reference64. To the extent possible, symptoms are effectively treated in the patient’s existing home environment. Odyssey-Collier states the patient must show the following symptoms before an inpatient bed option is selected: uncontrolled pain; intractable nausea; vomiting and diarrhea; respiratory distress; seizures or hemorrhage or intensive teach of medication administration. Lack of adequate caregiver support is also a factor for inpatient. VITAS Healthcare Corporation of Florida (CON #9969) the patient’s condition and the home situation determine need for inpatient admission. Respite care is provided to relieve family members and caregivers. Due to its emphasis on continuous care, VITAS indicates it avoids inpatient placement to the extent possible. The applicant states it has written guidelines defining patient and facility eligibility for facility-based care, but does not reference the guidelines in this section. This applicant references the Medicare Hospice Benefit65. Further, VITAS includes in its application66 a policy referenced as “Criteria for Inpatient Care” (Policy Number 5:22). This policy was not provided for Agency review. It is noted that in Vol. 4 of the application, VITAS provides a policies and procedures manual reference but clearly states it is a table of contents only.

(j) Provisions for serving persons without primary caregivers at home. All five co-batched applicants indicate that they have procedures in place to address the needs to persons without primary caregivers in the home.

63 CON #9967 Supplementary Appendices, Appendix S-5/Admissions–Brief Length of Stay (page 4 of 4). 64 CON #9968 AHCA Form CON-1, page #60 and Volume 2, Attachment S – The Medicare Hospice Benefit. 65 CON #9969, Volume 2, Tab 5 – The Medicare Hospice Benefit. 66 Ibid, Volume 4 – Tab 17/VITAS Policy Manual (Table of Contents)

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(k) Arrangements for the provision of bereavement services. Evercare Hospice of Collier County, Inc. (CON #9965) provides a description of bereavement services67. The applicable policies were made available for Agency review. In brief, the applicant states in its narrative that bereavement services are provided a minimum of 13 months and also up to 13 months. This would appear to be a discrepancy. Services are triggered by assessment at the time of admission (upon 96 hours of admission). Face-to-face encounters as well as support groups are made available. Those in bereavement are to be contacted (by phone or in person) by hospice staff upon the death of their loved one. After approximately one month of the death, another assessment is completed and after that, periodic mailings (how many and when is not stated in the policy) generally round out the bereavement process. Those particularly vulnerable may be referred for further counseling at any time. There is no reference to special programs for children, such as camps. There is also no reference to this being available to non-hospice grievers. HCR Manor Care Services of Florida, Inc. (CON #9966) cites extensive bereavement services and training for volunteers68, this is to both hospice and non-hospice individuals in the community that have experienced a loss. It proposes a bereavement coordinator (one FTE per 80 census). In brief, this applicant proposes assessment of bereavement needs within 72 hours of admission. An assessment is also done (if separate from the initial assessment) upon the patient’s death. Attendance to the funeral of the deceased is mentioned as a service that may be provided. Within four to six weeks of the death another assessment is completed. Bereavement letters go out on the 3rd and 13th month of the patient’s death. The bereavement file will be closed after 13 months but during that time (or after if it is determined that services should be extended) appropriate referral is to be provided, depending on

67 CON #9965 AHCA Form CON-1, pages 68 – 70 and Attachment G – Evercare Hospice: Policies and Procedures/Section III-Interdisciplinary Team. Bereavement Services (Policy#3.40) and Bereavement Program (Policy#3.42) 68 CON #9966 AHCA Form CON-1, page 2-12, Exhibit 2-6 and Volume 2, “Voices from the Heart”

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assessment determination. A copy of one of the bereavement letters states there is support to children, but the reference provides no other detail. “Voices from the Heart” are case examples of bereavement experiences that ’s parent (Manor Care, Inc.) has experienced. Hope of Southwest Florida, Inc. (CON #9967) cites bereavement services69, this is to both hospice and non-hospice individuals in the community that have experienced a loss. The policies address bereavement services at admission, upon death and other bereavement protocols. This applicant states bereavement service need is assessed upon admission and continues for at least 15 months following death. It is noted here that upon death, services are available for not less than 15 months; this appears to be a discrepancy. Anticipatory grief is to be addressed within 24 hours after the interdisciplinary care team has made a referral (to the bereavement counselor). Within two weeks of the patient’s death, a sympathy card is mailed, in another week, a sympathy call is made and the hospice representative offers to see the griever in person or invites them to support group meetings. Sympathy letters are mailed in the following months after the death - one, three, six, 12 and 15. The bereavement file is closed 15 months after the death and the griever is no longer active in one or more of the services. Odyssey HealthCare of Collier County, Inc. (CON #9968) states that bereavement services may begin at any time once a patient is admitted into the hospice program and can be continued for up to 13 months. An assessment is completed (by a registered nurse [RN]) upon patient admission to determine patient and/or family needs. The bereavement coordinator arranges for contact with the family within 72 hours of the patient’s death and a plan of care is developed in the same time frame. The assessment will result is three levels of need. The applicant describes services rendered and differences between Level 1 and Levels 2 and 3; however, Levels 2 and 3 are blended such that they are not distinct from each other70. The applicant references Volume 2, Attachment G – Policy and Procedures Manual Table of Contents “for additional information on bereavement

69 CON #9967 AHCA Form CON-1, page#80 and Supplementary Appendices S-3/Bereavement Services. 70 CON #9968 AHCA Form CON-1, page#22

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services”71; however, that attachment provides no information of bereavement. A further review of Volume 2 reveals an Attachment K – Assessment Policies. This latter attachment includes policies include initial, psychosocial and spiritual assessment procedures. VITAS Healthcare Corporation of Florida (CON #9969) states that bereavement assessment is performed upon admission and services may be extended into the 15th month after the death. Assessment begins upon admission and cards and letters of sympathy are sent in the following monthly intervals upon the death – one, three, six, nine, 12 and 15. Telephone calls are also an option, but how often made is not stated. Counseling and/or referral is provided when assessment dictates a need. This applicant provides materials that address child grief and the grief of a surviving spouse. There are also special programs for grief experienced during holidays. Support groups are also stated as an available resource.

(l) Proposed community education activities concerning hospice programs. Evercare Hospice of Collier County, Inc. (CON #9965) generally discusses activities of its parent, UnitedHealth Group, Inc., regarding community education programs, stating it will implement similar education programs to outreach local medical providers, hospitals and clinics residential care facilities and related groups. There is no specificity beyond that description. It further mentions that the Evercare Hospice Foundation strives to provide education about the value of hospice care. No attachment is referenced in this section that specifically addresses community outreach strategies or procedures. A review of the applicant’s table of contents, table and exhibit pages and appendices list directly cites educational/promotional

71 Ibid, page #64

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materials that show outreach plans for the area. The policy table of contents72 indicates a policy on marketing and patient privacy. A copy of the policy is not included for Agency review and consideration. HCR Manor Care Services of Florida, Inc. (CON #9966) states it will reach out to Alzheimer’s support groups, schools, churches and professional organizations and distribute educational materials to the community. No attachment is referenced in this section that specifically addresses community outreach strategies or procedures. This applicant does not include a table of contents to reference such materials. It does include approximately a half-dozen brochures that describe HCR Manor Care’s hospice services. A further review of the applicant’s submitted materials reveals an Exhibit 4-3 (pages #4-14 of the application) in which a press release addresses attendance at the 10th Annual Aging with Dignity Celebration (October 18, 2006) in Tallahassee. There is also a recent “Marketing Minute” page from HCR Manor Care’s marketing and sales department. These draw attention to recognition that that parent (Manor Care, Inc.) has recently received. Hope of Southwest Florida, Inc. (CON #9967) proposes to particularly target the terminally ill, under 65 years of age. It plans to reach this population through community education partnerships with health providers, services agencies and places of worship. This applicant references materials on the Hope community education program73; this is a policy that addresses fundraising, not community outreach or education. The portion of the supplementary that does address community education74 is a policy that affirms certain principals and philosophy of education in a hospice context. This one-page policy does not provide guidance on any specific “off-the-shelf” marketing materials or those designed by Hope. Odyssey HealthCare of Collier County, Inc. (CON #9968) states successes in other hospice areas (inside and outside of Florida) and attributes this to effective community outreach. No support letters are included to verify the applicant has begun community outreach or has searched

72 CON #9965 Attachment G – Evercare Hospice: Policies and Procedures/Section XI-Protection, Use and Disclosure of Health Information. Marketing and Patient Privacy (Policy #11.30. 73 CON #9967 Supplementary Appendices S-21: Fund Raising. 74 Ibid, S-20: Community Education.

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out community partners in Collier County or the Southwest Florida area. However, Odyssey-Collier does claim it will pursue public awareness and local educational campaigns. A range of written educational and awareness materials75 are provided for Agency review. They include such topics as end of life and levels of care, continuous care and numerous other related materials, some in Spanish. VITAS Healthcare Corporation of Florida (CON #9969) plans to seek community awareness through numerous mechanisms and they include public forums, seminars at churches, schools and other locations (no letters of support were provided from any churches or schools). It does state a “Cool Kids Club” program that supports increased awareness of hospice opportunities and direct contact with the elderly and “PetPals”, making pet therapy available in 50 percent of all VITAS programs. Of all co-batched applicants, VITAS provides the largest number and widest range of educational and awareness books, pamphlets and related materials. Further, rather than being simply generic or broadly address hospice marketing in a “one-size-fits-all” approach, some of the these materials focus directly on the populations this applicant addressed as being most in need. These materials include the following: a video “Heart of Hospice”; a CD ROM “In Touch”; booklets on “Seasons of Life”; a newsletter “VITAS Vital Signals”; The Jewish Hospice Manual; booklets on secondary but common end of life events; “Making A Difference – the African AIDS Pandemic”; “Veterans Market – Opportunities and Challenges” and “The Surviving Spouse”. This is not an exhaustive list but is reflective of the efforts VITAS has made to attune its literature to particular populations and the extensive materials it makes available for Agency review and consideration.

(m) Fundraising activities. Evercare Hospice of Collier County, Inc. (CON #9965) states that its parent, UnitedHealth Group, Inc., maintains a United Giving Campaign whereby employees may make payroll contributions to 501(c)(3) entities. It highlights that in 2006, a $25,000 contribution was made to the National Hospice Foundation. The letter of thanks, found in the applicant’s Appendix E is listed as one of the letters of

75 CON #9968 Volume 2/Attachment N – Odyssey Education Material and Tools

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support discussed in Section B of this review. The policy table of contents76 indicates a policy on fundraising and patient privacy. A copy of the policy is not included for Agency review and consideration. HCR Manor Care Services of Florida, Inc. (CON #9966) highlights the Manor Care Foundation and the establishment of “The Hospice Memorial Fund”. The applicant states this organization releases funds only to 501(c )(3) entities and recipients must be in states in which Manor Care has operations. No estimate was offered regarding to what extent The Hospice Memorial Fund is planned to impact Hospice Service Area 8B, should this applicant be awarded a CON. Hope of Southwest Florida, Inc. (CON #9967) states its fundraising helps to off-set non-reimbursable costs and also raises community awareness. It states it has had three campaigns to raise funds for its three facilities (fundraising timeframes are not stated). This applicant references policy related to fundraising77; this is a policy that addresses the emergency management plan, not fundraising. The portion of the supplementary that does address fundraising78 states individuals may opt out of receiving fundraising communications. Hope reports $629,000 and $391,000 in years 2004 and 2005, respectively, through pledges and shows local success in fundraising activities. Odyssey HealthCare of Collier County, Inc. (CON #9968) states the organization does not rely upon fundraising as a source of operational funds but its parent (Odyssey HealthCare, Inc.) has an active contributions program. The applicant plans to donate some items that are not reimbursable, calling them “extras”79. The applicant plans to make charitable contributions to the local Alzheimer’s Association and the American Cancer Society. Contribution amounts are not disclosed. The applicant states an affiliated organization, the Odyssey Foundation (the Foundation). Some of the funds through the Foundation have contributed to the Dream Foundation’s senior’s assistance programs and SKY Camp – a camp for grieving children, seven to 17 years

76 CON #9965 Attachment G – Evercare Hospice: Policies and Procedures/Section XI-Protection, Use and Disclosure of Health Information. Fundraising and Patient Privacy (Policy #11.28). 77 CON #9967 Supplementary Appendices S-22: Emergency Management Plan. 78 Ibid, S-21: Fundraising. 79 CON#9968 AHCA Form CON-1, page#63

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of age, who have experienced the death of a loved one. There is no exact application to specifically explain how the affiliate Foundation might work in Hospice Service Area 8B to raise funds or to what extent it would be active in Collier County. VITAS Healthcare Corporation of Florida (CON #9969) states it does not actively seek contributions or other funds and will not work competitively against hospices that do conduct such campaigns. It has also predicated its application on three conditions, one being to make its extensive educational materials available to the existing Collier County hospice provider, coordinate names of interested fund contributors and upon award of a CON, make a $20,000 charitable donation to Hospice of Naples, Inc.

3. Statutory Review Criteria

a. Is need for the project evidenced by the availability, quality of care, efficiency, accessibility and extent of utilization of existing health care facilities and health services in the applicant’s service area? ss. 408.035(2), 408.035(7), Florida Statutes. Hospice Service Area 8B is currently served by a single licensed hospice program – Hospice of Naples, Inc. The following table illustrates the total Hospice Service Area 8B admissions provided for the most recently reported five years (July through June, beginning in 2001-2002 through 2005-2006):

Hospice Service Area 8B Total Hospice Admissions CYs 2001-2005 Provider 2002 2003 2004 2005 2006 Hospice of Naples, Inc. 1,050 1,100 1,379 1,327 1,331

Source: Florida Need Projections for Hospice Programs agency publication for indicated years. As seen above, the only hospice provider in Hospice Service Area 8B is Hospice of Naples, Inc., for all of the indicated years. Total admissions, for four of the last five years, have consistently increased (2004 to 2005 is the sole exception). All co-batched applicants are seeking to establish a new program in response to the Agency’s published fixed need pool.

The following table illustrates projected admissions for years one and two for each applicant:

Total Projected Admissions By Applicant

for Years One and Two CON # Applicant Year One (2008) Year Two (2009)

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FTEs FTEs 9965 Evercare 195 340 9966 HCR Manor Care 15280 263 9967 Hope 249 355 9968 Odyssey-Collier 16881 265 9969 VITAS 186 354

Source: CON Applications 9965 - 9969

The most recently published Florida Need Projections for Hospice Programs publication for the January 2008 planning horizon indicates a projected hospice patient count over current hospice patient count of 361. Hope and VITAS’ projections for year two show intentions of capturing a large portion of the hospice population anticipated by the Agency’s need methodology, a year past the planning horizon. Evercare Hospice of Collier County, Inc. (CON #9965) states intention of utilizing the parent’s full-time board-certified medical director model as an efficiency, along with other characteristics such as an open access enrollment strategy whereby anti-cancer therapies and therapies considered aggressive or experimental may be applied for …”a large number of individuals who still desire some treatment along with traditional hospice benefits”.82 As previously noted, hospice care includes palliative, rather than curative care, in Florida even if Medicare or Medicaid reimbursement is not sought. Evercare also gives emphasis to the efficiency of its staff visitation within three hours of admission, a disaster preparedness plan and a registered nurse (RN) and certified nursing assistant (CNS) ratio of 1:10. Other efficiencies are stated such as electronic medical records.

Evercare offers no exact headquarters location site in Collier County and no planned branch locations.

80 CON #9966 AHCA Form CON-1, page 2-13 reports 151 admissions for the first year but arithmetically the distinct categories (Medicare, Medicaid, 3rd party insurance, self-pay and charity/other) total 152 admissions. 81 CON #9968 AHCA Form CON-1, page 58 reports 169 admissions for the first year but arithmetically the distinct categories (Medicare, Medicaid, self-pay and commercial insurance) total 168 admissions. 82 CON #9965 AHCA Form CON-1, page#75

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HCR Manor Care Services of Florida, Inc. (CON #9966) states its parent, Manor Care, Inc., had an average daily census (ADC) nationwide of over 5,000 patients (CY 2005) and believes that in addition to its national experience, it is well positioned in Collier County to offer hospice services. It operates two skilled nursing homes and has provided letters of support and agreement to contract with the hospice for inpatient beds at these two facilities and believes hospice services will add to its continuum of care. The applicant further expects to achieve some efficiencies as a result of its current Collier County operations. HCR Manor Care believes it improves access and availability by accepting patients that are still actively seeking tube feeding, IV therapies and certain curative measures, along with pain management, psychosocial and spiritual support. HCR Manor Care holds that many patients die without hospice care because they (the patients) would not abandon curative treatments and believe that hospice is available to them only if they do so. HCR Manor Care proposes to accept patients wherever they (the patients) are in their end-of-life journey and provide beneficial hospice services even while patients remain active players in the curative process. As previously noted hospice is defined in the Florida Statutes as a centrally administered corporation providing a continuum of palliative and supportive care for the terminally ill patient and his or her family. Palliative care is defined as services or interventions which are not curative but are provided for the reduction or abatement of pain and human suffering83. This applicant offers no exact headquarters location site in Collier County and no planned branch locations. It is the only co-batched applicant to propose intents to seek an additional CON to establish its own in-house hospice facility but does not specify an exact date it intends to seek such authorization.

83 Florida Statutes Chapter 400.6005 Legislative findings and intent. The Legislature finds that terminally ill individuals and their families, who are no longer pursuing curative medical treatment (emphasis added), should have the opportunity to select a support system that permits the patient to exercise maximum independence and dignity during the final days of life. The Legislature finds that hospice care provides a cost-effective and less intrusive form of medical care while meeting the social, psychological, and spiritual needs of terminally ill patients and their families. The intent of this part is to provide for the development, establishment, and enforcement of basic standards to ensure the safe and adequate care of persons receiving hospice services. Section 400.601(3), Florida Statutes defines "hospice" as a centrally administered corporation providing a continuum of palliative and supportive care for the terminally ill patient and his or her family and (4) defines "palliative care" as services or interventions which are not curative but are provided for the reduction or abatement of pain and human suffering.

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Hope of Southwest Florida, Inc. (CON #9967) briefly responds to availability, quality of care, efficiency, accessibility and extent of utilization84. Hope states distinctly it is a nearby current provider of hospice services, and believes that residents younger than 65 years of age are at risk in Collier County. However this was not demonstrated. It further believes, but did not document, that cancer patients are in need of palliative therapies greater than they are currently receiving and that residents of the Immokalee area (largely Hispanics) are particularly vulnerable. It is noted that, although not to the extent of other co-batched applicants, Hope has shown that it expects to admit more Medicare recipients age 65 and older with cancer than other patient populations. This applicant also highlights that in recent hurricanes, the existing hospice in the area was unable to maintain continuous admissions while Hope continued on a continuous basis. Hope reports intentions of utilizing it’s existing Fort Myers (Lee County) office as the administrative headquarters for Collier County operations. It also intends to have branches in Immokalee and Naples. All its existing inpatient facilities in Lee County are offered as readily available. Odyssey HealthCare of Collier County, Inc. (CON #9968) contends that the existing hospice, Hospice of Naples, Inc., is either failing to provide adequate community education or is not reaching physicians, hospitals, nursing homes and ALFs adequately to match demand. Although this was not demonstrated by the applicant, it further indicates that it intends to focus more resources on community education and customer satisfaction. Odyssey-Collier references a portion of its application85 that highlights materials specifically designed to address non-cancer patients in need of hospice services, along with more general hospice services and standards of care. This applicant believes its public education and community representative strategies will better prepare Collier County to access hospice services. The applicant’s three-hour admission from time of notice policy (as opposed to the Medicare required 48 hours) and increased choice by virtue of a new hospice in the area, will all improve access and availability.

84 CON #9967 AHCA Form CON-1, page#83 85 CON #9968 AHCA Form CON-1, 67 and Attachment N – Odyssey Education Material and Tools

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Odyssey does not propose a headquarters location at any given location in Collier County, nor does it propose branch offices. VITAS Healthcare Corporation of Florida (CON #9969) believes there is a need for more continuous care, and that veterans, Jewish Americans and Hispanics, rural residents in general, non-cancer patients and SNF/ALF residents are populations that it intends to ensure have access to hospice services. It also affirms willingness to work with the existing hospice provider to serve almost as a complement to existing services. It identifies areas it intends to reach out to serve and provides numerous written materials that are culturally sensitive and designed to capture these populations. Its quality of care covers such topics as appreciable pain reduction within no more than 48 hours, extensive use of technology, multiple training mechanisms, patient assessment at admission by a physician and a physician on every care team. Accessibility is addressed in that the applicant intends to establish an office that’s centrally located (exact site not yet determined) so that satellites will have reasonable access to the host office.

VITAS proposes to establish branch offices in Immokalee and Marco Island in the first year of operation. It believes the following groups are inadequately served by the current Collier County hospice arrangement: cancer patients (any age) and patients under the age of 65 (cancer or non-cancer diagnosis). VITAS goes further in identifying the largest number of other residents it believes are underserved than other applicant. However, it too does not demonstrate that these populations are underserved. These additional populations include the following: acute care hospital deaths in Collier County are occurring disproportionately in the absence of hospice care; continuous care is lacking (with disproportionate deaths occurring at in-patient facilities); that U.S. military veterans die disproportionately in the absence of hospice care in the subject county, as do Hispanics (particularly in the Immokalee area) along with rural residents in general. This applicant proceeds to also believe Jewish households, along with skilled nursing facility and assisted living residents are also in need of but are lacking adequate hospice care. This applicant predicates on conditions the following in order to reach these populations: establishment of Immokalee and Marco Island branch offices within the first year of operation and a 65 percent non-cancer hospice population. These conditions are proposed with measurements.

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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(3), 408.035(12), Florida Statutes. Evercare Hospice of Collier County, Inc. (CON #9965) confirms that neither it, nor its parent, UnitedHealth Group, Inc., has hospice operations in Florida at this time. However, it is claimed the parent has hospice operations in eight states86, the nearest being Georgia. Of the parent’s 10 hospice programs, eight are stated to be Medicare-certified. It is claimed further that the parent currently serves over 130,000 elderly and disabled individuals. It further stresses that its medical directors are full-time employees and are board-certified. It states participation in the Florida Nursing Home Diversion Program. In its application87 Evercare states numerous volunteer work activities that promote community support and visibility, some being in Florida. Though not offered as a point of reference in this section, a further review of the application88 reveals that Evercare offers some policies that relate to quality of care. One such policy89 states that Evercare will establish a Quality Assurance and Utilization Review (QAUR) committee that will develop and implement a QAUR plan. This plan is reported to the governing body annually, minutes are taken of the findings and recommendations. The applicant did not offer federal hospices surveys conducted in other states as evidence of its ability to provide quality of care. HCR Manor Care Services of Florida, Inc. (CON #9966) reports the following affiliations through the parent: 100 licensed hospices in 23 states; six home care health agencies (in Florida); 340 nursing homes and assisted living facilities in 30 states (37 and 11 in Florida, respectively). Two of these Florida SNFs have been previously mentioned, which have contractual commitments with HCR Manor Care, should it be awarded a CON. The applicant further highlights its various accomplishments through awards and accreditations, with some being membership in the National Association for Home Care and Hospice, 65 hospice programs accredited by the Community Health Accreditation Program (CHAP), the “National Innovator” award through Aging with Dignity and caregivers recognized by the Rosalyn Carter Institute.

86 CON #9965 AHCA Form CON-1, page#82. 87 Ibid, Attachment I – UnitedHealth Group Corporation Service Initiatives. 88 Ibid, Attachment G – Evercare Hospice: Policies and Procedures/Section X/Program Evaluation. 89 Ibid, Policy #10.00 – Quality Management.

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This applicant places great emphasis on its philosophy that the terminally ill under HCR Manor Care do not have to relinquish hope in order to be served (this is also claimed by co-applicant Evercare). It supports that hope can exist in a terminal prognosis environment and that the patient does not have to have made a decision not to try and recover. The applicant believes that pressure to abandon hope often leads to later enrollment and consequently, less effective end-of-life care. Hospice is defined in the Florida Statutes as: a centrally administered corporation providing a continuum of palliative and supportive care for the terminally ill patient and his or her family. Palliative care is defined as services or interventions which are not curative but are provided for the reduction or abatement of pain and human suffering. Elsewhere in the application90, HCR Manor Care shares its two chapter quality improvement materials that focus on four characteristics: quality assurance, quality improvement, quality management and performance improvement. The applicant did not offer federal hospices surveys conducted in other states as evidence of its ability to provide quality of care. Hope of Southwest Florida, Inc. (CON #9967) includes its current Florida hospice licensure (September 1, 2006 through August 31, 2007). The licensure identifies Hope’s authorization to operate in Lee, Glades, Hardee, Hendry, Highlands and Polk Counties, its eight branch offices, its three inpatient facilities (all in Lee County) and its two residential facilities (both in Lee County). Hope also includes a copy of its Community Health Accreditation Program (CHAP) certificate [December 12, 2003 through December 11, 2006]. The applicant was in the process of renewing the accreditation at the time of application for this CON submission cycle. Hope states it has enjoyed Florida hospice licensure since 1983. This applicant has received two pharmaceutical awards: the Pinnacle Award from the American Pharmacists Association and the 2005 Excellence in Pharmacotherapy Outcomes Award, issued by the ExceleRx Institute. These pharmacology awards relate to superior care and improved patient outcomes. Other related awards are also noted. Agency records indicate one confirmed complaint on its Fort Myers hospice operation, as of the three-year period ending January 29, 2007. The sole confirmed complain was on resident/patient abuse/neglect.

90 CON #9966 AHCA Form CON-1, page#4-15 / Exhibit 4-4 Heartland Home Health Care & Hospice’s Quality Improvement Core Curriculum.

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Odyssey HealthCare of Collier County, Inc. (CON #9968) reports that the parent, Odyssey HealthCare, Inc., operates 82 Medicare-certified hospice programs in 30 states, with over 8,300 patients. The applicant further attests that it will absorb the parent’s quality improvement plan91, as well as other polices. The parent contracts with a third-party research firm to survey patient satisfaction (the firm is not identified). The applicant states all the parent’s hospices are members of the National Hospice and Palliative Care Organization and are all Medicare and Medicaid-certified (or are seeking such certification). Odyssey-Collier confirms it will absorb all of the parent’s remaining policies. It is further stated the Horizon Hospice AMS information system, by McKesson, is used as the electronic medical records system, a system the applicant states reduces paperwork time, increases direct care hours and makes for real-time information distribution. Odyssey-Collier states it will enjoy the full support of the parent’s resources in establishing high quality services. As of a run date of January 29, 2007, Agency records show no confirmed hospice complaints regarding this applicant’s sister Florida hospice operations, owned by its parent, Odyssey HealthCare, Inc. VITAS Healthcare Corporation of Florida (CON #9969) is the only co-batched applicant stating it is Joint Commission Accredited (no other identification is made) and provides a long list of distinctions92. Some distinctions the applicant highlights are as follows: Florida’s largest hospice with operation in Miami-Dade County since 1978; an average daily census (ADC) of 2,743 patients; serves over 21,000 patients and families annually; claims a 76 percent non-cancer patient population in Palm Beach County and more than 107 area nursing home and assisted living facility contracts in Miami-Dade, Broward and Palm Beach Counties. It also states printed literature in the largest range of languages of any co-batched applicant (such as Spanish, Creole and Korean, though the applicant did not previously identify Korean-Americans as a population being underserved). This applicant reports annual and unannounced audits of numerous operations within the hospice programs. It also states a “Quality of Outcomes”93 component that is proprietary to the parent. It further highlights the “Missoula-

91 CON #9968 AHCA Form CON-1, page#69 and Attachment E – Continuous Quality Improvement 92 CON #9969 AHCA Form CON-1, pages 111 and 112 93 Ibid, page#115

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VITAS Quality of Life Index”94 (MVQLI). This index is designed to capture in quantitative terms a patient’s subjective assessment of their individual situation. These relate to physical, spiritual and emotional characteristics. The plan of care is adjusted on three to four-week intervals, depending on the results of subsequent assessment reviews.

Agency records indicate nine confirmed complaints within the most recent three-year period on its hospice operations, spread among the following cities: Orlando; Melbourne; Palmetto Bay and Fort Lauderdale. The confirmed complaints are as follows: inappropriate resident/patient admission and recertification (two); administrative (two); patient care (two); plan of care (one); medical records/charting (one) and inappropriate discharge (one).

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(4), Florida Statutes.

Evercare Hospice of Collier County, Inc. (CON #9965): This review is for Evercare Hospice of Collier County, Inc., applying to establish a new hospice program in Hospice Service Area 8B, Collier County, Florida. The financial impact of the project will include the project cost of $649,450 and year two operating costs of $2,492,890. The audited financial statements of the applicant were reviewed to assess the financial position as of the balance sheet date and the financial strength of its operations for the period presented. The applicant is a development stage company with no assets and a liability (due to parent) of $20,910 as of November 30, 2006. The applicant’s ultimate parent company is UnitedHealth Group, Inc. (Parent). The applicant did not provide a copy of the audited financial statements of the parent company; however, the parent company is a publicly traded corporation and we were able to obtain a copy of the parent’s audited financial statements from the Securities and Exchange Commission’s web-site. UnitedHealth Group, Inc. will provide funding for this project. Therefore, the audited financial statements of the parent for the periods ending December 31, 2004 and 2005 were analyzed for the purpose of evaluating the parent’s ability to provide the capital and operational funding necessary to implement the project.

94 Ibid, page#116

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Short-Term Position: The parent’s current ratio of 0.6 indicates current assets are less than current liabilities and results in negative working capital amount of $6 billion, a weak position. The ratio of cash flow to current liabilities of 0.3 is below average and a weak position. Overall, the parent has a weak short-term position. (See table below). Long-Term Position: The long-term debt to equity ratio of 0.4 indicates long-term net assets exceed long-term liabilities. This is less debt in relation to equity than average and a good position. The cash flow to assets ratio of 10.5 percent is slightly above average and an adequate position. The most recent year had revenues in excess of expenses in the amount of $5.1 billion, which resulted in an 11.3 percent operating margin. Overall, the applicant has a good long-term position. (See table below). Capital Requirements: Schedule 2 indicates the only capital project for the applicant is the project under review. The applicant is projecting an operating loss of $580,900 during the first year of this project. In addition, the parent has committed to fund CON #9960, which has a project cost $649,450 and a year one projected operating loss of $566,340. Funding will be required for working capital until these projects can earn a profit. Available Capital: The parent corporation will be providing the funding for this project. The financial ratio analysis discussed above indicates that the short-term position of the parent is very weak. Operating cash flow in 2005 was relatively unchanged from the 2004 year; however, the available working capital decreased from a negative $3.1 billion to a negative $6.0 billion. Although the short-term position of the parent is weak, the long-term position appears to be good. With $4.3 billion in cash flows from operations, $5.1 billion in operating profits, and a debt to equity ratio of 0.4, the parent should be able to acquire debt, if necessary, to meet its current obligations. Staffing: Schedule 6A indicates, by December 31, 2008 (the first year of the proposed project), the applicant forecasts 12.4 FTEs as follows: total administration (6.5 FTEs); medical director (1.0 FTEs); registered nurses [RNs] (1.6 FTEs); home health aides [HHAs] (1.6 FTEs); bereavement coordinator (0.4 FTEs); chaplain (0.3 FTEs); volunteer coordinator (0.4 FTEs) and medical social worker (0.6 FTEs). This total FTE count for the

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proposed program increases to 21.3 for year two (ending December 31, 2009), with the FTEs of the above categories reported as 6.5, 1.0, 4.9, 4.9, 0.7, 0.9, 0.7 and 1.9, respectively. Total administration does not change; the most sizable increases are among nursing staff, followed by the medical social worker and to a lesser extent, ancillary staff. Evercare provides a human resource policy summary95 and other recruitment and retention materials in its application96. These materials do not describe or otherwise affirmatively state recruitment mechanisms, practices or guidelines. Employee benefits and company recognition plans include, in part, the following: a new employee orientation program and staff development; health, wellness, dental, vision and disability plans; employee stock purchase; 401(k) retirement options; paid time off and holidays; employee assistance program; education reimbursement and adoption assistance. There is also a nursing scholarship grant program, an employee recognition plan (Sages of Clinical Services Award) and a Clinical Recognition Week. Conclusion: Based on the amount of equity the parent corporation has and the relatively limited funding required, funding for this project should be available as needed.

UNITED HEALTH GROUP, INC.

12/31/2005 12/31/2004 Current Assets $10,640,000,000 $8,241,000,000 Cash and Current Investment $6,011,000,000 $4,505,000,000 Total Assets $41,374,000,000 $27,879,000,000 Current Liabilities $16,644,000,000 $11,329,000,000 Total Liabilities $23,641,000,000 $17,162,000,000 Net Assets $17,733,000,000 $10,717,000,000 Total Revenues $45,365,000,000 $37,218,000,000 Interest Expense $241,000,000 $128,000,000 Excess of Revenues Over Expenses $5,132,000,000 $4,101,000,000 Cash Flow from Operations $4,326,000,000 $4,135,000,000 Working Capital ($6,004,000,000) ($3,088,000,000)

FINANCIAL RATIOS 12/31/2005 12/31/2004 Current Ratio (CA/CL) 0.6 0.7 Cash Flow to Current Liabilities (CFO/CL) 0.3 0.4 Long-Term Debt to Net Assets (TL-CL/NA) 0.4 0.5 Times Interest Earned (NPO+Int/Int) 22.3 33.0 Net Assets to Total Assets (TE/TA) 42.9% 38.4% Operating Margin (ER/TR) 11.3% 11.0% Return on Assets (ER/TA) 12.4% 14.7% Operating Cash Flow to Assets (CFO/TA) 10.5% 14.8%

EVERCARE CON #9965 LONG-TER

Hospice Revenue

95 CON #9965 AHCA Form CON-1, Appendix G – Policies and Procedures 96 Ibid, Appendix H – Employee Recruitment and Retention and Scholarship Programs

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Wage Index for Collier County (1.0782)

Wage

Component Wage Index

Adjusted Wage

Amount Unadjusted Component

Payment Rate

Routine Home Care 89.87 1.0782 96.90 40.92 137.82 Continuous Home Care 524.50 1.0782 565.52 238.86 804.38 Inpatient Respite 73.24 1.0782 78.97 62.06 141.03 General Inpatient 372.42 1.0782 401.54 209.4 610.94

Payment

Rate

Inflation Factor

Year Two

Inflation Adjusted Amount

Patient Days Year 2,

12/2009 Extended Routine Home Care 137.82 1.081 149.03 16,512 $2,460,742 Continuous Home Care 804.38 1.081 869.80 170 $ 147,866 Inpatient Respite 141.03 1.081 152.50 170 $ 25,925 General Inpatient 610.94 1.081 660.64 170 $ 112,308 Total 17,022 $2,746,841 From Schedule 7 $2,695,232 Difference $ (51,609) Percentage difference -1.91% HCR Manor Care Services of Florida, Inc. (CON #9966): This review is for HCR Manor Care Services of Florida, Inc., applying to establish a new hospice program in Hospice Service Area 8B, Collier County, Florida. The financial impact of the project will include the project cost of $305,771 and year two operating costs of $3,329,500.

HCR Manor Care Services of Florida, Inc. is a development stage enterprise formed under Florida law November 13, 2006. The purpose of the Company is to own and operate hospice programs. As of November 30, 2006, the applicant had no assets and $350 in liabilities. HCR Manor Care Services of Florida, Inc. parent and sole stockholder is HCR Home Healthcare and Hospice, Inc. The applicant provided audited financial statements of its ultimate parent, Manor Care, Inc. (parent), a for-profit corporation, for the periods ended December 31, 2005 and 2004. 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: The applicant’s current ratio of 1.2 indicates current assets are slightly more than current obligations, a below average but acceptable position. The working capital (current assets less current liabilities) of $79.0 million is a measure of excess liquidity that could be used to fund capital projects. The ratio of cash flow to current liabilities of 0.8 is an above average position. Overall the applicant has a good short-term position. (See table below). Long-Term Position:

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The parent’s long-term debt to net asset ratio of 1.4 indicates that the parent is highly leveraged. The most recent year had $257.7 million in operating income, which resulted in an operating margin of 7.5 percent. While the results of operations have weakened somewhat from the previous year, overall, the applicant has an adequate long-term position. (See table below). Capital Requirements: Schedule 2 listed capital projects totaling $603,727. The parent corporation, Manor Care, Inc., will provide funding for all capital projects. The applicant provided a letter dated December 20, 2006, from Manor Care, Inc. committing to provide funding to the applicant for this project and all other capital projects. Staffing: Schedule 6A indicates, by December 31, 2008 (the first year of the proposed project), the applicant forecasts 13.55 FTEs as follows: total administration (4.22 FTEs); medical director (0.5 FTEs); registered nurses [RNs] and licensed practical nurses [LPNs] (2.33 FTEs equally); nurses aides (2.33 FTEs); chaplains (1.0 FTEs); social workers (1.42 FTEs); volunteer coordinator (1.0 FTEs) and bereavement coordinator (1.0 FTEs). This total FTE count for the proposed program increases to 22.14 for year two (ending December 31, 2009), with the FTEs of the above categories reported as 6.5, 0.5, 4.92, 4.92, 1.75, 2.0, 1.0 and 1.0, respectively. The medical director, volunteer and bereavement coordinator FTE counts remain constant but the sizable increase is in nursing staff, followed by administration and the least increases are for the chaplain and social worker. In the notes to Schedule 6A, HCR Manor Care provides anticipated staff/patient ratios. An inexhaustive list of these ratios are as follows: LPNs and home health aides (HHAs) of 1:12; RN to LPN 2:1 in year one and 3:2 in year two; volunteer coordinator 1:100 and chaplain 1:50. It is noted that the applicant does not state home health aides in Schedule 6A, only nurse’s aides. HCR Manor Care offers the parent’s (Manor Care) resources to reflect recruitment strategies and efforts97. The applicant reports recruiters and a national contract with an advertising agency (none stated by name) to acquire potential employees. The parent also utilizes the U.S.

97 CON #9966 AHCA Form CON-1, Tab 5, Page# 5-4 (Recruitment and Retention)

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Department of Labor’s Job Corps Program. Scholarships and tuition reimbursement are stated briefly as another recruitment tool and retention for nursing, home health aide and social worker staff. Leadership and management development is also stated briefly. No employee benefit programs are stated. Conclusion: Based on the parent’s financial position and activity, funding for this project and all capital projects should be available as needed.

Manor Care, Inc. 12/31/2005 12/31/2004 Current Assets $531,329,000 $540,367,000 Cash and Current Investment $12,293,000 $32,915,000 Assets Restricted for Capital Projects $0 $0 Total Assets $2,339,234,000 $2,350,464,000 Current Liabilities $452,371,000 $402,254,000 Total Liabilities $1,565,511,000 $1,356,539,000 Net Assets $773,723,000 $984,159,000 Total Revenues $3,417,290,000 $3,208,867,000 Interest Expense $41,240,000 $42,420,000 Operating Income (OI) $257,672,000 $254,879,000 Cash Flow from Operations $353,948,000 $329,766,000 Working Capital $78,958,000 $138,113,000

FINANCIAL RATIOS 12/31/2005 12/31/2004 Current Ratio (CA/CL) 1.2 1.3 Cash Flow to Current Liabilities (CFO/CL) 0.8 0.8 Long-Term Debt to Net Assets (TL-CL/NA) 1.4 1.0 Times Interest Earned (NPO+Int/Int) 7.2 7.0 Net Assets to Total Assets (TE/TA) 33.1% 41.9% Operating Margin (ER/TR) 7.5% 7.9% Return on Assets (ER/TA) 11.0% 10.8% Operating Cash Flow to Assets (CFO/TA) 15.1% 14.0%

HCR MANOR CARE CON #9966 LONG-TERM Hospice Revenue

Wage Index for Collier County (1.0782)

Wage


Adjusted Wage


Payment Rate


64


Payment

Rate

Inflation Factor

Year Two


Revenue Year 2, Dec 2009

Calculated Patient Days

Routine Home Care 137.82 1.081 149.03 $2,583,800 17,338 Continuous Home Care 804.38 1.081 869.80 $62,600 72 Inpatient Respite 141.03 1.081 152.50 $8,300 54 General Inpatient 610.94 1.081 660.64 $356,600 540 Total $3,011,300 18,004 Patient Days - Schedule 7 18,229

Difference 225

Percentage difference 1.23%

Hope of Southwest Florida, Inc. (CON #9967): This review is for Hope of Southwest Florida, Inc., applying to establish a new hospice program in Hospice Service Area 8B, Collier County, Florida. The financial impact of the project will include the project cost of $369,597 and year two operating costs of $5,460,173.

The audited financial statements of the applicant for the periods ending September 30, 2005 and 2004 were analyzed for the purpose of evaluating the applicant’s ability to provide the capital and operational funding necessary to implement the project. Short-Term Position: The applicant’s current ratio of 2.1 indicates current assets are more than twice current obligations, an average position. The working capital (current assets less current liabilities) of $7.6 million is a measure of excess liquidity that could be used to fund capital projects. The ratio of cash flow to current liabilities of 0.4 indicates that cash flow is less than current obligations. Although a cash flow to current liability ratio of 0.4 is below average and considered to be moderately weak, the current ratio is a measure of the applicant’s ability to absorb the difference in cash flow and current liabilities in the short-term. Overall, the applicant has a good short-term position. (See table below). Long-Term Position: The ratio of long-term debt to net assets of 0.7 indicates the applicant has sufficient equity to have access to capital. The most recent year had an increase in net assets of $1.1 million, which resulted in a total margin of 1.7 percent. Overall, the applicant has an acceptable long-term position. (See table below).

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Capital Requirements: Schedule 2 indicates the applicant has capital projects, including repayment of debt through 2008 totaling $14,165,700. The applicant is projecting an operating loss of $217,017 during the first year of this project. Available Capital: The audited financial balance sheet indicated the applicant had cash and current investments of $8.5 million and annual operating cash flows of $3.0 million. Staffing: Schedule 6A indicates, by June 30, 2008 (the first year of the proposed project), the applicant forecasts 18.94 FTEs as follows: volunteer coordinator (1.0 FTEs); RNs (3.64 FTEs); HHAs and personal care specialists [PCSs] (3.03 FTEs); chaplains (1.58 FTEs); social workers [MSW level] (1.45 FTEs); team assistant (1.50 FTEs); bereavement counselor (0.73 FTEs); hospice physician/medical director (0.75 FTEs); continuous care LPNs (0.18 FTEs); ancillary therapists (1.50 FTEs); clinical manager (1.25 FTEs); homemaker (1.0 FTEs) and on-call RNs (1.33 FTEs). This total FTE count for the proposed program increases to 31.11 for year two (ending June 30, 2009), with the FTEs of the above categories reported as 1.60, 6.69, 5.57, 2.07, 2.67, 2.0, 1.34, 1.50, 0.67, 2.25, 2.0, 1.0 and 1.75, respectively. All categories increase, with the exception of homemaker which stays constant. The greatest FTE increases are first among RNs, followed by HHAs/PCSs, then social workers. The remaining categories increase between 0.42 FTEs (on-call RNs) to 0.75 FTEs (equal among hospice physician/medical director, ancillary therapist and clinical manager). In the notes to Schedule 6A, this applicant breaks down the FTEs by satellites, current operations in Bonita Springs (Lee County) and the proposed satellites in Naples and Immokalee (Collier County). The Naples location has the greater number of FTEs for both year one and year two. This is the only co-batched applicant the provides such a drill down. Hope references a portion of its application to staff education98. Procedures and protocols are in place to address such matters as: in-service trainings; temporary clinical employees; RN orientation; certified nursing assistance training and that of personal care specialists; new employee orientation. This is not an exhaustive list. Hope does not reference or describe recruitment guidelines or employee benefit programs.

98 CON #9967 AHCA Form CON-1, Volume 3 – Appendix S-10 / Staff Education

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Conclusion: Based on the financial position and activity of the applicant, along with the relatively limited funding required, funding for this project should be available as needed. Funding for all capital projects is not certain, but likely.

Hope of Southwest Florida, Inc.

9/30/2005 9/30/2004 Current Assets $14,799,900 $17,007,200 Cash and Current Investment $8,497,900 $11,326,700 Restricted Assets $3,996,200 $9,288,300 Total Assets $54,628,000 $49,737,300 Current Liabilities $7,210,700 $4,897,200 Total Liabilities $27,310,700 $23,497,200 Total Net Assets $27,317,300 $26,240,100 Total Revenue and Support $61,666,600 $51,637,300 Interest Expense $549,700 $216,000 Excess of Revenues over Expenses $1,009,500 $2,773,300 Increase in Net Assets $1,077,200 $2,802,400 Cash Flow from Operations $2,999,400 $2,746,000 Working Capital $7,589,200 12,110,000

Financial Ratios 9/30/2005 9/30/2004 Current Ratio (CA/CL) 2.1 3.5 Cash Flow to Current Liabilities (CFO/CL) 0.4 0.6 Long-Term Debt to Net Assets (TL-CL/NA) 0.7 0.0 Net Assets to Total Assets (NA/TA) 50.0% 52.8% Operating Margin (Increase Assets/OR) 1.6% 5.4% Total Margin (Increase TA/OR) 1.7% 5.4% Return on Assets (Increase Unrestricted Assets/TA) 1.8% 5.6% Operating Cash Flow to Assets (CFO/TA) 5.5% 5.5%

HOPE CON #9967 LONG-TERM

Hospice Revenue Wage Index for Collier County (1.0782)

Wage


Adjusted Wage


Payment Rate


67


Payment

Rate

Inflation Factor Year

Two


Patient Days

Year 2, June 2009 Extended

Routine Home Care 137.82 1.097 151.25 22,743 $3,439,793 Continuous Home Care 804.38 1.097 882.75 98 $86,510 Inpatient Respite 141.03 1.097 154.77 24 $3,714 General Inpatient 610.94 1.097 670.47 1,538 $1,031,185 Total 24,403 $4,561,202 From Schedule 7 $4,304,994 Difference $(256,208) Percentage difference -5.95% Odyssey HealthCare of Collier County, Inc. (CON #9968): This review is for Odyssey HealthCare of Collier County, Inc., applying to establish a new hospice program in Hospice Service Area 8B, Collier County, Florida. The financial impact of the project will include the project cost of $464,720 and year two operating costs of $2,045,302.

Odyssey HealthCare of Collier County, Inc. was formed as a for-profit corporation in Delaware on October 18, 2006. The purpose of the Company is to own and operate hospice programs. As of October 31, 2006, the applicant had no assets or liabilities. The applicant provided audited financial statements of its parent and sole stockholder, Odyssey Healthcare, Inc. (Parent), a for-profit corporation, for the periods ended December 31, 2005 and 2004. 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: The applicant’s current ratio of 1.9 indicates current assets are slightly less than two times current obligations, an average position. The working capital (current assets less current liabilities) of $61.6 million is a measure of excess liquidity that could be used to fund capital projects. The ratio of cash flow to current liabilities of 0.9 is an above average position. Overall the applicant has a good short-term position. (See table below). Long-Term Position: The parent has minimal long-term liabilities when compared to net assets, a good position. The most recent year had $31.1 million in operating income, which resulted in an operating margin of 8.3 percent. While the results have generally weakened from the previous year, overall, the applicant has a good long-term position. (See table below).

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Capital Requirements: Schedule 2 listed capital projects totaling $3,425,590. The parent corporation, Odyssey Healthcare, Inc., will provide funding for all capital projects. The applicant provided a letter dated December 31, 2006, from Odyssey Healthcare, Inc. committing to provide funding to the applicant for this project and all other capital projects. Staffing: Schedule 6A indicates, by August 31, 2008 (the first year of operation) the applicant forecasts 10.9 FTEs as follows: total administration (7.0 FTEs); RNs (1.3 FTEs); HHAs (1.5 FTEs); spiritual counselor (0.3 FTEs); dietician (0.3 FTEs) and medical social worker (0.4 FTEs). This total FTE count for the proposed program increases to 21.2 FTEs for year two, ending August 31, 2009. In this second year, the categories noted above are retained with the follows FTE counts: 8.0, 3.9, 4.7, 0.9, 0.3 and 1.3, respectively. Only the dietician holds a constant FTE of 0.3. Other staff categories are added in the second year, they include the following: a patient care secretary (1.0 FTEs); RN on-call (1.0 FTEs); bereavement coordinator (0.5 FTEs) and a volunteer coordinator (0.5 FTEs). The applicant indicates on the notes to Schedule 6A that some positions will serve in dual roles until patient volume is sufficient to warrant additional hires. The medical director will be contracted, not serving as an employee. Like co-batched applicant HCR Manor Care, Odyssey-Collier provides selected staff ratios to patients in the notes, these ratios are reasonably similar. Staff recruitment, retention and development efforts are stated both in volumes 1 and 2 of the application 99. A detailed benefits package is described, to include the following: bonuses, CEU or certification reimbursement as nurses and nursing staff advance, plus non-clinical continuing education. This is not an exhaustive list. Elsewhere in the application100, staff orientation and numerous training opportunities are documented. Odyssey-Collier comments further on an intercompany transfer policy, whereby existing employees within the parent, Odyssey Healthcare, Inc. may transfer to another hospice within the parent’s various locations.

99 CON #9968 AHCA Form CON-1, Page#74 and Volume 2, Attachment F – Odyssey HealthCare Employee Benefit Plan 100 Ibid, Attachment I – Orientation and Continuing Education Policies

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Conclusion: Based on the parent’s financial position and activity, funding for this project and all capital projects should be available as needed.

ODYSSEY HEALTHCARE, INC.

12/31/2005 12/31/2004 Current Assets $ 130,338,000 $ 98,166,000 Cash and Current Investment $ 15,183,000 $ 33,258,000 Assets Restricted for Capital Projects $ - $ - Total Assets $ 244,967,000 $ 204,091,000 Current Liabilities $ 68,721,000 $ 34,907,000 Total Liabilities $ 77,669,000 $ 42,011,000 Net Assets $ 167,298,000 $ 162,080,000 Total Revenues $ 381,649,000 $ 350,276,000 Interest Expense $ - $ - Operating Income (OI) $ 31,755,000 $ 56,329,000 Cash Flow from Operations $ 58,665,000 $ 47,180,000 Working Capital $ 61,617,000 $ 63,259,000 Current Ratio (CA/CL) 1.9 2.8 Cash Flow to Current Liabilities (CFO/CL) 0.9 1.4 Long-Term Debt to Net Assets (TL-CL/NA) 0.1 0.0 Times Interest Earned (NPO+Int/Int) Net Assets to Total Assets (NA/TA) 68.3% 79.4% Operating Margin (OI/TR) 8.3% 16.1% Return on Assets (OI/TA) 13.0% 27.6% Operating Cash Flow to Assets (CFO/TA) 23.9% 23.1%

Odyssey-Collier CON #9968 LONG-TERM

Hospice Revenue Table

Wage


Adjusted Wage


Total Payment


Payment

Rate

Inflation Factor

Year Two


Revenue Year 2, August 2009

Patient Days

Routine Home Care 137.82 1.103 151.99 1,834,846 12,072 Continuous Home Care 804.38 1.103 887.07 112,907 127 Inpatient Respite 141.03 1.103 155.53 148,804 957 General Inpatient 610.94 1.103 673.75 26,076 39 Total 2,122,633 13,195 From Schedule 7 13,250 Difference 55 Percentage difference 0.41%

VITAS Healthcare Corporation of Florida (CON #9969): This review is for VITAS Healthcare Corporation of Florida, applying to establish a new hospice program in Hospice Service Area 8B, Collier County, Florida. The financial impact of the project will include the project cost of $225,000 and year two operating costs of $3,633,470. The audited financial statements of VITAS Healthcare Corporation of Florida for the periods ending December 31, 2005 and 2004 were analyzed

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for the purpose of evaluating the applicant’s ability to provide the capital and operational funding necessary to implement the project. The applicant is an indirect wholly owned subsidiary of Chemed Corporation (formerly named Roto-Rooter). Prior to February 24, 2004 it was an indirect wholly owned subsidiary of VITAS Healthcare Corporation. It should be noted that these financial statements include costs allocated from the parent. Included on the balance sheet are good will, an asset, valued at $107.3 million and an inter-company payable, a liability, booked at $93.9 million. The inter-company payable is the net balance of inter-company transactions and is primarily the result of a central cash management system wherein all cash receipts are remitted to the Parent and the Parent funds all cash disbursements. Short-Term Position: The applicant’s current ratio of 1.6 indicates that liquid assets are slightly greater than short-term obligations, an adequate position that must be viewed with the understanding that all cash is carried on the books of the parent, and actual current assets are likely to be understated as a result. The ratio of cash flow to current liabilities of 1.5 is above average and a good position. The working capital (current assets less current liabilities) of $7.2 million is a measure of excess liquidity that could be used to fund capital projects. Overall the applicant has a good short-term position. (See table below). Long-Term Position: The ratio of long-term debt to net assets of 2.9 indicates that the applicant is highly leveraged. However, all of the debt classified as long-term consists of the inter-company payable that carries no interest, and may not have to be repaid. The most recent year had operating income of $29.5 million, which resulted in an operating margin of 15.8 percent. Total net assets are $32.3 million. Overall the applicant has a good long-term position. (See table below). Capital Requirements: Schedule 2 listed capital projects totaling $2,768,375. Available Capital: The audited financial statements indicated the applicant had working capital of $7.2 million and annual operating cash flows of $18.3 million.

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Staffing: Schedule 6A indicates, by June 2008 (the first year of the proposed project), the applicant forecasts 18.13 FTEs as follows: total administration (4.47 FTEs); physician (0.32 FTEs); team director [RN] (1.0 FTEs); RNs (2.25 FTEs); LPNs (2.57 FTEs); nurses aides (4.73 FTEs); on-call representative (0.58 FTEs); social worker (0.67 FTEs); volunteer/ bereavement manager (0.54 FTEs) and chaplain (1.0 FTEs). This total FTE count for the proposed program increases to 42.09 for year two (ending June 2009). All the staff categories are retained; none are added. However, total administration FTEs rise to 7.58. Physician and all nursing staff categories rise, particularly nurses aides which go to 13.85 FTEs, followed next by LPN (7.33 FTEs), RNs (5.25 FTEs) and team director [RN] (2.33 FTEs). Among social services, the chaplain remains at a constant FTE of 1.0 but the social worker FTE increases to 1.08 and the volunteer bereavement manager to 1.0 FTEs. In the notes to Schedule 6A, VITAS will be operated by a general manger who will be drawn from the VITAS infrastructure and is familiar with VITAS systems and resources. VITAS describes its recruitment, retention and employee benefits by narrative in its Volume 1101 and under separate attachment102. It relies upon the parent’s resources, VITAS Healthcare Corporation. This applicant reports a handsome benefits package including the following: medical, dental, vision, life, disability and long-term disability coverage; group legal coverage; 401(k) retirement plan and paid time off. This is not an exhaustive list. The applicant offers no recruitment or related guideline protocols. Conclusion: Based on the applicant’s financial position and activity, funding for this project and all capital projects should be available as needed.

101 CON #9969 AHCA Form CON-1, Page# 113-115 102 Ibid, Volume IV, Attachment 15 – Overview of Benefits

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CON #9969

VITAS Healthcare Corporation of Florida 12/31/2005 12/31/2004 Current Assets $19,569,787 $14,481,486 Cash and Current Investment $2,100 $2,100 Assets Restricted for Capital Projects $0 $0 Total Assets $138,581,566 $134,013,014 Current Liabilities $12,399,067 $10,922,498 Total Liabilities $106,329,423 $120,064,458 Net Assets $32,252,143 $13,948,556 Total Revenues $186,131,968 $142,382,486 Interest Expense $0 $0 Operating Income (OI) $29,486,480 $22,467,317 Cash Flow from Operations $18,303,687 $17,476,386 Working Capital $7,170,720 $3,558,988

Financial Ratios 12/31/2005 12/31/2004 Current Ratio (CA/CL) 1.6 1.3 Cash Flow to Current Liabilities (CFO/CL) 1.5 1.6 Long-Term Debt to Net Assets (TL-CL/NA) 2.9 7.8 Times Interest Earned (NPO+Int/Int) Net Assets to Total Assets (NA/TA) 23.3% 10.4% Operating Margin (OI/TR) 15.8% 15.8% Return on Assets (OI/TA) 21.3% 16.8% Operating Cash Flow to Assets (CFO/TA) 13.2% 13.0%

VITAS CON #9969 LONG-TERM

Hospice Revenue Table

Wage


Adjusted Wage


Total Payment


Payment

Rate

Inflation Factor

Year Two


Patient Days Year 2, June

2009 Extended Routine Home Care 137.82 1.097 151.25 19,163 2,898,332 Continuous Home Care 502.73 1.097 551.72 1,179 650,477 Inpatient Respite 141.03 1.097 154.77 0 0 General Inpatient 610.94 1.097 670.47 510 341,940 Total 20,852 3,890,749 From Schedule 7 3,752,466 Difference -138,283 Percentage difference -3.69%

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

proposal? ss. 408.035 (6), Florida Statutes.

Evercare Hospice of Collier County, Inc. (CON #9965): Schedule 7 of the application indicates that the services to be provided are: routine home care, continuous home care, respite and general inpatient care. The payer types identified in the application as a percentage to total patient days are: Medicare at 96.0 percent, Medicaid at 1.0 percent, self-

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payers/charity at 2.0 percent, and commercial insurance/managed care at 1.0 percent. The Department of Health and Human Services sets rates for routine home care, continuous home care, inpatient respite care, and general inpatient care. The Federal rates were calculated for the Collier County, Florida wage index for Medicare Hospice payments of 1.0782 and inflated through December 2009. The average price adjustment factor used was 3.61 percent per year based on the new CMS Market Basket Price Index as published in the 3rd Quarter 2006 Health Care Cost Review. Estimated patient days for each level of service from Schedule 7, year 2 were multiplied by the calculated reimbursement rate for each service in order to estimate the total revenue that would be generated by that number of patient days. The results were then compared to the applicant’s estimated revenue. The applicant appears to have understated revenues by approximately 1.9 percent, which is not considered material. The results of the calculations are summarized in the table above. A review of the projected expenses indicates that expenses in year one and two are consistent with the applicant’s assumptions. The applicant projects an operating profit for the second year of $148,137.

This project appears to be financially feasible, if the applicant is able to meet its projected patient days and payer mix assumptions. HCR Manor Care Services of Florida, Inc. (CON #9966): Schedule 7 of the application indicates that the services to be provided are: routine home care, continuous home care, respite and general inpatient care. The payer types identified in the application as a percentage to total patient days are: Medicare at 89.0 percent, Medicaid at 4.0 percent, self-payers/charity at 1.0 percent, commercial insurance at 3.0 percent and other payers at 3.0 percent. The Department of Health and Human Services sets rates for routine home care, continuous home care, inpatient respite care, and general inpatient care. The Federal rates were calculated for the Collier County, Florida wage index for Medicare Hospice payments of 1.0782 and inflated through December 2009. The average price adjustment factor used was 3.61 percent per year based on the new CMS Market Basket Price Index as published in the 3rd Quarter 2006 Health Care Cost Review. Estimated revenues for each level of service from Schedule 7, year 2 were divided by the calculated reimbursement rate for that service in order to estimate the total patient days that would be generated by that level or

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revenue. The results were then compared to the applicant’s estimated number of patient days. The results of the calculations are summarized in the table above. The applicant’s projected patient days were 1.2 percent or 225 days greater than the calculated patient days. This variance is not considered material. Operating profits are expected to increase from a loss of $170,000 for year one to a profit of $601,700 for year two. Assuming the applicant is able to meet its projected patient days and payer mix assumptions, financial feasibility of this project appears likely. Hope of Southwest Florida, Inc. (CON #9967): Schedule 7 of the application indicates that the services to be provided are: routine home care, continuous home care, respite and general inpatient care. The payer types identified in the application as a percentage to total patient days are: Medicare at 90.0 percent, Medicaid at 5.0 percent, self-payers/charity at 0.7 percent, and commercial insurance at 4.4 percent. The Department of Health and Human Services sets rates for routine home care, continuous home care, inpatient respite care, and general inpatient care. The Federal rates were calculated for the Collier County, Florida wage index for Medicare Hospice payments of 1.0782 and inflated through June 2009. The average price adjustment factor used was 3.54 percent per year based on the new CMS Market Basket Price Index as published in the 3rd Quarter 2006 Health Care Cost Review. Estimated patient days for each level of service from Schedule 7, year 2 were multiplied by the calculated reimbursement rate for each service in order to estimate the total revenue that would be generated by that number of patient days. The results were then compared to the applicant’s estimated revenue. The applicant appears to have understated revenues by approximately 6.0 percent, which is not considered material. The applicant used the same base year payment rates for each level of service to estimate revenues as those used for comparison. The different outcomes appear to be caused by the different inflation factors used, with the applicant using a factor of 3.0 percent for their estimates. The results of the calculations are summarized in the table above. A review of the projected expenses indicates that expenses in year one and two are consistent with the applicant’s assumptions. The applicant projects an operating profit for the second year of $73,446. This project appears to be financially feasible, if the applicant is able to meet its projected patient days and payer mix assumptions.

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Odyssey HealthCare of Collier County, Inc. (CON #9968): Schedule 7 of the application indicates that the services to be provided are: routine home care, continuous home care, respite and general inpatient care. The payer types identified in the application as a percentage to total patient days are: Medicare at 95.0 percent, Medicaid at 3.0 percent, self-payers/charity at 1.0 percent, and commercial insurance at 1.0 percent. The Department of Health and Human Services sets rates for routine home care, continuous home care, inpatient respite care, and general inpatient care. The Federal rates were calculated for the Collier County, Florida wage index for Medicare Hospice payments of 1.078 and inflated through August 2009. The average price adjustment factor used was 3.52 percent per year based on the new CMS Market Basket Price Index as published in the 3rd Quarter 2006 Health Care Cost Review. Estimated revenues for each level of service from Schedule 7, year 2 were divided by the calculated reimbursement rate for that service in order to estimate the total patient days that would be generated by that level or revenue. The results were then compared to the applicant’s estimated number of patient days. The results of the calculations are summarized in the table above. The applicant’s projected patient days were 0.4 percent or 55 days greater than the calculated patient days. The difference is not considered material. Operating profits are expected to increase from a loss of $867,230 for year one to a profit of $32,731 for year two. Assuming the applicant is able to meet its projected patient days and payer mix assumptions, financial feasibility of this project appears likely. VITAS Healthcare Corporation of Florida (CON #9969): Schedule 7 of the application indicates that the services to be provided are: routine home care, continuous home care, respite and general inpatient care. The payer types identified in the application as a percentage to total patient days are: Medicare at 85.0 percent, Medicaid at 7.0 percent, self-payers/charity at 1.0 percent, and commercial insurance at 7.0 percent. The Department of Health and Human Services sets rates for routine home care, continuous home care, inpatient respite care, and general inpatient care. The Federal rates were calculated for the Collier County, Florida wage index for Medicare Hospice payments of 1.078 and inflated through June 2009. The average price adjustment factor used was 3.54 percent per year based on the new CMS Market Basket Price Index as

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published in the 3rd Quarter 2006 Health Care Cost Review. The applicant did not state the inflation factor used to calculate estimated revenues. However, salaries on Schedule 5 were increased by 3.0 percent for the 2nd year. Estimated patient days for each level of service from Schedule 7, year 2 were multiplied by the calculated reimbursement rate for that service in order to estimate the total revenue that would be generated by that number of patient days. The results were then compared to the applicant’s estimated revenue. The results of the calculations are summarized in the table above. The applicant used an unusual method for estimating revenue for continuous care days. According to the notes to Schedule 7, based on their experience in providing this level of care, the applicant used an hourly rate to estimate revenues based on an average of 15 hours of care per patient day. Code of Federal Regulations 42CFR.302(e)(4), states that when a patient is under continuous care for eight or more hours but less than 24 hours in a day, the daily rate is converted to an hourly rate. In order to be consistent with the applicant’s method, the payment estimated for this level of service was calculated based on 15 hours per patient day at an hourly rate that is 1/24th of the estimated daily rate for this level of service. The applicant’s projected revenue was 3.69 percent or $138,283 less than the calculated revenue. A significant portion of the difference may be due to the use of a lower inflation factor; the remaining unexplained difference is not considered material. Operating profits are expected to increase from a loss of $451,108 for year one to a profit of $81,471 for year two. Assuming the applicant is able to meet its projected patient days and payer mix assumptions, financial feasibility of this project appears likely.

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e. Will the proposed project foster competition to promote quality and

cost-effectiveness? Please discuss the effect of the proposed project on any of the following: ss. 408.035(7), Florida Statutes. Evercare Hospice of Collier County, Inc. (CON #9965): This application is for a new hospice program to be located in Hospice Service Area 8B which currently has one existing hospice program. This project would be a new choice of provider in the service area. The impact of the price of services on consumer choice is limited to the payer type. Most consumers do not pay directly for hospice services rather they are covered by a third-party payer. The impact of price competition would be limited to third-party payers that negotiate price for services, namely managed care organizations. Therefore, price competition is limited to the share of patient days that are under managed care plans. The applicant is projecting 1.0 percent of patient days from managed care payers with 97.0 percent of patient days expected to come from fixed price government payer sources (Medicare and Medicaid). With the large majority of patient care being provided from fixed price government payer sources, this project is not likely to have any discernable positive impact on price-based competition to promote cost-effectiveness. However, if approved, this applicant would be an alternative to the existing hospice provider in the service area. Introducing competition within the service area, and, with no direct price-based competition, the emphasis is likely to be placed on quality of care and uncompensated community services as a means for providers to differentiate themselves. As providers offer improved or enhanced services to patients and families as a means to compete on quality measures, cost-effectiveness would be impacted since the additional or enhanced services would be offered even with the high percentage of fixed priced government payers. In other words, the potential exists for new or enhanced services to be provided for the same Federal and State dollars. Although this project is not likely to result in price-based competition, if approved, this project will add another competitor to the service area. In general, the introduction of competition to a market results in an environment that promotes quality and cost-effectiveness.

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HCR Manor Care Services of Florida, Inc. (CON #9966): This application is for a new hospice program to be located in Hospice Service Area 8B which currently has one existing hospice program. This project would be a new choice of provider in the service area. The impact of the price of services on consumer choice is limited to the payer type. Most consumers do not pay directly for hospice services rather they are covered by a third-party payer. The impact of price competition would be limited to third-party payers that negotiate price for services, namely managed care organizations. Therefore, price competition is limited to the share of patient days that are under managed care plans. The applicant is projecting no patient days from managed care payers with 93.0 percent of patient days expected to come from fixed price government payer sources (Medicare and Medicaid). With the large majority of patient care being provided from fixed price government payer sources, this project is not likely to have any discernable positive impact on price-based competition to promote cost-effectiveness. However, if approved, this applicant would be an alternative to the existing hospice provider in the service area. Introducing competition within the service area, and, with no direct price-based competition, the emphasis is likely to be placed on quality of care and uncompensated community services as a means for providers to differentiate themselves. As providers offer improved or enhanced services to patients and families as a means to compete on quality measures, cost-effectiveness would be impacted since the additional or enhanced services would be offered even with the high percentage of fixed priced government payers. In other words, the potential exists for new or enhanced services to be provided for the same Federal and State dollars. Although this project is not likely to result in price-based competition, if approved, this project will add another competitor to the service area. In general, the introduction of competition to a market results in an environment that promotes quality and cost-effectiveness. Hope of Southwest Florida, Inc. (CON #9967): This application is for a new hospice program to be located in Hospice Service Area 8B which currently has one existing hospice program. This project would be a new choice of provider in the service area. The impact of the price of services on consumer choice is limited to the payer type. Most consumers do not pay directly for hospice services rather they are covered by a third-party payer. The impact of price competition would be limited to third-party payers that negotiate price for services, namely managed care organizations. Therefore, price

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competition is limited to the share of patient days that are under managed care plans. The applicant is projecting no patient days from managed care payers with 95.0 percent of patient days expected to come from fixed price government payer sources (Medicare and Medicaid). With the large majority of patient care being provided from fixed price government payer sources, this project is not likely to have any discernable positive impact on price-based competition to promote cost-effectiveness. However, if approved, this applicant would be an alternative to the existing hospice provider in the service area. Introducing competition within the service area, and, with no direct price-based competition, the emphasis is likely to be placed on quality of care and uncompensated community services as a means for providers to differentiate themselves. As providers offer improved or enhanced services to patients and families as a means to compete on quality measures, cost-effectiveness would be impacted since the additional or enhanced services would be offered even with the high percentage of fixed priced government payers. In other words, the potential exists for new or enhanced services to be provided for the same Federal and State dollars. Although this project is not likely to result in price-based competition, if approved, this project will add another competitor to the service area. In general, the introduction of competition to a market results in an environment that promotes quality and cost-effectiveness. Odyssey HealthCare of Collier County, Inc. (CON #9968): This application is for a new hospice program to be located in Hospice Service Area 8B which currently has one existing hospice program. This project would be a new choice of provider in the service area. The impact of the price of services on consumer choice is limited to the payer type. Most consumers do not pay directly for hospice services rather they are covered by a third-party payer. The impact of price competition would be limited to third-party payers that negotiate price for services, namely managed care organizations. Therefore, price competition is limited to the share of patient days that are under managed care plans. The applicant is projecting no patient days from managed care payers with 98.0 percent of patient days expected to come from fixed price government payer sources (Medicare and Medicaid). With the large majority of patient care being provided from fixed price government payer sources, this project is not likely to have any discernable positive impact on price-based competition to promote cost-effectiveness. However, if approved, this applicant would be an alternative to the existing hospice provider in the service area.

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Introducing competition within the service area, and, with no direct price-based competition, the emphasis is likely to be placed on quality of care and uncompensated community services as a means for providers to differentiate themselves. As providers offer improved or enhanced services to patients and families as a means to compete on quality measures, cost-effectiveness would be impacted since the additional or enhanced services would be offered even with the high percentage of fixed priced government payers. In other words, the potential exists for new or enhanced services to be provided for the same Federal and State dollars. Although this project is not likely to result in price-based competition, if approved, this project will add another competitor to the service area. In general, the introduction of competition to a market results in an environment that promotes quality and cost-effectiveness. VITAS Healthcare Corporation of Florida (CON #9969): This application is for a new hospice program to be located in Hospice Service Area 8B which currently has one existing hospice program. This project would be a new choice of provider in the service area. The impact of the price of services on consumer choice is limited to the payer type. Most consumers do not pay directly for hospice services rather they are covered by a third-party payer. The impact of price competition would be limited to third-party payers that negotiate price for services, namely managed care organizations. Therefore, price competition is limited to the share of patient days that are under managed care plans. The applicant is projecting no patient days from managed care payers with 92.0 percent of patient days expected to come from fixed price government payer sources (Medicare and Medicaid). With the large majority of patient care being provided from fixed price government payer sources, this project is not likely to have any discernable positive impact on price-based competition to promote cost-effectiveness. However, if approved, this applicant would be an alternative to the existing hospice provider in the service area. Introducing competition within the service area, and, with no direct price-based competition, the emphasis is likely to be placed on quality of care and uncompensated community services as a means for providers to differentiate themselves. As providers offer improved or enhanced services to patients and families as a means to compete on quality measures, cost-effectiveness would be impacted since the additional or enhanced services would be offered even with the high percentage of fixed priced government payers. In other words, the potential exists for new or enhanced services to be provided for the same Federal and State dollars.

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Although this project is not likely to result in price-based competition, if approved, this project will add another competitor to the service area. In general, the introduction of competition to a market results in an environment that promotes 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(10), Florida Statutes and Ch. 59A-3 or 59A-4, Florida Administrative Code.

Each one of the five co-batched applicants is requesting approval to establish a new hospice program rather than the development of a freestanding inpatient hospice facility. There are no construction costs and methods associated with these proposals.

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(11), Florida Statutes.

Hospice programs are required by Federal and State law to provide hospice patients with inpatient care when needed (42 Code of Federal Regulations 418.98). Hospice care also must be provided regardless of ability to pay103.

Evercare Hospice of Collier County, Inc. (CON #9965), as a new hospice entity, has no Medicaid or indigent care history. However, in Schedule 7A, it proposes three percent patient days for indigent/charity care (two percent self-pay and one percent Medicaid) for both years one and two. The notes to Schedule 7A indicate that self-pay absorbs charity care. This is the only co-batched applicant that predicates its application on conditions (Schedule C) that it will provide at least 1.5 percent indigent/charity care. HCR Manor Care Services of Florida, Inc. (CON #9966), as a new hospice entity, has no Medicaid or indigent care history. However, in

103 Florida Statutes 400.6095 Patient admission; assessment; plan of care; discharge; death.--(1) Each hospice shall make its services available to all terminally ill persons and their families without regard to age, gender, national origin, sexual orientation, disability, diagnosis, cost of therapy, ability to pay (emphasis added), or life circumstances. A hospice shall not impose any value or belief system on its patients or their families and shall respect the values and belief systems of its patients and their families.

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Schedule 7A104, it proposes three percent patient days for indigent/charity care (other payers), four percent for Medicaid, three percent charity and one percent self-pay. This is for both years one and two. The notes to Schedule 7A105 state charity care is recorded under “Other Payers” and self-pay is recorded separately. Therefore, in the case of HCR Manor Care, self-pay and charity care are mutually exclusive, based on the applicant’s notes to the schedule. HCR Manor Care provides a table106 that totals the distribution of payers to admissions. This table is consistent with Schedule 7A, relative to Medicaid, charity care and self-pay. Hope of Southwest Florida, Inc. (CON #9967) states it has a history of providing services to Medicaid and medically indigent patients, reporting that in 2006, about 5.1 percent of all patient days were provided to Medicaid or medically indigent patients. In Schedule 7A, it proposes five percent Medicaid days and 0.7 percent self-pay (for both years of operation). Neither in Schedule 7A itself nor in its notes does Hope specifically state directly that charity care is covered by the self-pay category; however, as no other distinction is made and with other payers set at 0.0 percent, there is no other category available under which charity or indigent care could be placed.

Odyssey HealthCare of Collier County, Inc. (CON #9968), as a new hospice entity, has no Medicaid or indigent care history. However, in Schedule 7A, it proposes four percent patient days (one percent self-pay and three percent Medicaid) for both years one and two. The notes to Schedule 7A indicate that charity care appears in the self-pay figures. The applicant states the parent, Odyssey HealthCare, as of year-to-date November 2006, has approximately 60 percent non-Medicare net revenue in Medicaid, with about two percent of the remainder from indigent/charity care. VITAS Healthcare Corporation of Florida (CON #9969) states it has a history of providing services to Medicaid and charity care patients, reporting that it historically provides over one percent of revenues in charity care and that this reached a total or $8.9 million in 2005. In Schedule 7A, VITAS proposes 6.4 percent Medicaid and 9.1 percent charity in year one and 7.0 percent and 1.0 percent in year two, respectively. These are the greatest percentage commitments of any co-batched applicant.

104 CON #9966 records Medicaid and indigent/charity care as Schedule 7. However, Schedule 7 is reserved strictly for “Nursing Homes” only. Schedule 7A is for “Hospitals and Other Projects”. Therefore, the Agency re-titles these results as Schedule 7A projections. 105 Ibid. 106 CON #9966 AHCA Form CON-1, Page# 3-15, Table 3-3: Projected Admissions by Payer.

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F. SUMMARY A fixed need pool of one was published for a new hospice program in Hospice Service Area 8B, Collier County. After weighing and balancing all applicable review criteria, the following relevant factors are listed with regard to the establishment of a hospice program in Hospice Service Area 8B. Evercare Hospice of Collier County, Inc. (CON #9965), a Florida for-profit entity, proposes to establish a new hospice program in Hospice Service Area 8B, Collier County. No exact Collier County location is specified. The applicant and its parent, UnitedHealth Group, Inc (United) state that United currently has no hospices in Florida. The applicant is proposing total project costs of $649,450; covered are building costs (leasehold improvements but no construction costs), development and pre-operational start-up costs. There are no land, equipment or financing costs. Evercare predicates a CON on the following conditions: non-covered services, such as but not limited to, palliative radiation; palliative chemotherapy (related to the terminal illness); other therapies such as music, massage, aroma and other holistic treatments (not specified in greater detail) and at least 1.50 percent of care as indigent/charity care. Hospice programs are required by federal and state law to provide services to everyone requesting them and therefore the Agency would not place conditions on a program to provide legally required services. Although the applicant has indicated that palliative radiation and chemotherapy are non-covered services, they are covered if required by the patient. Need/Access: • The applicant is applying in response to published need for Hospice

Service Area 8B (Collier County).

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• Support of the applicant's proposal is not demonstrated by letters of support from local health care providers (such as acute care hospitals, skilled nursing facilities (SNFs), or other related providers and possible referral sources).

• No support letters commit to contractual relationships to promote program success, with no or little indication of effective referral mechanisms in place.

• The applicant appears to indicate it will accept patients into its hospice program who wish to receive curative care. It is clear the Legislature intended hospice care to be received by patients not seeking curative treatment. Hospice is defined in the Florida Statutes as: a centrally administered corporation providing a continuum of palliative and supportive care for the terminally ill patient and his or her family. Palliative care is defined as services or interventions which are not curative but are provided for the reduction or abatement of pain and human suffering.

• The applicant is proposing a smaller program than Hope and VITAS but larger than HCR Manor Care and Odyssey.

• Non-core conditions proposed by the applicant were not quantified or made measurable by the applicant.

Quality of Care: • Neither this applicant, nor the parent (United) report any hospice

operations in Florida, with the parent’s nearest hospice program in Georgia. Surveys from hospice programs outside of Florida were not offered by the applicant.

Financial Feasibility/Availability of Funds: • The applicant has a “weak” short-term position but “good” long-term

position. • Presuming projected patient days and payer mixes are correct, the

project appears to be financially feasible. Medicaid/Charity Care: • Hospice programs are required by law to provide services to all who

seek them. • The applicant is projecting that Medicaid will comprise 1.0 percent of

total patient days in year one and two of the proposed project. Self-pay/charity care is estimated at 2.0 percent of total patient days in both years.

Architectural:

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• The applicant is requesting approval to establish a new hospice program rather than development of a freestanding inpatient hospice facility. There are no construction costs and methods associated with this proposal.

HCR Manor Care Services of Florida, Inc. (CON #9966), a Florida for-profit entity, proposes to establish a new hospice program in Hospice Service Area 8B, Collier County. No exact Collier County location is specified. The applicant and its parent, Manor Care, Inc. (Manor Care) state that Manor Care currently has no operational hospices in Florida. The applicant is proposing total project costs of $305,771; covered are equipment, development and pre-operational start-up costs. There are no land or building costs. HCR Manor Care Services of Florida, Inc. predicates on conditions, the following: It is willing to accept conditions based on statements made within this application as deemed appropriate by the Agency. It states that it will agree to timely reporting of utilization rates to the applicable local health council (LHC) and the Department of Elder Affairs and any other conditions that the Agency may deem appropriate. Utilization reporting is required in regulations and therefore a CON condition to require the application to do something that is already required is unnecessary. It is noted that hospice admission data, which is required to be reported to the Agency by hospice programs, is reported directly to the Agency and not local health councils. Need/Access: • The applicant is applying in response to published need for Hospice

Service Area 8B (Collier County). • Support of the applicant's proposal is demonstrated by letters of

support from local health care providers (such as acute care hospitals, skilled nursing facilities (SNFs), adult living facilities (ALFs), and other related providers and possible referral sources). Two letters of support from local acute care hospitals and two from SNFs agree to contractual relationships, serving as inpatient facilities. Other facilities agree to “work with” this applicant but do not specifically agree to a contractual relationship, per se.

• The applicant is proposing a small program compared to Hope and VITAS.

• The applicant indicates it believes it has distinguished itself from other applicants in that it will target patients wishing to receive curative treatment. It is clear the Legislature intended hospice care to

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be received by patients not seeking curative treatment. Hospice is defined in the Florida Statutes as: a centrally administered corporation providing a continuum of palliative and supportive care for the terminally ill patient and his or her family. Palliative care is defined as services or interventions which are not curative but are provided for the reduction or abatement of pain and human suffering.


Quality of Care:

• Neither this applicant, nor the parent (Manor Care) report any hospice operations in Florida at this time. Surveys from hospice programs outside of Florida were not offered by the applicant.

Financial Feasibility/Availability of Funds: • The applicant has a “good” short-term position and an “adequate”

long-term position. • Presuming projected patient days and payer mixes are correct, the



total patient days in year one and two of the proposed project. Self-pay/charity care is estimated at 3.0 percent of total patient days in both years.

Architectural: • The applicant is requesting approval to establish a new hospice

program rather than development of a freestanding inpatient hospice facility. There are no construction costs and methods associated with this proposal.

Hope of Southwest Florida, Inc. (CON #9967), a Florida not-for-profit, 501(c)(3), proposes to establish a new hospice program in Hospice Service Area 8B, Collier County. It is the current provider of hospice services to the residents of Hospice Service Area 8C (Lee, Hendry and Glades Counties) and 6B (Polk, Hardee and Highlands Counties). Within one year, this applicant proposes satellite offices in two Collier County cities – Naples and Immokalee. Administrative headquarters is to be in Fort Myers (Lee County).

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The applicant is proposing total project costs of $369,597; covered are equipment, development and pre-operational start-up costs. There are no land or building costs. Hope predicates a CON on the following conditions: submission to the Agency business licenses and certificates of occupancy regarding its Naples and Immokalee offices during the first year of operation; submission to the Agency education and outreach materials to enhance access to the population under 65 years of age and cancer patients who currently receive insufficient palliative therapies; provide attendance sheets of the aforementioned educational and outreach efforts and submit its emergency preparedness plan for Collier County. Hospice programs are required by federal and state law to provide services to everyone requesting them and therefore the Agency would not place conditions on a program to provide legally required services. Although the applicant has indicated that palliative radiation and chemotherapy are non-covered services, they are covered if required by the patient. Need/Access: • The applicant is applying in response to published need for Hospice


support from two local continuous care retirement communities with operational skilled nursing facilities (SNFs). These two SNFs commit to a contractual relationship to serve as inpatient sites.

• This applicant has support letters and cover the widest variety of supports, both from health care and non-health community partners. The letters sustain that a reasonable referral protocol is in place.

• The applicant and VITAS expect to operate the largest program if approved. A staffing comparison indicates that VITAS will have the larger staff.

• Non-core conditions were measurable and specifically addressed areas the applicant believed to be underserved.

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Quality of Care: • Agency records indicate one confirmed complaint on its Fort Myers

hospice operation, as of the three-year period ending January 29, 2007. The sole confirmed complain was on resident/patient abuse/neglect.

Financial Feasibility/Availability of Funds: • The applicant has a “good” short-term position and an “acceptable”

long-term position. • Presuming projected patient days and payer mixes are correct, the



total patient days in year one and two of the proposed project. Self-pay/charity care is estimated at 0.7 percent of total patient days in both years. Schedule 7A and the accompanying notes do not directly state self-pay includes charity care; however, all remaining payer categories are set at 0.0 percent.


program. There are no construction costs and methods associated with this.

Odyssey HealthCare of Collier County, Inc. (CON #9968) is parented by Odyssey HealthCare, Inc. The applicant proposes to establish a new hospice program in Hospice Service Area 8B, Collier County. No exact office location is offered other than somewhere in Collier County – no satellite offices are proposed. The parent currently operates two hospice programs in Florida, one located in Hospice Service Area 4B – Volusia and Flagler Counties and the other in Hospice Service Area 11 – Miami-Dade and Monroe Counties. The applicant is proposing total project costs of $464,720; covered are equipment, development and pre-operational start-up costs. There are no land or building costs. Odyssey-Collier predicates a CON on the following conditions: non-covered services, such as but not limited to, palliative radiation; palliative

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chemotherapy (related to the terminal illness); other therapies such as music, massage, aroma and other holistic treatments; expenditure of at least $25,000 during the first two years on public education concerning end of life planning and any reporting to the Department of Elder Affairs will be disclosed to the Agency annually. As noted above under co-batched applicant, Evercare, although the applicant has indicated that palliative radiation and chemotherapy are non-covered services, they are covered if required by the patient. Additionally, as the applicant is not required to report data it reports to the Department of Elder Affairs to the Agency, this will be a listed condition should the CON be awarded. Need/Access: • The applicant is applying in response to published need for Hospice

Service Area 8B (Collier County). • Support of the applicant's proposal is not demonstrated by letters of

support from local health care providers (such as acute care hospitals, skilled nursing facilities (SNFs), adult living facilities (ALFs), or other related providers). None are from Collier County or the Southwest Florida area.

• No support letters commit to contractual relationships to promote program success, with no indication of effective referral mechanisms in place.


Quality of Care: • The applicant’s parent (Odyssey Healthcare, Inc.) operates two

hospices in Florida and, per Agency records, the parent had experienced no confirmed complaints as of the three-year period, ending January 29, 2007.

Financial Feasibility/Availability of Funds: • The applicant has “good” short-term and long-term positions. • Presuming projected patient days and payer mixes are correct, the



total patient days in year one and two of the proposed project. Self-

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pay/charity care is estimated at 1.0 percent of total patient days in both years.

Architectural: • The applicant is requesting approval to establish a new hospice.

There are no construction costs and methods associated with this proposal.

VITAS Healthcare Corporation of Florida (CON #9969) is a for-profit Florida-based entity, headquartered in Miami, Florida. It reports some 28 years of hospice experience, with 41 hospices in 16 states and licensure to provide hospice services for Miami-Dade, Broward and Palm Beach Counties. The applicant states no current plans for a freestanding inpatient facility but intends to have offices in Immokalee, Marco Island and a third that is undisclosed but relatively convenient to both. The applicant is proposing total project costs of $238,375; covered are equipment, development and pre-operational start-up costs. There are no land or building costs. VITAS predicates a CON on the following non-core conditions: non-core services such as assessment by a physician upon admission (measured by a signed declaratory statement which may be supported by review of patient medical records), a physician on every care team with patient visits as required (measured via a signed declaratory statement which may be support via a review of patient medical records; upon the first day of hospice care, all responsive patients will be assessed pursuant to the 0-10 World Health Organization pain scale, a patient pain history will be maintained (recorded in Vx via telephone calls using the telephone key pad for data entry) with extremely high levels of pain reduced to moderate or lower levels within 48 hours (greater than 60 percent of patients who report pain from seven to 10 will report a reduction of pain to five or less within the 48 hours); implementation of a pet therapy program immediately (measured by a signed declaratory statement); operational and programmatic conditions to include establish satellite offices in Immokalee and Marco Island during the first year of operation (measured by submission of the office address and location to the Agency and publication of such addresses in the provider’s collateral material); implement TeleCare immediately (measured by publication of the relevant collateral materials for the provider and patient community); establish a local ethics committee, beginning upon certification (measured by publication of the names and relevant information of the ethics committee members and the related schedule of meetings; by the end of the second year of operations implement CarePlanIT (a handheld bedside clinical information system) to be measured by the CarePlanIT

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budget on Schedule 2 of CON #9969 application and will be measured at the time of implantation via a signed declaratory statement; offer educational programs to applicable Hospice of Naples, Inc. partners (staff, physicians and patients measured by publication of relevant materials and related communication between the applicant and Hospice of Naples, Inc.; provide Hospice of Naples Foundation a list of the applicant’s patients and families that wish to make hospice contributions (measured by the applicant’s inclusion of Hospice of Naples Foundation information on the applicant’s collateral materials); make a $20,000 charitable contribution to Hospice of Naples upon the applicant’s certification (measured by a signed declaratory statement and evidence of funds transfer); serve 65 percent patients classified as non-cancer (measured via required annual submission to the Agency applicable submission data); establish immediately a clinical pastoral education program (measured via publication of the relevant collateral materials for the pastoral community and identification of the pastoral interns who participate in the program each year). Need/Access: • The applicant is applying in response to published need for Hospice


support from two local acute care hospitals that commit to a contractual relationship.

• VITAS and Hope proposed the largest program and VITAS supports its proposal with the highest projected number of full-time equivalents.

• The applicant identifies a number of populations it believes are underserved and while it was not demonstrated that these populations were underserved, VITAS offered measurable conditions to ensure that the need of the populations it identified will be met.

Quality of Care: • VITAS has nine confirmed complaints, per Agency records, for the

three-year period ending January 29, 2007 and is accredited by the Joint Commission.

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Financial Feasibility/Availability of Funds: • The applicant has “good” short-term and long-term positions. • Presuming projected patient days and payer mixes are correct, the



total patient days in year one. In year two, this percentage rises to 7.0 percent. Charity care comprises 9.1 percent of total patient days in year one and declines to 1.0 percent in year two.


program. There are no construction costs and methods associated with this proposal.

G. RECOMMENDATION

Approve CON #9969 to establish a hospice program. Total project costs are $369,597. CONDITIONS: 1. Every patient shall be assessed by a physician upon admission

(measured by a signed declaratory statement which may be supported by review of patient medical records).

2. A physician will serve as a member on every care team with patient visits as required (measured via a signed declaratory statement which may be supported via a review of patient medical records).

3. On the first day of hospice care responsive patients will be asked to rate their pain on the 0-10 World Health Organization pain scale (severe pain to worst pain imaginable). A pain history will be created for each patient. These measures will be recorded in Vx via a telephone call using the telephone keypad for data entry. These outcome measures will include greater than 60 percent of patients who report severe pain on a 7-10 scale will report a reduction to five or less within 48 hours.

4. Implement a pet therapy program to begin immediately upon licensure. This will be measured via a signed declaratory statement by VITAS Healthcare Corporation of Florida (VHCF).

5. Establish satellite hospice offices in Immokalee and Marco Island during the first year of operation. This will be measured via

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submission of the office address and location to the Agency and publication of such addresses in the provider’s collateral material.

6. Implement a TeleCare program to begin immediately. This will be measured via publication of the relevant collateral materials for the provider and patient community.

7. Establish a local ethics committee, beginning upon certification. This will be measured via publication of the names and relevant information of the ethics committee members and the related schedule of meetings.

8. Implementation of CarePlanIT, a handheld bedside clinical information system, by the end of the second year of operation. This is measured by identification of the CarePlanIT budget on Schedule 2 of this application and will be measured at the time of implementation via a signed declaratory statement by VHCF.

9. Offer VHCF educational programs to applicable Hospice of Naples, Inc. staff, physicians and patients. This will be measured via publication of relevant materials and related communication between VHCF and Hospice of Naples, Inc.).

10. Provide Hospice of Naples Foundation information to VHCF patients and their families seeking to donate funds to hospice services. This will be measured by VHCF’s inclusion of Hospice of Naples Foundation information on VHCF’s collateral material

11. Make charitable contribution from VITAS Healthcare Corporation to Hospice of Naples in the amount of $20,000 at the time of certification. This will be measured via a signed declaratory statement by VITAS and evidence of funds transfer. This will also enhance HON’s contributions. A letter indicating VHCF’s parent, VITAS Healthcare Corporation, commitment to this donation is on the following page.

12. Sixty-five percent of non-cancer patients. This will be measured via VHCF’s required annual submission of admission data to the Agency.

13. Establish a Clinical Pastoral Education program to begin immediately upon licensure. This will be measured via publication of the relevant collateral materials for the pastoral community and identification of the pastoral interns who participate in the program each year.

Deny CON Numbers 9965, 9966, 9967, and 9968

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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: Karen Rivera Health Services and Facilities Consultant Supervisor Certificate of Need Jeffrey N. Gregg

Chief, Bureau of Health Facility Regulation

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Documents

STATE AGENCY ACTION REPORTahca.myflorida.com/MCHQ/CON_FA/Batching/pdf/9966.pdf · 2007. 2. 22. · 2 CON #9966 AHCA Form CON-1, Page 2-26, Letters of Intent to Contract for Inpatient