STATE AGENCY ACTION REPORT · Gonzalez, Hispanic Vicar and Lisa Garcia, Faith Formation Minister...

STATE AGENCY ACTION REPORT ON APPLICATION FOR CERTIFICATE OF NEED

A. PROJECT IDENTIFICATION

1. Applicant/CON Action Number

Cornerstone Hospice and Palliative Care, Inc./CON #10122

2445 Lane Park Road

Tavares, Florida 32778

Authorized Representative: Ms. Patricia Lehotsky

(352) 343-1341

Good Shepherd Hospice, Inc./CON #10123

12973 Telecom Parkway, Suite 100

Temple Terrace, Florida 33637

Authorized Representative: Mr. H. Darrell White

(813) 871-8400

2. Service District/Subdistrict

Hospice Service Area 6B (Hardee, Highlands and Polk Counties)

B. PUBLIC HEARING

A public hearing was not held or requested regarding the proposals to

establish inpatient hospice facilities in Polk County, Hospice Service Area

6B.

Letters of Support Cornerstone Hospice and Palliative Care, Inc. (CON #10122)

submitted 117 unduplicated letters of support in CON #10122’s

Appendices IV-XII. Two letters were not signed. One email was not

signed. Four letters were not dated, the other 113 were dated between

May 4, 2011-June 10, 2011. The Agency received three letters dated

May 24, 2011, that were not included with the application.

CON Action Number: 10122-10123

2

Eight support letters are from community government members: Grady

Judd, Polk County Sheriff, Gow B. Fields, Mayor of the City of Lakeland,

Steve Bissonnette, Assistant Director of Community Development for the

City of Lakeland, Nathaniel Birdsong, Winter Haven City Commissioner,

James “JP” H. Powell, Winter Haven City Commissioner, Gary W. Hester,

Winter Haven Chief of Police, Dale L. Smith, Winter Haven City Manager,

and Nancy Z. Daley, Mayor of the City of Lake Alfred. These letters

generally cite Cornerstone’s provision of services (many provided with no

reimbursement received) to the community, Cornerstone’s excellent

reputation and its provision of quality care. Sheriff Judd stated that,

“I believe in addressing problems in a holistic manner, thus increasing

the quality of life for our citizens. Certainly, a comforting and stabilizing

presence can help make the best of even the worst of situations. Hospice

does just that for countless patients and their families.”

Several hospital administrators support this project. These include:

M. Scott Smith, CEO of Lake Wales Medical Center; Don Breeding,

Interim CEO for Heart of Florida Regional Medical Center; Lance

Anastasio, President and CEO of Winter Haven Hospital and Kathy

Knowles, Palliative Care Manager at Winter Haven Hospital.

There are 15 letters from local physicians. These include: Dr. Preeti

Harchandani and Dr. Sunil Nihalani from Ridge Medical Associates;

Dr. James G. Hardigan from Watson Clinic, Dr. Sergio Seoane,

Dr. Reginald A. Allen, Dr. Morris Kutner, Dr. Avantica Gondi, Dr. Claude

Dera, Dr. Dario F. Cardona, Dr. Antonio Trindale from Center for Cancer

Care & Research, Dr. Tamika Singh, Dr. Herminio Cuervo, Dr. James L.

Sanders, Drs. Randy V. Heysek and Susan Ross from Central Florida

Cancer Institute.

Eleven letters are from individuals whose loved ones received care

through the provider or volunteer with the provider. These letters had

common themes citing Cornerstone as a caring and supportive

organization, Cornerstone’s experience in hospice care and that there are

not enough hospice beds available in Polk County to meet the need.

Thirteen letters are from religious institutions. These include:

Fr. Franklin Salazar, Hispanic Ministry, Saint Joseph Church (Winter

Haven), Francisco Maldonado Gutierrez, Coordinator of Hispanic

Ministry at St. Joseph’s Catholic Church (Lakeland), Fr. Domingo

Gonzalez, Hispanic Vicar and Lisa Garcia, Faith Formation Minister from

St. Ann Catholic Community; Fr. Felix Banos, Parish Vicar and Jose

Ramos, Deacon in the Hispanic Community of Resurrection Church;

Deacon Antonio Martinez from Saint Anthony Church, Anthony Fusaro,


3

Ph.D., Executive Director of Talbot House Ministries, Randy Brock,

Senior Adult Pastor of Victory Church, Rev. C.E. Dollison,

Pastor/Teacher at First Missionary Baptist Church1, Rev. Kendrix J.

Gardner, Sr. Pastor at New Mt. Zion Missionary Baptist Church, Rev. H.

Leon Brown, President of the Winter Haven Interfaith Ministerial Alliance

and the Interdenominational Ministerial Association of Polk County and

Pastor Walter K. Laidler, President of the Interdenominational Ministers

Alliance of Lakeland, Florida.

Twenty-five citizens and members of the business community sent in

letters of support for Cornerstone. These included Jane Patton,

President of Haines City-Northeast Polk County Regional Chamber of

Commerce, 14 funeral home owner/operators and 10 local business

owner/operators. Thirty six “Friends of Hospice” sent in a form letter of

support. Seven home care agencies and long-term care facilities voiced

their support including: Cynthia Basalone, Action Home Care, Ashley

Vogel, Territory Manager for Comfort Keepers, Cheryl Bernabe, Nurse

Manager at New Era Assisted Living Facility, Teresa Montoya, Social

Services Director for Florida Presbyterian Homes, M.T. Carleton-Bucher,

Founder and President Emeritus for Florida Professional Association of

Care Givers, Inc, Renee DeJane, Community Manager for Lake Hammock

Village, and Cynthia Bodnar, Administrator for Amonet Care Home.

In summary, the 120 support letters carry the following recurring

themes: Cornerstone should open a hospice unit at Grace Manor

Assisted Living Facility in Lakeland, Cornerstone has an excellent

reputation and quality of care, Cornerstone would be a great benefit to

the community and Cornerstone has a proven track record of success by

serving in communities where there is unmet need.

Good Shepherd Hospice, Inc. (CON #10123) submitted 382

unduplicated letters of support in CON #10123’s Appendix 6 (Letters of

Support). Sixteen letters were not dated, the other 366 were dated

between April 26, 2011-June 17, 2011. The Agency received 16 letters

that were not included with the application. One was not dated, the

other 15 were dated between May 1, 2011 and June 17, 2011. The

President and CEO of Chapters Health System, Kathy Fernandez, the

parent and sole member of the applicant submits a letter of support

separately. Some of the support letters received are listed below.

1 Reverend C.E. Dollison also signed the Winter Haven Interfaith Ministerial Alliance and the Interdenominational Ministerial Association of Polk County support letter as the organization’s Vice President.


4

Four letters from members of the Florida Legislature document support.

They are: from the Florida Senate, the Honorable Paula Dockery (District

15), from the Florida House, the Honorable Seth McKeel (District 63), the

Honorable Kelli Stargel (District 64) and the Honorable John Wood

(District 65). Senator Dockery stated that, “Good Shepherd Hospice

patients and their loved ones need a hospice house that is accessible and

available.” Representative Stargel says, “it has been my privilege to get to

know the good work that is being done by Good Shepherd Hospice in our

area…the ability to provide compassionate and comprehensive end-of-life

care is important to me and my constituents.”

Seven support letters are from local elected officials: Lori Edwards,

Supervisor of Elections for Polk County; Edwin V. Smith, Polk County

Commissioner, District 3 and Commission Chairman; Marsha M. Faux,

Polk County Property Appraiser; Gow B. Fields, Mayor of the City of

Lakeland; Jeff Potter, Mayor of the City of Winter Haven; Don Selvage,

Lakeland City Commissioner; and Frank J. O’Reilly, School Board

Member of Polk County.

Hospital administrators’ letters include: Warren L. Santander,

VP/Administrator of Florida Hospital Heartland Medical Center/Lake

Placid; Lance Anastasio, President and CEO of Winter Haven Hospital;

Mary Jo Schreiber, Chief Nursing Officer of Winter Haven Hospital; Kathy

Knowles, Palliative Care Manager of Winter Haven Hospital; Phyllis

Fitzwater, Assistant, VP of Care Management of Winter Haven Hospital;

Elizabeth Starling, Assistant Director Care Management of Winter Haven

Hospital; M. Scott Smith, CEO of Lake Wales Medical Center; Janet

Davis, VP Acute Care Services of Tampa General Hospital; and Dr. Fred

Blind, Medical Director University of Florida Division of Emergency

Medicine at Winter Haven.

There are 96 letters of support from physicians and nine letters of

support from nurses. These include: Watson Clinic, Bartow Medical

Clinic, Florida Medical Center, Bond Clinic, Gessler Clinic, Haines City

Internal Medicine, Center for Cancer Care & Research, Primary Medical

Center of Lakeland, Nite Owl Urgent Care, Clark & Daughtrey Medical

Group, Central Florida Cancer Institute, Trinity Medical Center,

Lakeland Spine Center, Jay Care Medical Center, Haines City Family

Health Centers, Internal Medicine Institute, Heart of Florida Medical

Center, Mid Florida Internal Medicine Associates, Hardee Family

Medicine, Florida Hospital Wauchula, Robinson Family Clinic, Premier

Walk-In Clinic, Florida Cancer Specialists and Smaritand’s Touch Care

Center. Additionally, there are 20 letters of support from nursing homes,

15 from assisted living facilities and three from home health agencies.


5

One hundred and seventy letters are from individuals whose loved ones

received care through the provider. These letters had common themes

citing Good Shepherd as a wonderful organization, great care received by

Good Shepherd, a hospice house in Lakeland would be a great benefit to

the community and the need for a state-of-the-art hospice with a safe,

homelike environment.

There were 59 support letters from the community. These included:

Maureen S. Kelly, President and CEO of West Central Florida Area

Agency on Aging, Inc.; Gary E. Clark, Chairman of the Polk County

Veterans’ Council; Stefanie A. Thompson, Program Specialist of the

Alzheimer’s Association, Florida Gulf Coast Chapter; John W. Fitzwater,

President and CEO of Community Foundation of Greater Lakeland.

Several members of religious organizations lend their support—Randy

Brock, Senior Adult Pastor at Victory Church; Jerry Goodell, Senior

Associate Pastor of First Baptist Church at The Mall; Dr. Brian K. Dill,

Chair of the Clergy Council at North Lakeland Presbyterian Church; and

Kenneth Ellis, Director of Discipleship at First Presbyterian Church.

The other 51 letters came from businesses and services within the

proposed service area.

In summary, the 398 support letters carry the following recurring

themes: Good Shepherd has a 30-year history of delivering support and

guidance to Lakeland residents facing the end of their lives, Good

Shepherd obtained accreditation from the Joint Commission and the

National Institute of Jewish Hospice, the need for a state-of-the art

hospice house where health care professionals can address patient’s

needs in a safe and homelike environment, Good Shepherd exceeds state

and federal regulations when delivering end-of-life care and the benefit

Good Shepherd’s inpatient hospice house would bring to the community.

Both applicants (Cornerstone and Good Shepherd) submitted a joint

letter stating “their respective inpatient facilities will be designed to meet

the needs of their existing patient base rather than serve the patients of a

different hospice program. Therefore, neither applicant opposes the

approval of the other.” This letter is signed by Patricia Lehotsky,

representative of Cornerstone, and Kathy Fernandez, representative of

Good Shepherd Hospice.


6

C. PROJECT SUMMARY

Cornerstone Hospice and Palliative Care, Inc. (CON #10122), a

Florida not-for-profit corporation, proposes to establish an in-patient

hospice unit of 12 beds within the assisted living facility (ALF), Grace

Manor in Hospice Service Area 6B. Grace Manor is located at 4620

Socrum Loop Road, Lakeland, Polk County, Florida 33805.

The project involves a total cost of $283,200. Construction cost is

$77,275 and the project will involve 2,800 gross square feet of

renovation. Costs covered are for building, equipment, project

development and start-up.

Cornerstone Hospice and Palliative Care, Inc. proposes no conditions to

project approval.

Good Shepherd Hospice, Inc. (CON #10123), a Florida not-for-profit

corporation, proposes to establish a 12-bed freestanding inpatient

hospice facility (Lakeland Hospice House) in Hospice Service Area 6B.

The facility is to be located in or near the city of Lakeland in Polk County,

Florida. The stated project objectives are:

To improve the access and availability of inpatient hospice care for the

residents of the Lakeland area in Polk County.

To replace the existing seven-bed inpatient hospice unit operated by

Good Shepherd at the Palm Terrace of Lakeland nursing home.

To provide adequate hospice bed capacity to meet the future needs of

Good Shepherd patients in the Lakeland area of Polk County.

The applicant plans to lease the proposed facility from Chapters Health

System (Good Shepherd’s parent organization). Good Shepherd Hospice

will license and operate the Lakeland Hospice House.

The project involves a total cost of $10,089,898. Construction cost is

$6,487,700 and the project will involve 29,458 gross square feet of new

construction. Costs covered are for land, building, equipment, project

development and start-up.

Good Shepherd Hospice, Inc. proposes the CON be predicated on one

condition: the Lakeland Hospice House will be constructed in or near

Lakeland in Polk County, Florida.


7

D. REVIEW PROCEDURE

The evaluation process is structured by the certificate of need review

criteria found in Section 408.035, Florida Statutes. These criteria form

the basis for the goals of the review process. The goals represent

desirable outcomes to be attained by successful applicants who

demonstrate an overall compliance with the criteria. Analysis of an

applicant's capability to undertake the proposed project successfully is

conducted by assessing the responses provided in the application, and

independent information gathered by the reviewer.

Applications are analyzed to identify strengths and weaknesses in each

proposal. If more than one application is submitted for the same type of

project in the same district (subdistrict), applications are comparatively

reviewed to determine which applicant best meet the review criteria.

Section 59C-1.010 (3)(b), Florida Administrative Code, allows no

application amendment information subsequent to the application being

deemed complete. The burden of proof to entitlement of a certificate

rests with the applicant. As such, the applicant is responsible for the

representations in the application. This is attested to as part of the

application in the Certification of the Applicant.

As part of the fact-finding, the consultant, Marisol Novak, analyzed the

application in its entirety with consultation from the Financial Analyst,

Derron Hillman, who evaluated the financial data, and the Architect,

Said Baniahmad, who evaluated the architecturals and the schematic

drawings as part of the application(s). E. CONFORMITY OF PROJECT WITH REVIEW CRITERIA

The following indicate the level of conformity of the proposed project with

the criteria and application content requirements found in Florida

Statutes, sections 408.035, and 408.037; applicable rules of the State of

Florida, Chapter 59C-1 and 59C-2, Florida Administrative Code.

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

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


8

The Agency does not publish need for inpatient hospice beds. Hospice

programs are required by federal and state law to provide hospice

patients with inpatient care when needed (42 Code of Federal

Regulations 418.108) and no more than 20 percent of a hospice’s total

patient days may be inpatient days per Section 400.609(4), Florida

Statutes. Inpatient care may be provided through contractual

arrangements in hospitals and nursing homes, and is generally provided

on a short-term basis within a total hospice stay.

Currently there are four licensed hospice providers in Service Area 6B.

These providers are: Good Shepherd Hospice, Cornerstone Hospice and

Palliative Care, Hope Hospice and Community Services and

Compassionate Care Hospice.

Service Area 6B has two freestanding inpatient hospice facilities with a

total of 28 inpatient beds. Good Shepherd is the licensee for the two

facilities--operating 12 beds in Auburndale (the George Forsythe Hospice

House) and 16 beds in Sebring (The Bud and Donna Somers Hospice

House).

The map below identifies the current inpatient hospice facility locations

and Cornerstone’s (CON #10122) proposed site. Good Shepherd Hospice

(CON #10123) does not include a proposed location for its facility except

for the general provision that it will be located in or near the City of

Lakeland.


9

Hospice Service Area 6B

Inpatient Hospice Facilities and Cornerstone Hospice & Palliative Care (CON #10122) Proposed Location

Source: MapPoint 2006.


10

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

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

Medical treatment trends. Market conditions.

Population demographics and dynamics

Cornerstone Hospice and Palliative Care, Inc. (CON #10122) states

that there are hospice inpatient beds available in 35 out of 68 counties in

the State of Florida. These counties contain approximately 89.9 percent

of the 2009 state population2. These 35 counties have a bed per 1,000

population value of 0.08, and the State of Florida has a bed per 1,000

value of 0.07. Polk County has a bed 1,000 value of 0.03. Therefore, the

applicant concludes that Polk County should have 46 hospice inpatient

beds instead of the current 19—or 27 more beds3. See the table below.

Inpatient Hospice Data for the State of Florida and Polk County

Counties

% of Total

Population

% of Total

Beds

% of Total

Beds per 1,000

Polk County 1 1.5% 584,343 3.1% 19 1.4% 0.03

Counties with

Inpatient Beds

35

51.5%

16,852,585

89.9%

1,329

100%

0.08

Counties without

Inpatient Beds

33

48.5%

1,897,898

10.1%

0

0%

0

State Total 68 100% 18,750,483 100% 1,329 100% 0.07 Source: CON application #10122, page 19.

The applicant indicates that there are nearly 20 deaths per day in Polk

County. Using population and death rate data from 2008, the applicant

calculates the state death rate as 0.906 percent and Polk County’s death

rate as 0.949 percent (the reviewer calculated 0.947). Using bed totals,

the applicant calculates that there is one inpatient hospice bed per 128

deaths in the state and one inpatient hospice bed per 292 deaths in Polk

County (using this data the reviewer created the table below). The

applicant contends that based on these numbers, the inpatient hospice

bed total in Polk County should be 43 to match the state number.

2 Per CON application #10122, page 19 based on the Bureau of Economic and Business Research population data. 3 Agency licensure records show 12 licensed inpatient hospice beds in Polk County. The applicant is including Good Shepherd’s seven-bed unit at Palm Terrace of Lakeland.


11

Polk County and State Death Rates and Inpatient Hospice Bed Data Geographic Area

2008 Deaths

7/1/2008 Population

Death Rate

# of Hospice Inpatient Beds

Bed Ratio

Polk County

5,548

585,752

0.949

19

1 for every

292

State of Florida

170,473

18,812,155

0.906

1,329

1 for every

128 Source: Data on Page 20 of CON application #10122.

Cornerstone’s bed data is based on the Florida Department of Elder

Affairs CY 2010 report’s Table 7 which is “Inpatient Facility/Residential

Units Operated by Florida Hospices in 2009” and includes counties

(Broward, Orange, Osceola, etc.) that our licensure records show do not

have licensed inpatient hospice facilities. The Agency does not have an

inventory of the beds in nursing homes and hospitals that are operated

by hospice providers. The inclusion of residential beds cannot be used to

support need for inpatient hospice beds.

Need methodologies based solely on population (or deaths) to bed ratios,

which do not consider utilization of the service, are not generally

considered accurate indicators of numeric need.

Good Shepherd Hospice, Inc. (CON #10123) states that the need for

the proposed Lakeland Hospice House is based on the projected growth

of Good Shepherd and on the identified needs of its patients in the

Lakeland area for the intensive services that would be available in a

freestanding inpatient hospice facility.

Good Shepherd Hospice has previously stated the purpose of the project

is to improve the access and availability of inpatient hospice care for the

residents of the Lakeland area in Polk County. The applicant indicates

that during CY 2010, the inpatient hospice facilities operated by Good

Shepherd in Service Area 6B had an overall average bed occupancy of 89

percent (see chart below).

Inpatient Hospice Utilization for Facilities in Service Area 6B in 2010

Service Area 6B Providers Beds Patients Days ALOS Occupancy

Forsythe House 12 625 4,007 6.4 91%

Palm Terrace of Lakeland 7 353 2,136 6.1 89%

Total 19 978 6,143 6.3 89% Source: CON application #10123, page 42.

Note: The Agency does not collect inpatient hospice utilization. The Forsythe House is the applicant’s

12-bed inpatient hospice facility located in Auburndale. Good Shepherd utilizes seven of Palm Terrace of

Lakeland’s 185 licensed community nursing home beds for inpatient hospice services.

Good Shepherd indicates that Somers House (its Sebring inpatient

hospice licensed February 24, 2011), achieved an average occupancy of

50 percent during its first three months of operation and is projected to

have an overall occupancy rate of 80 percent during its first year of

operation.


12

Availability, utilization and quality of like services

Cornerstone Hospice and Palliative Care, Inc. (CON #10122) indicates

that the availability of an inpatient bed in Polk County is less than half

the state average. This analysis includes residential beds and therefore

does not substantiate need for inpatient hospice beds. The applicant’s

data also includes hospital and nursing home beds operated by hospices.

The applicant lists these facts for this conclusion(see the table below):

Polk County’s occupancy rate is ranked fifth (highest out of the 35

counties reported to have inpatient facility/residential units operated

by Florida hospices)

Polk County’s occupancy rate of 92 percent (19 beds with 6,935 total

bed days and 6,350 patient days during CY 2009)

An “excess” capacity in Polk County of 1.6 bed days (this is the

remaining 585 bed days/365 days and is essentially a restatement of

occupancy)

The average admission per bed in Polk County is 56 (97 percent of the

highest averaged county—Seminole which had 934 facility admissions

and 16 beds or 58 admissions per bed). Polk County had 1,956

admissions and 19 beds or 56 admissions per bed.

Florida and Polk County Inpatient Bed Data

Geographic Area

Average Admits/Bed

Average Occupancy

Average Length of Stay

State Average 26 70% 10.2

State Median 29 74% 9.1

Polk County 56 92% 6.0 Source: CON application #10122, page 19 & FL Dept. of Elder Affairs 2010 Hospice Report, page 16.

The applicant contends that the high admissions rate in Polk County, 56

admissions per inpatient bed, forces hospices to have a rapid turnover,

short length of stay to accommodate the most critical patients, patients

may be discharged before their symptoms are completely managed and

potential patients are admitted much later in their disease process.

There is no evidence that Polk County patients in need of inpatient

hospice care are not receiving the appropriate level of care. As previously

stated, the applicant includes residential beds and counties that the

Agency shows do not have inpatient hospice facilities.

Good Shepherd Hospice, Inc. (CON #10123) indicates that improving

access to inpatient hospice care for the residents of the Lakeland area is

a benefit if the proposed facility is approved. Good Shepherd states that

it would not be feasible or practical to add inpatient hospice bed capacity

in Polk County by expanding the bed capacity of the 12-bed facility in

Auburndale. The applicant asserts that even if expanding the bed


13

capacity at Auburndale was possible, it would not address the needs of

the residents of Lakeland because Lakeland residents do not customarily

utilize health services in the Auburndale region. Good Shepherd further

states that the residents of the Auburndale area of Polk County would

require the use of any such potential expansion capacity of the

Auburndale facility.

Good Shepherd states that it anticipates an inpatient average daily

census (ADC) of 10.4 in year one (ending December 31, 2014) and 11.1

in year two (ending December 31, 2015). Good Shepherd projects a bed

need (at 85 percent occupancy) of 13 in year one and 14 in year two,

respectively. For CY 2010, the applicant reports an11.4 inpatient

hospice ADC for the Lakeland area. Good Shepherd plans to close the

seven-bed Palm Terrace hospice unit upon licensure of the project.

Good Shepherd states it will continue to maintain hospital contracts for

inpatient hospice care that cannot be provided in its hospice houses or

where the patient desires a hospital placement. The applicant further

states that by the second year of operation (December 31, 2015) the

proposed daily cost per patient at its proposed site is $658, as opposed to

$876 at a contracting hospital. This is a cost savings of $218 per day per

patient and by the second year of operation the applicant estimates a

cost savings of over $887,000. Good Shepherd states that in addition to

increased costs associated with contracting there are other shortcomings

to contracting with hospitals such as reluctance of hospice patients to

accept an institutional environment and limitations on the ability of

Good Shepherd Hospice to control the nursing and physical

environment. The applicant also states that hospitals are less

compatible with a comprehensive approach to end-of-life care.

Good Shepherd indicates that it does not use nursing homes for general

inpatient care, but does currently lease a seven-bed dedicated inpatient

unit at Palm Terrace of Lakeland. The applicant states that these are not

enough inpatient hospice beds to meet the needs of its Lakeland area

patients. Good Shepherd Hospice further states that by the second year

of operation the proposed daily cost per patient at its proposed site is

$658, as opposed to $768 operating at the Palm Terrace hospice unit.

This is a cost savings of $110 per day per patient and by the second year

of operation the applicant estimates a cost savings of over $449,000.

The applicant states that the projected operating costs include all

required hospice services and visits by interdisciplinary team members,

medical supplies, drugs and pharmaceuticals as well as all other

operating costs (including non-patient related labor costs such as dietary

and housekeeping, building operations and maintenance, rental


14

payments associated with leasing the building plus administrative

expenses). Good Shepherd states that since it is a not-for-profit entity,

all of these savings will be used to increase the availability and quality of

hospice care in Service Area 6B.

Utilization, specifically to provide adequate hospice bed capacity to meet

the future needs of Good Shepherd Hospice’s patients in the Lakeland

area, is also stated as a justification for the proposed facility. The

applicant reports an approximate 75 percent market share in Service

Area 6B. Good Shepherd also reports Service Area 6B’s hospice

penetration rate increased from 26 percent in 2000 to 66 percent in

2010, while hospice admissions increased by 160 percent and resident

deaths increased by only six percent (see the chart below).

Increase in Hospice Penetration for Service Area 6B

Year Hospice Admissions Resident Deaths Penetration

2000 1,774 6,712 0.264

2001 1,962 6,662 0.295

2002 2,267 6,821 0.332

2003 3,003 6,892 0.436

2004 3,353 7,066 0.475

2005 3,179 7,219 0.440

2006 3,688 7,091 0.520

2007 4,061 7,136 0.569

2008 4,372 7,008 0.624

2009 4.486 7,186 0.624

2010* 4,684 7,145 0.656 Source: CON application 10123, page 25

*Deaths for 2010 are estimated.

Good Shepherd Hospice indicates that the 12-bed Forsythe House and

the seven-bed dedicated Palm Terrace unit (both in Polk County)

averaged 89 percent occupancy in CY 2010, indicating high occupancy

rates.

Medical treatment trends


that currently when a patient must be admitted to the hospital they often

experience unnecessary suffering—the hospital staff are not prepared to

care for terminally ill patient. The applicant lists several issues that

frequently occur in a hospital facility:

Lack of continuity of care. Difficulty for hospice staff to maintain

control of the plan of care when the patient occupies an intensive care

or general inpatient bed in a hospital.

Inadequate pain and symptom control.


15

Inflexibility of institutional routines. A patient may have to endure

any manner of invasive and burdensome tests and/or treatments that

are not consistent with his/her wishes for palliative care.

Lack of staff qualified in end-of-life care.

Lack of homelike setting/atmosphere.

Cost issues.

Access. The hospitals in the Polk County have unpredictable and

seasonal fluctuation in occupancy—hospitals do not and cannot

“reserve” beds for hospice use.

The applicant elaborates on the issue of cost stating that currently the

contracts Cornerstone has with the local hospitals all require that, at a

minimum, hospice pass through the per diem of $600.96 currently

received from Medicare/Medicaid. Furthermore, many of these contracts

expect an additional payment of either a percentage or total costs of the

ancillary charges. Additionally, Cornerstone continues to incur costs for

interdisciplinary staff visits to the hospital and medical equipment

maintained in the home with no additional reimbursement. The

applicant states that the best alternative for cost containment for

Cornerstone is to have a unit operated by the hospice. See the table

below.

Cost Differences Per Facility Type

Per Patient Day Proposed Facility (CON #10122)

Revenue $541.02 $545.00

Expense to Facility $73.72 $68.52

Care Staff $314.52 $292.32

Admin and Indirect $105.53 $98.08

Margin $47.25 $86.09

Hospital—Inpatient

Revenue $541.02 $545.00


Care Staff $0.00 $0.00


Margin ($165.47) (162.45)

Nursing Home—Inpatient

Revenue $541.02 $545.00


Care Staff $0.00 $0.00


Margin $10.49 $21.92 Source: CON application #10122, page 11.

Cornerstone made no distinction as to what either of these columns denote. The applicant’s Schedule 7 year

one and year two projections do not agree with these per day projections.


16

This results in a $213/$249 dollar savings over hospital inpatient

hospice bed contracts and $37/$64 dollar savings over nursing home

inpatient hospice bed contracts per patient, per day. The applicant also

states that the proposed facility will make it possible to move more

terminally ill patients from acute care hospital beds, where charges

average over $5,000 per day, to hospice beds where charges will be

$600.96 per day4.

Good Shepherd Hospice, Inc. (CON #10123): As previously stated, by

2015, the proposed daily cost per patient at its proposed site is $658, as

opposed to $876 at a contracting hospital. This is a cost savings of $218

per day per patient. Additionally, the applicant states that beds are

made available to Good Shepherd Hospice on a contingency basis and

are often in short supply during the winter season.

Good Shepherd indicates that it does not use nursing homes for general

inpatient care, but that it does currently lease a seven-bed dedicated

inpatient unit at Palm Terrace of Lakeland. The applicant states that by

the second year of operation the proposed daily cost per patient at its

proposed site is $658, as opposed to $768 operating at the Palm Terrace

Hospice unit. This is a cost savings of $110 per day per patient. Good

Shepherd contracts with 28 nursing homes in Service Area 6B,

coordinating the care for its hospice patients who are also residents of

the nursing facilities. The applicant is able to provide inpatient respite

care in nursing homes under these contracts as well. Good Shepherd

does not offer nursing home cost for contracts, stating it is not its

practice to provide general inpatient care in nursing home scatter beds.

The applicant alleges nurse staffing levels at some nursing homes do not

meet Medicare regulations that require 24-hour coverage by registered

nursing staff.

Market conditions

Cornerstone Hospice and Palliative Care, Inc. (CON #10122)

estimates that at a minimum, 10 percent of its 150 (average daily census

in Service Area 6B) patients would be eligible for an inpatient level of

care. Currently these patients must be sent to one of the applicant’s

inpatient units/hospice houses or must be hospitalized. This can cause

difficulties for their families, disruption/disorientation in a patient’s

ability to control his/her care and they may not receive adequate

palliation of symptoms. The applicant cites a study5 of “relocation stress

4 The applicant also indicates a per diem revenue of $541.02 and $545.00, which is somewhat confusing. 5 Relocation stress syndrome: the case of palliative care patients by Davina Porock is included in

Appendix XVI of CON application #10122.


17

syndrome” that states “Palliative care patients are extremely vulnerable

to physical, psychological, social and spiritual distress when transferred

from specialist palliative care services”.

Cornerstone states that its current hospice houses and inpatient unit are

operated very efficiently by having admission rates at the state median or

slightly higher. The applicant indicates that its occupancy rates are

above the state average and its length of stay is consistent with the state

average. Cornerstone asserts that establishing hospice inpatient beds at

Grace Manor would give it the opportunity to improve the statistics for

Polk County as the unit would be operated with the same attention to

efficiency, quality and cost-effectiveness that the applicant has shown in

the past. The applicant states that the proposed project will greatly

enhance its ability to provide a seamless continuum of care in the most

cost-effective manner for the communities of Polk, Hardee and Highland

Counties.

Good Shepherd Hospice, Inc. (CON #10123) states that the first year of

operations will end December 31, 2014 and the second year, by

December 31, 2015. The applicant anticipates an inpatient average daily

census (ADC) of 10.4 in year one and 11.1 in year two (CON #10123,

page 58). Good Shepherd indicates that the project is designed to serve

the residents of the Lakeland area and projects a bed need (at 85 percent

occupancy) of 13 in year one and 14 in year two, respectively. For

CY 2010, the applicant reports an 11.4 inpatient hospice ADC for the

Lakeland area. Good Shepherd plans to close the seven-bed Palm

Terrace Hospice unit while adding four residential hospice beds and 12

inpatient hospice beds with the proposed project.

The applicant states that the primary advantage that will arise from

operating its own freestanding inpatient hospice facility is the assurance

that Good Shepherd Hospice will be able to provide high quality inpatient

hospice care when and where it is needed. Good Shepherd contends that

the Lakeland Hospice House is the most cost-effective alternative for

providing general inpatient care to patients who are residents of the

Lakeland area.


18

2. Agency Rule Preferences a. Rule 59C-1.0355 (7) Florida Administrative Code states that the

Agency will not normally approve a proposal for the construction of a freestanding inpatient hospice facility unless the applicant demonstrates that the freestanding facility will be more cost-efficient than contractual arrangements with existing hospitals or nursing homes in the service area. The application shall include the following:

(1) A description of any advantages that the hospice program will

achieve by constructing and operating its own inpatient beds.


asserts that hospice units are more cost-effective than inpatient

care available through contractual agreements with existing

hospitals and nursing homes. Furthermore, the applicant

indicates that hospitals are increasingly alarmed at the disparity

between their costs/charges and the amount of reimbursement

they may receive from hospice—all the while, the hospice accrues

the costs for interdisciplinary team visits to the hospital and

equipment maintained in the home with no additional

reimbursement. Cornerstone maintains that nursing home

arrangements for skilled care are likewise more expensive, often

adding continuous, round the clock nursing care. The applicant

contends that a hospice unit with hospice staff is a much higher

quality and more cost-effective way to care for the skilled-need

dying population.

As previously discussed, the estimates for the new facility show a

$213/$249 dollar savings over hospital inpatient hospice bed

contracts and $37/$64 dollar savings over nursing home inpatient

hospice bed contracts per patient, per day. The applicant also

states that the proposed facility will make it possible to move more

terminally ill patients from acute care hospital beds, where charges

average over $5,000 per day, to hospice beds where charges will be

$600.96 per day.

Cornerstone maintains that a hospice unit at Grace Manor meets

the specifications of the least restrictive environment while

providing hospice patients with skilled care in a home-like

atmosphere. Contrasting hospital staff to hospice staff, the

applicant states that hospital staff often display discomfort with


19

hospice and palliative care policies and participation. It is hospice

philosophy to assure that patient choice is preserved.

Furthermore, the applicant asserts that Cornerstone staff

members’ compassionate attitudes contribute to a patient’s sense

of security and well-being.

The applicant states that approximately 17 new jobs will be opened

in the community with the proposed project. Additionally,

volunteers also find rewarding work at hospice—last year

46,049.89 volunteer hours were contributed by Cornerstone

volunteers.

In conclusion, the applicant asserts that $21.36 per hour will be

saved in the new facility for a grand total of savings of $983,625.65

for the year. Cornerstone maintains that the proposed facility will

mean continuity of care is preserved and costs are contained for

the patients with a substantial savings for the health care system.

Good Shepherd Hospice, Inc. (CON #10123) states that there are

several advantages that will arise from operating its own

freestanding inpatient hospice facility. The applicant states that

the primary advantage is the assurance that Good Shepherd will

be able to provide high quality inpatient hospice care when and

where it is needed. The reasons for this include:

In its own facility, Good Shepherd Hospice can better control

the medical and psycho-social support environment and provide

hospice-focused care.

The environment of the Lakeland Hospice House will be

homelike and intimate, unlike the institutional settings for

scatter-beds in hospitals and nursing homes.

The medical cultures in hospitals and nursing homes are not

optimal for palliative end-of-life care.

The hospice plan of care cannot be easily followed by non-

hospice staff in settings that are structured for a different type

of care.

Beds available to Good Shepherd Hospice in contract facilities

are scattered so that consistent staffing by specially trained

staff is more difficult to maintain.

Patient care coordination and continuity of care will be

enhanced in the Lakeland Hospice House setting because the

control of medical records will remain with Good Shepherd

Hospice.


20

The applicant states it provides about 70 percent of its general

inpatient care services in Service Area 6B through its two

freestanding inpatient hospice facilities (in Auburndale and

Sebring) and its existing Palm Terrace hospice unit. The balance of

the inpatient care needed for its patients is provided through

contractual arrangements with nine local hospitals and 28 nursing

homes for beds on an as-needed basis. Good Shepherd states that

scatter bed contracts are not ideal since the nursing staff and

aides are not usually experienced in caring for terminally ill

patients and their families.

Additionally, as previously stated, by 2015, the proposed daily cost

per patient at its proposed site is $658, as opposed to $876 at a

contracting hospital. This is a cost savings of $218 per day per

patient. Good Shepherd states that by the second year of

operation the proposed daily cost per patient at its proposed site is

$658, as opposed to $768 operating at the Palm Terrace hospice

unit. This is a cost savings of $110 per day per patient. Good

Shepherd contracts with 28 nursing homes in Service Area 6B,

coordinating the care for its hospice patients who are also

residents of the nursing facilities. The applicant is able to provide

inpatient respite care in nursing homes under these contracts as

well. Good Shepherd does not contract to provide general inpatient

care in nursing home scatter beds. The applicant alleges nurse

staffing levels at some nursing homes do not meet Medicare

regulations that require 24-hour coverage by registered nursing

staff.

The $658 projected cost of providing the inpatient hospice services

in a contract facility includes the contracting costs plus the costs

of providing required hospice services including visits from a

hospice nurse, patient/family counselor and chaplain. Good

Shepherd states that it will be able to provide effective and high

quality inpatient hospice services while saving the unnecessary

additional expenses of contracting for inpatient hospice services.

The applicant contends that the Lakeland Hospice House is the

most cost-effective alternative for providing general inpatient care

to Good Shepherd Hospice’s patients who are residents of the

Lakeland area.


21

(2) Existing contractual arrangements for inpatient care at

hospitals and nursing homes, or in the case of the proposed new hospice program, contacts made with hospitals and nursing homes regarding contractual arrangements for inpatient care.


states it has contracts established with hospitals in Service Area

6B. The applicant has collegial and supportive relationships with

all hospital administrators. Cornerstone’s efforts include yearly

goals to maximize cost-effective, quality care for patients jointly

served by all the agencies involved. The applicant has explored

joint hospital/hospice efforts to develop specialized Palliative Care

programs with the assistance of CAPC, the National Center for

Advance of Palliative Care Programs. Cornerstone contends

though, that the local hospitals have limited bed capacity and

those beds are filled with acutely ill patients leaving little space for

terminally ill patients. The applicant states that all of its

contracted hospitals have requested Cornerstone do more inpatient

care in hospice houses.

Furthermore, the applicant contracts with long-term care facilities,

such as the The Palms in Sebring for inpatient care. Cornerstone

states that it carefully selects the facilities providing the highest

quality of care and provides daily hospice physician, nurse, home

health aide and other member of the interdisciplinary team visits.

The applicant contends that joint care planning and attention to

the detailed needs of these dying patients ensures excellence in

care and is more cost-effective than hospitalization.

Cornerstone does not list the hospitals and nursing homes (with

the exception of the Palms at Sebring) that it contracts with for

inpatient care. The letter of support from the Heart of Florida

interim CEO indicates his facility “partners” with the applicant to

provide inpatient care. Cornerstone does not provide sample

inpatient care contracts.


22

Good Shepherd Hospice, Inc. (CON #10123) lists nine hospitals

that have general inpatient care contracts and 28 nursing homes

that it has contracts with for its hospice patients in Service Area

6B. The application includes (Appendix 13) sample contracts for

hospitals and nursing homes. Good Shepherd states the

contractual relationships will not be weakened or otherwise

affected by the development of the proposed Lakeland Hospice

House.

As discussed previously, the applicant illustrates the expected

cost benefit of the proposal over the existing contracted beds. As

stated previously, Good Shepherd Hospice indicates it is not its

practice to provide general inpatient care service in nursing home

scatter beds since such facilities are not characteristically the most

practical and appropriate setting for intensive end-of-life care due

to staffing concerns and the lack of a home-like environment. (3) Anticipated sources of funds for the construction.


does not address this question directly but does state elsewhere

that it has all the necessary resources in place and available to

successfully implement hospice general inpatient beds at Grace

Manor.

Good Shepherd Hospice, Inc. (CON #10123) states that the

proposed facility will be developed and owned by Chapters Health

System, Inc., the parent corporation of the applicant. Good

Shepherd Hospice, Inc. will lease the facility from Chapters Health

System, Inc., license the facility and operate the facility as a

freestanding inpatient hospice facility. This application includes a

letter of commitment from Chapters Health System, Inc. to fund

the development of the facility, to construct the facility and to lease

it to Good Shepherd Hospice, Inc.

The applicant states that funding for the proposed project will be

from cash-on-hand belonging to Chapters Health System, Inc.


23

b. Rule 59-1.0355 (8) Florida Administrative Code: Semi-Annual Utilization Reports. Each hospice program shall report utilization information to the Agency or its designee on or before July 20th of each year and January 20th of the following year.

Cornerstone Hospice and Palliative Care, Inc. (CON #10122) did not

address this question.

Good Shepherd Hospice, Inc. (CON #10123) states that it has

historically provided these required reports and will continue to do so in

the future.

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

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


that currently the needs of general inpatient care for hospice patients are

achieved through contractual scatter beds in existing health care

facilities. As previously stated, the applicant contends that this is not

optimal and presents distinct disadvantages such as:

Lack of continuity of care. Difficulty for hospice staff to maintain

control of the plan of care when the patient occupies an intensive care

or general inpatient bed in a hospital.

Inflexibility of institutional routines. Acute and long-term care staff

often display discomfort with family participation in patient care and

may have little or no experience with care of the dying. The applicant

indicates that patient choice becomes difficult to achieve with routine

feeding, sleeping, bathing and restricted visitation.

Lack of homelike setting/atmosphere.

Cost issues. Cornerstone’s costs for staff and services continue to

accrue and must be covered despite all inpatient per diem being paid

to hospitals/long-term care facilities.

Access. Hospital beds are at a premium, beds for hospice patients

may be hard to get admitted to when needed.

Inadequate pain management.


24

Hospital and long-term care facility staff rotation and turnover and

staff who are not comfortable with, or do not have the skills to care for

terminally ill patients.

Poor use of financial resources. Despite being paid the entire per

diem for hospice patients plus additional ancillary charges, many

hospitals claim to lose money on hospice patients. Paying the

ancillary charges result in cost deficits for Cornerstone.

The applicant asserts that considerable cost-savings to the community

would be realized by the proposed facility. Cornerstone general inpatient

care beds at Grace Manor would provide the ambiance of a home-like

environment, the autonomy of the hospice philosophy and the structure

to offer patients maximum choice and skilled care in the last part of their

lives. Cornerstone maintains that coordination, collaboration and

communication between the staff of Cornerstone Suites at Grace Manor

and the hospice home care teams will provide the most optimum and

cost-effective care.

Cornerstone has designed the wing at Grace Manor to operate as a

hospice unit and will keep operating costs much lower than in an

intensive care hospital setting. This facility will increase jobs available to

the community. Furthermore, the applicant maintains that hospices

serve the whole community and are not aligned with any single

competitive group. Cornerstone indicates that contract beds will still be

available for those patients who will be more appropriately cared for in

an institutional setting—but the hospice unit at Grace Manor guarantees

the fullest possible choices and provides an alternative setting more

conducive to skilled care.

Cornerstone contends that patients who may be uninsured, under-

insured or may have co-existing psychiatric/behavioral issues will be

better served with the proposed facility. These patients are often unable

to find care, or spend the end of their lives in expensive, isolating acute

care beds when more compassionate and appropriate care might be had

at a much lower cost.

Cornerstone concludes that creating general inpatient beds at Grace

Manor in Polk County optimizes all possibilities of availability, quality of

care, efficiency, accessibility and extent of utilization of existing health

care facilities/health services in Service Area 6B. The applicant

maintains that the project creates the opportunity to provide hospice

inpatient care that will be more appropriate for many hospice patients

who currently receive care in institutional settings or patients who would

never be able to access hospice care at all.


25

Good Shepherd Hospice, Inc. (CON #10123) states that the need for

the proposed Lakeland Hospice House is based on the projected growth

of Good Shepherd and on the identified needs of its patients in the

Lakeland area for the intensive services that would be available in a

freestanding inpatient hospice facility.

The applicant states, as illustrated earlier, Good Shepherd’s existing

inpatient hospice facilities operated at 89 percent occupancy during

2010. Good Shepherd asserts that it has chosen a 12-bed project that is

commensurate with efficient and effective operations and with the needs

of its patients residing in the Lakeland area.

Good Shepherd projects 2,906 admissions for Polk County residents in

CY 2015, the second year of operation, and that 1,469 (50.55 percent)

will be residents of the Lakeland area. The applicant contends that this

is based on the historical trend in population, death rates, hospice

penetration and market share in Service Area 6B.

Good Shepherd anticipates an inpatient ADC of 10.4 in year one (CY

2014) and 11.1 in year two (CY 2015). Good Shepherd indicates that the

project is designed to serve the residents of the Lakeland area and

projects a bed need (at 85 percent occupancy) of 13 in year one and 14 in

year two, respectively. For CY 2010, the applicant reports an 11.4

inpatient hospice ADC for the Lakeland area. See the table below.

Hospice Inpatient Bed Need Projections for Good Shepherd Hospice Patients

Who Are Residents of Polk County Polk County Total

Actual Data 2009

Projection for Year One (2014)

Projection for Year Two (2015)

Population of Polk County 583,985 617,487 628,880

Death Rate per 1,000 9.63 8.93 8.80

Deaths of Polk County Residents 5,621 5,514 5,534

Penetration 0.626 0.691 0.700

Total Hospice Admissions 3,519 3,810 3,874

GSH Market Share 76% 75% 75%

GSH Admissions-Polk County 2,669 2,845 2,906

Percent Using Inpatient Care 49% 54% 55%

Inpatient Hospice Admissions 1,295 1,533 1,598

Inpatient Length of Stay 5.8 6.8 7.0

Inpatient Hospice Days 7,526 10,424 11,186

Inpatient Average Daily Census 20.6 28.6 30.6

Hospice Inpatient Bed Need 24 34 36 Source: CON application #10123, page 49.


26

The applicant states that based on geographic and utilization data, two

defined planning areas provide a sound basis for long range planning for

inpatient hospice services in Polk County. These two planning areas are

the Lakeland area and the Winter Haven area. The existing seven-bed

Palm Terrace Hospice unit is located in the Lakeland area and is the

most accessible to residents of the Lakeland area while the existing 12-

bed Forsythe House is located in the Winter Haven area and is the most

accessible to those residents. See the table below.

Patient Origin Distribution for Patients Served in Good Shepherd’s

Polk County Hospice Facilities in 2010 Hospice Facility

Palm Terrace Hospice Unit Forsythe Hospice House

Patients Percentage Patients Percentage

Lakeland Area 282 80% 134 21%

Winter Haven Area 40 11% 449 72%

Other Areas 31 9% 42 7%

Total 353 100% 625 100% Source: CON application #10123, page 54.

The applicant asserts that the 12-bed Lakeland Hospice House will

replace the capacity of the seven-bed Palm Terrace Hospice unit, will

operate more efficiently than the Palm Terrace Hospice unit and will

provide the additional bed capacity needed to meet the needs of the

Lakeland area.

Good Shepherd presents data that demonstrates Polk County’s two

major hospitals show a similar definitive demarcation between these two

areas of Polk County. Below is a table showing the patient origin

statistics for Medicare discharges.

Patient Origin Distribution for Medicare Hospital Patients

for Lakeland and Winter Haven Hospitals for the Year Ending June 30, 2010

Hospital Lakeland Regional Medical Center Winter Haven Hospital

Patients Percentage Patients Percentage

Lakeland Area 14,646 78% 527 6%

Winter Haven Area 2,055 11% 7,716 88%

Other Areas 2,163 11% 508 6%

Total 18,864 100% 8,751 100% Source: CON application #10123, page 54.

Using this geographic demarcation, the applicant presented the data in

the table below.


27

Hospice Inpatient Bed Need Projections for Good Shepherd Hospice Patients in the

Polk County Planning Areas Polk County Planning Areas

Actual Data 2009

Projection for Year One (2014)

Projection for Year Two (2015)

Inpatient Average Daily Census 20.6 28.6 30.6

Lakeland Area 11.4 14.8 15.9

Winter Haven Area 9.3 13.7 14.7

% Contract Scatter Beds 26% 25% 25%

Lakeland Area 28% 25% 25%

Winter Haven Area 24% 25% 25%

Scatter Bed Use-Average Census 5.4 7.1 7.7



Hospice Facility Inpatient Use 15.2 21.4 23.0



Hospice Facility Inpatient Bed Need 18 25 27

Lakeland Area 10 13 14

Winter Haven Area 8 12 13 Source: CON application #10123, page 49.

Additionally, Good Shepherd does project to be slightly higher than 4.6

percent State of Florida inpatient average census, at 4.8 percent.

The applicant concludes that based on the geographic and utilization

data presented, Good Shepherd is confident that the two defined

planning areas provide a sound basis for the for the proposed 12-bed

Lakeland Hospice House.

b. Does the applicant have a history of providing quality of care? Has the applicant demonstrated the ability to provide quality care? ss. 408.035(1)(c), Florida Statutes

Cornerstone Hospice and Palliative Care, Inc. (CON #10122) states it

sets exceptional, state-of-the-art standards for care, is dedicated to

continuous improvement and that it maintains a reputation for

excellence.

The applicant has been licensed by the State of Florida and certified by

Medicare since 1984. Cornerstone also follows the recommendations

and standards of practice set by the Hospice and Palliative Care

Organization. Furthermore, the applicant is an active member of Florida

Hospices and Palliative Care Organization and a member/Quality Partner

of the National Hospice and Palliative Care Organization.


28

A comprehensive performance improvement plan and compliance

programs have been implemented by the applicant. Additionally, these

compliance and improvement plans are revised each year to reflect the

changing program or patient/family needs. The current Quality

Improvement Plan is included by Cornerstone in Appendix XVII-4 of their

application.

Cornerstone states that it is a highly respected organization as evidence

by both professional and financial long-term support. The applicant has

been awarded many major grants indicating clear recognition of superior

quality performance by esteemed organizations. Appendix XVII-3 of CON

application #10122 includes a list of these grants.

The applicant maintains that its leadership team has been recognized

nationally. In 2005 Pat Lehotsky, Cornerstone’s President and CEO, won

the Heart of Hospice Award for her contributions to the service of hospice

and the quality of Cornerstone’s programs.

Furthermore, Cornerstone maintains that its staff are continuing their

education and currently over 50 percent of its registered nurses and 30

percent of its home health aides are certified through the National

Hospice and Palliative Care Organization in palliative care. The applicant

states that 40 of Cornerstone’s registered nurses are ELNEC (End of Life

Nursing Education Consortium) trained and the executive program

manager is a certified ELNEC trainer.

Cornerstone maintains that it has been surveyed on an annual and bi-

annual basis and has been deficiency free for many years. The applicant

asserts that there have been no substantiated complaints in the past

three years. This was confirmed by the reviewer, with the three-year

period ending June 23, 2011.

The applicant states that it uses DEYTA, a national program to measure

quality and compare hospices, measuring, “significantly higher

(statistically) on 19 questions when compared to all other hospices6.”

These questions included: care patient received while under care of

hospice, patient’s personal need taken care of, family keep informed

about patient’s condition and medicine received for patient’s pain. Two

sample DEYTA surveys are found in Appendix XVII of CON application

#10122

6 According to Michael Brown, Account Manager, DEYTA, LLC.


29

It is noted that the applicant participated in voluntary reporting from

July 2010 through September 2010, on the Florida Health Finder,

Hospice Provider Family Satisfaction Survey. Cornerstone had between

235 and 297 survey respondents and received five-star ratings (90 to 100

percent satisfaction) in all categories.

Good Shepherd Hospice, Inc. (CON #10123) states that it maintains

compliance with the applicable hospice licensure rules in Chapter 58A-2,

Florida Administrative Code. Good Shepherd states that it is accredited

by the Joint Commission and complies with NHPCO standards.

The applicant included its “Policies and Procedures Related to Inpatient

Care” in the application’s Appendix 17.

It is noted that the applicant participated in voluntary reporting from

July 2010 through September 2010, on the Florida Health Finder,

Hospice Provider Family Satisfaction Survey. Good Shepherd had

between 138 and 181 survey respondents and received five-star ratings

(90 to 100 percent satisfaction) in all categories.

Agency records indicate Good Shepherd had one substantiated complaint

during the three-year period ending June 23, 2011. A single complaint

can encompass multiple compliant categories. The substantiated

complaint categories were (one each): nursing services, plan of care and

medicine problem/errors/formulary. c. What resources, including health manpower, management

personnel, and funds for capital and operating expenditures, are available for project accomplishment and operation? ss. 408.035(1)(d), Florida Statutes

Cornerstone Hospice and Palliative Care, Inc. (CON #10122):

The applicant, a Florida not-for-profit corporation, provided audited

financial statements for the periods ending September 30, 2010 and

2009. These statements were analyzed for the purpose of evaluating the

applicant’s ability to provide the capital and operational funding

necessary to implement the project.

Short-Term Position:

The applicant’s current ratio of 1.5 indicates current assets are more

than 1.5 times current obligations, an adequate position. The ratio of

cash flow to current liabilities of 0.5 is below average and an adequate


30

position. The working capital (current assets less current liabilities) of

$2.6 million is a measure of excess liquidity that could be used to fund

capital projects. Overall, the applicant has an adequate short-term

position. (See Table 1).

Long-Term Position:

The ratio of long-term debt to net assets of 0.0 indicates the applicant

has no existing long-term debt and therefore should have no difficulty

obtaining additional debt financing if needed, a good position. The ratio

of cash flow to assets of 12.4 percent is well above average and a strong

position. The most recent year had an operating gain of $695,155, which

resulted in a 1.5 percent operating margin. Overall, the applicant has a

good long-term position. (See Table 1).

Capital Requirements:

Schedule 2 indicates total capital projects of $1,435,950 which consist of

the CON subject to this review and estimated capital budgets for 2012

and 2013.

Available Capital:

Funding for this project will be provided by the applicant. Based on our

review, the applicant has available working capital of $2.6 million and

cash flow from operations of $2.8 million. It should be noted that the

architectural review of this projected concluded that the noted

deficiencies would increase the cost of this project tremendously. As

such we cannot determine if the applicant has sufficient funding to or

has accounted for the cost associated with addressing these deficiencies.

Staffing:

Schedule 6A indicates, by December 31, 2012 (the first year of the

proposed project), the applicant forecasts 15.51 FTEs. The breakdown is

as follows: 4.64 FTEs registered nurses [RNs]; 3.48 FTEs licensed

practical nurses [LPNs]; nurses’ aides (5.39 FTEs); administrator (one

FTE); social service director (0.5 FTEs); cooks (3.08 FTEs); facility

maintenance (0.5 FTE) and chaplain (0.5 FTE). This total FTE count

increases to 16.92 for year two (ending December 31, 2013) when the

nursing staff FTEs increases as follows: LPNs (4.64 FTEs) and nurses’

aides (5.64 FTEs). In the notes to Schedule 6A, Cornerstone states that

staffing levels are consistent with the anticipated caseloads based on the

operating experience of the applicant.

Conclusion:

The applicant’s access to funding for this project is in question due to the

uncertainty about the construction costs necessary for this project.


31

TABLE 1

Cornerstone Hospice & Palliative Care, Inc.

9/30/2010

9/30/2009

Current Assets (CA) $8,295,334

$7,130,904

Cash and Current Investment $3,772,002

$1,931,498

Total Assets (TA) $22,444,490

$21,264,438

Current Liabilities (CL) $5,652,400

$5,710,433

Total Liabilities (TL) $5,652,400

$5,710,433

Net Assets (NA) $16,792,090

$15,554,005

Total Revenues (TR) $47,881,239

$50,652,623

Interest Expense (IE) $0

$0

Operating Income (OI) $695,155

($1,087,007)

Cash Flow from Operations (CFO) $2,780,642

($1,201,773)

Working Capital $2,642,934

$1,420,471

FINANCIAL RATIOS

9/30/2010

9/30/2009

Current Ratio (CA/CL) 1.5

1.2

Cash Flow to Current Liabilities (CFO/CL) 0.5

-0.2

Long-Term Debt to Net Assets (TL-CL/NA) 0.0

0.0

Times Interest Earned (OI+IE/IE) NA

NA

Net Assets to Total Assets (NA/TA) 74.8%

73.1%

Operating Margin (OI/TR) 1.5%

-2.1%

Return on Assets (OI/TA) 3.1%

-5.1%

Operating Cash Flow to Assets (CFO/TA) 12.4% -5.7%

Good Shepherd Hospice, Inc. (CON #10123): The applicant, a Florida

not-for-profit corporation, provided audited financial statements for the

periods ending December 31, 2010 and 2009, of the applicant and the

parent, Chapters Health System. These statements were analyzed for the

purpose of evaluating the applicant’s and parent’s ability to provide the

capital and operational funding necessary to implement the project.

Short-Term Position:

Applicant: The applicant’s current ratio of 0.7 indicates current assets

are less than current obligations in the amount $1.3 million, a weak

position. The ratio of cash flow to current liabilities of 0.3 is well below

average and a weak position. Overall, the applicant has a weak short-

term position. (See Table 1).


32

Parent: The parent’s current ratio of 3.3 indicates current assets are 3.3

times more than current obligations; this is well above average and a

strong position. The ratio of cash flow to current liabilities of 0.5 is

below average and an adequate position. The working capital (current

assets less current liabilities) of $39.6 million is a measure of excess

liquidity that could be used to fund capital projects. Overall, the parent

has a good short-term position. (See Table 1).

Long-Term Position:

Applicant: The ratio of long-term debt to net assets of 0.0 indicates the

applicant has no existing long-term debt and therefore should have no

difficulty obtaining additional debt financing if needed, a good position.

However, it should be noted that financing acquired is likely to come

from the parent. The ratio of cash flow to assets of 19.1 percent is above

average and a good position. The most recent year had an operating gain

of $601,718, which resulted in a 1.2 percent operating margin. Overall,

the applicant has a good long-term position. (See Table 1).

Parent: The ratio of long-term debt to net assets of 0.4 is below average

and indicates the parent has some leverage to borrow against if

necessary, a good position. The ratio of cash flow to assets of 6.0 percent

is slightly below average and an adequate position. The most recent year

had an operating gain of $7.6 million, which resulted in a 5.5 percent

operating margin. Overall, the parent has a good long-term position.

(See Table 1).

Capital Requirements:

Schedule 2 indicates total capital projects of $10.7 million which consist

of the CON subject to this review, exempt residential beds and estimated

capital budgets for 2012.

Available Capital:

Funding for this project will be provided by the parent. Based on our

review, the parent has available working capital of $39.7 million and

cash flow from operations of $8.7 million. The parent appears to have

sufficient capital to fund this project and the entire capital budget.

Staffing:

Schedule 6A indicates, by December 31, 2014 (the first year of the

proposed project), the applicant forecasts 35.40 FTEs. The breakdown is

as follows: registered nurses (RNs) 4.66 FTEs; licensed practical nurses

(LPNs), 4.66 FTEs; home health aides, 9.32 FTEs; ARNPs, 0.54 FTEs;

physician, 0.81 FTEs; inpatient manager/director, 1.08 FTEs; social

service specialist, 1.24 FTEs; dietary cooks, 2.21 FTEs; dietary aides,

2.21 FTEs; housekeeping, 3.32 FTEs; maintenance, 1.08 FTEs; site


33

secretary, 2.65 FTEs; medical records clerk, 0.54 FTE; volunteer

coordinator, 0.54 FTE; chaplain, 0.54 FTE. This total FTE count remains

the same for year two (ending December 31, 2015). In the notes to

Schedule 6A, Good Shepherd states that staffing levels are based on the

experience of the applicant and the parent in developing and operating

inpatient facilities in Service Areas 6A and 6B. Good Shepherd

anticipates that current recruitment and training will be sufficient to fill

all proposed positions—positions will be open to all existing employees.

Conclusion:

Yes, funding for this project should be available as needed.

TABLE 1

Good Shepherd Hospice, Inc. (December 31, 2010)

Parent

Applicant

Current Assets (CA) $57,317,396

$3,342,669

Cash and Current Investment $36,463,715

$1,000

Total Assets (TA) $144,729,803

$8,298,417

Current Liabilities (CL) $17,626,495

$4,653,517

Total Liabilities (TL) $51,566,598

$4,653,517

Net Assets (NA) $93,163,205

$3,644,900

Total Revenues (TR) $138,017,622

$49,394,713

Interest Expense (IE) $1,010,921

$0

Operating Income (OI) $7,613,972

$601,718

Cash Flow from Operations (CFO) $8,708,312

$1,581,094

Working Capital $39,690,901

($1,310,848)

FINANCIAL RATIOS

Parent

Applicant

Current Ratio (CA/CL) 3.3

0.7

Cash Flow to Current Liabilities (CFO/CL) 0.5

0.3

Long-Term Debt to Net Assets (TL-CL/NA) 0.4

0.0

Times Interest Earned (OI+IE/IE) 8.5

N/A

Net Assets to Total Assets (NA/TA) 64.4%

43.9%

Operating Margin (OI/TR) 5.5%

1.2%

Return on Assets (OI/TA) 5.3%

7.3%

Operating Cash Flow to Assets (CFO/TA) 6.0% 19.1%


34

d. What is the immediate and long-term financial feasibility of the proposal? ss. 408.035(1)(f), Florida Statutes.


For year two of operations, the applicant projected the following

percentage of total patient days by group: Medicare at 87.6 percent,

Medicaid at 5.1 percent, self-pay/charity at 0.4 percent, and commercial

insurance at 6.9 percent.

The applicant indicated on Schedule 7 that the service it intends to

provide is routine home care and general inpatient care for which the

Department of Health and Human Services sets rates. The Federal rates

were calculated for the Polk County, Florida Wage Index for Medicare

Hospice payments of 0.8771 and inflated through December 2013. The

average price adjustment factor used was 2.9 percent per year based on

the new CMS Market Basket Price Index as published in the 1st Quarter

2011 Health Care Cost Review.

Estimated patient days for each level of service from Schedule 7, year two

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 gross revenue. The results of the calculations are

summarized in Table 2 below.

Based on our calculation, the applicant’s projected gross revenue was 3.9

percent, or $76,418, less than the calculated gross revenue.

Understating revenue is a conservative assumption and therefore

reasonable.

Operating profits from this project are expected to increase from a profit

of $593 for year one to a profit of $249,283 for year two.

Conclusion:

Assuming the applicant is able to obtain funding for this project, this

project appears to be financially feasible.


35

HOSPICE REVENUE TABLE 2

CON #10122 Cornerstone Hospice

Wage Index for Polk County(0.8771) p. 26

Wage Component Wage Index

Adjusted Wage

Amount Unadjusted Component

Payment Rate

Routine Home Care $100.75 0.8771 $88.37 $45.88 $134.25

Continuous Home Care $588.01 0.8771 $515.74 $267.78 $783.52

Inpatient Respite $82.10 0.8771 $72.01 $69.57 $141.58

General Inpatient $417.52 0.8771 $366.21 $234.75 $600.96

Payment Rate

Inflation Factor Year

Two

Inflation Adjusted Amount

Patient Days Year 2,

December 31 -2013

Calculated Gross

Revenue

Routine Home Care $134.25 1.065 $142.97 986 $140,966

Continuous Home Care $783.52 1.065 $834.42 0 $0

Inpatient Respite $141.58 1.065 $150.78 0 $0

General Inpatient $600.96 1.065 $639.99 2,957 $1,892,451

Total 3,943 $2,033,417

From Schedule 7 $1,956,999

Difference

-$76,418

Percentage difference -3.90%

Good Shepherd Hospice, Inc. (CON #10123): For year two of

operations, the applicant projected the following percentage of total

patient days by group: Medicare at 79.4 percent, Medicaid at 11.8

percent, self-pay/charity at 1.8 percent, and commercial insurance at

7.0 percent.

The applicant indicated on Schedule 7 that the service it intends to

provide is general inpatient care for which the Department of Health and

Human Services sets rates. The Federal rates were calculated for the

Polk County, Florida Wage Index for Medicare Hospice payments of

0.8771 and inflated through December 2015. The average price

adjustment factor used was 3.0 percent per year based on the new CMS

Market Basket Price Index as published in the 1st Quarter 2011 Health

Care Cost Review.


36

Estimated patient days for each level of service from Schedule 7, year two

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 gross revenue. The results of the calculations are

summarized in Table 2 below.

Based on our calculation, the applicant’s projected gross revenue was 8.1

percent, or $206,291, less than the calculated gross revenue. The

reason for the understatement could be a combination of the inflation

assumption used and/or an assumption of days for inpatient respite

which were not identified in the schedule. In any event, understating

revenue is a conservative assumption and therefore reasonable.

Operating profits from this project are expected to increase from a loss of

$65,263 for year one to a profit of $29,043 for year two.

HOSPICE REVENUE TABLE 2

CON 10123 Good Shepherd Hospice

Wage Index for Polk County(0.8771) p.26

Wage Component Wage Index

Adjusted Wage

Amount Unadjusted Component

Payment Rate

Routine Home Care $100.75 0.8771 $88.37 $45.88 $134.25

Continuous Home Care $588.01 0.8771 $515.74 $267.78 $783.52

Inpatient Respite $82.10 0.8771 $72.01 $69.57 $141.58

General Inpatient $417.52 0.8771 $366.21 $234.75 $600.96

Payment Rate

Inflation Factor Year

Two

Inflation Adjusted Amount

Patient Days Year 2,

December 31 -2013

Calculated Gross

Revenue

Routine Home Care $134.25 1.128 $151.38 0 $0

Continuous Home Care $783.52 1.128 $883.51 0 $0

Inpatient Respite $141.58 1.128 $159.65 0 $0

General Inpatient $600.96 1.128 $677.65 4,067 $2,755,994

Total 4,067 $2,755,994

From Schedule 7 $2,549,703

Difference

-$206,291

Percentage difference -8.09%

Conclusion:

This project appears to be financially feasible.


37

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

These applications are for new 12-bed inpatient hospice facilities to be

located within an existing ALF (Grace Manor) and a freestanding facility.

Service Area 6B currently has two existing inpatient hospice programs.

Therefore, these projects are offering new choices of providers in

Lakeland.

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 6.9 percent of

its patient days from managed care/commercial insurance payers with

92.7 percent of patient days expected to come from fixed price

government payer sources (Medicare and Medicaid), with the remaining

0.4 percent as self-pay/charity.

Good Shepherd Hospice, Inc. (CON #10123)

Therefore, price competition is limited to the share of patient days that

are under managed care plans. The applicant is projecting 7.0 percent of

its patient days from managed care/commercial insurance payers with

91.2 percent of patient days expected to come from fixed price

government payer sources (Medicare and Medicaid), with the remaining

1.8 percent as self-pay/charity.

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. As providers offer new or enhanced services to patients

and families as a means to compete on quality measures, cost-

effectiveness would be impacted since the new or enhanced services

would be offered despite the large 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.

Conclusion:

These projects are not likely to result in price-based competitions.


38

f. Are the proposed costs and methods of construction reasonable? Do they comply with statutory and rule requirements? ss. 408.035(1)(h), Florida Statutes; Ch. 59A-3 or 59A-4, Florida Administrative Code

Cornerstone Hospice and Palliative Care, Inc. (CON #10122) proposes

to establish an inpatient unit consisting of 12 beds within the assisted

living facility (ALF), Grace Manor in Lakeland, Polk County. The

narrative indicates six semi-private patient rooms but the schematic plan

show four private and two semi-private patient rooms.

The construction type is not listed on the schematic floor plan or

architectural narrative. The facility is described as a multi-story

concrete construction augmented with steel. There is no mention of fire

resistance rated ceilings or an automatic sprinklered system. As

described the construction type for I-2 occupancy would be limited to

Type I and Type II-A per Florida Building Code.

The existing ALF indicates Institutional Group I-1 occupancy and the

proposed hospice is Institutional Group I-2 occupancy. Code

requirements shall apply to each portion of the building based on the

occupancy classification of that space except most restrictive applicable

provisions shall apply to the entire building or portion thereof.

The plan does not indicate that the facility will be divided into smoke

compartments as required by the Florida Building Code and the Life

Safety Code. Facilities that are I-2 occupancy (Florida Building Code)

and Healthcare occupancy (NFPA 101) are required to be sub-divided

into smoke compartments by one-hour fire resistant smoke barriers. This

allows staff to relocate patients into an adjacent smoke compartment

without having to evacuate the building.

The following deficiencies have been identified on the plan:

The minimum corridor width shall be eight feet, as required by FBC,

and NFPA 101, chapter 18.

Patient sleeping rooms and all common use areas and toilets shall be

accessible, and comply with FBC, section 11-6.1.

Doors in patient toilet rooms shall swing out or be equipped with

reversible hardware; water closets shall have grab bars on both sides.

Access to a clean work room shall be from corridor or ante room.

A janitor closet with a floor drain and storage for housekeeping

equipment and supplies shall be provided.

A washer and dryer for patients’ personal use shall be provided.

A level 1, type 10, class 48 generator shall be provided.


39

The scope of proposed renovations is limited to minor upgrades. The

construction cost estimates appear to be reasonable for the scope of

work. However with noted deficiencies, the cost of the project will

increase tremendously.

The information provided in the project completion forecast appears to be

reasonable. However with noted deficiencies, schedule for completion of

this project will be changed.

It is unclear whether or not the facility complies with the Florida Building

Code or the Life Safety Code for inpatient beds. Additional information

regarding construction type, multiple occupancies, smoke

compartmentation and other deficiencies are needed to make a

determination of code compliance. Additional renovations may be

required to bring the facility into compliance.

Good Shepherd Hospice, Inc. (CON #10123): The applicant proposes

to establish a new 16-bed hospice in Polk County, Florida; which

consists of 12 inpatient beds and four residential beds. This facility is

designed as a one-story FBC type II-B and NFPA type II(000)

construction, fully sprinklered building. Both construction types are

adequate. This building is divided into two smoke compartments as

required by the Life Safety Code.

All beds are located in private rooms which exceed the minimum space

requirements of the Florida Building Code. As designed the rooms

provide ample space to accommodate family members. All patient rooms

are provided with an attached private toilet room. The project narrative

indicates that all patient bedrooms and toilet rooms will be accessible.

The patient care and support areas are in smoke compartment “A” with

support areas located in center. Administrative and public spaces are

located in a separate smoke compartment. The facility shall provide a

Level 1, type 10, Class 48 generator, as required by Florida Building

Code, section 437.2.8.1. The plans are schematic and will require

further development, but there are no major code deficiencies identified

at this stage.

Based on the analysis of actual cost data of a similar project, the

estimated construction costs appear to be within the expected range.


reasonable.


40

The architectural review of the applications shall not be construed as an

in-depth effort to determine complete compliance with all applicable

codes and standards. The final responsibility for facility compliance

ultimately rests with the owner.

The Agency for Health Care Administration does not require any further

plan reviews for hospice licensure; however, the Agency will provide a

formal review of construction documents for any owner who wants to

ensure code compliance.

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

Hospice programs are required by federal and state law to provide

hospice patients with inpatient care when needed (42 Code of Federal

Regulations 418.108). Hospice care also must be provided regardless of

ability to pay.


has highly skilled, specialized staff whose total responsibility is to assist

qualified Medicaid applicants through the complicated application

process. Furthermore, Cornerstone proposes to spend three percent of

patient charges to charity care in year one of operations and three

percent of patient charges in year two.

The applicant asserts that it has a long history of providing care to

indigent and Medicaid patients. Additionally, as a non-profit

organization, Cornerstone has a continuing commitment to serve all who

need services including: AIDS patients, the homeless, undocumented

patient as well as other minority patients. All extra dollars are put back

into patient care and clinical services, therefore the communities

Cornerstone services benefit from its cost-effective and high quality

hospice outreach programs.

Good Shepherd Hospice, Inc. (CON #10123) states it has a policy and

a history of providing services to all persons regardless of ability to pay,

including Medicaid patients and the medically indigent. The applicant

proposes to maintain this policy and continue to provide services to all

patients, regardless of ability to pay or payer source.


41

F. SUMMARY

The Agency does not publish need for inpatient hospice beds. Hospice

programs are required by federal and state law to provide hospice

patients with inpatient care when needed (42 Code of Federal

Regulations 418.108) and no more than 20 percent of a hospice’s total

patient days may be inpatient days per Section 400.609(4), Florida

Statutes. Inpatient care may be provided through contractual

arrangements in hospitals and nursing homes, and is generally provided

on a short-term basis within a total hospice stay.

There are a total of 28 inpatient beds in Service Area 6B with Good

Shepherd operating 12 beds in Auburndale (the George Forsythe Hospice

House) and 16 beds in Sebring (The Bud and Donna Somers Hospice

House).

Cornerstone Hospice and Palliative Care, Inc. (CON #10122) proposes

to establish an inpatient unit of 12 beds at Grace Manor ALF in Service

Area 6B. Grace Manor is located at 4620 Socrum Loop Road, Lakeland,

Polk County, Florida 33805.

The project involves a total cost of $283,200. Construction cost is

$77,275 and the project involves 2,800 GSF of renovation.

Cornerstone proposes no conditions to project approval.

Good Shepherd Hospice, Inc. (CON #10123) proposes to establish a

12-bed freestanding inpatient hospice facility (Lakeland Hospice House)

in Hospice Service Area 6B. The facility will be located in or near


The project involves a total cost of $10,089,898. Construction cost is

$6,487,700 and the project involves 29,458 GSF of new construction.

Good Shepherd proposes the CON be predicated on one condition: the

Lakeland Hospice House will be constructed in or near Lakeland in Polk

County, Florida.

Need/Access

Cornerstone Hospice and Palliative Care, Inc. (CON #10122) is

supported by 120 unduplicated letters from a combination of sources:

local government officials, area hospitals, physicians, friends of the

hospice, volunteers, business owners and loved ones of former patients.


42

The applicant contends that there is one inpatient hospice bed per 128

deaths in the state and one inpatient hospice bed per 292 deaths in Polk

County. This indicates that the opportunity in Polk County for an

inpatient bed is less than half the state average.

Cornerstone asserts that the occupancy and average length of stay in

Polk County demonstrates the need for beds—the occupancy rate so

high, the average length of stay so low for a growing county population.

The applicant’s need and utilization includes residential beds and beds

in hospitals and nursing homes.

Cornerstone indicates that the proposed facility at Grace Manor will

produce a $213/$249 savings over hospital inpatient hospice bed

contracts and $37/$64 savings over nursing home inpatient hospice bed

contracts per patient, per day.

Good Shepherd Hospice, Inc. (CON #10123) is supported by 398

unduplicated letters from a combination of sources: the parent

corporation (Chapters Health System, Inc.), member of the Florida

Legislature, local elected officials, local area hospitals, physicians,

nursing homes, community leaders, business owners and loved ones of

former patients.

By 2015, the proposed daily cost per patient at its proposed site is $658,

as opposed to $876 at a contracting hospital. This is a cost savings of

$218 per day per patient. The applicant states that by the second year of

operation the proposed daily cost per patient at its proposed site is $658,

as opposed to $768 operating at the Palm Terrace hospice unit. This is a

cost savings of $110 per day per patient.

Good Shepherd states that it does not provide general inpatient care in

nursing home scatter beds since such facilities are not characteristically

the most practical and appropriate setting for intensive end-of-life care

due to staffing concerns and the lack of a home-like

Good Shepherd contends that the Lakeland Hospice House is the most

cost-effective alternative for providing general inpatient care to Good

Shepherd’s patients who are residents of the Lakeland area.


43

Quality of Care:


provides exceptional, state-of-the-art care, is dedicated to continuous

improvement and that it maintains a reputation for excellence.

The applicant has been licensed by the State of Florida and certified by

Medicare since 1984. A comprehensive performance improvement plan

and compliance programs have been implemented by the applicant.

Cornerstone has been surveyed on an annual and bi-annual basis and

has been deficiency free for many years. There have been no

substantiated complaints in the past three years (ending June 23, 2011).

It is noted that from July 2010 through September 2010, on the Florida

Health Finder, Hospice Provider Family Satisfaction Survey, Cornerstone

had between 235 and 297 survey respondents and received five-star

ratings (90 to 100 percent satisfaction) in all categories.

Good Shepherd Hospice, Inc. (CON #10123) states that it maintains

compliance with the applicable hospice licensure rules in Chapter 58A-2,

Florida Administrative Code. Good Shepherd states that it is accredited

by the Joint Commission and complies with NHPCO standards.

The applicant’s Appendix 17 contained its “policies and procedures

related to inpatient care”.

It is noted that from July 2010 through September 2010, on the Florida

Health Finder, Hospice Provider Family Satisfaction Survey, Good

Shepherd had between 138 and 181 survey respondents and received

five-star ratings (90 to 100 percent satisfaction) in all categories.

Agency records indicate one substantiated complaint during the three-

year period ending June 23, 2011, which involved multiple categories

(one each): nursing services, plan of care and medicine

problem/errors/formulary.

Financial Feasibility/Availability of Funds:

Cornerstone Hospice and Palliative Care, Inc. (CON #10122): The

applicant has an overall adequate short-term position and an overall

good long-term position.


44

The applicant’s access to funding for this project is in question due to the

uncertainty about the construction costs necessary for this project.

Assuming Cornerstone is able to obtain funding for this project, this

project appears to be financially feasible.

Good Shepherd Hospice, Inc. (CON #10123): The applicant has an

overall weak short-term position. The parent corporation has an overall

good short-term position. The applicant has an overall good long-term

position. The parent corporation has an overall good long-term position.

This project appears to be financially feasible. Funding for this project

should be available as needed.

Medicaid/Indigent/Charity Care:

Hospice programs are required by law to provide services to all who seek

them.


has highly skilled, specialized staff that assist qualified Medicaid

applicants through the application process. The applicant asserts that it

has a long history of providing care to indigent and Medicaid patients.

Cornerstone proposes to spend three percent of patient charges to

charity care in year one of operations and three percent of patient

charges in year two.

Good Shepherd Hospice, Inc. (CON #10123) states it has a policy and

a history of providing services to all persons regardless of ability to pay,

including Medicaid patients and the medically indigent. The applicant

proposes to maintain this policy and continue to provide services to all

patients, regardless of ability to pay or payer source.

Architectural:

Cornerstone Hospice and Palliative Care, Inc. (CON #10122): The

construction type is not listed on the schematic floor plan or

architectural narrative.

There is no mention of fire resistance rated ceilings and sprinklered

system. The plan does not indicate that the facility will be divided into

smoke compartments as required by the Florida Building Code and the

Life Safety Code. Several deficiencies have been identified on the plan.


45

The scope of proposed renovations is limited to minor upgrades. The

construction cost estimates appear to be reasonable for the scope of

work. However with noted deficiencies cost of the project will increase

tremendously.


reasonable. However with noted deficiencies, the schedule for

completion of this project will be changed.

It is unclear whether or not the facility complies with the Florida Building

Code or the Life Safety Code for inpatient beds. Additional information

regarding construction type, multiple occupancies, smoke

compartmentation and other deficiencies are needed to make a

determination of code compliance. Additional renovations may be

required to bring the facility into compliance.

Good Shepherd Hospice, Inc. (CON #10123): This facility is designed

as a one-story FBC type II-B and NFPA type II(000) construction, fully

sprinklered building. Both construction types are adequate. This

building is divided in two smoke compartments as required by the Life

Safety Code.

The plans are schematic and will require further development, but there

are no major code deficiencies identified at this stage.

Based on the analysis of actual cost data of a similar project, the

estimated construction costs appear to be within the expected range.


reasonable.

G. RECOMMENDATION

Approve CON #10123 to establish a 12-bed freestanding inpatient

hospice facility, Lakeland Hospice House, in Hospice Service Area 6B.

The project cost is $10,089,808. The project will involve 29,458 GSF of

new construction and a construction cost of $6,487,700.

CONDITION: The Lakeland Hospice House will be constructed in or near


Deny CON #10122.


46

AUTHORIZATION FOR AGENCY ACTION

Authorized representatives of the Agency for Health Care Administration

adopted the recommendation contained herein and released the State Agency Action

Report.

DATE:

James B. McLemore Health Services and Facilities Consultant Supervisor Certificate of Need

Jeffery Gregg Chief, Bureau of Health Facility Regulation

STATE AGENCY ACTION REPORT · Gonzalez, Hispanic Vicar and Lisa Garcia, Faith Formation Minister...

Documents

Transcript of STATE AGENCY ACTION REPORT · Gonzalez, Hispanic Vicar and Lisa Garcia, Faith Formation Minister...