STATE AGENCY ACTION REPORT - FL Agency for Health Care ... · Villages, Florida 31262 and the site...

STATE AGENCY ACTION REPORT

ON APPLICATION FOR CERTIFICATE OF NEED

A. PROJECT IDENTIFICATION

1. Applicant/CON Action Number

HealthSouth Rehabilitation Hospital of Sumter/Lake County, LLC/ CON #10196

6300 La Calma Drive, Suite 170 Austin, Texas 78752

Authorized Representative: Ronald T. Luke, JD, PhD President, Research & Planning

Consultants, L.P. (512) 371-8166

The Villages Tri-County Medical Center, Inc. d/b/a The Villages Regional Hospital/CON #10197 600 East Dixie Avenue

Leesburg, Florida 34748

Authorized Representative: Donald G. Henderson, FACHE President and Chief Executive Officer Central Florida Health Alliance

(352) 323-5001

2. Service District/Subdistrict

District 3 (Alachua, Bradford, Citrus, Columbia, Dixie, Gilchrist,

Hamilton, Hernando, Lafayette, Lake, Levy, Marion, Putnam, Sumter, Suwannee and Union Counties)

B. PUBLIC HEARING

A public hearing was requested and held on Wednesday, October 23, 2013 at The College of Central Florida, the Harvey Klein Conference

Center, Meeting Room B, 3001 SW College Road, Ocala, Florida 34474.

CON Action Numbers: 10196 & 10197

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The reviewer notes that the driving distance from The Villages Lake Sumter Landing Market Square at 1000 Lake Sumter Landing, The

Villages, Florida 31262 and the site of the public hearing is 33.1 miles (43 minutes driving time). This is primarily by way of I-75. 1

Below is a brief summary of comments made by the presenters.

The Villages Tri-County Medical Center, Inc. d/b/a The Villages Regional Hospital—CON application #10197

John Henderson, FACHE, President and Chief Executive Officer, Central Florida Health Alliance (CFHA) introduced CFHA board members

present in the audience: Russell D’Emidio2, Greg Lewis (Treasurer), Roger Beyers and Terry Upton. Mr. Henderson also stated that area physicians, members of the community, hospital staff and administrative

team were present and requested those in favor of the project to please stand. The reviewer noted that per the sign-in sheets, 60 attendees (or

90.91 percent) were in favor of CON application #10197 and six attendees (9.09 percent) were in favor of CON application #10196.

Mr. Henderson stated that he believed that viable community health systems are the best model to deliver the full range of medical services to the community. He indicated health care delivery and operation in

Central Florida and particularly the rural areas is difficult, that many providers have gone bankrupt or have had to “sell out” and that many

managed care companies in the area have fled but that CFHA has remained viable and is “up for the challenge”. He indicated the project is to be a hospital-within-a-hospital. However, the project is to establish a

CMR (comprehensive medical rehabilitation) unit at The Villages Regional Medical Center and we will refer to the project in this context in our review. He illustrated as an indicator of the difficulties of viability in the

area, particularly among small freestanding hospitals, CFHA has provided a partnership and “a tremendous amount” of assistance

(support services and staff) to the “65-bed” Promise Hospital3. He stated that The Village Regional Hospital (TVRH) has a very strong balance sheet with a positive operating margin which Mr. Henderson stated is “an

unusual thing in Florida these days”.

Mr. Henderson discussed CFHA’s charity care policy and stated the applicant treats everyone in an emergency regardless of their ability to

1 Source: The Villages address - http://www.thevillages.com/AboutUs/location.htm. and

https://maps.google.com for the driving distance. 2 Mr. D’Emidio is the Director at Large, of The Villages Homeowner’s Association per their website at

http://www.thevha.net/about-us-a-faqs/71-current-vha-leadership?catid=916%3Aabout-us. 3 M. Bryan Day, Senior Vice President, Promise Healthcare, Inc. included a letter of support (see below). Promise Hospital of Florida at The Villages is a 40-bed long term care hospital located in

Oxford, (Sumter County) Florida.

http://www.thevillages.com/AboutUs/location.htm

http://www.thevha.net/about-us-a-faqs/71-current-vha-leadership?catid=916%3Aabout-us


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pay. He again emphasized that CFHA provides a full range of services, with control, management and governance being made up of local

citizens. He stated the applicant is experienced in acute, post-acute and the outpatient settings. Mr. Henderson stated affiliated Leesburg

Regional Medical Center (LRMC), which CFHA operates, has one of the largest cardiac surgery programs in the state (third largest in Florida) with over 750 cardiac procedures per year and a large neurosurgical

program (stated to be an adjunct to rehabilitation). He stated “if we can do heart surgery and brain surgery, we can also do acute rehabilitation”. He indicated TVRH provides a cancer center affiliated with Moffitt Cancer

Center and offers outpatient rehabilitation already. Mr. Henderson indicated “in balance” CFHA is more than capable of the proposed

project, with expansion capability, if the needed arises. Saad Ehtisham, FACHE, Senior Vice President and Chief Operating

Officer, CFHA discussed continued diversification and the progress of services at TVRH. He stated that since 2011, TVRH has been in

discussion with nursing care corporations specializing in rehabilitation and that the proposed project is “not a new model” for TVRH, but that the HealthSouth proposal (CON application #10196) “forced our hand” to

move forward and accelerate plans. Mr. Ehtisham then discussed his past experience with managing rehab centers, indicating that in the freestanding provider model, one is not able to transport patients at the

appropriate time for discharge/commencement of recovery because those patients were too acutely sick or acuity was too high for them to be

accepted into a freestanding center. The availability of physicians to go to those centers was limited. By contrast, Mr. Ehtisham stated that in the hospital setting proposed, physicians can more easily follow their

patients. Also, an on-site rapid response team in a “code situation” is much faster than 911 emergency medical services. He also stated about 230 physicians (including specialists and subspecialists) are available on

staff at TVRH.

Mr. Ehtisham stated that emergency care will be available at a lower cost compared to the cost associated with emergency services at a freestanding site. Mr. Ehtisham indicated The Villages area has the

highest Medicare population in District 3 and the average daily census (ADC) at TRVH has more than doubled over the past six years. He also

stated high golf cart access for this population. Mr. Ehtisham contended that HealthSouth (CON application #10196) will

state TVRH does not have dedicated staff for the project and that most acute care hospitals “float staff in and out”. He stated being a nurse himself and having been an acute nursing officer, this charge is not true.

He indicated the rehabilitation setting must have dedicated/trained staff with rehabilitation certification and that TVRH has such staff.


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Mr. Ehtisham indicated that project equipment costs are about $66,000 per bed and that for the last 13 CMR unit applications submitted to the

Agency, the average equipment cost was $31,540 per bed. He also indicated that reviewing the equipment for six freestanding hospitals, the

average equipment cost per bed was $55,323. Mr. Ehtisham continued stating that LRMC’s CMR average cost per discharge is $13,073 and that per MedPAC 2011 data, CMR units of a similar size to LRMC had an

average cost per discharge was $17,000 and that CFHA has already shown it can manage costs4.

Mr. Ehtisham stated the loss of a medical rehabilitation director in 2010 at LRMC but that a new director is now on staff and the right skill set is

now on-site. He also indicated some stroke patients were out-migrated to the Orlando area but further review has shown these patients could have been properly treated at LRMC and that this issue has been

resolved. Mr. Ehtisham concluded by stating that health care is local and CFHA is the local provider.

David Levitt, Managing Partner, Levitt Healthcare Affiliates, stated the use rate for CMR beds in the area is low, indicating people are not

accessing inpatient CMR services like they are in other parts of the state and likewise referral rates (to CMR services) are low, stated to be an access limitation. Mr. Levitt estimated a need of 24 to 38 CMR beds over

the next five-year planning horizon, using varying methodologies. He indicated that a 30-bed unit is substantial and larger than 40 percent of

all CMR units in the state. He further indicated the HealthSouth proposal (CON application #10196) would over-bed the market. Mr. Levitt noted the applicant’s Medicare mix estimate is high, highest in

the district if not in the country, due to the area’s high elderly population. He indicated that 80 percent of the CMR services in the country are within a hospital and “only 20 percent are freestanding”

facilities. Mr. Levitt indicated in summary that the project meets the growing need in the area, addresses and remedies not normal

circumstances that exist, complements existing resources, increases accessibility and is a cost-effective answer to CMR bed need in the area.

Two former patients, Kim Morgan and Richard Rigelsky spoke very highly of the CMR and related services they had received at CFHA facilities.

4 MedPAC is the Medicare Payment Advisory Commission, an independent US federal body

established by the Balanced Budget Act of 1997 whose primary role is to advise the US Congress on

issues affecting the administration of the Medicare program including payments to private health plans participating in Medicare and health providers serving Medicare beneficiaries.

http://en.wikipedia.org/wiki/United_States_Congress


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Susan St. John, the attorney representing CFHA, emphasized that the project will provide a continuum and continuity of care, where physicians

can easily see their patients and readily address complications, keeping costs down, unlike having to travel to see patients at a freestanding site.

Patients would be able to see the physicians that they “know and trust” in a familiar setting and family members would not have to make unnecessary trips outside of the local community.

Bradley Arnold, County Administrator, Sumter County, Florida stated there is need for CMR services in Sumter County and that it’s “exciting”

that two applicants are trying to meet the need because “we want that need met”. Mr. Arnold stated the following reasons he supports CON

application #10197 – their accredited experience, they are an existing industry in Sumter County supporting other industry in Sumter County, they are already connected to the community and the continuum of care

(inside The Villages). Mr. Arnold indicated that Sumter County has EMS responsibilities and wants to keep its focus on initial response and not

patient transport. Alex Smirnoff, MD, a neurologist, stated from a doctor’s point of view, it’s

all about patient care. Dr. Smirnoff stated experience with taking care of neurological patients for almost 30 years and everywhere he has worked the rehab unit is incorporated into the building of the hospital and that

“that is the only way it works”. He also stated there is no advantage to have a rehab unit outside and “tons” of reasons to have it inside. Any

needed consult or other services, they are readily available inside but if outside, even if the rehab unit is across the parking lot, services become less available, much more cumbersome and “way more costly”.

Dr. Smirnoff indicated from a biological point of view, CMR is an organ or a part of the full organism. He said everyone understands it’s better to have your kidney inside your body than outside or somehow connected

outside. He stated every doctor he has spoken to supports the project.

Dolly McCranie, Director of Case Management, TVRH, stated it breaks her heart when patients don’t want to go to Leesburg, even when she tells them “it will change your life” and that services there are “tops”.

Gary Lester, Vice President for Community Relations, The Villages stated

“we don’t want rehab services outside our community”. He indicated he was a pastor for many years and it’s important for people to be able to visit (by golf cart) spouses, neighbors and friends in rehab. He stated the

“major source of transportation in The Villages is the golf cart”. He further indicated TVRH is an integral part of The Villages and has grown and developed with the community and residents of The Villages are on

the TVRH board.


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Don Hahnfeldt, Commissioner, District 6, Sumter County Board of County Commissioners, Vice Chairman, CFHA and former three-term

president of The Villages Homeowners’ Association stated the project should be approved because of the commitment and dedication of the

hospital and staff and the support of the community. Commissioner Hahnfeldt stated 100,000 people, at an average age of 68, are in The Villages (none of whom are Florida natives) because people have moved

there to realize active, healthy living and get health care. He also commented on the various health care partnerships between CFHA/TVRH and Moffit, USF Health, The Villages and The Villages

Health.

Commissioner Hahnfelt indicated the success of CFHA has been best summarized by John Armstrong, MD, FACS, Florida Surgeon General and Department of Health Secretary, who during a visit last week, stated

that “The Villages is a model for healthy living and environment for Florida and the rest of the nation”.

HealthSouth Rehabilitation Hospital of Sumter/Lake County, LLC CON application #10196

Andy Ward, MBA, Vice President of Development, HealthSouth Corporation stated HealthSouth is a 103-hospital company, all being

specialty rehabilitation hospitals and the largest such company in the U.S. Mr. Ward further stated that 21 percent of all CMR discharges in

the country are from a HealthSouth hospital. He also stated this affords HealthSouth to focus all of its resources on rehabilitation, since “that’s all we do”. He further stated HealthSouth can share best practices

among all its hospitals and that with 103 hospitals you are not “out on an island as a rehab unit” but have 103 other administrators, chief nursing officers, medical directors and others and that this brings

advantages to the patients. Mr. Ward indicated HealthSouth had no or little support when it received the CON for its facility in Ocala, Florida,

yet that it is now supported by the community’s hospitals and physicians and with 80 percent occupancy it is “pretty full”.

Mr. Ward discussed the national functional independence measure—(FIM)5 gain scores against severity adjusted benchmarks for the Uniform

Data System for Medical Rehabilitation (UDSMR) population that about 70 percent of all CMR providers use UDS, showing HealthSouth’s higher FIM gains results. He stated HealthSouth is quality focused, being a

high quality-low cost provider. Mr. Ward also stated that in 2012, HealthSouth had an average cost per patient of $12,194 with

5 FIM™ is a trademark of the Uniform Data System for Medical Rehabilitation, a division of UB Foundation Activities, Inc. and is the most widely accepted functional assessment measure in use in

the rehabilitation community.


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charges/payments from Medicare of $17,900 and that other freestanding hospitals are more expensive.

Mr. Ward indicated that HealthSouth’s proposed project location “in or

near (and as close as we can get to) The Villages” will serve Lake and Sumter Counties and create 130 full-time jobs by the third year of operation. He concluded by stating that the project will be a “fully tax

paying hospital”. Ronald Luke, JD, PhD., President, Research and Planning Consultants,

LP, pointed out that CMR in Florida is a tertiary service and is “not to be provided in every local acute care hospital, they are to serve a larger

area” and that the project is not seeking to serve only The Villages area but the residents of Lake and Sumter County and that this is why you see more beds proposed (50). Per Dr. Luke, Subdistrict 3-7 is a separate

medical market and the CMR use rate for the area is quite low (about 1.6 compared to an average of about 2.4). Dr. Luke stated that CFHA has

not been able to meet the CMR needs of area residents, which explains the lower than expected CMR rates. Dr. Luke also discussed the criteria specified in 42 CFR 412.29 which requires that at least 60 percent of

patients admitted to CMR facilities have one of the 13 diagnoses. Dr. Luke points out that patients and physicians are unable to discern the difference (or adequacy) in CMR care offered at Leesburg compared to

other SNFs in the area. He noted a retention rate (staying in Leesburg) of 56 percent for CMR whereas in areas where there is a freestanding

facility, the retention rate is over 90 percent. Per Dr. Luke, a retention rate below 60 percent means something is “not quite right” in meeting the CMR needs of area residents.

Dr. Luke stated that a bed need analysis estimate based on the state average use rate for freestanding facilities indicated a total need of 70

beds in Subdistrict 3-7 and a proposal of 50 leaves substantial room for Leesburg. He questioned why CFHA should be given an additional

program as it has not been able to conduct a successful program (based on Leesburg North’s occupancy rates). In reference to CFHA’s support for its project, Dr. Luke indicated that HealthSouth Ocala’s over 85

percent occupancy, with the facility just having opened in December 2012, demonstrates “the support of patients and physicians”.6

6 HealthSouth Rehabilitation Hospital of Ocala (CON #10097) was licensed effective 11/27/12. Local health council data indicates the 40-bed facility reported 81.18 percent occupancy during the months

of April - June 2013.


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Dr. Luke proceeded to discuss financial access, stating that on average HealthSouth’s Florida hospitals have averaged between 3.4 and 4.4

percent of their patient days to Medicaid and charity care patients.7 He then indicated that CFHA provided between 1.8 and 1.7 percent of its

CMR patient days to Medicaid and charity care patients. Per Dr. Luke, you would expect the tax exempt hospital to provide more not less services to these patients, but regarding CMR, in this case “the facts are

a little different”. He also questioned why CFHA’s Leesburg program has not provided the equipment proposed in CON application #10197 at its existing unit.

Ellen Witterstaeter, Administrator, HealthSouth Rehabilitation Hospital

of Ocala, described a HealthSouth hospital and stated the proposed design would be similar to her hospital. She also stated HealthSouth Ocala’s medical market is very small with almost all admissions coming

from Marion County and local acute care hospitals. Ms. Witterstaeter reiterated that HealthSouth Ocala did not have much written support

when its CON application was submitted but now has 100 percent support from area hospitals. Ms. Wittersteater then presented a PowerPoint tour of HealthSouth Ocala and discussed use and benefits of

various equipment items and the facility’s activities of daily living (ADL) suite.

Randall Braddom, MD, MS, FAAPMR and “a proud Village resident for a couple of years now”, stated he has been doing rehabilitation for about

40 years. Dr. Braddom stated he started two inpatient rehabilitation units himself and has had “a lot of experience in what works and what doesn’t work in rehabilitation”. The reviewer noted that comments made

in Dr. Braddom’s presentation were similar to those he made in his letter of support (see below).

Anish Khanna, MD, Director, Ocala Hospitalist Group, P.A., Ocala Health System, stated he was there when HealthSouth’s facility first opened in

Ocala. He said he could speak for the hospital’s high quality outcomes and also that he recently sent two Medicaid patients to the facility and that they were promptly accepted. Dr. Khanna stated the applicant cares

and knows what it is doing.

The following individuals spoke in opposition to CON application #10196. Phillip Braun, Vice President and Chief Counsel, CFHA, stated he was

born and raised in Lake County, has watched The Villages and the area grow, and that HealthSouth does not really understand the (The Villages) market that is very different from Ocala’s. Mr. Braun also commented

7 HealthSouth’s historical provision of Medicaid/Medicaid HMO/charity care days is discussed in

section E. 3. g. of this report.


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that while CFHA may not pay property taxes, their employees pay taxes, taxes are paid on utilities and “we put money back in the system”. He

also commented that CFHA’s money stays in the community and does not go outside to shareholders.

Susan St. John, addressed HealthSouth’s (CON application #10196’s) Medicaid condition stating that The Villages is primarily a Medicare

community and HealthSouth will likely have a hard time meeting its proposed Medicaid condition. She also stated many CMR patients treated at Leesburg are Medicare/Medicaid dual eligible and that these,

along with all patients, would be accepted regardless of ability to pay or payer source.

Written Materials submitted at the public hearing:

The Villages Regional Hospital - CON application #10197 John Henderson, Saad Ehtisham and David Levitt (CON application

#10197) included separate PowerPoint documents in support of their presentations. Mr. Henderson also submitted a document referenced as presentation materials for the public hearing including audited financials

for 2013 and 2012 and additional letters of support from the community. CON application #10197 written materials included 91 support letters

signed and dated during October 2013 of the same form letter variety as described under the Letters of Support CON application #10197 section

(below). These letters were generally consistent with the letter by Ms. Dolly McCranie and had the following resident origins: The Villages (37 letters); no address, city of origin or stated affiliation (27 letters);

applicant hospital staff (seven letters); Lady Lake and Summerfield (six letters each); Fruitland Park and Oxford (two letters each) and one letter each from Auburndale (District 6), Belleview, Leesburg and Ocala.

HealthSouth Rehabilitation Hospital of Sumter/Lake County, LLC

CON application #10196 Andy Ward, Dr. Ronald Luke, Ellen Witterstaeter and Dr. Randall Braddom (CON application #10196) each included separate PowerPoint

presentations.

Dr. Ronald Luke (CON application #10196) submitted a 14-page document titled “Written Comments on CON Applications 10196 and 10197 Prepared for the Public Hearing on October 23, 2013”. This

document covered the following:

Project Description;

Service Area of Planning Comprehensive Medical Rehabilitation (CMR)

Services;

CFHA Has Not Shown a Need for Additional CMR Beds;


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HealthSouth Is the Reliable Choice to Improve CMR Access and

Quality in Subdistrict 3-7;

Financial Access and Community Benefit;

Clinical Comparisons; and

Conclusion.

Dr. Anish Khannam (CON application #10196) submitted a two-page letter of support that was similar to his oral presentation.

Letters of Support:

HealthSouth Rehabilitation Hospital of Sumter/Lake County, LLC (CON application #10196) includes six unduplicated letters of support

(with a total of 10 signatures). Two of the support letters are dated September 3, 2013 and one is dated September 30, 2013, the remaining three support letters are not dated. Six signatures indicate a District 3

location (in The Villages, East Villages or Leesburg area), five signatures are from physicians (four of these being District 3 area physicians), two signatures indicate a District 7 location and two signatures do not

identity a location.

Five of the six letters of support are of a form letter variety with the following themes:

there is a patient population in Lake and Sumter Counties that would benefit from an intensive, multi-disciplined therapy hospital setting,

as proposed;

as the largest retirement community in the country, The Villages is a

unique market with a need for a full continuum of care that is community based;

the project would provide a level of care currently not available in Sumter County and generally not accessible to the many retirees in

Lake County; and

patients would be referred to a “CIPR hospital” if there was such a

hospital in The Villages to eliminate what is perceived as a barrier to quality care for this patient population.

The following District 3 area medical practitioners signed similarly worded form letters as described above:

Jennifer L. Cultrera, MD, American Board of Internal Medicine and

American Board Eligible Oncology & Hematology, Maen Hussein, MD, American Board Internal Medicine, Internal Medicine-Oncology and Internal Medicine-Hematology and Vasundhara Iyengar, MD (same

board certifications as Dr. Hussein with additional American Board of


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Anatomic Pathology and Clinical Pathology), Florida Cancer Specialists & Research Institute; and

Tom Tran and Mike Richards (both PA-C, MPAS and phlebologists),

Comprehensive Vein Center at The Villages.

Randall L. Braddom8, MD, MS, FAAPMR, who prepared the “Continuity of Care and the Rehabilitation Continuum of Care SNF vs. CMR” portion of HealthSouth’s CON application #10196, provides a letter which states

he has been a specialist in the field of physical medicine and rehabilitation for almost 40 years. Dr. Braddom states extensive academic and administrative experience in physical medicine and

rehabilitation, being the founder of two rehabilitation units and CEO of Wishard Memorial Hospital in Indianapolis. Dr. Braddom states the local

situation has improved with HealthSouth opening an “excellent rehabilitation center” in Ocala, Florida. However, Dr. Braddom indicates the center is “already full” and that “The Villages and indeed the entirety

of Lake and Sumter Counties are in dire need of an inpatient rehabilitation center”.

Dr. Braddom states that “I have now learned that there is actually an existing inpatient rehabilitation center in Leesburg, Florida”. Per

Dr. Braddom, the community “largely considers the facility to deliver a SNF level of care, and I was quite surprised to learn that it was actually licensed as a comprehensive medical rehabilitation unit”. Dr. Braddom

also indicates the Leesburg unit is “simply not adequate to serve the needs of all of Lake and Sumter Counties” and “while the local LTAC and

nursing homes can handle some of the acute rehabilitation needs, optimal care in an acute inpatient medical rehabilitation facility is clearly the missing link in the local provision of a full spectrum of quality

medical care services”.

Dr. Braddom states the following seven reasons in support of CON application #10196:

it is well known that HealthSouth has one of the best overall records of quality outcomes of any system of inpatient physical rehabilitation

hospitals in the county;

HealthSouth can “hit the ground running”, while other providers in

the area would likely undergo a “shake-down cruise” of learning by trial and error;

8 Dr. Braddom is not licensed to practice medicine in the State of Florida, as of October 10, 2013. His 30-page resume in CON application #10196, Attachment 12, indicates his professional employment,

academic appointments, associations and extensive physical medicine and rehabilitation background.


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inpatient rehabilitation is HealthSouth’s main business, with records

of outstanding clinical results, patient satisfaction and remarkable overall efficiency;

a freestanding rehabilitation hospital has the best chance of avoiding

intra-hospital/internal department competitions and problems and pitfalls that result from local hospital policies and jealousies…by

being a neutral and non-threatening facility;

HealthSouth’s more ample capital investment will provide for state-of-

the-art technology and inpatient-specific training programs;

HealthSouth’s financial capacity and architectural know-how will

maximize clinical care efficiency and avoid initial errors in design and construction; and

as a “for-profit” organization, HealthSouth will pay property and other taxes to the local, state and federal government, alleviating the

burden placed on local taxpayers. HealthSouth provides a list of patient testimonials (in CON application

#10196, Attachment 18). Four of the patient testimonials have signatures with a Florida address and are complimentary of

rehabilitation services received at HealthSouth facilities in Florida. The Villages Tri-County Medical Center, Inc. d/b/a The Villages

Regional Hospital (CON application #10197) includes 41 unduplicated letters of support (with a total of 42 signatures), dated during September 6, 2013 through October 4, 2013. Forty of the 41 letters of support

indicate a District 3 address (of Sumter, Lake or Marion County origin, primarily from The Villages, Leesburg or Lady Lake). Five of these

support letters are from elected officials/The Villages representatives and eight are from physicians.

D. Alan Hays, DMD, State Senator, District 11, The Florida Senate, states the project will enhance patient recovery, will be more economical

for CMR patients and in many cases, for the state. Senator Hayes points out that as a health care practitioner, he is aware that initiation of rehabilitative services may abbreviate the time needed for rehabilitation.

Further, “Having the inpatient opportunity” in The Villages Regional Hospital “will serve this purpose well. Otherwise, patients have to be recovered enough to be moved… into another facility”. Senator Hayes

states that “As the State Senator whose district includes all of The Villages, I am quite familiar with the lifestyle of The Villages residents”.

The rehab center located on The Villages Regional Hospital campus will greatly enhance residents’ ability to visit their loved ones. He also cites The Villages Regional Hospital’s service “to the necessary Medicaid

patients is an additional advantage for the State”. Senator Hayes indicates that services at TVRH are “very comprehensive” and the project “will offer rehabilitative patients ready access to a wide array of specialty

services that are already in place”. He concludes that duplication of


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services will frequently result in higher health care expenses which “we are trying to minimize”.

H. Marlene O’Toole, State Representative, District 33, The Florida House

of Representatives, states that she “enthusiastically” endorses the project, given the hospital’s size and “the great demand in our immediate vicinity”. She also states that in the current situation, those in need of

inpatient rehabilitation are transferred “out of town”, or are admitted to a nursing facility for a lower level of care. Representative O’Toole concludes by stating that the project will “address existing barriers to

access” and better serve the community.

Al Butler, Vice-Chairman, Sumter County Board of County Commissioners, states that Sumter County residents will benefit “from a rehabilitation hospital and the quality therapeutic services” that will be

provided through the project.

H. Gary Morse, Chief Executive Officer, The Villages, Florida, states that “as a high quality health care provider that is locally governed and controlled, The Villages Regional Hospital offers the best option for

expanding the health care services needed in our community”. Per Mr. Morse, the project “is yet another necessity (for) our residents in order to ensure that appropriate services are available across the

continuum of care” and the project “is the only suitable model that will ensure our residents receive the treatment planning and care appropriate

to meet their health care needs”. Elliot Sussman, MD, MBA, Chair, The Villages Health9 and Professor of

Medicine, University of South Florida, states that the project reflects a “continued commitment to provide fully integrated medical facilities and services needed to serve The Villages and the surrounding Tri-County

area”.

Joseph Hildner, MD, FAAPF, Chief Medical Officer, The Villages Health, states that the “our community (would be best served by) a freestanding rehabilitation facility due to the size of the older population and their

higher level of complex needs” and “a hospital based rehab has ready access to a multitude of specialists and clinicians”. Dr. Hildner

concludes that the project would offer greater convenience, reduce cost and promote continuity of care and in the case of emergencies, hospital-based rehab is best equipped to handle unexpected situations.

9 The reviewer notes that per the website at http://www.thevillageshealth.com/aboutus.php, The

Villages Health System is a partnership with USF Health®. Per the website at

http://health.usf.edu/villages/doctors.htm, this partnership brings a coordinated care experience to

Villagers. The Villages Health has primary care centers located throughout The Villages and USF Health Specialty Care Center (opening in The Villages area in 2013) will help build a patient centric,

primary care focused, community model of health care.

http://www.thevillageshealth.com/aboutus.php

http://health.usf.edu/villages/doctors.htm


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Kathy Lieffort, Sr. Vice President of Operations, The Villages Health,

states that her organization is a large primary care delivery system (nearly 40 physicians). Ms. Lieffort states that the transitions of care are

“the most vulnerable time in a patient’s life” and the project’s continuity of care “is of upmost importance”. Ms. Lieffort indicates the project would “be a great addition to our integrated delivery model”.

Gary Lester, Vice President of Community Relations, The Villages, Florida states he has served in this capacity for 14 years and that “we owe it to

our seniors to keep them as healthy as possible for as long as possible”. Mr. Lester further states that with over 2,200 clubs, 540 holes of golf and

an incredible array of additional amenities, it is “imperative that after a medical set-back, the residents of our community are able to resume their normal activities as much as possible”. Per Mr. Lester, the project

will “give The Villages residents the greatest chance of being able to achieve their highest level of function possible”.

Robert Maiello, MD, Central Florida Physical Medicine & Rehabilitation, PA, states he is Leesburg Regional’s medical director for rehabilitation

since 2003 and previously served as the original medical director (from 1991 to 1995). Dr. Maiello states that the physiatrists practicing in the area have privileges at Leesburg Regional Medical Center and The

Villages Regional Hospital and are well known to area physicians. Dr. Maiello contends that the continuity of care from acute

hospitalization to acute rehabilitation is “much smoother when the physicians are familiar with each other” and that “an acute care rehabilitation hospital affiliated with The Villages Regional Hospital

ensures better medical/surgical care than can be provided at a freestanding rehabilitation hospital”. Dr. Maiello emphasizes that the senior population “need and deserve an acute rehabilitation hospital

within their community”. He also states that Central Florida Health Alliance has been successful for getting applicable Medicaid approval for

rehabilitative services in the current situation and that the same efforts will likely be successful for the new project.

Dr. Maiello states that while HealthSouth will offer advanced/latest equipment, “a lot of this equipment is inappropriate or unnecessary

during acute rehabilitation hospitalization”. He asserts that most people who get inpatient rehabilitation prior to discharge home will do so in a sub-acute skilled nursing facility and that this is appropriate but that for

those who are appropriate for inpatient hospital rehabilitation this latter scenario “can be disastrous for their outcome”.

David Sustarsic MD, FACS, certified by the American Board of Surgery and Jose Rosado, MD, FACC, Clinical Assistant Professor, University of

Florida, Florida Heart and Vascular Center, state they believe the project


15

will lead to better health care outcomes, with better medical and functional recovery and shorter stays for their patients. They also

indicate the project will reduce set-backs, medical complications and overall stress that is more likely when an acute care patient in need of

inpatient rehabilitation is transported to another location for inpatient rehabilitation.

Marc Schwartzber, MD, Chief of Surgery, Leesburg Regional Medical Center and The Villages Regional Hospitals’ Director of Vascular and Interventional Radiology, states the project should “provide care over a

more seamless continuum from acute care to independent living”. Dr. Schwartzberg also states that with his two hospitals “already

electronically connected”, this will allow for “instantaneous access to medical information and reduction if not elimination of costly redundant services”.

Two neurologists - Alexander Smirnoff, MD and William Hammesfahr,

MD emphasize the value of continuity of care that the project would provide. Dr. Smirnoff states The Villages residents are golf cart dependent and do not have access to transportation when their loved one

is in a facility out of the area. He also states an advantage to the project is that it will have “needed professionals who are on-staff and on-premises with services readily available to the patient”. Dr. Hammesfahr

states that he has been a chief reviewer for projects of the National Institute of Disability and Rehabilitation Research (NIDRR) and that he

has been identified by the Florida Department of Health as “…the first physician…to restore deficits (injuries) caused by stroke”. The reviewer notes that the NIDRR is a component of the U.S. Department of

Education's Office of Special Education and Rehabilitative Services and is the main federal agency that supports applied research, training and development to improve the lives of individuals with disabilities10. Per

Dr. Hammesfahr, the applicant has the resources and commitment to be successful in the proposed project.

Nicholas Przystawski, DPM, Central Florida Foot Care, PA, indicates that as a podiatrist, he is aware that medically “fragile” patients would greatly

benefit from and receive more seamless care, through this project.

M. Bryan Day, Senior Vice President, Promise Healthcare, Inc., indicates that his organization’s market is experiencing “a considerable increase in patients who require hospitalization for stroke, neurological disorders,

neurosurgery, and complex orthopedic issues”. Per Mr. Day, the project would provide “another vital part of the continuum of care” to the area.

10 Source: http://www2.ed.gov/about/offices/list/osers/nidrr/index.html?src=mr

http://www2.ed.gov/about/offices/list/osers/nidrr/index.html?src=mr


16

Dolly McCranie, BSN, RN, ACM, Director of Case Management, The Villages Regional Hospital states she has 20 years of case management

experience. She indicates that residents of The Villages “are not willing/able to have their loved ones moved to Leesburg or Ocala for their

acute rehabilitation needs”. Per Ms. McCranie this is for many reasons but primarily because “the patients do not want their spouse driving after dark, dealing with challenging traffic and many drive only by golf

cart”. She also states “the Villagers do not want to leave the Villages, they feel safe here”. Ms. McCranie further indicates that area residents “often choose skilled nursing facilities due to this barrier”.

Joe Shipes, Executive Vice President, Leesburg Partnership states he has

been in the Leesburg area for over 18 years and that the level and quality of care provided by the CFHA “is unparalleled”. The reviewer notes that the Leesburg Partnership is an association of residents, government,

business people and resources that are focused on the goal of aiding in the physical, economic, and social revitalization of the Leesburg

Community11. H. D. Robuck, Jr., President, Ro-Mac Lumber and Supply, Inc. states

that he is a central Florida business owner, attorney and life-long resident of Lake County. Mr. Robuck concludes that The Villages Regional Hospital has delivered high quality, compassionate and

affordable health care for over 10 years and the project “is a vital part of that continuity of service to help meet rising health care demands” in the

area. The remaining 22 support letters are primarily in a form letter variety.

Themes or reasons to promote the project are generally consistent with those expressed in the support letter by Ms. Dolly McCranie.

C. PROJECT SUMMARY

HealthSouth Rehabilitation Hospital of Sumter/Lake County, LLC (CON application #10196), also referenced as HRHSLC or HealthSouth,

proposes to establish a new 50-bed inpatient comprehensive medical rehabilitation (CMR) hospital, on a 7.5 acre site in northern Sumter

County, Florida. The applicant indicates the project is scheduled to begin operations in early 2016.

11 Source: Leesburg Partnership website at http://www.leesburgpartnership.com/history.html.

http://www.leesburgpartnership.com/history.html


17

The total project cost is estimated at $25,855,430. The project involves 53,192 gross square feet (GSF) of new construction at a construction cost

of $12,207,933. Project cost includes land, building, equipment, project development, and start-up costs.

The applicant poses the following 10 reasons to warrant project approval.

The existing CMR provider in the subdistrict, Leesburg Regional Medical Center North (LRMCN), offers only a minimal program in an

old facility that is perceived as a nursing home.

Because of the inadequacies of the current CMR program, the

subdistrict has abnormally low CMR use and retention rates.

An unexpectedly low percentage of CMS 13 patients are referred to

CMR and an exceptionally high percentage of CMS 13 patients are referred to skilled nursing facilities (SNFs) because of the perception that the LRMCN is not materially different than a SNF rehabilitation

program.

LRMC does not provide adequate financial access to CMR services to

Medicaid and charity care patients, relative to HealthSouth’s Florida hospitals.

Shifting patients from SNF beds to a top quality CMR program will relieve pressure on nursing homes. The nursing bed moratorium and

the growing elderly population in the area will require SNF beds to be used to provide more nursing care and less rehabilitation care in the future. This is not so much an issue in The Villages area as there are

two newly opened community nursing homes (The Villages Rehabilitation and Nursing Center (120 beds in D3-7) opened April

11, 2013 and The Club Health & Rehabilitation Center at The Villages (60-beds in Marion County D3-4) licensed July 13, 2012. In addition, Freedom Pointe at The Villages Rehabilitation & Healthcare Centre is

a 72-bed sheltered nursing home that opened October 8, 2009 and is able to serve community residents. The Villages is also able to add a

new nursing home by exemption pursuant to s. 408.036(3)(d) Florida Statutes.

HealthSouth as a specialized CMR provider has the advantage of

being focused solely on providing CMR services. HealthSouth’s size and focus makes it preferable to smaller CMR units in general

hospitals or multi-purpose specialty hospitals for efficiency, technology, space configuration, staffing and patient outcomes.

HealthSouth has a history of providing top quality CMR services in

Florida markets and increasing CMR use rates to appropriate levels.

Central Florida Health Alliance (CFHA) and its sister facilities (LRMCN

and the applicant The Villages Regional Hospital) has never shown a true commitment to implementing a top quality CMR program, despite

having provided CMR services for 20 years.


18

The Agency cannot rely on CFHA to follow through on its

commitments. CFHA has received and abandoned two CONs for major projects. HealthSouth, on the other hand, has promptly implemented each CON if has received from the Agency.

There is sufficient demand for CMR services in the subdistrict, given appropriate used rates and retention rates to fill LRMCN’s 22 beds

and HealthSouth’s proposed 50 beds at 85 percent capacity. HRHSLC will not adversely impact LRMCN’s CMR unit if LRMCN uses the two

years between the time HealthSouth receives a CON and the date HRHSLC opens to improve its existing program. Any adverse impact HRHSLC has on LRMCN will be due to the relative scope and

capabilities of the programs as perceived by physicians, patients and families.

Additionally, on pages 31-33 of CON application #10196, eight reasons are offered as to why, in the current comparative review of this batch

cycle, HealthSouth is “superior and should be the applicant approved”.

The applicant proposes the following conditions to CON approval on the application’s Schedule C.

C.2. Percent of a particular population subgroup to be served.

The particular population groups to be served are the Medicaid population qualifying for charity care as defined by Florida statutes.

1. As a condition of approval of this application, the hospital will

provide a minimum of 2.5 percent of patient days to the

combination of Medicaid patients and uninsured patients who meet the definition of charity care patients under Florida Statutes. HealthSouth will work with acute care hospitals, state human

service agencies and private organizations to identify uninsured persons in need of CMR inpatient services in District 3.

To be reported in our annual report to the Agency for Health Care Administration.

C.3. Special Programs

2. The hospital will institute a stroke rehabilitation program when it opens and will obtain specialty certification from the Joint

Commission in hip fracture rehabilitation within the first three years of operation.

To be measured by a letter from the Joint Commission indicating stroke specialty certification and included in our annual report to

the Agency for Health Care Administration in year three.


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3. The hospital will institute a hip fracture rehabilitation program

when it opens and will obtain specialty certification from the Joint Commission in hip fracture

To be measured by a letter from the Joint Commission indicating hip fracture specialty certification and included in our annual

report to the Agency for Health Care Administration in year three. 4. The hospital will provide an auto ambulator and the other

equipment described below as part of technology package when the hospital opens. If technological change makes better equipment

available by the time of purchase the hospital may substitute more modern equipment that serves the same functions.

Auto Ambulator

ReoGo Ambulator

Balance System SD

Saebo Hand Unit

VitalStim

Bioness

Adnodyne Unit.

To be measured by a letter confirming the acquisition on the above equipment or its technical equivalent in our annual report to the Agency for Health Care Administration.

C.4. Other Conditions

5. The hospital will be accredited by the Joint Commission HRHSLC will seek accreditation from the Joint Commission accreditation

within the first year of operation.

To be measured on our annual report to the Agency for Health

Care Administration.

6. The hospital will provide, at no charge to the community, education programs on disability awareness and community reentry to improve the independence and quality of life of persons

with disabilities and their caretakers. The hospital will make existing conference space available to support group meetings and for community education programs developed by HS and others.


20

To be measured by a list of all community education programs held that relate to this condition. The list will show the title of the

course, the instructors, the dates of the courses and the intended audience and sill be included in our annual report to the Agency

for Health Care Administration.

7. HealthSouth will provide $10,000 annually for three years

($30,000 total commitment) for scholarships for nursing or allied health professionals at educational institutions in the service area. In order to qualify for scholarships, students will have to meet the

following criteria:

Must be a Subdistrict 3-7 resident

Must be registered in a degree program in nursing or a

rehabilitation therapy

Must maintain a 3.0 GPA.

To be measured by documentation on the progress of the

scholarship program in our annual report to the Agency for Health Care Administration.

8. HealthSouth will provide $5,000 annually for three years ($15,000 total commitment) to sponsor community education programs

jointly with disability advocacy groups located in the service area. To be measured by documentation of the community education

programs in our annual report to the Agency for Health Care Administration.

NOTE: Section 408.043 (4), Florida Statutes, prohibits accreditation by any private organization as a requirement for the issuance or

maintenance of a certificate of need, so Joint Commission accreditation (Conditions #2, #3 and #5) will not be cited as conditions to approval. Should the project be approved, the applicant’s proposed conditions

would be reported in the annual condition compliance report as required by Rule 59C-1.013 (3) Florida Administrative Code.

The Villages Tri-County Medical Center, Inc. d/b/a The Villages Regional Hospital (CON application #10197) proposes to establish a

new 30-bed comprehensive medical rehabilitation (CMR) unit in Sumter County, Florida. The Villages Regional Hospital is a Class I general acute care hospital with a total of 223 licensed acute care beds. The facility

has notification #120030 for a 100-acute care bed addition; however, the applicant indicates that it will add the 30 CMR beds in this CON

application and 54 acute care beds to its North Tower addition. The hospital provides Level I adult cardiovascular services and is a designated primary stroke center.


21

The total project cost is estimated at $8,756,437. The total project

involves 28,597 gross square feet (GSF), including 27,217 GSF of new construction and 1,380 GSF of renovation, at a total construction cost of

$5,561,466. Project cost includes building, equipment, project development, and start-up costs.

The applicant poses the following seven “not normal” or special circumstances to warrant project approval.

The number of CMR discharges per 1,000 in District 3 and Sumter County is below the average discharge rate for Florida.

The percentage of acute care discharges referred to CMR services in District 3 and Sumter County is below the statewide average.

This lower percentage of referrals to CMR may be explained by the fact that District 3 residents, generally, and Sumter and Lake

residents, specifically, are referred to Medicare SNFs at rates above the statewide average.

In spite of a new provider opening 40 additional beds in 2012, the CMR beds in District 3 had the second highest occupancy rate among

all of Florida’s service districts in 2012, with a rate of 74.7 percent.

There is growing recognition within the health care industry, and

implicitly recognized by the Agency’s recent approval of several new CMR programs, that CMR services should be available on a local rather than a regional basis.

The approval of TVRH’s proposed CMR program will not have a significant impact on existing providers.

TVRH has the highest Medicare mix of patients of any acute care hospital in District 3 (82.3 percent).

The applicant proposes the following conditions to CON approval on the

application’s Schedule C. 1. The proposed facility will be a distinct part CMR unit located

within existing space currently being developed in The Villages Regional Hospital, Villages, Florida.

Compliance with the condition shall be demonstrated by furnishing AHCA with a copy of the licensure documentation that

shows the physical location of the CMR unit.

2. TVRH will provide a minimum of 1.3 percent of its annual CMR

patient days to the combination of Medicaid, Medicaid HMO and charity (including self-pay) patients.


22

Compliance with the condition shall be measured as follows: inpatient days specific to the CMR unit shall be reported by payer

category, including at a minimum Medicaid, Medicaid HMO and charity/self-pay. Total inpatient days specific to the CMR unit

shall be reported also. The inpatient days applicable to each payer category shall be divided by the total and the result multiplied by 100 to arrive at an inpatient day percentage for each payer. The

sum of the percentages for Medicaid, Medicaid HMO and charity patients shall be summed to arrive at a figure that can be compared to the condition.

3. TVRH will seek CARF accreditation for its CMR program 12

months after serving the first patient in the CMR unit.

Compliance with this condition shall be demonstrated by

furnishing AHCA with an abridged copy of its application for CARF accreditation and subsequently, the CARF accreditation.

4. TVRH will institute a stroke rehabilitation program upon opening

its CMR program and will maintain its specialty certification in

stroke rehabilitation from the Joint Commission.

TVRH will include a copy of the certificate received from the Joint

Commission for its stroke rehabilitation program.

5. TVRH will provide equipment described below as part of the rehabilitative technology that will be available at TVRH when its CMR program opens. TVRH may substitute different equipment of

equal or better capability. a. Lite Gait

b. Mobile Arm Support c. Bioness

d. Recumbent Cross Training e. Rehab Cycle f. Upper Body Exerciser

g. Stand-in Table h. Shuttle Balance

i. VitalStim j. Sona-Speech software k. Automobile Transfer Simulator (Mock Car)

l. Golf Car Transfer Training m. Rickshaw.


23

The hospital will provide copies of printed information documenting the technology, consistent with the listing in the

above condition statement, which has been purchased and is in service at TVRH.

6. TVRH will provide to area hospitals and nursing homes, a liaison

to provide educational programs on CMR clinical specialization on

no less than a quarterly basis. TVRH will prepare a list of all community education programs held

that relate to this condition.

a. The list will show the title of the course, the instructors, the dates of the courses and the intended audience.

b. The hospital will include in the report the curricula vita of

any person filling the position of care manager/outreach coordinator during the calendar year and their dates of

service. The report will also include a description of his or her activities throughout the year.

c. The hospital will prepare a list of all meeting held in the

hospital that relate to this condition. The list will show the nature of the meeting, the group holding the meeting, and the dates of the meeting.

7. TVRH will assure the system wide McKesson Electronic Health

Record (EHR) will be integrated and available for all CMR patients.

The hospital will provide an Affidavit attesting to compliance with

this standard signed by the appropriate officer of the applicant, as well as documents which support use of a system-wide EHR12, such as invoices, user manuals, or other documents verifying

compliance with this condition. Community education programs held that relate to this condition.

8. TVRH will offer comprehensive outpatient rehabilitation programs

and services.

The hospital will provide a copy of the admission policy for the

outpatient rehabilitation program, a program description and a count of the patients served each year.

12 The reviewer notes that the applicant incorrectly indicated “HER” in reference to EHR.


24

Note: Section 408.043 (4), Florida Statutes, prohibits accreditation by any private organization as a requirement for the issuance or

maintenance of a certificate of need, so CARF and Joint Commission accreditation (Conditions #3 and #4, respectively) will not be cited as

conditions to approval. The reviewer notes the applicant states the provision of annual compliance reports to the Agency consistent with all requirements of Rule 59C-1.018 (3)(a), Florida Administrative Code.

However, should the project be approved, the applicant’s proposed conditions would be reported in the annual condition compliance report as required by Rule 59C-1.013 (3) Florida Administrative Code.

D. REVIEW PROCEDURE

The evaluation process is structured by the certificate of need review

criteria found in Section 408.035, Florida Statutes, rules of the State of Florida, Chapters 59C-1 and 59C-2, Florida Administrative Code, and

local health plans. These criteria form the basis for the goals of the review process. The goals represent desirable outcomes to be attained by successful applicants who demonstrate an overall compliance with the

criteria. Analysis of an applicant's capability to undertake the proposed project successfully is conducted by evaluating the responses and data provided in the application, and independent information gathered by the

reviewer.

Applications are analyzed to identify strengths and weaknesses in each proposal. If more than one application is submitted for the same type of project in the same district (subdistrict), applications are comparatively

reviewed to determine which applicant(s) best meets the review criteria. Rule 59C-1.010(2) (b), Florida Administrative Code, prohibits any

amendments once an application has been deemed complete. The burden of proof to entitlement of a certificate rests with the applicant.

As such, the applicant is responsible for the representations in the application. This is attested to as part of the application in the Certification of the applicant.

As part of the fact-finding, the consultant, Steve Love analyzed the

application with consultation from the financial analyst, Eric West, Bureau of Central Services, who reviewed the financial data and Said Baniahmad of the Office of Plans and Construction, who reviewed the

application for conformance with the architectural criteria.


25

E. CONFORMITY OF PROJECT WITH REVIEW CRITERIA

The following indicate the level of conformity of the proposed project with the criteria and application content requirements found in Florida

Statutes, Sections 408.035, and 408.037 and applicable rules of the State of Florida, Chapter 59C-1 and 59C-2, Florida Administrative Code.

1. Fixed Need Pool

a. Does the project proposed respond to need as published by a fixed

need pool? ss. 408.035(1) (a), Florida Statutes. Rule 59C-1.008(2),

Florida Administrative Code and Rule 59C-1.039(5), Florida Administrative Code.

In Volume 39, Number 140, dated July 19, 2013 of the Florida Administrative Register, a fixed need pool of zero beds was published for

CMR beds in District 3 for the January 2019 planning horizon.

District 3 has 198 licensed and zero approved CMR beds. HealthSouth Rehabilitation Hospital of Marion County, LLC (CON #10097) d/b/a HealthSouth Rehabilitation Hospital of Ocala, was licensed for 40 CMR

beds, effective November 27, 2012. During CY 2012, District 3 experienced 74.72 percent CMR bed utilization. The applicants are applying outside of the fixed need pool.

b. According to 59C-1.039 (5)(d) of the Florida Administrative Code,

need for new comprehensive medical rehabilitation inpatient services shall not normally be made unless a bed need exists according to the numeric need methodology in paragraph (5)(c) of

this rule. Regardless of whether bed need is shown under the need formula in paragraph (5)(c), no additional comprehensive medical rehabilitation inpatient beds shall normally be approved for a

district unless the average annual occupancy rate of the licensed comprehensive medical rehabilitation inpatient beds in the district

was at least 80 percent for the 12-month period ending six months prior to the beginning date of the quarter of the publication of the fixed bed need pool.

As shown in the table below, District 3’s 198 licensed CMR beds

experienced an occupancy rate of 74.72 percent during the 12-month period ending December 31, 2012. District 3’s last five years of utilization is illustrated below.


26

Comprehensive Medical Rehabilitation Bed Utilization - District 3

Calendar Years 2008 - 2012 Facility Beds CY 2008 CY 2009 CY 2010 CY 2011 CY 2012

Shands Rehabilitation Hospital 40 73.72% 70.48% 69.05% 75.60% 78.52%

HealthSouth Rehabilitation Hospital of Ocala* 40 N/A N/A N/A N/A 35.43%

Seven Rivers Regional Medical Center** 16 N/A 34.70% 59.23% 57.93% 65.25%

Leesburg Regional Medical Center-North*** 22 85.12% 87.56% 71.81% 63.80% 59.45%

HealthSouth Rehab Hospital of Spring Hill**** 80 91.51% 88.35% 79.35% 74.26% 80.79%

District 3 Total 198 85.05% 79.28% 73.67% 71.49% 74.72% Source: Florida Hospital Bed Need Projections & Service Utilization by District for July 2009-2013. Notes: *HealthSouth Rehabilitation Hospital of Ocala’s 40-bed CMR hospital was licensed November 27, 2012. **Seven Rivers Regional Medical Center’s 16-bed CMR unit was licensed May 27, 2009.

***Leesburg Regional Medical Center – North added seven beds effective March 23, 2010. ****HealthSouth Rehab Hospital of Spring Hill added 10 beds effective October 7, 2009.

The map below shows current District 3 CMR providers and CON

application #10197’s proposed locations. HealthSouth (CON application #10196) states a northern Sumter County location, in or near The

Villages, Florida area but provides no other geographic details.


27

District 3 Licensed Comprehensive Medical Rehabilitation Facilities and

The Villages Regional Hospital/CON application #10197

Source: Microsoft® MapPoint® 2013.

Note: HealthSouth Rehabilitation Hospital of Sumter/Lake County, LLC (CON application

#10196) is to be located in northern Sumter County, in or near The Villages, Florida area

but no exact location is offered.


28

MapQuest directions obtained September 17, 2013 indicate that the existing facilities are located within the following approximate driving miles/driving

times (in minutes) from the applicants and each other:

Driving Distance in Miles—Existing Facilities and Proposed Sites

Facility

The

Villages

Regional Hospital

HealthSouth

Rehabilitation

Hospital of Ocala

HealthSouth

Rehabilitation

Hospital of Spring Hill

Leesburg Regional Medical

Center North

Seven Rivers

Regional

Medical Center

Shands

Rehab Hospital

The Villages Regional Hospital

(CON application #10197)

22.66

miles

56.45

miles

15.18

miles

48.25

miles

57.26

miles

HealthSouth Rehabilitation Hospital of Ocala

22.66 miles

59.30 miles

33.69 miles

36.30 miles

37.84 miles

HealthSouth Rehabilitation Hospital of Spring Hill

56.45 miles

59.30 miles

56.30 miles

35.06 miles

88.87 miles

Leesburg Regional Medical Center

North

15.18

miles

33.69

miles

56.30

miles

53.45

miles

68.05

miles

Seven Rivers Regional Medical Center

48.25 miles

36.30 miles

35.06 miles

53.45 miles

58.32 miles

Shands Rehabilitation Hospital

57.26 miles

37.84 miles

88.87 miles

68.05 miles

58.32 miles

Source: MapQuest.

Note: HealthSouth Rehabilitation Hospital of Sumter/Lake County, LLC (CON application #10196) indicates that the facility will be in northern Sumter County but no exact location is offered.

Driving Distance in Minutes (Min.)—Existing Facilities and Proposed Sites

Facility

The

Villages Regional

Hospital

HealthSouth

Rehabilitation Hospital of

Ocala

HealthSouth

Rehabilitation Hospital of

Spring Hill

Leesburg Regional Medical Center

North

Seven Rivers

Regional Medical

Center

Shands Rehab

Hospital

The Villages Regional Hospital (CON application #10197)

36

min. 76

min. 24

min. 66

min. 79

min.

HealthSouth Rehabilitation Hospital of Ocala

36 min.

83

min. 57

min. 53

min. 42

min.

HealthSouth Rehabilitation Hospital

of Spring Hill

76

min.

83

min.

70

min.

44

min.

118

min.

Leesburg Regional Medical Center North

24 min.

57 min.

70 min.

75

min. 93

min.

Seven Rivers Regional Medical Center

66 min.

53 min.

44 min.

75 min.

68

min.

Shands Rehabilitation Hospital

79

min.

42

min.

118

min.

93

min.

68

min.

Source: MapQuest. Note: HealthSouth Rehabilitation Hospital of Sumter/Lake County, LLC (CON application #10196) indicates that the

facility will be in northern Sumter County but no exact location is offered.

As shown in the two tables above, the closest CMR providers to The

Villages Regional Hospital (CON application #10197) are Leesburg Regional Medical Center North (15.18 miles/24 minutes) and HealthSouth Rehabilitation Hospital of Ocala (22.66 miles/36 minutes),

respectively.

The table below shows the total number of Sumter County adult residents discharged from a Florida CMR provider (regardless of whether a CMR freestanding or an in-hospital CMR distinct unit) in calendar year

2012.


29

Sumter County Adult Residents Discharged from CMR Providers

Calendar Year 2012 Facility Name

Facility District/ County

Total Discharges

Percent Total

Discharges

Total Patient Days

Percent Patient Days

Leesburg Regional Medical Center-North 3/Lake 45 31.47% 625 29.48%

Leesburg Regional Medical Center* 3/Lake 36 25.17% 440 20.75%


3/Hernando 28 19.58% 530 25.00%

Shands Rehab Hospital 3/Alachua 18 12.59% 312 14.72%

Other District 3 Facilities 4 2.80% 47 2.22%

Total District 3 Facilities 131 91.61% 1,954 92.17%

Non-District 3 Facilities 12 8.39% 166 7.83%

Total All Facilities 143 100.0% 2,120 100.0% Source: Florida Center for Health Information and Policy Analysis, CY 2012 database—CMR. MS-DRGs 945 and 946. Note: *Leesburg Regional Medical Center is not a licensed inpatient CMR provider, but Leesburg North is under the same

Medicare provider number.

The reviewer notes that, in CY 2012, according to data from the Florida Center for Health Information and Policy Analysis:

Of the 143 adult Sumter County residents discharged from CMR

providers, 131 (91.61 percent) were discharged from a District 3 provider and 12 (8.39 percent) were discharged from a non-District 3

CMR provider. The out-migration was primarily to District 4’s Brooks Rehabilitation Hospital (four patients/2.80 percent) and District 7’s Orlando Regional Medical Center (three patients/2.10 percent).

The table below shows the total number of Lake County adult residents

discharged from a Florida CMR provider (regardless of whether a CMR freestanding or an in-hospital CMR distinct unit) in calendar year 2012.

Lake County Adult Residents Discharged from CMR Providers-Calendar Year 2012 Facility Name

Facility District/ County

Total Discharges

Percent Total

Discharges

Total Patient Days

Percent Patient Days

Leesburg Regional Medical Center* 3/Lake 135 32.53% 1,813 31.92%

Leesburg Regional Medical Center-North 3/Lake 93 22.41% 1,244 21.90%

Orlando Regional Medical Center 7/Orange 69 16.63% 917 16.14%

Winter Park Memorial Hospital 7/Orange 35 8.43% 496 8.73%

Shands Rehab Hospital 3/Alachua 21 5.06% 312 5.49%


3/Hernando 17 4.10% 243 4.28%

Florida Hospital Orlando 7/Orange 15 3.61% 231 4.07%

Total District 3 Facilities** 267 64.34% 3,622 63.77%

Total District 7 Facilities 119 28.67% 1,644 28.94%

All Other District Facilities 29 6.99% 414 7.29%

Total All Facilities 415 100.0% 5,680 100.0% Source: Florida Center for Health Information and Policy Analysis, CY 2012 database—CMR. MS-DRGs 945 and 946.

Note: *Leesburg Regional Medical Center is not a licensed inpatient CMR provider, but Leesburg North is under the same Medicare provider number.

** HealthSouth Rehabilitation Hospital of Ocala reported one patient discharge with a 10 day length of stay.


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The reviewer notes that, in CY 2012, according to data from the Florida Center for Health Information and Policy Analysis:

Of the 415 adult Lake County residents discharged from CMR

providers, 267 (64.34 percent) were discharged from a District 3 provider, 119 (28.67 percent) were discharged from a District 7

provider and 29 (6.99 percent) were discharged from all other ( non-District 3 and non-District 7) CMR providers. This indicates out-migration of 35.66 percent for the period, primarily to District 7’s

Orlando Regional Medical Center (at 16.63 percent), Winter Park Memorial Hospital (at 8.43 percent) and Florida Hospital-Orlando (at 3.61 percent).

c. Other Special or Not Normal Circumstances

HealthSouth Rehabilitation Hospital of Sumter/Lake County, LLC (CON application #10196) states that there has not been a published

need for CMR beds in the last seven years and because existing CMR providers can add up to 10 beds without full CON review, if they are

operating at or over 80 percent capacity, there will likely never be a bed need projected for a district (a similar argument is posed by CON application #10197). The applicant states that the focus for a CON

should be based on the existence of a distinct medical market for a CMR service, which the applicant indicates exists in Sumter and Lake Counties and largely to the exclusion of the remainder of District 3.

HealthSouth contends that the following “not normal circumstances” merit project approval:

Because LRMCN is a minimal CMR program, the subdistrict has an

abnormally low CMR use rate.


abnormally low retention rate of CMR discharges.


abnormally low percentage of CMS 13 patients referred to CMR and an abnormally high percentage of CMS 13 patients referred to SNF.

Because of the abnormally low percentage of Medicaid (0.6 percent)

and charity care (0.0 percent) patients the LRMCN program admitted in 2012, there is a lack of financial access to CMR services for

residents of the subdistrict.

HealthSouth provides the three year average CMR use rates (2010-2013), CMR destination patterns (2012) of Subdistrict 3-7 CMR patients, CMR patient retention rates and compares the CMS 13 patient CMR

discharges statewide to Subdistrict 3-7, and contends these factors support the need for its project (see the tables below for additional on these items).


31

First, HealthSouth indicates an average CMR use rate of 1.7 per 1,000 adult residents (age 18 plus) for Lake and Sumter Counties, over the

three-year period ending 2012. This use rate is compared to a stated 2.4 use rate for the same age cohort, statewide, when compared to non-CMR

and the full universe of CMR categories (#1 through #4 in the figure below). Again, using the same age group, statewide population and time period, HealthSouth indicates the highest use rate (3.5) for freestanding

CMR operations. See the figure below.

Three-Year Average CMR Use Rates

Three-Year Average CMR Use Rate Per 1,000 Pop

2010, 2011 and 2012

County 18-64 65+ Total 18+

Lake 0.7 4.2 1.8

Sumter 0.6 2.5 1.6

Subdistrict 3-7 0.7 3.6 1.7

Category 18-64 65+ Total 18+

1. No CMR 0.7 3.9 1.4

2. Hospital Unit Only 0.7 4.7 1.6

3. Freestanding Only 1.0 13.0 3.5

4. Freestanding & Unit 1.1 11.3 3.2

Florida Resident Total 0.9 7.6 2.4

Freestanding (with or w/o unit 1.1 11.9 3.3 Source: CON application #10196, Figure 20, page 39.

Based on the above figure, the reviewer notes the stated 1.7 use rate for Lake and Sumter County residents is slightly higher than the stated

“hospital unit only” rate of 1.6, indicating Lake and Sumter County adult residents had a slightly higher use rate over the past three years, overall.

HealthSouth states that Subdistrict 3-7 has the second lowest CMR use rate (1.7) of any subdistrict statewide with a freestanding CMR program,

with the lowest use rate (1.3) being in Subdistrict 3-2 and a statewide average use rate of 3.2, in 2012.

Second, HealthSouth indicates the subdistrict, as a whole and Lake County in particular, has an abnormally low patient retention rate for CMR services (56 percent) compared to a reported statewide average (94

percent) in 2012, for subdistricts with a CMR program in a specialty hospital. The next lowest patient retention rate for CMR services, in the

same cohort, was 80 percent, in Subdistrict 1-2. Numerically for the same period, HealthSouth states that of 562 total Subdistrict 3-7 resident CMR discharges, 313 remained in the subdistrict for their CMR

care (56 percent). HealthSouth states that for the same period, statewide, subdistricts with a freestanding CMR facility had 13,990

Florida resident CMR discharges. Of these 13,990 CMR discharges, 13,042 remained in their respective subdistrict for their CMR care. See the figure below.


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Subdistricts with Freestanding CMR Programs, CY 2012

Facility Subdistrict

with Freestanding

CMR

Counties

CMR

Discharges Remaining in

Subdistrict

Total

Resident CMR

Discharges

Percentage of Residents Retained for

CMR

Services

1-2 Okaloosa, Walton 293 367 80%

2-1

Bay, Calhoun, Franklin, Gulf, Holmes, Jackson, Washington

1,328

1,411

94%

2-2

Gadsden, Jefferson, Leon, Liberty, Madison, Taylor, Wakulla

1,043

1,098

95%

3-2

Alachua, Bradford,

Dixie, Gilchrist, Lafayette, Levy, Union

377

408

92%

3-6 Hernando 1,062 1,095 97%

3-7 Lake, Sumter 313 562 56%

4-1, 4-2, 4-3

Baker, Clay, Duval, Nassau, St. Johns

2,553

2,601

98%

5-3, 5-4 Pinellas 2,064 2,176 95%

7-1 Brevard 1,291 1,426 91%

8-6 Sarasota 1,734 1,823 95%

9-1 Indian River 984 1,023 96%

10 Broward 4,444 4,682 95%

11-1 Miami-Dade 5,639 5,967 95%

Total 13,042* 13,990** 94%*** Source: CON application #10196, Figure 23, page 43. * The reviewer notes the arithmetic total of this column is 23,125. ** The reviewer notes the arithmetic total of this column is 24,639.

*** The reviewer notes 13,042/13,990=93.22 percent.

HealthSouth further indicates that for CY 2012, Subdistrict 3-7 patient

destinations for CMR care were to the following individual counties, most to least – Lake, Orange, Hernando and Alachua. HealthSouth also offers

the CMR provider facility, patient county of origin and the percentage of the CMR discharged population in the table below.


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CMR Patient Destination for Lake and Sumter County Residents

Hospital

County Lake

County Sumter County

Subdistrict 3-7

Percent of Subdistrict

LRMC* Lake 231 82 313 56%

Orlando Regional Medical Center

Orange

69

3

72

13%


Hernando

16

28

44

8%

Shands Rehab Hospital Alachua 21 18 39 7%

Winter Park Memorial Hospital Orange 35 2 37 7%

Florida Hospital Orange 16 0 16 3%

All Other 30 8 38 5%

Total 418 141 559** 100%*** Source: CON application #10196, Figure 24, page 44. * Leesburg Regional Medical Center is not a licensed inpatient CMR provider, but, Leesburg Regional has

the same Medicare provider number as Leesburg North.

** The reviewer notes the applicant’s total was 562 in Figure 23 but is 559 in Figure 24. *** The reviewer notes the arithmetic calculation is 99 percent, but reaches 100 percent likely due to rounding.

Third, HealthSouth indicates the percentage of CMS 13 patients referred to CMR from general hospitals in Subdistrict 3-7 (a rate of 3.0 percent) is

abnormally low when compared to other subdistricts with freestanding CMR programs (a rate of 11.0 percent). The applicant also indicates that correspondingly, the percentage of patients discharged to SNF is

abnormally high. See the figure below.

Percent of CMS 13 Patients Discharged to CMR from Facilities in Subdistricts with a Freestanding CMR Provider, CY 2012

Subdistricts

with Freestanding

CMR

Counties

CMS 13

Patients Discharged

to CMR

CMS 13 Patients

Percentage of CMS 13

Patients Discharged

To CMR

1-2 Okaloosa, Walton 172 1,485 12%

2-1 Bay, Calhoun, Franklin, Gulf, Holmes, Jackson, Washington

413

2,195

19%

2-2 Gadsden, Jefferson, Leon, Liberty, Madison, Taylor, Wakulla

276

2,546

11%

3-2 Alachua, Bradford, Dixie, Gilchrist, Lafayette, Levy, Union

462

4,449

10%

3-6 Hernando 255 1,540 17%

3-7 Lake, Sumter 116 3,380 3%

4-1, 4-2, 4-3

Baker, Clay, Duval, Nassau, St. Johns

839

9,754

9%

5-3, 5-4 Pinellas 651 8,585 8%

7-1 Brevard Excluded due to Known Coding Issues

8-6 Sarasota 549 3,651 15%

9-1 Indian River 315 1,473 21%

10 Broward 1,331 11,620 11%

11-1 Miami-Dade 2,079 16,703 12%

Total 7,458 67,381 11% Source: CON application #10196, Figure 25, page 45.


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As for LRMCN’s CMR payer mix, HealthSouth indicates that for CY 2012,

this percentage was low, with 0.6 percent being attributed to Medicaid/Medicaid managed care, 0.0 percent to charity/self-pay and

the largest single percentage, 92.7 percent, to Medicare/Medicare managed care. HealthSouth states recognition that charity care varies depending on the demographics of the community but that its history of

charity and Medicaid care in Florida illustrates its commitment to meeting the needs of its patients.

Projected CMR Bed Demand and Utilization

If the project is approved, HealthSouth anticipates the subdistrict’s CMR use rate will increase substantially to about the average for other districts with freestanding CMR facilities. More specifically, HealthSouth

expects the project would generate sufficient admissions and patient days to support an additional 51 CMR beds at 85 percent occupancy

now, and 70 beds by 2018. See the figure below.

Subdistrict 3-7 CMR Bed Need

2012 2018 18-64 65+ Total 18+ 18-64 65+ Total 18+

County CMS Discharges at Freestanding Use Rate

Lake 175 867 1,042 200 1,048 1,248

Sumter 48 549 597 52 769 821

Sub District 3-7 224 1,416 1,639 252 1,817 2,069

County CMS Patient Days at Freestanding Use Rate

Lake 2,419 11,965 14,384 2,758 14,466 17,224

Sumter 668 7,572 8,240 717 10,608 11,325

Sub District 3-7 3,087 19,537 22,624 3,475 25,074 28,549

County Average Daily Census (ALOS = 13.8)

Lake 7 33 39 8 40 47

Sumter 2 21 23 2 29 31

Sub District 3-7 8 54 62 10 69 78

County Bed Need at 85% Occupancy

Lake N/A N/A 46 N/A N/A 56

Sumter N/A N/A 27 N/A N/A 37

Sub District 3-7 N/A N/A 73 N/A N/A 92

CMR Beds at LRMC* N/A N/A 22 N/A N/A 22

Sub District 3-7 N/A N/A 51 N/A N/A 70 Source: CON application #10196, Figure 27, page 48.

HealthSouth states that its assumptions consider other nearby existing non-Subdistrict 3-7 CMR providers but do not assume any in-migration.

The applicant estimates that the capture of approximately 72 percent of the CMR patients projected at the stated average freestanding hospital

use rate, would allow both HealthSouth and LRMCN to reach 85 percent occupancy.


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HealthSouth indicates that its experience in the Marion County market is

evidence of what happens when “a top quality CMR specialty facility opens in a medical market that previously relied heavily on SNF-based

rehabilitation services”. The applicant reports that between December 2012 and September 2013, HealthSouth Ocala experienced an average occupancy rate of 76 percent.

The Proposed Project Need Not Impact Existing CMR Providers

Per HealthSouth, the gap between the expected CMR discharge rate in counties with freestanding CMR provides and the current rate means

that the project, if approved, need not have an adverse impact on LRMC. The applicant further states that if LRMCN is impacted by the proposed project, it will be because it (LRMC) has failed to improve its CMR

program.

HealthSouth Has the Experience and the Expertise to Meet the Needs of Underserved CMR-Eligible Patients in Sumter and Lake Counties

HealthSouth discusses increasing the use rate for CMR services primarily by offering education to the area’s hospital discharge planners and physicians regarding: clinical research on the scope of patients that

can benefit from inpatient rehabilitation; the specialized rehabilitation technology available at HealthSouth hospitals; coordination of clinical

pathways when working with a HealthSouth hospital and the “superior” outcomes delivered by HealthSouth.

HealthSouth reports itself to be a low cost, efficient and high quality post-acute rehabilitation provider, whether compared to other freestanding providers, distinct part units, or both.

HRHSLC Makes Family Involvement in Recovery a Priority

HealthSouth discusses that daily family involvement in care and training directly affects patients’ ability to return to the community as opposed to

an institutional setting. The applicant plans to feature an activities of daily living (ADL) suite, with a model bedroom, bathroom and kitchen.

HealthSouth states caregiver training is critical and that without it, family may feel unable to take the patient back home. HealthSouth also

states recognition of an emotional component to recovery that is best served when patients are able to spend time with their loved ones while undergoing treatment and that the applicant is often able to make

accommodation for family members to stay overnight.


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HealthSouth indicates that helping patients and families cope with loss of function and new ways to adapt is provided through the rehabilitation

team and that one communication tool used is the Wellness Information and Tools for Health (WITH) notebook. The notebook is stated to include

state and federal resources and helpful reminders related to fall prevention, safety, pain management, exercise and stress relief. Per the applicant, throughout the patient’s stay, pertinent information is added

to the individualized WITH notebook, which travels with the patient throughout their stay and home.

Continuity of Care and the Rehabilitation Continuum of Care – SNF vs. CMR

HealthSouth reports that CMR services include diagnostically distinct programs that offer specialized inpatient services within an

interdisciplinary team approach. The applicant indicates which rehabilitation services are medically necessary and appropriate for a

patient must be individually assessed when the patient is initially referred and later as the person’s functional capacity changes over the course of the rehabilitation program. HealthSouth offers a matrix of

inpatient rehabilitation services compared to other settings where rehabilitation services can be provided. See the figure below.

Rehabilitation Services Matrix

Intensity and Complexity of Rehabilitation

Services

High

Inpatient rehabilitation

Inpatient Rehabilitation

Outpatient therapies; or Home Care therapies

Medium

Inpatient

Rehabilitation

Inpatient rehabilitation;

or SNF with therapies

Outpatient therapies

Low

SNF with therapies, or Home Care

therapies

Outpatient therapies; or Home Care

therapies

Outpatient therapies

Low Medium High

Level of Functional Independence Source: CON application #10196, Figure 29, page 56.

HealthSouth concedes that there are currently both SNF and CMR services available in Lake County but contends that “a lack of CMR visibility deters acute care providers from referring patients to CMR units

at LRMC, which may result in patients being inappropriately referred to SNF programs”. The reviewer notes the applicant does not provide

evidence to document that in the current Subdistrict 3-7 rehabilitative services situation, patients are in fact being inappropriately placed resulting in poor or substandard health care outcomes.

HealthSouth provides a “partial” list of 14 differences in CMR and SNF level care on page 57 of CON application #10196.


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Quality of Care and Efficiency in CMR Units vs. CMR Hospitals

HealthSouth contends that while there are advantages and disadvantages to both CMR units and CMR hospitals, the benefits of the

latter make it the “superior setting in markets large enough to support one”. See the figure below.

Comparison of CMR Hospitals and CMR Units CMR Hospitals CMR Units

Achieves Economies of Scale X In some instances

Lower Average Cost Per Discharge X

Lower Direct and Indirect Costs X

Better Cost Management X

Staff’s Time Fully Committed to CMR X

Medical Director’s CMR Time 40 hours/week 20 hours/week

Patient Volume to Support Diagnosis-Specific Programs X

Architectural Design Specific for CMR Services X In some instances

Immediate Access to Acute Care Services X

Does Not Compete with Referring Hospitals X In some instances Source: CON application #10196, Figure 30, page 58.

HealthSouth indicates CMR hospitals usually have 40-60 beds, while CMR units typically have 20-30 beds and that in District 3 the average bed size is even lower, with the two in-hospital units averaging 19 beds.

HealthSouth contends that large capacity leads to higher patient volumes and therefore exposure to patients with a wide variety of diagnoses. In turn, these larger bed sizes are stated to be associated with lower costs.

The applicant states and the reviewer confirms that in 2011, the median number of beds in CMRs in the lowest cost quartile was 42 beds and the

highest cost quartile CMRs had a median of 17 beds (MedPAC March 2013-Report to the Congress, Medicare Payment Policy, Chapter 10, page 229, Table 10-12). Again, per HealthSouth, having more patients and a

more evenly distributed mix of patient diagnoses allows freestanding providers to develop expertise and treatment plans for patients across

many other diagnoses. HealthSouth discusses lower mean cost per discharge at freestanding

CMR hospitals compared to CMR units. The reviewer notes that in 2010 and 2011, MedPAC concluded that freestanding CMRs were better than hospital-based units at “managing their costs” and reported that CMR

hospitals had significantly lower average adjusted costs per discharge as compared to CMR units. See the table below.


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Mean Adjusted Cost per Discharge

by Provider Type

Calendar Years 2010 & 2011 2010* 2011**

All CMRs $15,205 $15,822

Hospital based units $15,940 $16,725

Freestanding $12,050 $12,388 Source: MedPAC, Report to the Congress, Medicare Payment Policy, Inpatient Rehabilitation Facility

Services, *Chapter 9, page 247, Table 9-11, March 2012 and **Chapter 10, page 228, Table 10-11, March 2013.

HealthSouth further contends that freestanding CMR hospitals’ clinical

staff is “not forced to divide their time between general acute care and rehabilitation patients” and also that in the case of CMR units, staff from

the acute side of the hospital that does not have rehabilitation training may be assigned to work in the rehabilitation unit. HealthSouth holds that freestanding CMR hospitals are designed “from the ground up” with

new and emerging technologies to meet unique needs of CMR patients, while CMR units “are often a floor or other small portion of a physical space that was initially designed for general acute care services” that

have been re-purposed for rehabilitation. HealthSouth further contends that CMR units “have to compete for capital investment with higher

margin service lines, which often means they receive little or no capital investment”.

The applicant concedes that CMR units provide the benefit of “easy access to hospital tests and laboratory data, as well as other services”.

However, HealthSouth asserts that “because of the ease of access and time efficiency, in many cases, local specialty physicians are more willing to visit a CMR hospital than fight their way through a large acute

hospital to see a patient”. HealthSouth also asserts that a patient who requires acute care hospital services should not be transferred to an inpatient rehabilitation hospital, whether it is a unit or a freestanding

site. The applicant indicates HealthSouth clinicians provide screening and in-service trainings with acute care hospital discharge planners to

help identify when a patient is both medically stable and appropriate for discharge from the acute care to the rehabilitation setting. Per HealthSouth, patients are never admitted to a HealthSouth hospital

without having their specific circumstances reviewed by a rehabilitation physician before the transfer.

HealthSouth holds that because of the medical complexity of rehabilitation patients, processes are in place to meet their medical

needs even if a new problem arises after the admission. The applicant states that the facility will have registered nurses on-site 24 hours a day and 24-hour physician call coverage. HealthSouth further states if a

medical emergency arises, emergency rescue and transfer services are invoked while onsite staff conducts basic or advanced life support. Per


39

the applicant, there is no safety advantage for units as contrasted with freestanding CMRs and that the net advantage rests with the size, setting

and services offered in a freestanding environment.

The reviewer notes that while both applicants discuss and offer the virtues and pitfalls of distinct-part unit CMR services vs. freestanding CMR, neither applicant provides specific fact-based documentation that

poorer or better health care outcomes resulted solely due to transfer by EMS transport (or the lack thereof).

HealthSouth discusses various failings of District 3-7 general hospitals and CFHA’s lack of follow-through in related projects as evidence that

area providers have been unable or unwilling to provide highly visible CMR services, outreach and education that would bring area resident CMR use rates to “a reasonable level”.

The Villages Tri-County Medical Center, Inc. d/b/a The Villages

Regional Hospital (CON application #10197) indicates that population growth in the area has resulted in an average daily census (ADC) at The Villages Regional Hospital from between 60 and 80 in FY 2007 to just

over 140 in FY 2012. The Villages Regional Hospital states it is the only acute care provider located within the actual boundary of The Villages Development Regional Impact (DRI) area, a nationally known, self-

contained retirement community (reportedly approximately 25,000 acres and 90,000 residents with a projected build out of more than 105,000

residents by 2017). Per TVRH, The Villages is meeting many of the residents’ retail, recreational, social and health care needs onsite. Per the applicant, “fully 80 percent of all resident trips are internal trips,

both beginning and ending in The Villages”. In addition, the applicant states “most resident and visiting guest trips are by golf cart”, with transportation outside The Villages by private automobile. The project is

stated to “further support this on-site self-sufficiency by ensuring local access to inpatient rehabilitative care to The Villages’ residents”. The

applicant also stresses the project is “fully integrated with the existing CFHA portfolio of services and expertise” and will increase “patient access, comfort and convenience”, resulting in “better patient care”.

TVRH attributes a current referral rate for CMR services as low due to

“patients foregoing acute inpatient rehabilitation services for a lower level of care in an alternative setting”. The applicant expects that with increased community education and outreach activities, the referral rate

will increase. The project is to be located in the north tower addition at TVRH, with the

project stated to be Medicare certified by July 1, 2015. The applicant reports 16 specialty services and programs that will be made available

through the project.


40

Per TVRH, freestanding inpatient rehabilitation facilities do not have the

ability to manage medically complex patients and therefore, the acute care hospital is “forced to keep the patient until the medical event is

resolved”. The applicant indicates the following examples of the capabilities of TVRH to provide medically complex patients who meet inpatient rehabilitation admission criteria:

IV management

o Short-term antibiotics o Heparin drip

Percutaneous Endoscopic Gastrostomy (PEG) Tube management

Telemetry monitoring

Hemodialysis

Wound V.A.C. therapy

Tracheostomy care.

As stated previously, the reviewer notes that while both applicants discuss and offer the virtues and pitfalls of distinct-part unit CMR

services vs. freestanding CMR. TVRH discusses population growth for District 3 overall as well as population growth for Subdistrict 3-7 (Lake

and Sumter Counties). The reviewer notes that population projections, on a district-wide basis, are factored into the Agency’s need projections for inpatient CMR need.

The applicant states that using MapQuest, below is the travel duration, in miles and minutes, to existing rehabilitation providers in District 3

from TVRH. The reviewer notes that generally the applicant’s estimates differ from those determined by the Agency, as shown in item E.1.a. of

this report.

Travel Time to Existing Rehab Providers in District 3 from TVRH County Facility Minutes Miles

Alachua Shands Rehab Hospital 69 66.9

Marion HealthSouth Rehab Hospital of Ocala 35 27.1

Citrus Seven Rivers Regional Medical Center 75 54.6

Hernando HealthSouth Rehab Hospital of Spring Hill 85 62.7

Lake Leesburg Regional Medical Center-North 21 13.3 Source: CON application #10197, Figure 7, page 26.

Per TVRH, the travel times states do not reflect “peak traffic or delays associate with increase congestion and volume from snow birds”. Also, the applicant states that seasonal fluctuation has an impact on travel

time.


41

Leesburg Regional Medical Center-North CMR Unit

The applicant concedes that LRMCN is 1.5 to 2.5 miles from the main hospital and reports it is 13 miles or 21 minutes from the proposed

project. However, TVRH states that many patients “prefer” to remain in an acute care setting with resources available. The applicant also states “patients and families are much more willing to agree to receive CMR

services when provided within the same four walls in which patients received inpatient services”. Per the applicant, the “burden” on family members travel to an outside location for CMR services is “a substantial

deterrent”. TVRH attests that a long-range plan to incorporate the CMR unit into the main campus of LRMC is being considered.

Criteria for Determination of Need

That CMR providers can add up to 10 beds through exemption, if they

are operating at or over 80 percent capacity and that there will likely never be a bed need projected for a district, is posed and similarly argued by CON application #10196. TVRH contends that an increasing need for

rehabilitation patients to obtain inpatient services “close to home” establishes a “not normal” circumstance.

TVRH asserts that rehabilitation patients often have co-morbidities and notably high acuity, making proximity to acute, diagnostic and

emergency services and overall continuity of care important. District 3 Characteristics

TVRH indicates that in 2012, District 3 had a CMR discharge or use rate

of 18.76 per 10,000 population, compared to a state rate of 19.72 per 10,000 population, among all age cohort. See the figure below.

2012 CMR Discharges per 10,000 Population by District

for the 65-74 and 75+ Age Cohorts and All Ages Combined Age Cohort

District 65-74 75+ All Ages

1 33.05 71.69 11.30

2 114.41 323.92 35.79

3 31.60 92.98 18.76

4 53.79 110.78 19.21

5 39.07 110.00 20.47

6 28.72 44.46 10.33

7 37.28 82.20 11.86

8 45.31 121.38 27.48

9 31.08 87.14 17.44

10 83.06 217.71 29.59

11 75.29 169.44 23.94

Total 47.46 116.24 19.72 Source: CON application #10197, Figure 11, page 31.


42

TVRH further indicates that in 2012, Sumter County had a lower CMR discharge or use rate (14.00) compared to District 3 overall (19.54).

These rates are stated to be regardless of the facility location. See the figure below.

2012 CMR Discharges per 10,000 Population by District

for Patients Originating from District 3 Counties Age Cohort

County Under Age 18 18-44 45-64 65-74 75+ Total

Alachua 1.07 3.11 18.79 41.24 72.35 12.09

Bradford - 5.19 13.11 25.05 44.29 10.74

Citrus 0.94 7.29 32.41 60.81 168.77 47.86

Columbia - 3.51 21.96 53.23 162.17 23.41

Dixie 3.23 8.37 18.13 28.65 23.86 14.22

Gilchrist - 1.83 6.38 17.30 53.55 8.31

Hamilton - 3.51 17.03 8.01 36.56 8.78

Hernando - 3.51 14.00 63.89 265.38 46.83

Lafayette - 5.51 133.19 871.48 4,174.94 329.17

Lake 0.32 2.73 8.21 20.08 36.29 9.88

Levy 1.20 10.64 21.77 84.35 237.02 39.36

Marion 0.47 3.28 5.38 6.11 11.08 4.67

Putnam 1.22 5.68 7.51 14.77 35.40 8.76

Sumter 2.24 0.56 6.69 22.74 30.81 14.00

Suwannee - 1.45 12.66 29.90 15.16 8.44

Union - 1.68 10.28 27.26 - 5.85

District 3 Total 0.59 3.62 13.78 33.60 96.29 19.54 Source: CON application #10197, Figure 12, page 31.

Regarding acute discharges referred to inpatient rehabilitation, TVRH indicates that in 2012, District 3 overall had an acute discharges referred to inpatient rehabilitation percentage of 1.4 (the same as District 7), with

only Districts 1, 4 and 6 having lower percentages. Among District 3’s 16 counties, the applicant indicates that in that same year, Sumer

County had an acute discharges referred to inpatient rehabilitation of 1.0 percent (with seven counties having lower percentages within the district).

Regarding acute discharges referred to Medicare skilled nursing, TVRH indicates that in 2012, District 3 overall had an acute discharges referred

to Medicare skilled nursing percentage of 11.5, with Districts 4, 5, 8 and 9 having higher percentages. Among District 3’s 16 counties, the

applicant indicates that again in the same year, Sumter County had an acute discharges referred to Medicare skill nursing of 13.9 percent (with only Citrus County having a higher percentage within the district).


43

District 3 Rehabilitation Utilization

TVRH discusses utilization rates among existing CMR providers in District 3, similarly to the Agency’s utilization table (see Item E.1.b in

this report). For District 3 overall, between 2009 and 2012, the applicant indicates a lowest ADC of 108.6 (2008) and a highest ADC of 121.2 (2012). TVRH also indicates that in 2012, occupancy rates for CMR

services in District 3 were 74.7 percent, the second highest of any district statewide for that period.

Service Area and Demographics

TRVH states that in 2012, 89.2 percent of the hospital’s patients were residents in a nine zip code area, with the primary service area (PSA) of 77.1 percent originating from a three zip code area and the secondary

service area (SSA) of 12.1 percent originating from a six zip code area. Based on the PSA and SSA zip codes, TRVH estimates a total population

of 174,447 (by 2014) and 188,805 (by 2019), a projected population increase of 8.2 percent. See the figure below.

The Villages Regional Hospital Service Area Population Projections

Projections

ZIP Code County City 2014 2019 % Change

Primary Service Area (PSA)

32162 Sumter The Villages 54,683 64,296 17.6%

32159 Lake Lady Lake 29,024 30,624 5.5%

34491 Marion Summerfield 29,445 31,018 5.3%

Subtotal PSA 113,152 125,938 11.3%

Secondary Service Area (SSA)

34785 Sumter Wildwood 17,934 18,431 2.8%

34731 Lake Fruitland Park 10,829 10,920 0.8%

34420 Marion Belleview 15,859 15,991 0.8%

34484 Sumter Oxford 5,095 5,808 14.0%

32195 Marion Weirsdale 3,271 3,354 2.5%

32179 Marion Ocklawaha 8,307 8,363 0.7%

Subtotal SSA 61,295 62,867 2.6%

PSA and SSA 174,447 188,805 8.2% Source: CON application #10197, Figure 22, page 38, Claritas.

TRVH estimates that the service area age 65 and over population in 2014

of 82,384 will increase to 98,020 in 2019, a projected increase of 19.0 percent. See the figure below.


44


Service Area Population Projections Age 65 and Over Projections

ZIP Code County City 2014 2019 % Change

Primary Service Area (PSA)

32162 Sumter The Villages 36,475 46,033 28.2%

32159 Lake Lady Lake 17,729 19,976 12.7%

34491 Marion Summerfield 12,401 14,346 15.7%

Subtotal PSA 66,605 80,355 20.6%

Secondary Service Area (SSA)

34785 Sumter Wildwood 4,163 4,589 10.2%

34731 Lake Fruitland Park 2,857 3,157 10.5%

34420 Marion Belleview 3,408 3,584 5.2%

34484 Sumter Oxford 2,422 3,040 25.5%

32195 Marion Weirsdale 1,055 1,201 13.8%

32179 Marion Ocklawaha 1,874 2,094 11.7%

Subtotal SSA 15,779 17,665 12.0%

PSA and SSA 82,384 98,020 19.0% Source: CON application #10197, Figure 23, page 38, Claritas – 2014/2019.

TVRH estimates an increase of 15,636 age 65 and over residents (82,384 + 15,636=98,020) in its total service area by 2019 and states that this growing elderly population “will require increasing access to health care

services in the future”.

Inpatient Rehabilitation Bed Need TVRH presents four bed need methodologies to justify the project. Each

incremental bed need estimate is projected for 2019.

Percent of Acute Care Discharges Referred to Inpatient Rehabilitation

Applying the referral rate for inpatient rehabilitation to District 3 residents results in the need for 31 incremental beds. It is not clear why the applicant uses 2017 and 2019 and references “Claritas 2014/2019”

in the table below.

District 3 Incremental CMR Bed Need

with Increase of Acute Care Discharges to CMR

at Florida Percent of Acute Care Discharges to CMR 2012 2017 2019

District 3 Acute Care Discharges 213,533 221,804 225,202

Total Population 1,623,562 1,686,451 1,712,284

Acute Care Discharges Per 1,000 131.52 131.52 131.52

District 3% Acute Care to CMR 1.4% 1.4% 1.4%

CMR Discharges at District 3 2012 Rate 3,014 3,131 3,179

Florida % Acute Care to CMR 1.7% 1.7% 1.7%

Acute Care Discharges to CMR at Florida % 3,627 3,767 3,825

Estimated Increase in CMR Discharges with Improved Access 613 636 646

Estimated ALOS 14.7 14.7 14.7

Incremental Patient Days 8,993 9,342 9,485

Incremental ADC 24.6 25.6 26.0

Incremental CMR Bed Need at 85% 29 30 31 Source: CON application #10197, Figure 24, page 39, AHCA Florida Database and Claritas 2014/2019.


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Reduction in Referrals to Medicare Skilled Nursing

Applying the statewide Medicare skilled nursing referral rate to Sumter

County results in the need for 24 incremental beds. See the figure below.

Sumter County Incremental Bed Need

With Reduction in Acute Care Discharges to Medicare Skilled Nursing

at Florida Percent of Acute Care Discharges to Medicare Skilled Nursing 2012 2019

Sumter County Acute Care Discharges 13,316 15,742

Total Population 102,155 120,768

Acute Care Discharges Per 1,000 130.35 130.35

Sumter County % Acute Care to SNF 13.9% 13.9%

Florida 2011 % Acute Discharge to SNF 10.6% 10.6%

Incremental Difference 3.26% 3.26%

Potential Increase to CMR Referrals with Decrease in % to SNF 434 513

Estimated ALOS 14.68 14.68

Incremental Patient Days 6,376 7,537

Incremental ADC 17.5 20.7

Incremental CMR Bed Need at 85% 21 24 Source: CON application #10197, Figure 25, page 40.

TVRH Service Area Bed Need

The TVRH’s service area inpatient rehabilitation rate with 2012 statewide averages results in the need for 37 incremental beds. Again, it is not clear why the applicant uses 2017 and 2019 and references “Claritas

2014/2019” in the table below.


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TVRH Service Area

Projected CMR Bed Need for 2012, 2017 and 2019

Based on Florida CMR Discharge Rates per 10,000 2012

18-44 45-64 65-74 75+ Total

Service Area Population 29,338 45,644 47,581 29,370 169,195

2012 Florida CMR Discharges per 10,000 3.52 15.30 47.46 116.24 19.72

Project CMR Discharges 10 70 226 341 649

ALOS Patient Days 14.7

Patient Days 9,523

ADC 26.1

Bed Need at 85% 31

2017

18-44 45-64 65-74 75+ Total


2012 Florida CMR Discharges per 10,000 3.52 15,30 47.46 116.24 19.72



Patient Days 10,849

ADC 29.7

Bed Need at 85% 35

2019

18-44 45-64 65-74 75+ Total


2012 Florida CMR Discharges per 10,000 3.52 15.30 47.46 116.24 19.72



Patient Days 11,461

ADC 31.4

Bed Need at 85% 37 Source: CON application #10197, Figure 26, pages 40 and 41.

Bed-to-Population Need

The statewide CMR bed-to-population ratio is nearly three times higher

than the experience of Sumter and Lake Counties, resulting in the need for 38 incremental beds. See the figures below.

2012 Bed-To-Population Ratio

2012 Beds

2012 Population

Bed: Population Ratio Per 10,000

Sumer and Lake Counties 22 403,814 0.54

District 3 198 1,623,562 1.22

Florida 2,594 19,220,695 1.35 CON application #10197, Figure 27, page 41

2019 Projected Bed-To-Population Ratio

2019 Population Bed: Population Ratio

Per 10,000

Bed Need

Sumer and Lake Counties 443,436 1.35 60

Less Existing Beds 22

Incremental Need 38 CON application #10197, Figure 28, page 41.


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Other Bed Need Indicators and Differentiating Factors

Per TVRH, its larger percentage of age 65 and over patient discharges in 2012 (79.2 percent) compared to District 3 overall (48.2 percent) and the

state overall (40.9 percent) “further differentiates TVRH and the need” for the project. See the figure below.

2012 Age Distribution Comparison TVRH, District 3 Facilities and All Facilities in Florida Percent of Total

Age Cohort TVRH District 3 Facilities All Florida Facilities

Under 18 0.0% 6.2% 8.4%

18-44 5.2% 20.1% 24.2%

45-64 15.5% 25.7% 26.6%

65-74 31.6% 20.3% 16.1%

75+ 47.6% 27.9% 24.8% Source: CON application #10197, Figure 29, page 42.

The applicant includes various current news and related articles (CON application #10197, Exhibit C) about the elderly growth population in The Villages and Sumter County, one being a medical journal article

titled “Continuity of Care and Patient Outcomes After Hospital Discharge”, Journal of General Internal Medicine, Volume 19, pages 624-631, issued June 2004. The conclusion of the journal article states:

Patient outcomes could be improved if their early post-discharge

visits were with physicians who treated them in hospital rather than with other physicians. Follow-up visits with a hospital physician could be a modifiable factor to improve patient outcomes

following discharge from hospital.

The applicant reports for 2012 a higher Medicare discharge rate (71.5 percent) among CFHA hospitals compared to all facilities in District 3 (55.3 percent) and all facilities statewide (47.2 percent). Correspondingly

higher Medicare discharges for comprehensive rehabilitation are also stated. See the figure below.

Percent of 2012 Medicare Discharges

Inpatient Comprehensive Rehabilitation

TVRH 82.2% -

LRMC 62.6% 92.5%

Total CFHA 71.5% 92.5%

All Facilities in District 3 55.3% 76.3%

All Facilities in Florida 47.2% 73.7% Source: CON application #10197, Figure 30, page 44.

The applicant contends that the introduction of a non-CFHA rehabilitation provider and especially one targeting the service area’s commercially insured patients, has the ability to adversely impact

current CFHA operations and “significantly impair CFHA’s ability to


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provide integrated high quality care” and the applicant states especially local Medicare, Medicaid and indigent/underinsured patients.

TVRH also acknowledges higher rates of discharge to Medicare SNFs

(15.4 percent) and lower rates of discharge to comprehensive rehabilitation (0.6 percent) than District 3 overall or the state overall in 2012. See the figure below.

2012 Discharge Status Comparison

TVRH, District 3 Facilities and All Facilities in Florida

Discharge Status

TVRH District 3 Facilities

All Facilities in Florida

Percent Discharge to Medicare SNF 15.4% 11.5% 10.6%

Percent Discharge to Comp Rehab 0.6% 1.4% 1.7% Source: CON application #10197, Figure 31, page 44.

TVRH points out that a hospital-based CMR unit can avoid unnecessary

readmissions to a greater extent than freestanding CMR facilities because patients of the hospital-based unit will not necessitate discharge from CMR and readmission to the hospital.

TVRH does not anticipate the project will generate a significant impact on existing providers, expecting a 46.5 percent occupancy rate in year one

(2016) and a 66.7 percent occupancy rate in year two (2017).

2. Agency Rule Criteria:

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

Administrative Code, for applicable preferences.

3. General Provisions:

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

this rule may be provided in a hospital licensed as a general

hospital or licensed as a specialty hospital.

HealthSouth Rehabilitation Hospital of Sumter/Lake County, LLC (CON application #10196) is proposing to establish a new 50-bed Class III specialty (CMR) hospital.

The Villages Tri-County Medical Center, Inc. d/b/a The Villages Regional Hospital (CON application #10197) is

proposing to establish a 30-bed CMR unit at The Villages Regional Hospital, a Class I general hospital.


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

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

HealthSouth Rehabilitation Hospital of Sumter/Lake County, LLC (CON application #10196) states that the entire facility will

be dedicated to providing CMR services. The Villages Tri-County Medical Center, Inc. d/b/a The

Villages Regional Hospital (CON application #10197) proposes to establish a 30-bed CMR unit at The Villages Regional Hospital,

housed on the fifth floor of the north tower addition of a general hospital.

(c) Minimum Number of Beds. A general hospital providing comprehensive medical rehabilitation inpatient services

should normally have a minimum of 20 comprehensive medical rehabilitation inpatient beds. A specialty hospital providing CMR inpatient services shall have a minimum of 60

CMR inpatient beds. HealthSouth Rehabilitation Hospital of Sumter/Lake County,

LLC (CON application #10196) proposes to establish a 50-bed freestanding CMR hospital, which the applicant states is the

appropriate size for a new entrant to a market. The applicant indicates that the Agency has approved facilities with less than 60 CMR beds. The reviewer confirms that recently licensed

HealthSouth Rehabilitation Hospital of Ocala (CON #10097) is a 40-bed freestanding CMR hospital.

The Villages Tri-County Medical Center, Inc. d/b/a The Villages Regional Hospital (CON application #10197) proposes

to establish a 30-bed CMR unit at The Villages Regional Hospital, which meets this criterion.

(d) Medicare and Medicaid Participation. Applicants proposing to establish a new comprehensive medical rehabilitation

inpatient service shall state in their application that they will participate in the Medicare and Medicaid programs.

HealthSouth Rehabilitation Hospital of Sumter/Lake County, LLC (CON application #10196) states that it “conditions this application on participation in Medicare and Medicaid programs”.

The applicant proposes to condition project approval to provide a minimum of 2.5 percent of patient days to the combination of

Medicaid patients and uninsured patients who meet the definition


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of charity care patients under Florida Statutes. Notes to Schedule 7 indicate that the facility will provide 89.0 of its total annual

patient days to Medicare and Medicare HMO patients, 1.8 percent to Medicaid patients and 1.0 percent to charity care patients

during years one (ending FY 2016) through three (ending FY 2018). The notes further state that charity care is reported in the schedules as self-pay at 100 percent write-off and $0

reimbursement per day.

The Villages Tri-County Medical Center, Inc. d/b/a The

Villages Regional Hospital (CON application #10197) states that it participates in the Medicare and Medicaid programs and will

continue to do so with the proposed CMR project. The applicant proposes to condition project approval to provide a minimum of 1.3 percent of its annual CMR patient days to the combination of

Medicaid, Medicaid HMO and charity (including self-pay) patients. The applicant indicates that Medicare/Medicare HMO patients are

expected to be 92.0 percent of the CMR total that Medicaid/Medicaid HMO will represent 1.0 percent and self-pay patients will be 0.5 percent. Notes to Schedule 7B indicate that

the facility will provide 92.0 of its total annual patient days to Medicare patients, 1.1 percent to Medicaid patients and 0.5 percent to self-pay patients during year one (ending June 30,

2016). The notes also indicate the facility will provide 91.9 of its total annual patient days to Medicare patients, 1.1 percent to

Medicaid patients and 0.5 percent to self-pay patients during year two (ending June 30, 2017).

(4) Required Staffing and Services.

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

provided under the medical director of rehabilitation who is a board-certified or board-eligible physiatrist and has had at

least two years of experience in the medical management of inpatients requiring rehabilitation services.

HealthSouth Rehabilitation Hospital of Sumter/Lake County, LLC (CON application #10196) states it “agrees to provide CMR

services in the proposed facility under the supervision of a medical director of rehabilitation who is a board-certified or board-eligible physiatrist and has had at least two years of experience in the

medical management of inpatients requiring rehabilitation services”. The applicant also states plans to identify the most appropriate physician to fill this position prior to the hospital

accepting patients. The applicant further indicates the position will be under contract and to avoid disrupting services at any other

programs, HealthSouth will recruit for the position from outside


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the county, if necessary. HealthSouth states that estimated cost included in year one is $140,000, adjusted by 2.5 percent in year

two and three and this is “only the administrative function and not direct patient services”. Schedule 6 confirms the medical director

is a contract position. The Villages Tri-County Medical Center, Inc. d/b/a The

Villages Regional Hospital (CON application #10197) indicates the CMR program will be operated under the direct medical supervision of a physiatrist who is board-certified and has had

more than two years of experience in the medical management of inpatients requiring rehabilitation services. TVRH states Robert

Maiello, MD, is the medical director at “Leesburg Regional Acute Rehabilitation Hospital” and has been in that capacity since 2003. Per his curriculum vitae (CON application #10197, Exhibit G)

Dr. Maiello was board-certified in 1991 by the American Board of Physical Medicine and Rehabilitation. Schedule 6 confirms the

CMR physician/unit program director is a 0.5 FTE position.

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

services, CMR inpatient services shall include at least the following services provided by qualified personnel:

1. Rehabilitation nursing 2. Physical therapy

3. Occupational therapy 4. Speech therapy 5. Social services

6. Psychological services 7. Orthotic and prosthetic services

HealthSouth Rehabilitation Hospital of Sumter/Lake County, LLC (CON application #10196) provides a detailed response

indicating that it will have all of the above plus respiratory therapy services. The applicant provides a brief description of each CMR inpatient service on pages 69-74 of CON application #10196.


Villages Regional Hospital (CON application #10197) provides a detailed response indicating that it will have all of the above plus other services, including dialysis, respiratory therapy and other

ancillary services “that are available to all inpatients at the hospital”. The applicant provides a brief description of each CMR inpatient service on pages 50-52 of CON application #10197, with

rehabilitation staff job descriptions in Exhibit H.


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(5) Criteria for Determination of Need:

(a) Bed Need. A favorable need determination for proposed new

expanded comprehensive medical rehabilitation inpatient services shall not normally be made unless a bed need exists according to the numeric need methodology in 59C-

1.039(5)(c), Florida Administrative Code. Both applicants are applying in the absence of published need and

both contend that “not normal” special circumstances warrant approval of their respective projects (see Item E. 1. above).

(b) Most Recent Average Annual District Occupancy Rate.

Regardless of whether bed need is shown under the need

formula in paragraph (5) (c), no additional comprehensive medical rehabilitation inpatient beds shall normally be

approved for a district unless the average annual occupancy rate of the licensed comprehensive medical rehabilitation inpatient beds in the district was at least 80 percent for the

12-month period ending six months prior to the beginning date of the quarter of the publication of the fixed bed need pool.

District 3’s CMR occupancy rate was 74.72 percent for the

12-month period ending December 31, 2012. As previously stated, both applicants contend “not normal” special circumstances justify approval of their respective projects.

(c) Priority Consideration for Comprehensive Medical

Rehabilitation Inpatient Services Applicants. In weighing and

balancing statutory and rule review criteria, the Agency will give priority consideration to:

1. An applicant that is a disproportionate share hospital as

determined consistent with the provisions of section

409.911, Florida Statutes. 2. An applicant proposing to serve Medicaid-eligible

persons. 3. An applicant that is a designated trauma center, as

defined in section 10D-66.108, Florida Administrative

Code.


53

HealthSouth Rehabilitation Hospital of Sumter/Lake County, LLC (CON application #10196) is not a disproportionate share

hospital. The applicant notes that it cannot meet this preference factor as the facility will be designated as a Class III freestanding

CMR hospital. The applicant states that the proposed hospital will participate in

indigent care through indigent care assessment and, as a for-profit organization, will provide the community at large as well as the state with tax revenues with which to provide programs and

services to underserved persons. HealthSouth explains its discount and charity care procedures (Attachment 15-A/Hardship,

Discount and Charity Care Policy) and its “no insurance” procedures (Attachment 15-B/No Insurance Discount Policy). These are stated to be applicable to all existing hospitals and will

be adopted at the proposed facility.

The Villages Tri-County Medical Center, Inc. d/b/a The Villages Regional Hospital (CON application #10197) is not a disproportionate share hospital or designated trauma center. The

applicant does not participate in the Low Income Pool (LIP) Payment Program; however, TVRH states it provides “a significant percentage of care to Medicaid and charity patients”.

(6) Access Standard. Comprehensive medical rehabilitation inpatient

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

Both applicants acknowledge and the reviewer confirms that the access standard is currently met for District 3.


(CON application #10196) maintains that this access standard has been met for all districts since 1991 and is only a worst case criterion without regard to the actual dynamics of patient referrals for CMR

services. The applicant states that patients needing CMR services generally seek to remain in the county where they received acute care

hospital services because of age, medical fragility and a desire for continuity of care.

The applicant contends that if “top quality” CMR services are not offered in Subdistrict 3-7, many patients will not have reasonable access to CMR services regardless of driving times.


54

The Villages Tri-County Medical Center, Inc. d/b/a The Villages Regional Hospital (CON application #10197) reiterates that CMR

services should be provided on a local rather than a regional basis. The applicant also again highlights the continuum of care environment in the

original acute care hospital setting. The applicant comments on increased negative impacts and penalties for readmissions by Medicare and other payers, leading hospitals to focus on areas that reduce

readmission rates. TVRH indicates the cost of a readmission to the hospital emergency room is much higher and disruptive to the health care delivery system. As previously shown in Item E. 1. b. of this report,

per http://www.Mapquest.com, the driving distance/driving time between the applicant and Leesburg Regional Medical Center-North (the

closest CMR provider to TVRH) is 15.18 miles/24 minutes.

(7) Quality of Care.

(a) Compliance with Agency Standards. Comprehensive medical

rehabilitation inpatient series shall comply with the agency standards for program licensure described in section 59A-3, Florida Administrative Code. Applicants who submit an

application that is consistent with the Agency licensure standards are deemed to be in compliance with this provision.

HealthSouth Rehabilitation Hospital of Sumter/Lake County, LLC (CON application #10196) states that all of HealthSouth’s

Florida hospitals are in substantial compliance with Agency standards for program licensure as described by Section 59A-3, Florida Administrative Code. The applicant maintains that it has

invested in state-of-the-art quality measurement systems to carefully monitor processes and outcomes, allowing each facility to maintain the highest possible levels of quality. Procedures and

outcomes are regularly measured at every HealthSouth hospital and this policy will be implemented at the proposed facility. Per

the applicant, HealthSouth’s utilization of functional independence measure (FIM™) outcome results are higher than the Uniform Data System (UDS) for medical rehabilitation, every quarter, over the

last four years. Two of the applicant’s quality outcome charts are shown below. The applicant provides a brief summary of

HealthSouth’s quality and clinical excellence program on pages 78-84 of CON application #10197.

http://www.mapquest.com/


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HealthSouth Most Recent 12 Months Quality Outcomes

Percentage of Patients Discharged to the Community

HealthSouth Florida Actual versus UDS Expected

Source: CON application #10196, Figure 36, page 81.

In the chart above, the applicant indicates HealthSouth discharged patients to community/home in 75.90 percent of cases, compared to a UDS expected rate of 72.56 percent. HealthSouth states this

is an indicator of its superior quality of care.

70.00%

71.00%

72.00%

73.00%

74.00%

75.00%

76.00%

77.00%

HealthSouth Florida UDS Expected

Percent Discharged to Community/Home

Percent Discharged toCommunity/Home


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HealthSouth Most Recent 12 Months Quality Outcomes

Length of Stay Efficiency

HealthSouth Actual versus UDS Expected

Source: CON application #10196, Figure 37, page 82.

HealthSouth states that the length of stay (LOS) efficiency is the functional gain divided by the LOS. In the chart above, per HealthSouth, it had a higher efficiency (2.96 rate) than would have

been expected (2.59 rate) and that LOS efficiency is associated with lower costs.

The Villages Tri-County Medical Center, Inc. d/b/a The Villages Regional Hospital (CON #10197) states that it complies

with licensure standards described in Section 59A-3, Florida administrative Code, as well as with CMS Medicare conditions of participation, and will continue to do so following implementation

of the proposed project. The applicant states plans to purchase the UDS for medical rehabilitation. Per the applicant, CFHA, the

parent of both TVRH and LRMC, continually monitors and evaluates the quality care provided at its facilities through key functions that promote the following:

Elimination of unnecessary risks and hazards to assure safety

at all levels of care;

Appropriate utilization of resources;

2.4

2.5

2.6

2.7

2.8

2.9

3

HealthSouth Florida UDS Expected




57

Provision of the same standard of care for like populations

across the integrated delivery system;

Improvement in operational efficiencies;

Promotion of “best practices”; and

Improvement in customer services.

The applicant provides a brief summary of its quality and clinical

excellence program on pages 55-60 of CON application #10197, including numerous awards and recognitions.

(8) Services Description. An applicant for comprehensive medical rehabilitation inpatient services shall provide a detailed program

description in its certificate of need application including:


Villages Regional Hospital (CON application #10197) reiterates Item E.1.c.(4)(b) and lists in detail proposed specialized

equipment items for which the applicant conditions in CON application #10197.

(a) Age group to be served.

HealthSouth Rehabilitation Hospital of Sumter/Lake County, LLC CON application #10196) states that it will provide CMR

services to patients of all ages.

The Villages Tri-County Medical Center, Inc. d/b/a The Villages Regional Hospital (CON application #10197) states currently serving patients age 18 and older, with the majority of

patients (80 percent of discharge in 2012) in the 65 plus age cohort. The applicant indicates the planned project will have a similar age distribution.

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

any (e.g. spinal cord injury; brain injury) HealthSouth Rehabilitation Hospital of Sumter/Lake County,

LLC (CON application #10196) supplies an in-depth description of the following specialty programs on pages 86-91 of CON application #10196:

Hip Fracture Rehabilitation Program

Stroke Rehabilitation Program

Lymphedema Management Program

Neurological Rehabilitation Program

Arthritis Program


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Wound Care Program

Spinal Cord Injury Program

Orthopedic Rehabilitation Program

Spasticity Management Program

Hand Rehabilitation Treatment

Balance and Vestibular Program

Fibromyalgia Rehabilitation Program

Chronic Pain Management Program.


Villages Regional Hospital (CON application #10197) supplies the following list of specialty programs on page 66 of CON

application #10197:

Stroke Rehabilitation Program

Amputee Rehabilitation Program

Arthritis Program

Balance and Vestibular Program

Chronic Pain Management Program for diseases such as CHF,

COPD, diabetes and arthritis

Hand Rehabilitation Program

Movement Disorders Rehabilitation Program

Multiple Trauma Program

Neurological Rehabilitation Program

Non-Traumatic Brain Injury Program

Nutrition and Wellness Program

Orthopedic Rehabilitation Program, including hip/joint replacement, post-spinal injury and multiple sclerosis services

Pet Therapy

Spasticity Management Program

Wound Care Program

Smoking Cessation Program.

(c) Proposed staffing, including qualifications of the medical director, a description of staffing appropriate for any specialty program, and a discussion of the training and experience

requirements for all staff who will provide comprehensive medical rehabilitation inpatient services.

HealthSouth Rehabilitation Hospital of Sumter/Lake County, LLC (CON application #10196): Schedule 6 indicates that by year

three (2018) of operation, the applicant plans to have the following staff:


59

Administration (17.63 FTEs)

Nursing Staff (42.14 FTEs) includes 2.0 FTE unit secretaries

Ancillary (20.30 FTEs)

Dietary (7.13 FTEs)

Social Services (2.0 FTEs)

Housekeeping (5.13 FTEs)

Laundry (by contract, no stated FTE)

Plant Maintenance (1.75 FTEs).

HealthSouth maintains that the proposed facility will be fully

staffed with trained, qualified professionals. The applicant indicates that it will recruit employees from other HealthSouth

Florida facilities to commence operations of the proposed facility. HealthSouth asserts that policies and procedures across facilities are consistent and that high quality care will be provided to

patients and their families at the proposed facility.

The applicant references a nationwide list of corporate clinical education opportunities and a 2013 catalog of learning and CEU brochure (Attachment 6A), a 2012 therapy career ladder for

therapists [10th Edition/Version 4] (Attachment 6B), a HealthSouth nursing student loan program (Attachment 6C) and a therapy student loan program (Attachment 6D), in CON

application #10196. In addition, HealthSouth includes a 3 ½ page clinical affiliations list (Attachment 17A), with all Florida

post-secondary school listings and a sample clinical affiliation form (Attachment 17B). Per the applicant, these are reflective of HealthSouth’s commitment to expand knowledge and skills on

such subjects are cultural competency, expanding career opportunities, management skills and medical training.

The Villages Tri-County Medical Center, Inc. d/b/a The Villages Regional Hospital (CON application #10197):

Schedule 6 indicates that by year two (ending June 30, 2017) of operation, the applicant plans to have the following staff, specific to the proposal:

Administration (6.3 FTEs)

Physicians (0.5 FTEs)

Nursing Staff (30.6 FTEs) includes 2.0 FTE unit secretaries

Ancillary (15.8 FTEs).

TVRH reiterates its’ response found in Item E.1.c.(4)(a) and (b) in this report.


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

HealthSouth Rehabilitation Hospital of Sumter/Lake County, LLC (CON application #10196) states that it is prepared to put

forth special efforts to attract quality staff required for its rehabilitation programs and has initiated a number of innovative approaches to recruit and retain staff throughout its Florida

facilities as well as throughout its corporate structure. Methods of staff recruitment include:

In-house job posting

Corporate recruiting

Employment open house

Professional recruitment firms

Participation in local job fairs

Referral bonuses for select positions

Advertising in local newspapers, specialty newsletter magazines

Advertising in colleges that have specialty programs

Strong clinical affiliations program with allied health fields with

a wide variety of universities

Participation in professional conferences and educational events

on a local and regional level

HealthSouth Corporation clinical travelers

Hard to fill positions are advertised in specialty journals

Flyers mailed to home addresses from nationwide mailing lists.

HealthSouth has residency programs with several schools of allied

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

affiliations with health professional education programs including medical schools, schools of nursing, local vocational/technical

schools and graduate programs for psychologists, physical therapy, occupational therapy, speech therapy and therapeutic recreation. The applicant states that in addition to local

recruitment efforts, it can rely on support from HealthSouth’s corporate recruiting department to assist in recruitment of all professional areas.

Retention activities include providing benefits such as corporate

sponsored continuing education capabilities (rehabilitation training network), generous continuing education allowances, reimbursement for professional licenses, reimbursement of

national dues, annual merit pay increases, medical and dental insurance coverage, paid holidays and sick leave, flexible spending accounts, 401-K retirement investment plan, life insurance,


61

employee stock benefit plan, various employee recognition programs and activities, management development programs,

mentoring programs, tuition reimbursement assistance for staff attending relevant courses/seminars and a scholarship program.

The applicant states it will have an ongoing human resources program to coordinate the needs of its personnel.

The Villages Tri-County Medical Center, Inc. d/b/a The Villages Regional Hospital (CON application #10197) states that CFHA recruits highly qualified professionals using a wide

variety of approaches including:

Attending college and university career fairs

Hosting on-site open houses

Participating in local job fairs and community events

Posting all open positions internally for team members to see

and apply

Offering team members’ referral bonuses

Posting positions on the CFHA website

Partnering with various community agencies

Maintain affiliations with universities and colleges (both locally

and nationally)

Attending professional conferences and conventions

Utilizing direct mail pieces

Posting open positions on various on-line career sites such as Indeed, Monster, Career Builder, etc.

Working with local high schools to build a pipeline for future talent

Advertising with specialty websites and journals

Running advertisements in various local newspapers and

magazines

Utilizing professional search firms.

TVRH states that CFHA has agreements with various educational

institutions and serves as a clinical site for students ranging from high school through graduate school. The applicant also states

CFHA has affiliation agreements with over 25 colleges and universities across the US (some being in Florida), all of which offer various rehabilitation related programs. The applicant further

states CFHA has a program for nursing students that allows them to work as nurse techs while they continue their schooling and upon graduation and passing their boards, the new graduate

students are able to transition into registered nurse positions within CFHA and benefit from the extensive clinical orientation

offered.


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CFHA is stated to have extensive benefit packages, which include health, dental, vision, life and disability insurance and also a

generous retirement program with up to 5.25 percent employer contribution. Relocation assistance is offered for candidates

accepting designated positions, along with “non-traditional” benefits such as priority enrollment and reduced rates in the child learning center and a school-age summer program. Other benefits

stated are paid time off and sick time, a complimentary employee assistance program (for employees and family members), educational leave, a tuition assistance benefit (up to $5,000 per

year with no lifetime max), free annual biometric screenings and flu shots. There are also reduced rates at the wellness center.

(e) Expected sources of patient referrals.

HealthSouth Rehabilitation Hospital of Sumter/Lake County, LLC (CON application #10196) states that the primary source of

patient referrals will be area health care providers. The applicant indicates that since it does not operate any acute care general hospitals, it can expect to receive patient referrals from general

hospitals in the subdistrict and that HealthSouth’s past experience has shown this to be true.

The applicant maintains that it has a track record of successfully developing freestanding CMR hospitals in medical markets with

existing CMR programs and SNF-based rehabilitation programs owned by general hospitals. The applicant states the most recent example is in Marion County and that its case managers can

work collaboratively with discharge planners at all acute care hospitals in the area. Also, as a national provider of inpatient rehabilitation, HealthSouth asserts that is has successfully

developed a regional presence at the majority of facilities it operates.

HealthSouth indicates that other referral resources include nursing homes, physicians, assisted living facilities, home health

agencies and word of mouth. Furthermore, a small number of patients may live out of state.

The Villages Tri-County Medical Center, Inc. d/b/a The Villages Regional Hospital (CON application #10197) states

that the majority of referrals will be TVRH patients.


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(f) Projected number of comprehensive medical rehabilitation inpatient services patient days by payer type, including

Medicare, Medicaid, private insurance, self-pay and charity care patient days for the first two years of operation after

completion of the proposed project. HealthSouth Rehabilitation Hospital of Sumter/Lake County,

LLC (CON application #10196) indicates that the 50-bed facility will achieve 85 percent occupancy in the third year of operation. The projected patient days reflect a payer mix of 85.8 percent

Medicare, 1.8 percent Medicaid, 3.2 percent Medicare HMO, 6.0 percent managed care, 1.0 percent charity care, 2.0 percent

commercial payer and 0.20 percent other, for each of the first three years of operation (ending 2018). Notes to Schedule 7 indicate charity care is reported for self-pay at 100 percent write off and $0

reimbursement. See the schedule below.

HealthSouth Rehabilitation Hospital of Sumter/Lake County, LLC Projected CMR Payer Mix:

Years Ending 2016, 2017 and 2018 Payer

Year One Year Two Year Three

Days Percent Days Percent Days Percent

Medicare 8,185 85.8% 10,961 85.8% 13,312 85.8%

Medicare HMO 304 3.2% 409 3.2% 496 3.2%

Medicaid -- -- -- -- -- --

Medicaid HMO 172 1.8% 230 1.8% 279 1.8%

Commercial Managed Care 572 6.0% 767 6.0% 931 6.0%

Commercial/BCBS 191 2.0% 256 2.0% 310 2.0%

Other 19 0.2% 26 0.2% 31 0.2%

Self-Pay/Charity 95 1.0% 128 1.0% 155 1.0%

Total 9,538 100.0% 12,777 100.0% 15,514 100.0% Source: CON application #10196, Schedule 7 and notes.

The Villages Tri-County Medical Center, Inc. d/b/a The Villages Regional Hospital (CON application #10197) indicates

from Schedule 7B that the 30-bed CMR unit will realize the following projected payer mix in year one (ending June 30, 2016)

and year two (ending June 30, 2017) of the project: 92.0 percent Medicare; 1.0 percent Medicaid; 6.5 percent managed care and 0.5 percent self-pay. See the schedule below.


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Forecasted Patient Days by Payer

Years One and Two of Operation Ending June 30, 2016 and 2017

Payer

Year One Year Two

Days Percent Days Percent

Medicare 4,699 92.0% 6,719 92.0%

Medicaid 53 1.0% 79 1.0%

Other Managed Care 330 6.5% 475 6.5%

Self-Pay 26 0.5% 40 0.5%

Total 5,108 100.0% 7,313 100.0% Source: CON application #10197, pages 121 and 122.

Notes to the schedule indicate self-pay could be primarily charity care and uncompensated care. The applicant’s Schedule 7B for years one and two of the project does not address Medicare HMO

and Medicaid HMOs.

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

patients.

The reviewer notes the actual payer types for Lake and Sumter County residents discharged from inpatient rehabilitation distinct part unit or CMR freestanding facility. See the table below.

Lake and Sumter County Resident Discharges by Payer

From Inpatient Rehabilitation Distinct Part Unit or CMR Freestanding Facilities

Calendar Year 2012 Payer Type

Patient Days Discharges

Total Percent Total Percent

Medicare/Medicare HMO 6,035 77.37% 441 79.04%

Commercial Ins./Commercial Liability Coverage 1,288 16.51% 80 14.33%

Medicaid/Medicaid HMO 310 3.98% 21 3.76%

All Other* 167 2.14% 16 2.87%

Total 7,800 100.0% 558 100.0% Source: Florida Center for Health Information and Policy Analysis CY 2012 database.

Note: *This includes workers’ compensation, Tricare and other federal government, other state and local government and non-payment.

HealthSouth Rehabilitation Hospital of Sumter/Lake County,

LLC (CON application #10196) indicates that it will not discriminate against any person and will treat all patients

regardless of their ability to pay should those patients meet the clinical admission requirements. The applicant restates its proposed condition to provide a minimum of 2.5 percent of patient

days to the combination of Medicaid patients and uninsured patients who meet the definition of charity care patients under

Florida Statutes. Uninsured patients that do not qualify for charity care receive discount from billed charges for prompt pay, per the applicant.


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The Villages Tri-County Medical Center, Inc. d/b/a The Villages Regional Hospital (CON application #10197) states that

current admission criteria for charity care patients will remain unchanged as a result of the proposed project. The applicant

provides CFHA’s charity care patient financial services procedures policy (CON application #10197, Exhibit F). The applicant reiterates Schedule 7B to the application. TVRH conditions that it

will provide a minimum of 1.3 percent of its annual CMR patient days to the combination of Medicaid, Medicaid HMO and charity (including self-pay) patients.

(9) Utilization Reports. Facilities providing licensed comprehensive

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

(a) Within 45 days after the end of each calendar quarter, facilities shall provide a report of the number of

comprehensive medical rehabilitation inpatient services discharges and patient days which occurred during the quarter.

(b) Within 45 days after the end of each calendar year, facilities shall provide a report of the number of comprehensive medical rehabilitation inpatient days which occurred during the year,

by principal diagnosis coded consistent with the International Classification of Disease (ICD-9).

HealthSouth Rehabilitation Hospital of Sumter/Lake County, LLC (CON application #10196) states that it will participate in the

data collection activities of the Agency and the local health council and will participate in the data collection activities in accordance with Chapter 408 of the Florida Statutes.


Villages Regional Hospital (CON application #10197) states that it currently reports inpatient acute care discharge data to the Agency or its designee and will collect and report similar data for

patients discharged from the proposed CMR unit in compliance with the rule.


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3. Statutory Review Criteria

a. Is need for the project evidenced by the availability, quality of care, accessibility and extent of utilization of existing health care

facilities and health services in the applicant’s service area? ss. 408.035(1)(a) and (b), Florida Statutes.

District 3 has 198 licensed and zero approved CMR beds. District 3’s 198 licensed CMR beds experienced 74.72 percent utilization during the 12-month period ending December 31, 2012. The applicants are

applying outside of the fixed need pool.

HealthSouth Rehabilitation Hospital of Sumter/Lake County, LLC (CON application #10196) reiterates that in Subdistrict 3-7, the CMR use rate is abnormally low, the CMR retention rate is abnormally low, the

percentage of CMS 13 patients discharged to CMR is abnormally low and the percentage of CMS 13 patients discharged to SNF is abnormally high.

HealthSouth further contends that the 22 beds at LRMCN are operating at 59 percent occupancy and in addition, there is a stated lack of

financial accessibility for inpatient CMR services in the area. HealthSouth provides a map of Subdistrict 3-7 showing existing health

care facilities (both acute care and specialty hospitals) and provides in-depth listings of these facilities’ services. The hospitals are Florida

Hospital Waterman, South Lake Hospital, LRMC and LRMCN, TVRH, Lifestream Behavioral Health Center and Promise Hospital of Florida at The Villages. The applicant concedes that CMR is a tertiary service, per

Florida Statutes and Rule, that CMR is available in the area and that the subdistrict has “almost all the tertiary services one would expect to find in a secondary medical market without an academic medical center”,

with the exception of NICU Level II.

HealthSouth provides a map of Subdistrict 3-7 showing and discussing 16 existing SNF facilities in the area, with 1,727 community and 82 sheltered beds and references total patient days and total occupancy

rates at each facility for the 12-month period ending June 30, 2013. The applicant comments that South Lake Hospital has filed notification to

add a 30-bed hospital-based skilled nursing unit (HBSNU), with the capacity to add another 3013. HealthSouth indicates 13 of the 16 area SNF facilities advertise the provision of rehabilitation services.

13 On March 27, 2013, South Lake Hospital provided notification (NF#130005) to the Agency to

establish a 30-bed hospital based skilled nursing unit no later than February 2014.


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HealthSouth provides a figure (Figure 42-Summary of RUG (Resource Utilization Group) Data for Service Area SNFs) that indicates, as of June

30, 2013, an “ultra high” or very high ADC of 455, cumulatively, was experienced by the area SNFs. Per HealthSouth, some patients among

the ultra high and very high RUG group would more than likely benefit from inpatient rehabilitation.

HealthSouth reiterates that an unusually high percentage of CMS 13 patients are being discharged to SNF care, across all diagnoses. HealthSouth concludes that because Lake and Sumter County hospitals

are not discharging their patients with potentially appropriate diagnoses to CMR facilities, in 2012, LRMCN were operating at 59 percent capacity.

The applicant also reiterates that a higher discharge rate to SNF is pervasive across all diagnoses and limits patients’ ability to access the intensive rehabilitation care that some of their diagnoses demand.

HealthSouth asserts that in spite of capacity at LRMCN, area providers are not referring many patients there and that this situation indicates

that LRMC has not shown its services are superior to SNF-based rehabilitation.

The applicant contends that nursing homes have been substituted for CMR services in Sumter and Lake Counties; however, there are numerous situations in which SNF-level care cannot be substituted for

CMR-level care. However, the Agency notes that the applicant does not provide evidence to document that in the current Subdistrict 3-7

rehabilitative services situation, patient referral and rehabilitation patterns are resulting in poor or substandard health care outcomes. HealthSouth refers to MedPAC data that shows the adjusted 30-day

readmission rate for SNF patients is 19.8 percent compared to 17.4 percent for inpatient rehabilitation providers. These lower readmission rates are stated to result in lower costs per patient and demonstrate that

CMR providers deliver superior care to medically fragile patients. HealthSouth provides in-depth discussion of 14 major differences in the

two settings (CON application #10196, pages 113-125). These differences are listed below:


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Patient diagnoses are limited in CMR

Sites from which patients can be admitted

Length of stay is shorter in CMR

Interdisciplinary team approach

Attending physician visits

Medical director specialty

Registered nurse availability

Multiple and intensive therapy

Physician must evaluate patient within 24 hours in CMR

Individualized overall plan of care required within four days of admission in CMR

CMRs are required to monitor rehabilitation outcomes

Specialized teams can be developed in CMRs

SNFs have higher mortality rate than CMRs

CMRs have more specialized rehabilitation equipment.

HealthSouth also includes a comparison chart of CMR and SNF settings. See below.


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HealthSouth Rehabilitation Hospital of Sumter and Lake County, LLC (CON application #10196)

Comparison of CMR and SNF Settings

Source: CON application #10196, page 126.


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The applicant notes that Lake and Sumter County’s 16 nursing homes containing 1,727 total licensed community and 82 sheltered nursing

home beds averaged 89.12 percent utilization for calendar year 2012. The population 65 and over in the subdistrict is expected to increase by

24 percent between 2013 and 2018 and should nursing home utilization rates grow at even half that rate, HealthSouth anticipates the beds would be at 99.8 percent occupancy by 2018 (the applicant’s third year of

planned operation). HealthSouth contends available nursing home beds will be needed for

long-term care and that the ability and willingness of nursing homes to provide rehabilitation services to Medicare patients will be reduced going

forward due to changes to the Medicare payment system. HealthSouth maintains that approval of CON application #10196 is consistent with the availability and extent of utilization of existing CMR and SNF

programs.

The applicant maintains that the proposed facility will ensure that Sumter and Lake County patients have the opportunity for reasonably accessible CMR services. The applicant states that its corporate entity

has a track record of successfully developing freestanding CMR hospitals in medical markets where multiple acute care hospitals have CMR units. HealthSouth states it will work with area providers, discharge planners

and community leaders to ensure appropriate patients are aware that CMR services are available in the area.

The applicant indicates that part of its corporate-wide mission is that it is paramount to provide its patients with the finest clinicians,

technology, facilities and programs available. HealthSouth states that it sets only the highest standards of performance and continually strives to uphold and improve its reputation for excellence. Additionally, the

applicant indicates that it has invested in state-of-the-art quality measurement systems to carefully monitor processes and outcomes

allowing each facility to maintain the highest possible level of quality. HealthSouth offers detailed discussion of electronic health records (EHR)

and health information exchange (HIE).

The applicant indicates the proposed facility will be developed in an efficient manner in that the project will be accomplished within two years of approval and is projected to commence operations at the

beginning of 2016. In addition to providing care in an accessible, acceptable and effective manner—HealthSouth asserts that the proposed facility will also be an efficient/cost-effective provider of CMR services.


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The applicant illustrates, using data from the Centers for Medicare and Medicaid Services, that its hospitals have lower costs per discharge and

lower payment per discharge than other programs. HealthSouth provides the table below to illustrate this point.

CMS FY 2011* IRF Rate Setting File Analysis

Freestanding Non-

HealthSouth

Units

HealthSouth

Hospitals

Total

Number of IRFs 136 920 96 1,152

Average # of Discharges per IRF 593 247 932 345

Average Estimated Total Payment per Discharge for FY 2011*

$18,111

$17,820

$16,800

$17,649

Average Estimated Cost per Discharge for FY 2011*

$16,274

$18,522

$13,002

$16,824

Source: CON application #10196, page 138. Note: * The chart label and narrative notes indicate that this chart refers to 2012 data, although these lines

refer to 2011 data.

The applicant concludes by stating HealthSouth is one of the most highly

qualified providers of CMR services in the country, providing CMR services in a cost-effective fashion.

The Villages Tri-County Medical Center, Inc. d/b/a The Villages Regional Hospital (CON application #10197) contends that need for

the proposed project is based on access challenges for patients in the service area, particularly those within the retirement community of The Villages and the growth and development of the service area. TVRH also

states that the project is needed based on area residents’ low utilization of inpatient rehabilitation services and that the proposed project will improve CMR utilization rates in the service area. It is noted that the

applicant’s 22-bed Leesburg North CMR utilization has declined from 71.81 percent (5,359 patient days) in CY 2010 to 59.45 percent (4,787

patient days) in CY 2012. TVRH stresses the importance of the entire continuum of acute care (and

continuity of care) in order to optimize quality of care, including medical and functional outcomes for patients. Per the applicant, rehabilitation patients often have co-morbidities and notably high acuity and that

proximity to acute diagnostic and emergency services is important. TVRH indicates the project will lead to decreased time to discharge a

patient from the acute care setting to rehabilitation but also that readmission rates will likely be reduced, which is stated to improve quality of care for service area patients.

TVRH emphasizes that the proposed project offers the benefits of having

integrated services within an existing health care system such as CFHA and a hospital such as TVRH. Per the applicant, continuity of care, integration of services and expertise is essential when providing optimal

quality of care.


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The Agency has previously shown in Item E. 1. b. of this report, CFHA’s

licensed hospital-based CMR unit (Leesburg Regional Medical Center-North) had declining occupancy rates over the five-year period ending

December 31, 2012. At the public hearing on these co-batched projects (CON application #s 10196 and 10197), Dr. Ronald T. Luke, on behalf of CON application #10196, questioned why CFHA should be approved for a

second CMR unit when its existing CMR unit has declining occupancy rates.

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.


(CON application #10196) states that it has no current operations or operating history. The applicant indicates that the proposed quality care

will be based on HealthSouth Corporation’s experience, knowledge and accreditation principals. HRHSLC will seek Joint Commission accreditation and implement appropriate protocols to maintain a

superior quality of care upon licensure. The applicant will also seek disease-specific certification in stroke rehabilitation and hip fracture rehabilitation from the Joint Commission within the first three years of

operation.

The applicant indicates that during 2010, HealthSouth Rehabilitation Hospitals enlisted Press Ganey, a leading healthcare research firm, to continually measure patients’ experience in its hospitals. This

information is evaluated to help patients reach their goals for maximum independence.

The applicant contends that HealthSouth Corporation devotes significant resources to developing, implementing and maintain state-of-the-art

systems and technology which enables HealthSouth facilities to provide the highest quality of patient care. Examples of HealthSouth systems and technology include:

Risk Management Reporting System

Equipment (with embedded technology)

Rehabilitation Technologies (e.g. AutoAmbulator)

Automated Medical Records System

Computerized Order Entry System

Clinical Education.


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The applicant maintains that the corporate parent has 103 rehabilitation hospitals (12 in Florida), 22 outpatient satellite clinics and 25 licensed

hospital-based home health agencies serving people in 28 states and Puerto Rico.14

Some of HealthSouth’s quality instruments in CON application #10196 include: a three-page FIM™ patient assessment instrument (Attachment

4); a six-page safe patient mobility program (Attachment 8D); a Joint Commission Stroke Rehabilitation Certification list/State of Florida HealthSouth facilities (Attachment 16A) and a HealthSouth Nationwide

Joint Commission Certification list (Attachment 16B). Agency data indicates that the 10 HealthSouth Hospitals (803 total beds) had a total

of 12 substantiated complaints during the three-year period ending September 5, 2012. A single complaint can encompass multiple complaint categories. The table below has these listed by complaint

categories.

HealthSouth Substantiated Complaint Categories

for the Past 36 Months Complaint Category Number Substantiated

Quality of Care/Treatment 8

Nursing Services 7

Resident/Patient/Client Rights 2

Resident/Seclusion General 2

Resident/Patient/Client Assessment 1

Dietary Services 1

Physical Environment 1 Source: Agency for Health Care Administration complaint records.

The Villages Tri-County Medical Center, Inc. d/b/a The Villages Regional Hospital (CON application #10197) states that the parent,

CFHA, is a not-for-profit healthcare system serving primarily Lake, Sumter and Marion Counties and provides the following services:

Inpatient Rehabilitation

Urgent care

Post-acute care

Day surgery

Wound care

Hyperbaric treatment

Wellness facilities.

14 The Agency’s Hospital Beds and Services List publication, issued July 19, 2013 and updated Agency data indicates that HealthSouth has 11 licensed hospitals and one CON approved hospital (CON

application #10127) in the State of Florida.


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CFHA is stated to have a history of providing quality of care and continually improves its performance of key patient care that promote:

Elimination of unnecessary risks and hazards to assure safety at all

levels of care

Appropriate utilization of resources

Provision of the same standard of care for like populations across the integrated delivery system

Improvement in operational efficiencies

Promotion of “best practice”

Improvement in customer service.

TVRH attests that its sister facility, LRMC, has been successful with national quality measures for patients admitted with heart attacks, heart

failure, pneumonia, undergoing surgery and numerous quality measures related to the quality and safety in their care.

TVRH states that in 2009, state-of-the-art orthopedic services at the Alliance Bone & Joint Center expanded to The Villages, where joint

replacement is offered. The reviewer notes that per the CFHA’s website at http://www.cfhalliance.org/, The Joint Center offers board-certified

orthopedic surgeons and a joint care team that provides leading treatment solutions for bone and joint related ailments and injuries.

The applicant indicates the following awards and accolades for CFHA:

CFHA was named the 3rd company for Working Families in Central

Florida by the Orlando Sentinel, has been named in the Top 100 Companies for Working Families in Central Florida for 11 consecutive

years, being number one on the list three times.

The AARP named CFHA the #14 company in the 2009 healthcare

category for their “Best Employers for Workers over 50” award, having been named for the award for four consecutive years by AARP.

Alliance Wound Healing & Hyperbaric Center was awarded a Certificate of Distinction by the Joint Commission for disease-specific

certified wound care program.

LRMC received the American Stroke Association’s Bronze Performance

Award.

LRMC was awarded a three-year term of accreditation in Digital

Mammography as a result of a survey by the American College of Radiology.

TVRH joined LRMC in earning the Joint Commission’s Gold Seal of

Approval.

http://www.cfhalliance.org/


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Below are some 2012 (unless otherwise noted) awards and recognitions listed in the application.

LRMC’s stroke program was awarded the Get With the Guidelines®-

Stroke Gold Plus Quality Achievement Award.

The Leesburg Regional Acute Rehabilitation Hospital received a three-

year CARF accreditation for its inpatient adult rehab program as well as stroke specialty program.

CFHA was recognized among the top 20 percent of best performing health systems in the country by Thomas Reuters 100 Top Hospitals:

Health System Benchmarks.

TVRH was recognized as the #12 company and highest ranking acute

care hospital in Modern Healthcare’s inaugural list of “Healthcare Hottest”, a program honoring the fastest growing organizations in healthcare.

LRMC (2008) was named one of the 10 national winners of the Hospital of the Year Award by the American Alliance of Healthcare

Providers for the third consecutive year.

CFHA (2007) was one of 49 hospitals in the country to receive the

Premier/CareScience Select Practice National Quality Award, a designation that identified the hospital among the top one percent of

hospitals for quality and efficiency.

CFHA (2007) was named in the Solucient 100 Top Hospitals®

National Benchmarks for Success study, which is stated to identify the top hospitals based on overall performance in the key areas of outcomes, service line efficiency, hospital efficiency, financial

performance and growing community service. TVRH provides a 37-page, 2013-2014 CFHA Patient Safety and

Performance Improvement Plans (CON application #10197, Exhibit I). The table of contents includes: core values and concepts; systemic

processes; performance results and an eight item appendix. Agency data indicates that the three Florida Health Alliance Hospitals

(539 total beds) had a total of 12 substantiated complaints during the three-year period ending September 11, 2013. A single complaint can

encompass multiple complaint categories. The table below has these listed by complaint categories.


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Florida Health Alliance Hospitals Substantiated Complaint Categories

for the Past 36 Months Complaint Category Number Substantiated

Quality of Care/Treatment 5

Nursing Services 4

Administration/Personnel 3

Resident/Patient/Client Assessment 2

Fraud/False Billing 1

Infection Control 1

Pharmacy Services 1

Physical Environment 1

Resident/Patient/Client Rights 1

State Licensure 1 Source: Agency for Health Care Administration complaint records.

Of these 12 substantiated complaints, five were specific to The Villages Regional Hospital with the total complaint categories at that facility being as follows: quality of care/treatment and nursing services (two

complaints each) and one each for administration/personnel, infection control, physical environment, resident/patient/client assessment and

state licensure.

c. What resources, including health manpower, management

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

(d), Florida Statutes. HealthSouth Rehabilitation Hospital of Sumter/Lake County, LLC

(CON application #10196) proposes to establish a new 50-bed comprehensive medical rehabilitation hospital in Sumter County, Florida. The applicant is owned by HealthSouth Corporation (Parent).

The applicant provided a copy of the December 31, 2012, and 2011,

audited financial statements of its parent. These statements were analyzed for the purpose of evaluating the parent’s ability to provide the capital and operational funding necessary to implement the project.

Short-Term Position - Parent: The applicant’s current ratio of 2.1 in year two is slightly below average

and indicates current assets are approximately 2.1 times current liabilities, an adequate position. The working capital (current assets less

current liabilities) of $335.9 million is a measure of excess liquidity that could be used to fund capital projects. The ratio of cash flow to current liabilities of 1.4 is above average and a moderately strong position.

Overall, the applicant has an adequate short-term position (see Table 1 below).


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Long-Term Position -Parent: The ratio of long-term debt to net assets of 4.3 in year two is well over the

80th percentile, a weak position. The ratio of cash flow to assets of 17 percent is above average and a strong position. The most recent year the

applicant reported a net operating gain of $235.9 million, which resulted in a 10.9 percent operating margin, a moderately strong position. Overall, the applicant has an adequate long-term position (see Table 1

below). Capital Requirements:

Schedule 2 indicates total capital projects and equipment of $26,010,430, which includes the CON subject to this review.

Available Capital: Schedule 3 indicates that funding for this project will be cash on hand

from the applicant’s parent company, HealthSouth Corporation.

In support of its ability to fund the project, the applicant provided a letter of financial commitment from the parent company and a copy of HealthSouth Corporation’s 10-k filing with the Securities and Exchange

Commission. According to the audit, the parent has working capital available of $335.9 million and cash flow from operations of $411.5 million.


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TABLE 1

HealthSouth Corporation for CON application #10196

HealthSouth Corp (Parent) In Millions

HealthSouth Corp (Parent) In Millions

12/31/12

12/31/11

Current Assets (CA) $636.8

$491.6

Cash and Current Investment $132.8

$30.1

Total Assets (TA) $2,423.8

$2,271.2

Current Liabilities (CL) $300.9

$313.2

Goodwill $437.3

$421.7

Total Liabilities (TL) $2,019.7

$2,069.6

Net Assets (NA) $404.1

$201.6

Total Revenues (TR) $2,161.9

$2,026.9

Interest Expense (Int) $94.1

$119.4

Excess of Revenues Over Expenses (ER) $235.9

$254.6

Cash Flow from Operations (CFO) $411.5

$342.7

Working Capital $335.9

$178.4

FINANCIAL RATIOS

12/31/12

12/31/11

Current Ratio (CA/CL) 2.1

1.6

Cash Flow to Current Liabilities (CFO/CL) 1.4

1.1

Long-Term Debt to Net Assets (TL-CL/NA) 4.3

8.7

Times Interest Earned (ER+Int/Int) 3.5

3.1

Net Assets to Total Assets (NA/TA) 16.7%

8.9%

Operating Margin (ER/TR) 10.9%

12.6%

Return on Assets (ER/TA) 9.7%

11.2%

Operating Cash Flow to Assets (CFO/TA) 17.0% 15.1%

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

The Villages Tri-County Medical Center, Inc. d/b/a The Villages Regional Hospital (CON application #10197) is a 223-bed general

acute care hospital, trying to establish a 30-bed CMR unit in Sumter County, Florida. The applicant is owned by Central Florida Health Alliance, Inc. (Parent).

The applicant provided a copy of the June 30, 2012, and 2011, audited

financial statements of its parent. These statements were analyzed for the purpose of evaluating the parent’s ability to provide the capital and operational funding necessary to implement the project.


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Short-Term Position - Parent: The parent’s current ratio in year two of 2.8 is above average and

indicates current assets are approximately 2.8 times current liabilities, a good position. The working capital (current assets less current liabilities)

of $99.8 million is a measure of excess liquidity that could be used to fund capital projects. The ratio of cash flow to current liabilities of 0.8 is slightly below average and an adequate position. Overall, the parent has

an adequate short-term position (see Table 1 below). Long-Term Position - Parent:

The ratio of long-term debt to net assets in year two of 0.9 is above average and indicates that long-term debt is greater than equity, a weak

position. The ratio of cash flow to assets of 8.7 percent is slightly below average and an adequate position. The most recent year had revenues in excess of expenses of $20.2 million which resulted in a 5.1 percent

operating margin. Overall, the parent has an adequate long-term position (see Table 1 below).

Capital Requirements: The applicant indicates on Schedule 2 capital projects totaling $137.8

million which includes this project, a TVRH north tower addition, and other capital expenditures.

Available Capital: The applicant indicates on Schedule 3 of its application that funding for

the project will be provided from cash on hand by the parent. A letter from the parent’s chief financial officer in support of the related company financing was included. The parent’s 2012, audited financial statements

shows $99.8 million in working capital and $42.9 million in cash flow from operations.


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TABLE 1 The Villages Tri-County Medical Center, Inc. d/b/a The Villages Regional Hospital -

CON application #10197

Central Florida Health Alliance,

Inc. (Parent) In Thousands

Central Florida Health Alliance,

Inc. (Parent) In Thousands

06/30/12

06/30/11

Current Assets (CA) $156,806

$149,599

Cash and Current Investment $87,634

$77,123

Total Assets (TA) $491,780

$471,282

Current Liabilities (CL) $56,985

$69,429

Goodwill $0

$0

Total Liabilities (TL) $260,194

$263,777

Net Assets (NA) $231,586

$207,505

Total Revenues (TR) $395,688

$386,470

Interest Expense (Int) $6,644

$6,323

Excess of Revenues Over Expenses (ER) $20,206

$23,725

Cash Flow from Operations (CFO) $42,945

$54,627

Working Capital $99,821

$80,170

FINANCIAL RATIOS

06/30/12

06/30/11

Current Ratio (CA/CL) 2.8

2.2

Cash Flow to Current Liabilities (CFO/CL) 0.8

0.8

Long-Term Debt to Net Assets (TL-CL/NA) 0.9

0.9

Times Interest Earned (ER+Int/Int) 4.0

4.8

Net Assets to Total Assets (NA/TA) 47.1%

44.0%

Operating Margin (ER/TR) 5.1%

6.1%

Return on Assets (ER/TA) 4.1%

5.0%

Operating Cash Flow to Assets (CFO/TA) 8.7% 11.6%

Conclusion: Funding for this project and the entire capital budget

should be available as needed.

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

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

A comparison of the applicants’ estimates to the control group values provides for an objective evaluation of financial feasibility, (the likelihood that the services can be provided under the parameters and conditions

contained in Schedules 7 and 8), and efficiency, (the degree of economies achievable through the skill and management of the applicant). In


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general, projections that approximate the median are the most desirable, and balance the opposing forces of feasibility and efficiency. In other

words, as estimates approach the highest in the group, it is more likely that the project is feasible, because fewer economies must be realized to

achieve the desired outcome. Conversely, as estimates approach the lowest in the group, it is less

likely that the project is feasible, because a much higher level of economies must be realized to achieve the desired outcome. These relationships hold true for a constant intensity of service through the

relevant range of outcomes. As these relationships go beyond the relevant range of outcomes, revenues and expenses may, either, go

beyond what the market will tolerate, or may decrease to levels where activities are no longer sustainable.

Gross revenues, net revenues, and costs were obtained from Schedules 7 and 8 in the financial portion of the applications and compared to the

control group as a calculated amount per adjusted patient day. Both applicants will be compared to hospitals in the rehabilitation group

(Group 18). An intensity factor for comparative purposes of 1.2278 was calculated based on the average of the group. This methodology is used to adjust the group values to reflect the intensity of the patient as

measured by case mix. Per diem rates are projected to increase by an average of 2.7 percent per year. Inflation adjustments were based on the

new CMS Market Basket, 2nd Quarter, 2013. HealthSouth Rehabilitation Hospital of Sumter/Lake County, LLC

(CON application #10196): Projected net revenue per adjusted patient day (NRAPD) of $1,127 in year one and $1,199 in year two falls between the control group median and lowest values of $1,197 and $1,075 in year

one and $1,229 and $1,104 in year two. With net revenues falling between the median and lowest in the control group, the facility is

expected to consume health care resources in proportion to the services provided in year one (see Tables 2 and 3 below).

Anticipated costs per adjusted patient day (CAPD) of $1,216 in year one and $1,098 in year two is between the control group median and highest

values of $975 and $1,650 in year one and $1,002 and $1,694 in year two. With projected cost between the median and highest values in the control group, costs appear reasonable (see Tables 2 and 3 below). The


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applicant is projecting a decreased CAPD between year one and year two of $118, or 9.7 percent. It should be noted that this application is for a

new facility. The first year of operation has a below average occupancy rate. The low occupancy rate decreases economies of scale and as the

occupancy rate increases, CAPD would be expected to decrease. The year two projected operating income for the project of $1,297,854

computes to an operating margin per adjusted patient day of $101, or 8.5 percent, which is between the median and lowest values of $214 and negative $23. With a projected operating margin between the median

and lowest values in the control group, the operating margin appears reasonable and efficient.

Conclusion: Assuming the applicant will be able to obtain funding for the project, the 50-bed rehabilitation hospital appears to be financially

feasible.


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TABLE 2


CON application # 10196 Dec-16 YEAR 1

VALUES ADJUSTED

2011 DATA Peer Group 18 YEAR 1 ACTIVITY

FOR INFLATION

ACTIVITY PER DAY

Highest Median Lowest

ROUTINE SERVICES 17,168,342 1,797

1,756 685 559

INPATIENT AMBULATORY 0 0

7 0 0

INPATIENT SURGERY 0 0

0 0 0

INPATIENT ANCILLARY SERVICES 0 0

1,714 990 869

OUTPATIENT SERVICES 0 0

600 119 0

TOTAL PATIENT SERVICES REV. 17,168,342 1,797

2,878 1,879 1,549

OTHER OPERATING REVENUE 25,832 3

81 2 0

TOTAL REVENUE 17,194,174 1,800

2,917 1,881 1,552

DEDUCTIONS FROM REVENUE 6,427,778 673

0 0 0

NET REVENUES 10,766,396 1,127

1,614 1,197 1,075

EXPENSES ROUTINE 3,144,372 329

506 183 162

ANCILLARY 2,624,315 275

393 230 193

AMBULATORY 0 0

0 0 0

TOTAL PATIENT CARE COST 5,768,687 604

0 0 0

ADMIN. AND OVERHEAD 3,840,413 402

0 0 0

PROPERTY 2,002,166 210

0 0 0

TOTAL OVERHEAD EXPENSE 5,842,579 612

900 518 387

OTHER OPERATING EXPENSE 0 0

0 0 0

TOTAL EXPENSES 11,611,266 1,216

1,650 975 855

OPERATING INCOME -844,870 -88

330 214 -23

-7.8%

PATIENT DAYS 9,538 ADJUSTED PATIENT DAYS 9,552 TOTAL BED DAYS AVAILABLE 18,300

VALUES NOT ADJUSTED

ADJ. FACTOR 0.9985

FOR INFLATION

TOTAL NUMBER OF BEDS 50


PERCENT OCCUPANCY 52.12%

88.5% 73.7% 55.1%

PAYER TYPE PATIENT DAYS % TOTAL SELF PAY 95 1.0% MEDICAID 0 0.0%

7.8% 2.1% 0.0%

MEDICAID HMO 172 1.8% MEDICARE 8,185 85.8%

86.1% 77.4% 45.8%

MEDICARE HMO 304 3.2% INSURANCE 191 2.0% HMO/PPO 572 6.0%

20.7% 12.6% 3.6%

OTHER 19 0.2% TOTAL 9,538 100%


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TABLE 3

HealthSouth Rehabilitation Hospital of Sumter/Lake County, LLC CON application # 10196 Dec-17 YEAR 2

VALUES ADJUSTED


FOR INFLATION

ACTIVITY PER DAY



1,804 704 574


7 0 0


0 0 0

INPATIENT ANCILLARY SERVICES 0 0

1,760 1,016 892


616 122 0


2,956 1,930 1,591

OTHER OPERATING REVENUE 35,465 3

83 2 0


2,996 1,932 1,594

DEDUCTIONS FROM REVENUE 8,376,841 655

0 0 0

NET REVENUES 15,348,930 1,199

1,658 1,229 1,104


520 188 166

ANCILLARY 3,439,675 269

404 236 198

AMBULATORY 0 0

0 0 0


0 0 0


0 0 0

PROPERTY 2,086,200 163

0 0 0


924 532 397


0 0 0


1,694 1,002 878

OPERATING INCOME 1,297,854 101

330 214 -23

8.5%


VALUES NOT ADJUSTED

ADJ. FACTOR 0.9985

FOR INFLATION




88.5% 73.7% 55.1%


7.8% 2.1% 0.0%


86.1% 77.4% 45.8%


20.7% 12.6% 3.6%

OTHER 26 0.2% TOTAL 12,777 100%


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The Villages Tri-County Medical Center, Inc. d/b/a The Villages Regional Hospital (CON application #10197): Projected net revenue

per adjusted patient day (NRAPD) of $1,307 in year one and $1,334 in year two is between the control group highest and median values of

$1,593 and $1,181 in year one and $1,636 and $1,213 in year two. With net revenues falling between the control groups highest and median values, net revenues appear reasonable (see Tables 2 and 3 below).

Anticipated cost per adjusted patient day (CAPD) of $1,240 in year one and $1,177 in year two is between the control group median and highest

values of $1,628 and $962 in year one and $1,671 and $988 in year two. With cost projected between the median and highest values, the costs

appear to be reasonable (see Tables 2 and 3 below). The applicant is projecting a decrease in CAPD between year one and year two of $63, or five percent. It should be noted that this application is for a new facility.

The first year of operation has a below average occupancy rate. The low occupancy rate decreases economies of scale and as the occupancy rate

increases, CAPD would be expected to decrease.

The year two projected operating income for the applicant of $1.1 million

computes to an operating margin per adjusted patient day of $157 or 11.8 percent which is between the control group’s lowest and median values of negative $23 and $214. With operating margin between the

control group’s lowest and median values, operating margin appears reasonable (see Table 3 below).

Conclusion: This project appears to be financially feasible.


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TABLE 2

The Villages Tri-County Medical Center, Inc. d/b/a The Villages Regional Hospital – CON application #10197

Jun-16 YEAR 1

VALUES ADJUSTED


FOR INFLATION

ACTIVITY PER DAY



1,733 676 552


7 0 0


0 0 0

INPATIENT ANCILLARY SERVICES 11,674,440 2,286

1,691 976 857


592 117 0


2,840 1,854 1,528

OTHER OPERATING REVENUE 0 0

80 2 0


2,878 1,856 1,531

DEDUCTIONS FROM REVENUE 13,931,958 2,727

0 0 0

NET REVENUES 6,677,212 1,307

1,593 1,181 1,060


499 180 160

ANCILLARY 2,037,653 399

388 226 190

AMBULATORY 0 0

0 0 0


0 0 0


0 0 0

PROPERTY 880,884 172

0 0 0


888 511 381


0 0 0


1,628 962 844

OPERATING INCOME 343,770 67

330 214 -23

5.1%


VALUES NOT ADJUSTED

ADJ. FACTOR 1.0000

FOR INFLATION




88.5% 73.7% 55.1%


7.8% 2.1% 0.0%


86.1% 77.4% 45.8%


20.7% 12.6% 3.6%

OTHER 0 0.0% TOTAL 5,108 100%


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TABLE 3

The Villages Tri-County Medical Center, Inc. d/b/a The Villages Regional Hospital – CON application #10197

Jun-17 YEAR 2

VALUES ADJUSTED


FOR INFLATION

ACTIVITY PER DAY



1,779 694 567


7 0 0


0 0 0

INPATIENT ANCILLARY SERVICES 17,213,614 2,354

1,737 1,003 880


608 120 0


2,917 1,904 1,569

OTHER OPERATING REVENUE 0 0

82 2 0


2,956 1,906 1,573

DEDUCTIONS FROM REVENUE 20,628,555 2,821

0 0 0

NET REVENUES 9,759,053 1,334

1,636 1,213 1,089


513 185 164

ANCILLARY 2,990,617 409

398 233 196

AMBULATORY 0 0

0 0 0


0 0 0


0 0 0

PROPERTY 880,884 120

0 0 0


912 525 392


0 0 0


1,671 988 867

OPERATING INCOME 1,150,521 157

330 214 -23

11.8%


VALUES NOT ADJUSTED

ADJ. FACTOR 1.0000

FOR INFLATION




88.5% 73.7% 55.1%


7.8% 2.1% 0.0%


86.1% 77.4% 45.8%


20.7% 12.6% 3.6%

OTHER 0 0.0% TOTAL 7,313 100%


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

Competition to promote quality and cost-effectiveness is driven primarily

by the best combination of high quality and fair price. Competition forces entities to ultimately increase quality and reduce charges/cost in order to remain viable in the market. The health care industry has

several factors that limit the impact competition has to promote quality and cost-effectiveness. These factors include a disconnect between the payer and the end user of health care services as well as a lack of

consumer friendly quality measures and information. These factors make it difficult to measure the impact this project will have on

competition to promote quality and cost-effectiveness. However, we can measure the potential for competition to exist in a couple of areas.

The impact of the price of services on consumer choice is limited to the payer type. Most consumers do not pay directly for hospital services.

Rather, they are covered by a third-party payer. The impact of price based competition would be limited to third-party payers that negotiate price for services, namely managed care organizations. Therefore, price

competition is limited to the share of patient days that are under managed care plans.

There are five existing CMR programs in District 3 with a total of 198 licensed CMR beds. There are no existing CMR programs in Lake and

Sumter Counties. HealthSouth Rehabilitation Hospital of Sumter/Lake County, LLC

(CON application #10196): Provider-Based Competition:

The applicant is applying to establish a new 50-bed CMR hospital in District 3.

Price-Based Competition: The applicant is projecting six percent of patient days from managed care

payers with 85.8 percent of patient days expected to come from fixed price government payer sources (Medicare and Medicaid) (see Tables 2

and 3 above – CON application #10196). The Villages Tri-County Medical Center, Inc. d/b/a The Villages

Regional Hospital (CON application #10197): Provider-Based Competition:

The applicant is applying to establish a 30-bed CMR unit within TVRH in District 3.


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Price-Based Competition: The applicant is projecting 6.5 percent of patient days from managed

care payers with 93 percent of patient days expected to come from fixed price government payer sources (Medicare and Medicaid) (see Tables 2

and 3 above – CON application #10197). Conclusion (for both applicants): The potential for provider-based

competition will increase; however, price-based competition will likely be limited.

f. Are the proposed costs and methods of construction reasonable? Do they comply with statutory and rule requirements?

ss. 408.035(1)(h), Florida Statutes. Ch. 59A-3, Florida Administrative Code. The plans submitted for both applicants were schematic in detail with the expectation that they will each necessarily be revised and refined during the Design Development (Preliminary) and Contract Document Stages.

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

in-depth effort to determine complete compliance with all applicable codes and standards. The final responsibility for facility compliance ultimately rests with the owner. HealthSouth Rehabilitation Hospital of Sumter/Lake County, LLC

(CON application #10196): The site for the new hospital has not been selected. The applicant acknowledges that disaster preparedness issues

will be a criteria in selecting a site, building design and construction. Plans submitted by the applicant indicate that the building will be fully

sprinklered with construction type FBC Type II-A and NFPA 220 Type II(1,1,1). Both construction types are sufficient for the occupancy and building size (with sprinklered, and area modification increase). The

project information on the plan indicates that the project will comply with current codes. According to the narrative, a generator will provide

back-up energy with capacity to support the proposed hospital. The proposed hospital is divided into smoke compartments as required

by the applicable codes. The patient rooms and support functions for the nursing unit are separated from public, administration and outpatient

areas. All patient rooms are ADA accessible private rooms with accessible toilet/shower rooms. The facility’s proposed patient living areas, dining, recreation and day space would meet the minimum

requirement of 55 square feet of space per patient.


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All other required support spaces are provided and adequately sized and located. Occupational, physical therapy and outpatient rehabilitation

services are incorporated into the therapy department which includes a large therapy gym.

The estimated construction costs and project completion forecast appear to be reasonable.

The design as presented does not indicate any major impediments that would prevent the design and construction of a code compliant facility.


Regional Hospital (CON application #10197): The architectural plans and narrative submitted by the applicant indicate that the building is fully sprinklered, and construction type is listed as FBC, type IB. This

construction type does meet the requirements of the current Florida Building Code (FBC) for occupancy and building size. Additional floor

(fifth floor) under FBC “sprinkler system increase” is allowed. The proposed 30-bed CMR unit will be housed on the fifth floor of the

north tower addition, scheduled for completion in April 2015. All patient bedrooms would be private with a connecting toilet/shower room serving only one patient room. The plans and narrative indicate that all patient

rooms and patient toilet/shower rooms will comply with the FBC-Accessibility requirements. The size of the patient bedrooms exceeds the

minimum requirements of the Guidelines for Design and Construction of Health Care Facilities.

The CMR unit would be organized into two 15-bed wings with nurse stations, and required support areas. Patient day rooms are located at the end of each patient wing with abundant daylight and view. Physical

therapy/occupational therapy, activity/dining, and daily living suites are central to the two 15-bed wings. This arrangement reduces the travel

distance from the resident rooms to the most frequently used areas. The architectural plans and narrative indicate the proposed CMR unit is

divided into smoke compartments, and the project will comply with the current codes.

The estimated construction costs and project completion forecast appear to be reasonable.

The design as presented does not indicate any major impediments that would prevent the design and construction of a code compliant facility.


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

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

The two tables below illustrate Central Florida Health Alliance and District 3 acute care hospitals’ provision of Medicaid/Medicaid HMO and

charity care for Fiscal Years 2011 and 2012 data, respectively, from the Florida Hospital Uniform Reporting System.

Medicaid, Medicaid HMO and Charity Data

CFHA and District 3 Facilities

Fiscal Year 2011

Medicaid and Medicaid HMO

Days


Percent

Percent of

Charity Care

Percent Combined

Medicaid, Medicaid HMO

and Charity Care

Leesburg Regional Medical Center 8,452 10.86% 3.12% 13.98%

The Villages Regional Hospital 1,876 3.72% 2.52% 6.23%

District Total 158,115 16.01% 2.89% 18.90% Source: Agency for Health Care Administration Florida Hospital Uniform Reporting System.


CFHA and District 3 Facilities Fiscal Year 2012


Days


Percent

Percent of

Charity Care

Percent Combined Medicaid,

Medicaid HMO

and Charity Care

Leesburg Regional Medical Center 7,811 11.06% 2.67% 13.73%

The Villages Regional Hospital 2,061 3.93% 2.46% 6.39%

District Total 160,557 16.03% 2.95% 18.98% Source: Agency for Health Care Administration Florida Hospital Uniform Reporting System.

The table below illustrates HealthSouth’s and Florida’s freestanding CMR facilities provision of Medicaid/Medicaid HMO days and charity care for

Fiscal Years 2010-2012 based on the Florida Hospital Uniform Reporting System.


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HealthSouth Facilities and All Freestanding Florida CMR Facilities

Fiscal Years 2010-2012


Days


Percent

Percent of Charity Care

Percent Combined Medicaid,

Medicaid HMO and Charity Care

FY 2010

HealthSouth Facilities (9) 5,006 2.71% 0.75% 3.46%

Total Freestanding CMR Facilities (13) 12,767 4.74% 0.96% 5.71%

FY 2011


Total Freestanding CMR Facilities (13) 10,661 3.90% 1.01% 4.91%

FY 2012


Total Freestanding CMR Facilities (14) 9,330 3.30% 1.26% 4.56% Source: Agency for Health Care Administration Florida Hospital Uniform Reporting System for applicable years.

HealthSouth Rehabilitation Hospital of Sumter/Lake County, LLC (CON application #10196) states that although it has no past or current

operations, HealthSouth facilities have an extensive history of services to Medicaid patients and the medically indigent. The applicant provides a

historical payer mix for Florida HealthSouth facilities and notes the increasing number of self-pay and charity care patients over the last three years. See the table below.

HealthSouth Rehabilitation Hospitals of Florida

Payer Mix for CY 2010-2012 Total Discharges Patient Days

Payer 2010 2011 2012 2010 2011 2012

Medicare 10,496 10,914 10,881 150,669 152,219 151,875

Medicaid 313 288 332 5,084 4,107 4,283

Commercial 1,541 1,680 2,043 21,992 22,436 27,827

Self-Pay/Charity 77 140 302 1,613 2,266 4,225

Other 188 216 206 3,040 3,666 6,522

Total 12,615 13,238 13,764 182,398 184,694 194,732

Percentage of Total Discharges Percentage of Patient Days

2010 2011 2012 2010 2011 2012

Medicare 83.2% 82.4% 79.1% 82.6% 82.4% 78.0%

Medicaid 2.5% 2.2% 2.4% 2.8% 2.2% 2.2%

Commercial 12.2% 12.7% 14.8% 12.1% 12.1% 14.3%

Self-Pay/Charity 0.6% 1.1% 2.2% 0.9% 1.2% 2.2%

Other 1.5% 1.6% 1.5% 1.7% 2.0% 3.3% Source: CON application #10196, page 150.

HealthSouth proposes to provide service to Medicaid patients and the medically indigent. As a condition of approval of CON application

#10196, the applicant agrees to provide a minimum of 2.5 percent of patient days to the combination of Medicaid patients and uninsured


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patients who meet the definition of charity care patients under Florida Statutes. HealthSouth indicates that services to the latter category will

include any professional fees for physiatrists overseeing the patient’s rehabilitation while at the proposed facility.

The Villages Tri-County Medical Center, Inc. d/b/a The Villages Regional Hospital (CON application #10197) has a history of providing

care to Medicaid and medically indigent patients. During FYE June 30, 2011, the applicant provided 1,876 of its total annual patient days to Medicaid/Medicaid HMO patients (3.72 percent) and 2.52 percent to

charity care patients.

CFHA states a long and well-established commitment of providing care to all patients in need, including Medicaid patients and medically indigent patients and also states bringing a not-for-profit focus , ensuring that its

services are available to all local residents, including the vulnerable indigent, elderly and transient populations. The applicant proposes to

condition CON approval to a minimum of 1.3 percent of its annual CMR patient days to the combination of Medicaid, Medicaid HMO and charity (including self-pay) patients.

F. SUMMARY


(CON application #10196) proposes to establish a new 50-bed CMR hospital on a 7.5 acre site in northern Sumter County, Florida.

The applicant proposes eight conditions to CON approval on the application’s Schedule C (see Item C – Project Summary).

The total project cost is estimated at $25,855,430. The project involves 53,192 GSF of new construction at a construction cost of $12,207,933.

The Villages Tri-County Medical Center, Inc. d/b/a The Villages Regional Hospital (CON application #10197) proposes to establish a

new 30-bed comprehensive medical rehabilitation (CMR) unit on the fifth floor of the north tower addition at The Villages Regional Hospital in

Sumter County, Florida. The applicant proposes eight conditions to CON approval on the

application’s Schedule C (see Item C-Project Summary). The total project cost is estimated at $8,756,437. The project involves

28,597 GSF of new construction at a construction cost of $5,561,466.


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Need:

In Volume 39, Number 140, dated July 19, 2013 of the Florida Administrative Register, a fixed need pool of zero beds was published for

CMR beds in District 3 for the January 2019 planning horizon. District 3 has 198 licensed and zero approved CMR beds. During CY

2012, District 3 experienced 74.72 percent CMR bed utilization. The applicants are applying outside of the fixed need pool.

Both applicants present data which indicates that Sumter and Lake County residents in District 3 are underserved compared to other

districts around the state. HealthSouth Rehabilitation Hospital of Sumter/Lake County, LLC

(CON application #10196) provided six unduplicated letters of support (with a total of 10 signatures), indicating there is need for the proposed

CMR facility in the service area. The applicant also offers four supportive testimonials from HealthSouth patients who have received rehabilitation services from some HealthSouth rehabilitation hospitals in Florida.

The applicant poses the following 10 reasons to warrant project approval.

The existing CMR provider in the subdistrict, Leesburg Regional Medical Center North (LRMCN), offers only a minimal program in an

old facility that is perceived as a nursing home.

Because of the inadequacies of the current CMR program, the

subdistrict has CMR use rates and CMR retention rates that are abnormally low.

An unexpectedly low percentage of CMS 13 patients are referred to CMR and an exceptionally high percentage of CMS 13 patients are

referred to skilled nursing facilities (SNFs) because of the perception that the LRMCN is not materially different than a SNF rehabilitation program.

LRMC does not provide adequate financial access to CMR services to Medicaid and charity care patients, relative to HealthSouth’s Florida

hospitals.


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Shifting patients from SNF beds to a top quality CMR program will

relieve pressure on nursing homes. The nursing bed moratorium and the growing elderly population in the area will require SNF beds to be used to provide more nursing care and less rehabilitation care in the

future.

HealthSouth as a specialized CMR provider has the advantage of

being focused solely on providing CMR services. HealthSouth’s size and focus makes it preferable to smaller CMR units in general

hospitals or multi-purpose specialty hospitals for efficiency, technology, space configuration, staffing and patient outcomes.

HealthSouth has a history of providing top quality CMR services in

Florida markets and increasing CMR use rates to appropriate levels.

Central Florida Health Alliance (LRMCN and the applicant-The

Villages Regional Hospital) has never shown a true commitment to implementing a top quality CMR program, despite having provided

CMR services for 20 years.

The Agency cannot rely on CFHA to follow through on its

commitments. CFHA has received and abandoned two CONs for major projects. HealthSouth, on the other hand, has promptly

implemented each CON it has received from the Agency.

There is sufficient demand for CMR services in the subdistrict, given

appropriate used rates and retention rates to fill LRMCN’s 22 beds and HealthSouth’s proposed 50 beds at 85 percent capacity. HRHSLC will not adversely impact LRMCN’s CMR unit if LRMCN uses the two

years between the time HealthSouth receives a CON and the date HRHSLC opens to improve its existing program. Any adverse impact HRHSLC has on LRMCN will be due to the relative scope and

capabilities of the programs as perceived by physicians, patients and families.

The applicant indicates that its data support a need for 51 CMR beds in 2012 and 70 CMR beds in 2018 at 85 percent occupancy. HealthSouth

maintains that service area residents utilize inpatient CMR services at a rate significantly less and SNF rehabilitation services significantly more

than Floridians as a whole in all age groups. The Villages Tri-County Medical Center, Inc. d/b/a The Villages

Regional Hospital (CON application #10197) had 132 unduplicated letters of support (with a total of 133 signatures) indicating there is need for the proposed CMR unit in the service area.

The applicant poses the following seven “not normal” or special

circumstances to warrant project approval.

The number of CMR discharges per 1,000 in District 3 and Sumter

County is below the average discharge rate for Florida.


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The percentage of acute care discharges referred to CMR services in

District 3 and Sumter County is below the statewide average.

This lower percentage of referrals to CMR may be explained by the

fact that District 3 residents, generally, and Sumter and Lake residents, specifically, are referred to Medicare SNFs at rates above the statewide average.

In spite of a new provider opening 40 additional beds in 2012, the CMR beds in District 3 had the second highest occupancy rate among

all of Florida’s service districts in 2012, with a rate of 74.7 percent.

There is growing recognition within the health care industry, and

implicitly recognized by the Agency’s recent approval of several new CMR programs, that CMR services should be available on a local

rather than a regional basis.

The approval of TVRH’s proposed CMR program will not have a

significant impact on existing providers.

TVRH has the highest Medicare mix of patients of any acute care

hospital in District 3 (82.3 percent). The applicant indicates that its data support a need for as few as 21 to

as many as 31 CMR beds in 2012 and a need for 24 to 38 CMR beds in 2019 at 85 percent occupancy. TVRH maintains that the proposed unit

will complement the wide range of services already available among its CFHA family of hospitals.

Quality of Care: HealthSouth Rehabilitation Hospital of Sumter/Lake County, LLC

(CON application #10196): Agency complaint records indicate that during the three-year period ending September 11, 2013 HealthSouth’s

ten hospitals (803 beds) had a total of 12 substantiated complaints. The Villages Tri-County Medical Center, Inc. d/b/a The Villages

Regional Hospital (CON application #10197): Agency complaint records indicate that during the three-year period ending September 11,

2013 the Central Florida Health Alliance’s three hospitals (539 beds) had a total of 12 substantiated complaints.

Both applicants demonstrate the ability to provide quality care.


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Medicaid/Indigent Care:


(CON application #10196) conditions the proposed project to provide a minimum of 2.5 percent of patient days to the combination of Medicaid patients and uninsured patients who meet the definition of charity care

patients under Florida Statutes.


Regional Hospital (CON application #10197) conditions the proposed project to a minimum of 1.3 percent of its annual CMR patient days to

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

Cost/Financial Analysis:

Both applicants:

Funding for the project and the entire capital budget should be

available as needed.

The project appears to be financially feasible.

Potential for provider-based competition will increase; however,

price-based competition will likely be limited.

Architectural Analysis:

HealthSouth Rehabilitation Hospital of Sumter/Lake County, LLC (CON application #10196):

The site for the proposed new hospital has not been selected.

The applicant acknowledges that disaster preparedness issues will be

a criteria in selecting a site, building design and construction.

The design as presented does not indicate any major impediments

that would prevent the design and construction of a code compliant facility.

The estimated construction cost and project completion forecast

appear to be reasonable.


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The Villages Tri-County Medical Center, Inc. d/b/a The Villages Regional Hospital (CON application #10197):

The proposed CMR unit will be housed on the fifth floor of the north

tower addition at TRVH.

The size of the patient bedrooms exceeds the minimum requirements

of the Guidelines for Design and Construction of Health Care Facilities.

The design as presented does not indicate any major impediments that would prevent the design and construction of a code compliant

CMR unit.

The estimated construction cost and project completion forecast

appear to be reasonable.

G. RECOMMENDATION

Deny CON #10196 and CON #10197.


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AUTHORIZATION FOR AGENCY ACTION

Authorized representatives of the Agency for Health Care Administration

adopted the recommendation contained herein and released the State Agency Action Report.

DATE:

James B. McLemore Health Services and Facilities Consultant Supervisor

Certificate of Need

Jeffrey N. Gregg

Director, Florida Center for Health Information and Policy Analysis

STATE AGENCY ACTION REPORT - FL Agency for Health Care ... · Villages, Florida 31262 and the site...

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