STATE AGENCY ACTION REPORT ON APPLICATION FOR CERTIFICATE OF NEED A. PROJECT IDENTIFICATION: 1. Applicant/CON Action No. Greenbriar NH, L.L.C./CON #10215 4042 Park Oaks Boulevard, Suite 300 Tampa, Florida 33610 Authorized Representative: Ronald J. Swartz, Vice-President & CFO (813) 675-2341 2. Service District/Subdistrict District 6/Subdistrict 2 (Manatee County) B. PUBLIC HEARING: No public hearing was held or requested regarding the proposed project. C. PROJECT SUMMARY Greenbriar NH, L.L.C. (CON #10215) proposes to add 19 community nursing home beds to Greenbriar Rehabilitation and Nursing Center (District 6, Subdistrict 2 Manatee County) through the delicensure of 19 community nursing home beds at South Florida Health and Rehabilitation Center (District 6, Subdistrict 1 Hillsborough County) i. Greenbriar Rehabilitation and Nursing Center s 60 licensed community nursing home beds averaged 91.85 percent occupancy and South Florida Health and Rehabilitation Center s 179 beds averaged 85.68 percent occupancy during the 12-month reporting period ending June 30, 2013. Greenbriar NH, L.L.C. indicates that the 19 beds in this project (and two relocated facility beds) will be a part of a new 21-bed Rapid Recovery rehabilitative care unit, so the majority of its patients will be reimbursed by Medicare. The applicant proposes no conditions on its Schedule C.
Total project cost is $1,935,372. The project involves 1,676 gross square feet (GSF) of new construction and 30,938 GSF of renovation. Total construction cost is $1,707,669. Total project cost includes: land, building, equipment and project development costs. In 2011, the Florida Legislature extended the moratorium on the issuance of certificates of need for additional community nursing beds until Medicaid managed care is implemented statewide pursuant to Sections 409.961-409.985, Florida Statutes, or October 2016, whichever is earlier. This proposal represents a relocation, not an addition of beds within District 6 and is subject to expedited review pursuant to Subsection 408.036 (2) (c) Florida Statutes and Rule 59C-1.004(2) (d), Florida Administrative Code. D. REVIEW PROCEDURE The evaluation process is structured by the certificate of need review criteria found in Section 408.035, Florida Statutes; and applicable rules of the State of Florida Chapters 59C-1 and 59C-2, Florida Administrative Code. These criteria form the basis for the goals of the review process. The goals represent desirable outcomes to be attained by successful applicants who demonstrate an overall compliance with the criteria. Analysis of an applicant's capability to undertake the proposed project successfully is conducted by evaluating the responses and data provided in the application, and independent information gathered by the reviewer. 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 meet(s) the review criteria. Rule 59C-1.010(3) (b), Florida Administrative Code, prohibits any amendments once an application has been deemed complete. The burden of proof to entitlement of a certificate rests with the applicant. As such, the applicant is responsible for the representations in the application. This is attested to as part of the application in the Certification of the Applicant(s). As part of the fact-finding, the consultant Steve Love analyzed the application with consultation from the financial analyst, Derron Hillman, who reviewed the financial data. 2
E. CONFORMITY OF PROJECT WITH REVIEW CRITERIA The following pages indicate the level of conformity of the proposed project with the review criteria and application content requirements found in Sections 408.035 and 408.037, Florida Statutes; and Chapters 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? Ch. 59C-1.008(2), Florida Administrative Code. As noted above, Greenbriar NH, L.L.C. proposes to add 19 community nursing home beds at Greenbriar Rehabilitation and Nursing Center, (District 6, Subdistrict 2 Manatee County) through the delicensure of 19 community nursing home beds at South Florida Health and Rehabilitation Center, (District 6, Subdistrict 1 Hillsborough County). Section 408.036(2)(c), Florida Statutes, provides for the: Relocation of a portion of the nursing home s licensed beds to a facility within the same district, if the location is within a 30-mile radius of the existing facility and the total number of nursing home beds in the district does not increase. The CON reviewer confirms that the facilities are located within 30 miles of each other and the total number of nursing homes in the district does not increase. In CON application #10215, Exhibit 1-1, the applicant provides a notarized letter from the authorized licensee of the facility from which the beds are being relocated, certifying that the beds will be delicensed should the CON be awarded to the applicant. Expedited reviews may be submitted at any time and do not respond to fixed need pool publications. See Item 3. a. for a discussion of need for the project. 2. Agency Rule Preferences The following Florida Administrative Rule criteria applies to the project. a. Relocation of a portion of the nursing home s licensed beds to a licensed facility within the same district, if the relocation is within a 30-mile radius of the existing facility and the total number of nursing home beds in the district does not increase. (Rule 59C- 1.004 (2) (d) F.A.C.) 3
Greenbriar NH, L.L.C. indicates that the facilities are within a 30-mile radius of each other and both are located in District 6. Greenbriar Rehabilitation and Nursing Center, is located at 210 21 st Ave W, Bradenton, Florida 34205 and South Florida Health and Rehabilitation Center at 4610 S Manhattan Ave, Tampa, Florida 33611. These District 6 facilities are separated by an approximate 28.7 mile drive, per the Agency s FloridaHealthFinder.gov website. b. Applications submitted under this paragraph must be submitted by the licensed nursing home proposing to add the beds. Notarized letter from the facility from which the beds are being relocated must be submitted certifying that beds will be delicensed should the CON be awarded to the applicant. (Rule 59C-1.004 (2) (d) 1. F.A.C.) The applicant, Greenbriar NH, L.L.C. is the licensee for the facility which will be adding beds, Greenbriar Rehabilitation and Nursing Center. A notarized letter from Ms. Judith Haizlip, authorized representative of SV/Holy Point Properties, Inc., the licensee of South Florida Health and Rehabilitation Center, agreeing to delicense 19 community nursing home beds, should this CON be approved is included in Exhibit 1-1 of CON application #10215. c. The relocation of beds under this paragraph shall be limited to a portion of beds such that the occupancy rate of the remaining licensed beds of the facility from which beds are being relocated does not exceed 94 percent. (Rule 59C-1.004 (2) (d) 2. F.A.C.) South Florida Health and Rehabilitation Center reported 55,981 patient days in 179 beds or an average of 85.68 percent occupancy during the 12-month reporting period ending June 30, 2013. The reduction of 19 beds to a facility total of 160 beds would have resulted in an average occupancy of 95.86 percent (55,981 patient days/58,400 bed days based on 160 beds and 365 days). However, Greenbriar NH, L.L.C. notes that South Florida Health and Rehabilitation reported 13,597 patient days during April - June of 2013, which with 160 beds and 14,560 bed days would be an average occupancy of 93.39 percent. The applicant also states that during September 2013, the facility reported 4,486 patient days, or 93.46 percent occupancy with 160 beds. The reviewer confirmed the facility s patient days and occupancy rate for the second quarter of 2013. Preliminary local health council utilization data for July September 2013 indicates that South Florida Health and Rehabilitation Center reported 13,945 patient days, which would result in 95.78 per percent utilization for a 160-bed facility. Based on the facility s reported patient days for the months of April September 2013, a 160-bed facility would have had 94.03 percent occupancy. 4
d. Utilization Reports. Within 45 days after the end of each calendar quarter, facilities with nursing facility beds licensed under Chapter 400, F.S. shall report to the agency, or its designee, the total number of patient days which occurred in each month of the quarter and the number of such days which were Medicaid patients. (Rule 59C-1.035 (5) F.A.C.) Greenbriar NH, L.L.C. states that it will provide the required data to the Health Council of West Central Florida, Inc. and to the Agency. 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? Section 408.035(1) (a) and (b), Florida Statutes. As previously discussed, Greenbriar Rehabilitation and Nursing Center presently has 60 licensed beds and is seeking approval for an additional 19 community nursing home beds. The applicant notes that the facility is located near two hospitals Manatee Memorial (319 beds), is within l.6 miles and Blake Medical Center (383 beds) is within 6.2 miles. Greenbriar NH, L.L.C. indicates that the primary issues and health planning benefits that will occur with the 19-bed project s approval include the following factors. Recognizes the demand at Greenbriar Rehabilitation and Nursing Center, a 5-STAR rated facility. Improves access within District 6 by relocating beds to a subdistrict with fewer available beds Expansion permits improvements in the physical plant to occur, expanding services and updating the physical plant Improves quality by addressing residents requests for more private rooms Eliminates 19, three-bed wards at South Tampa Health and Rehabilitation Center. The applicant also states that need for the project is demonstrated in accord with Rule 59C-1.008(2)(e) Florida Administrative Code through a needs methodology assessment that includes: Population demographics and dynamics; Availability, utilization and quality of like services in the subdistrict; Medical treatment; and Market conditions. 5
Subdistrict Greenbriar NH, L.L.C. presents demographic trends in Manatee County, Hillsborough County, District 6 and Florida. The applicant notes that based on the Agency s Population Estimates, September 2013 District 6 has a total population of 2,357,260 of which 393,510 or 16.7 percent are persons age 65 and over compared to Manatee County s 323,469 total population with 80,563 persons or 24 percent of its population age 65 and over. The Agency s population estimates indicate that Manatee County s age 65 and over population will increase to 87,747 or by 8.9 percent by July 1, 2016. The applicant states that more people are demanding private rooms, with two-bed rooms as a maximum. Greenbriar concludes that the project will benefit both nursing homes by allowing them to offer elders enhanced accommodations. Nursing home bed availability is addressed by comparison of the current number of beds per thousand population age 65 and over for District 6 by subdistrict and Florida (see table below). Nursing Home Beds per 1,000 Population Aged 65 and Older Before The Project Jan. 1, 2013 Pop 65+ Community Beds 9/1/13 6 Beds per 1,000 Jan 1, 2016 Pop 65+ After The Project Community Beds 9/1/16 Beds per 1,000 County 6-1 Hillsborough 158,504 3,761 24 175,084 3,742 21 6-2 Manatee 79,688 1,360 17 86,196 1,379 16 6-3 Hardee 3,669 104 28 3,836 104 27 6-4 Highlands 32,315 598 19 33,815 598 18 6-5 Polk 114,341 2,945 26 125,650 2,945 23 District 6 Polk 388,517 3,462,588 8,768 80,074 23 23 424,581 3,762,969 8,768 80,458 Source: CON application #10215, page 3-2, based on AHCA s Population Estimates, September 2013; AHCA s Florida Nursing Home Utilization by District and Subdistrict, July 2012 June 2013. Note: The 384 approved beds in the statewide bed inventory are included in the bed count for 2016. Greenbriar NH, L.L.C. notes that Manatee County has 17 community nursing home beds per 1,000 population and over and because of projected growth, this ratio will decrease to 16 nursing home beds per 1,000 by 2016, even with the project. The applicant concludes here that redistribution of beds toward the most populous areas with the least number of beds will improve availability. It is noted that the applicant s 2016 projections do not address the possibility that the state s moratorium on new home beds may have terminated. In reference to utilization the applicant discusses the 12-month utilization period ending June 20, 2013, noting that Manatee County (Subdistrict 6-2) nursing homes reported 422,021 patient days and averaged 85.02 percent utilization in 1,360 community nursing home beds. During the 12-month reporting period ending June 30, 2013, Greenbriar Rehabilitation and Nursing Center (60 beds) reported 20,116 patient days or 91.85 percent occupancy. Subdistrict 6-1 (Hillsborough 21 21
County) averaged 90.29 percent occupancy (3,761 beds) and District 6 had 89.03 percent in 8,768 beds. The applicant provides the following chart comparing the number of patient days in proportion to the population age 65 and over by subdistricts, District 6 and the state. Nursing Home Patient Days in District 6 by Subdistrict and Florida and Days per 1,000 Persons Age 65 and Over, July 2012-June 2013 Subdistrict County Jan 1, 2013 Pop 65+ 7/12-6/13 Patient Days Days per 1,000 6-1 Hillsborough 158,504 1,239,429 7,820 6-2 Manatee 79,688 422,021 5,296 6-3 Hardee 3,669 30,801 8,395 6-4 Highlands 32,315 198,425 6,140 6-5 Polk 114,341 958,709 8,385 District 6 388,517 2,849,385 7,334 Florida 3,462,588 25,457,012 7,352 Source: CON application #10215, page 1-9, based on AHCA s Population Estimates, September 2013; AHCA s Florida Nursing Home Utilization by District and Subdistrict, July 2012-June 2013. Greenbriar NH, L.L.C. provides the following table to demonstrate that within a five-mile radius of each facility, Greenbriar Rehabilitation and Nursing Center has a greater percentage of population age 65 and compared to South Tampa Health and Rehabilitation Center. 2013 and 2018 Population Estimates for the Elderly Within a 5-Mile Radius of Greenbriar Rehabilitation and Nursing Center and South Tampa Health & Rehab Center 2013 Population Greenbriar 5-Mile Radius 65+ 75+ 85+ Total Population 48,161 24,246 7,329 190,866 Percent 25.2% 12.7% 3.8% 100.0% South Tampa 5-Mile Radius Population 18,176 8,835 2,854 129,682 Percent 14.0% 6.8% 2.2% 100.0% 2018 Population Greenbriar 5-Mile Radius 65+ 75+ 85+ Total Population 53,896 25,936 7,764 197,551 Percent 27.3% 13.1% 3.9% 100.0% South Tampa 5-Mile Radius Population 21,007 9,416 3,044 136,404 Percent 15.4% 6.9% 2.2% 100.0% Source: CON application #10215, page 3-6, based on The Nielson Company, 2013 update. The applicant concludes that Greenbriar Rehabilitation and Nursing Center s greater percentage of population age 65 will increase from 48,161 persons and 25.2 percent of the five-mile area s total population in CY 2013 to 53,896 and 27.3 percent of the 2018 total population, which as shown above, is much more than five area surrounding South Tampa Health and Rehabilitation Center. The applicant concludes that the project will improve access by, Relocating beds to the subdistrict with the fewest available beds per thousand elderly population 7
Relocating beds to a facility where the largest portion of seniors within the subdistrict can easily have access Access for quality rehabilitation services will be improved as the project will focus on rehab therapies and rapid recovery to return the patient home. Greenbriar NH, L.L.C. cites the subdistrict occupancy rate of 85.02 percent (in 1,360 beds) during the 12-month period ending June 30, 2013 and includes a chart showing utilization by facility. The applicant contends that the moderately high utilization is adversely influenced by facilities with three and four bed rooms that often use them as double occupancy rooms and that other facilities often utilize double occupancy rooms as private rooms to meet residents expectations and improve service. Greenbriar NH, L.L.C. notes that Braden River Rehabilitation Center and Riverfront Nursing and Rehabilitation Center have 25 three-bed wards and three four-bed wards and applying the double occupancy use for these facilities, there are actually 31 less beds available than in the inventory. The applicant concludes that considering available beds, the resulting occupancy rate in 1,329 beds would be 87.00 percent in Manatee County nursing homes. b. Does the applicant have a history of providing quality of care? Has the applicant demonstrated the ability to provide quality care? Is the applicant a Gold Seal Program nursing facility that is proposing to add beds to an existing nursing home? Section 408.035(1)(c) and (j), Florida Statutes. Greenbriar NH, L.L.C. states it is an affiliate of Greystone Healthcare Management Corporation, which provides management and administration services to 18 skilled nursing homes and one assisted living facility in Florida. The applicant provides a list of these facilities in the Additional Information Section of CON application #10215. Greenbriar NH, L.L.C. notes that Greenbriar Rehabilitation and Nursing Center was among the nine Greystone skilled nursing facilities that received the Bronze Award for Outstanding Quality Care in 2012 from the American Health Care Association and National Center for Assisted Living. The applicant notes that Greenbriar Rehabilitation and Nursing Center received a 5-STAR (the highest) overall rating on its most recent Agency inspection rating. Greenbriar Rehabilitation and Nursing Center received an overall five-star inspection quality rating for the rating period of April 2011 - September 2013 1. The overall five-star rating was drawn from the following ratings: quality of care (five stars), administration (five stars) 1 Per the Agency s website @ FloridaHealthFinder.gov last updated August 2013, which was confirmed by the reviewer on October 7, 2013. 8
and quality of life (three stars). The facility received five of five stars for each of the following rating components: nutrition and hydration, restraints and abuse, pressure ulcers, decline and dignity. A five-star rating means the facility is in the top 20 percent of the facilities in its region (District 6). Greenbriar NH, L.L.C. states that it has taken advantage of the Florida Health Care Association (FHCA) Quality Credentialing Program. The FHCA s credentialing process includes an internal and external review process of quality issues, which the applicant discusses in Quality of Care CON application #10215, pages 4-1 to 4-14. Copies of Greystone s Quality Improvement Programs, Risk Management/Quality Assurance Standards and Guidelines and Quarterly Systems Review Forms are included in Exhibit 4-3 of CON application #10215. The applicant also discusses the role of the resident council to address concerns and topics of interest. Greenbriar Rehabilitation and Nursing Center is not a Gold Seal Program nursing facility. Agency licensure records indicate that Greenbriar Rehabilitation and Nursing Center had one substantiated complaint, which was in the administration/personnel category during the three-year period ending on December 6, 2013. The 18 Greystone Healthcare Management Corporation affiliated skilling nursing homes (2,106 beds) had 64 substantiated complaints during the same period. A single complaint can encompass multiple complaint categories. The table below has these listed by complaint categories. Greystone Healthcare Management Corporation Affiliated Nursing Homes Substantiated Complaint Categories in the Past 36 Months Complaint Category Number Substantiated Quality of Care/Treatment 37 Resident/Patient/Client Assessment 9 Administration/Personnel 8 Admission, Transfer & Discharge Rights 6 Physical Environment 6 Resident/Patient/Client Rights 5 Dietary Services 4 Nursing Services 4 Infection Control 3 Falsification of Records/Reports 2 Physician Services 2 Resident/Patient/Client Abuse 1 Unqualified Personnel 1 Source: Agency for Health Care Administration complaint records. 9
c. What resources, including health manpower, management personnel, and funds for capital and operating expenditures are available for project accomplishment and operation? Section 408.035(1)(d), Florida Statutes. The financial impact of the project will include the project cost of $1,935,372 and incremental year two operating costs of $1,292,687. The applicant submitted audited financial statements Greystone Healthcare Holding IV, L.L.C. (Parent) for the period ending December 31, 2012 and 2011 were analyzed for the purpose of evaluating the parent s ability to provide operational funding necessary to implement the project. Short-Term Position: The parent s current ratio of 1.2 is below average and indicates current assets are approximately 1.2 times current liabilities, a weak position. The ratio of cash flows to current liabilities of 0.0 is below average, a weak position. The working capital (current assets less current liabilities) of $12.8 million is a measure of excess liquidity that could be used to fund capital projects. Overall, the parent has a weak short-term position (see Table 1). Long-Term Position: Parent - The ratio of long-term debt to net assets of 3.8 is well above average and indicates the applicant may have difficulty acquiring future debt financing if necessary. The ratio of cash flow to assets of 1.4 is below average, a weak position. The most recent year had $6.4 million of revenue in excess of expenses, which resulted in a total margin of 5.7 percent. Overall, the parent has a slightly weak long-term position (see Table 1). Capital Requirements: The applicant indicates on Schedule 2 capital projects totaling $1.96 million which includes this project and equipment. Available Capital: The applicant indicates on Schedule 3 of its application that funding for the project will be provided by the Parent with cash on hand. The Parent provided a letter indicating they will finance the project. 10
TABLE 1 CON application #10215 - Greenbriar NH, L.L.C. Parent 12/31/12 12/31/11 Current Assets $65,026,985 $70,151,975 Cash and Current Investment $5,651,447 $7,213,325 Total Assets $134,586,519 $127,270,287 Current Liabilities $52,268,033 $118,817,001 Total Liabilities $117,591,612 $118,817,001 Net Assets $16,994,907 $8,453,286 Total Revenues $112,923,494 $112,762,855 Interest Expense $2,128,093 $3,413,038 Excess of Revenues Over Expenses $6,436,330 $4,448,900 Cash Flow from Operations $1,904,516 $16,936,893 Working Capital $12,758,952 ($48,665,026) FINANCIAL RATIOS 12/31/12 12/31/11 Current Ratio (CA/CL) 1.2 0.6 Cash Flow to Current Liabilities (CFO/CL) 0.0 0.1 Long-Term Debt to Net Assets (TL-CL/NA) 3.8 0.0 Times Interest Earned (NPO+Int/Int) 4.0 2.3 Net Assets to Total Assets (NA/TA) 12.6% 6.6% Total Margin (ER/TR) 5.7% 3.9% Return on Assets (ER/TA) 4.8% 3.5% Operating Cash Flow to Assets (CFO/TA) 1.4% 13.3% Staffing: Section 400.23(3)(a)(1), Florida Statutes, specifies a minimum weekly average of certified nursing assistants (CNA) and licensed nurse staffing combined of 3.6 hours of direct care per resident per day. In addition, a minimum CNA staffing of 2.5 hours of direct care per resident per day, with a minimum of one CNA per 20 residents is required. For licensed nurses, a minimum licensed nurse staffing of 1.0 hour of direct resident care per resident day, with a minimum of one licensed nurse per 40 residents must be maintained. Based on the information provided in Schedule 6, the applicant s projected licensed nursing and direct care staffing exceeds the minimum level required in years one and two. The applicant s certified nursing assistant staffing exceeds the minimum levels required in both years. Conclusion: Funding for this project and the entire capital budget should be available as needed. 11
d. What is the immediate and long-term financial feasibility of the proposal? Section 408.035(1)(f), Florida Statutes. A comparison of the applicant s estimates to the control group values provides for an objective evaluation of financial feasibility, (the likelihood that the services can be provided under the parameters and conditions contained in Schedules 7 and 8), and efficiency, (the degree of economies achievable through the skill and management of the applicant). In general, projections that approximate the median are the most desirable, and balance the opposing forces of feasibility and efficiency. In other words, as estimates approach the highest in the group, it is more likely that the project is feasible, because fewer economies must be realized to achieve the desired outcome. Conversely, as estimates approach the lowest in the group, it is less likely that the project is feasible, because a much higher level of economies must be realized to achieve the desired outcome. These relationships hold true for a constant intensity of service through the relevant range of outcomes. As these relationships go beyond the relevant range of outcomes, revenues and expenses may, either go beyond what the market will tolerate, or may decrease to levels where activities are no longer sustainable. Comparative data was derived from skilled nursing facilities that submitted Medicaid cost reports in fiscal year 2011 and 2012. We selected 17 similar sized skilled nursing facilities with similar Medicaid utilization. The average price adjustment factor used was 2.7 percent per year based on the new CMS Market Basket Price Index as published in the 2nd Quarter 2013 Health Care Cost Review. Projected net revenue per patient day (NRPD) of $2334 in year one and $336 in year two is between the control group lowest and median values of $878 and $286 and $387 for year one and $294 and $397 in year two. With net revenues between the lowest and median values in the control group, the facility is expected to consume health care resources in proportion to the services provided (see Tables 2 and 3). Projected revenues appear to be reasonable. Anticipated costs per patient day (CPD) of $293 in year one and $287 in year two are between the lowest and median values of $246 and $363 in year one and $253 and $373 in year two. With net revenues between the lowest and median values in the control group, projected costs are considered feasible (see Tables 2 and 3). The applicant is projecting a decrease in CPD between years one and two of approximately 2.1 percent. Overall, costs appear to be reasonable. 12
Section 400.23(3)(a)(1), Florida Statutes, specifies a minimum weekly average of certified nursing assistants (CNA) and licensed nurse staffing combined of 3.6 hours of direct care per resident per day. In addition, a minimum CNA staffing of 2.5 hours of direct care per resident per day, with a minimum of one CNA per 20 residents is required. For licensed nurses, a minimum licensed nurse staffing of 1.0 hour of direct resident care per resident day, with a minimum of one licensed nurse per 40 residents must be maintained. Based on the information provided in Schedule 6, the applicant s projected licensed nursing staffing and direct care exceeds the minimum level required in years one and two. The applicant s certified nursing assistant staffing exceeds the minimum levels required in both years. The year two operating profit for the skilled nursing facility of a $1,339,175 computes to an operating margin per patient day of $49 which is between the control group s median and highest values of $35 and $175. Overall profitability appears achievable. Conclusion: This project appears to be financially feasible based on the prior profitable operations of the facility. 13
TABLE 2 CON application #10215 Jun-15 YEAR 1 VALUES ADJUSTED SELECT FY 2011/2012 YEAR 1 ACTIVITY FOR INFLATION COST REPORT DATA ACTIVITY PER PAT. DAY Highest Median Lowest ROUTINE SERVICES 8,582,183 327 1,290 249 197 ANCILLARY SERVICES 170,040 6 219 141 46 OTHER OPERATING REVENUE 0 0 41 1 0 GROSS REVENUE 8,752,223 334 1,498 400 261 DEDUCTIONS FROM REVENUE 0 0 0 0 0 NET REVENUES 8,752,223 334 1,416 387 286 EXPENSES ADMINISTRATIVE 2,296,009 88 311 95 72 ANCILLARY 1,411,012 54 PATIENT CARE 3,223,754 123 276 137 101 PROPERTY 711,607 27 315 29 11 OTHERS 57,014 2 TOTAL EXPENSES 7,699,396 293 1,226 363 246 OPERATING INCOME 1,052,827 40 175 35-4 12.0% PATIENT DAYS 26,237 VALUES NOT ADJUSTED TOTAL BED DAYS AVAILABLE 28,914 FOR INFLATION TOTAL NUMBER OF BEDS 79 Highest Median Lowest PERCENT OCCUPANCY 90.99% 95.6% 91.1% 79.6% PAYER TYPE PATIENT DAYS % TOTAL SELF PAY 1,095 4.2% MEDICAID 11,741 44.7% 54.3% 43.3% 36.1% MEDICARE 7,088 27.0% 56.4% 36.8% 10.3% INSURANCE 0 0.0% HMO/PPO 4,563 17.4% OTHER 1,750 6.7% TOTAL 26,237 100.0% 14
TABLE 3 CON application #10215 Jun-16 YEAR 2 VALUES ADJUSTED SELECT FY 2011/2012 YEAR 2 ACTIVITY FOR INFLATION COST REPORT DATA ACTIVITY PER PAT. DAY Highest Median Lowest ROUTINE SERVICES 9,031,435 330 1,324 256 202 ANCILLARY SERVICES 170,040 6 225 145 47 OTHER OPERATING REVENUE 0 0 42 1 0 GROSS REVENUE 9,201,475 336 1,538 411 268 DEDUCTIONS FROM REVENUE 0 0 0 0 0 NET REVENUES 9,201,475 336 1,453 397 294 EXPENSES ADMINISTRATIVE 2,335,037 85 320 98 74 ANCILLARY 1,452,087 53 PATIENT CARE 3,275,015 120 283 140 103 PROPERTY 742,749 27 323 30 12 OTHERS 57,412 2 TOTAL EXPENSES 7,862,300 287 1,259 373 253 OPERATING INCOME 1,339,175 49 175 35-4 14.6% PATIENT DAYS 27,375 VALUES NOT ADJUSTED TOTAL BED DAYS AVAILABLE 28,914 FOR INFLATION TOTAL NUMBER OF BEDS 79 Highest Median Lowest PERCENT OCCUPANCY 94.68% 95.6% 91.1% 79.6% PAYER TYPE PATIENT DAYS % TOTAL SELF PAY 1,095 4.0% MEDICAID 12,410 45.3% 54.3% 43.3% 36.1% MEDICARE 7,300 26.7% 56.4% 36.8% 10.3% INSURANCE 0 0.0% HMO/PPO 4,745 17.3% OTHER 1,825 6.7% TOTAL 27,375 100.0% 15
e. Will the proposed project foster competition to promote quality and cost-effectiveness? Section 408.035(1)(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 health care facilities to increase quality and reduce charges/costs in order to remain viable in the market. In this case the applicant is transferring existing beds from one location to another. Therefore, this project will not result in new beds to the service area and will not have a material impact on competition. Conclusion: The project is not likely to have a material impact on competition between skilled nursing facilities. f. Are the proposed costs and methods of construction reasonable? Do they comply with statutory and rule requirements? Section 408.035(1)(h), Florida Statutes; Ch 59A-4, Florida Administrative Code. CON application #10215, Exhibit 8-1, includes correspondence from the Agency s Plans & Construction office, conveying all necessary architectural approvals for the proposed project. The reviewer confirmed that effective September 12, 2013, the project (Number 35/64104-104-9) has been reviewed and approved by the Agency s office of Plans & Construction. 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? Section 408.035(1)(i), Florida Statutes. As previously stated, the project will be part of a 21-bed rehabilitative unit primarily utilized by Medicare beneficiaries. However, the applicant s Schedule 7 for the 19-bed project indicates that Medicaid will comprise 56.98 percent of year one and 59.11 percent of year two s total annual patient days. Schedule 7 also indicates that Medicaid will comprise 38.42 percent of the project s year one and 39.05 percent of year two s total revenue. Greenbriar NH, L.L.C. provides a comparison of Greenbriar Rehabilitation and Nursing Center s provision of Medicaid to the Subdistrict 6-2, District 6 and the state during the last five-year reporting periods ending June 30, 2013. The applicant notes that Greenbriar Rehabilitation and Nursing Center s Medicaid as a percent of total facility patient days has been lower than the Subdistrict 6-2 average and the Medicaid provided by Subdistrict 6-2 16
facilities has historically been lower than the district and the state. However, Greenbriar Rehabilitation and Nursing Center has increased Medicaid as a percentage of its total patient days from 45.53 percent during the 12 months ending June 2009 to 51.40 percent in the 12 months ending June 2013. The facility s 51.40 percent Medicaid percent is lower than the subdistrict (59.63 percent), district (59.24 percent) and the state (61.58 percent) during the 12 months ending June 2013 reporting periods. The applicant provides the forecasted admissions and patient days by payer for years one and two (ending June 30, 2015 and June 30, 2016) for the 79-bed facility below. Greenbriar Rehabilitation and Nursing Center 79-bed Community Nursing Home Projected Admissions and Patient Days by Payer Year One Year One Ending June 30, 2015 Ending June 30, 2016 Percent Total Patient Days Percent Total Patient Days Payer Admissions Patient Days Admissions Patient Days Medicare 322 7,088 27.02% 332 7,300 26.67% Medicaid 27 11,741 44.75% 29 12,410 45.33% Managed Care 217 4,563 17.39% 253 4,745 17.33% Self-Pay/Other 29 2,745 10.84% 42 2,920 10.67% Total 595 26,237 100.0% 682 27,375 100.0% Source: CON application #10215, page 9-3 and Schedule 7. Note: The CON reviewer combined the applicant s Self-Pay/Other columns as shown in CON application #10215, page 9-3 and Schedule 7, as the Self-pay columns have 1,095 patient days in both years one and two with no corresponding admissions. Greenbriar NH, L.L.C. did not provide an explanation for this. As shown in the table above, the applicant projects Medicaid will comprise 44.75 percent and 45.33 percent of the facility s total year one and year two patient days, respectively. Greenbriar NH, L.L.C. states that the facility will have all 79-beds Medicaid and Medicare certified. The applicant proposes no conditions for the project. F. SUMMARY Greenbriar NH, L.L.C. (CON #10215) proposes to add 19 community nursing home beds at Greenbriar Rehabilitation and Nursing Center (District 6, Subdistrict 2 Manatee County ) through the delicensure of 19 community nursing home beds at South Florida Health and Rehabilitation Center (District 6, Subdistrict 1 Hillsborough County). The applicant proposes no conditions to the approval of the project. 17
Total project cost is $1,935,372. The project involves 1,676 GSF of new construction and 30,938 GSF of renovation. Total construction cost is $1,707,669. Total project cost includes: land, building, equipment and project development costs. After weighing and balancing all relevant criteria, the following issues are presented: Need: The proposed project is not submitted in response to the fixed need pool. Greenbriar NH, L.L.C. provides population by ZIP code data to support need based on The Nielson Company, 2013 update. This data shows that the population age 65 within a five radius of Greenbriar Rehabilitation and Nursing Center is larger and is projected to increase at a higher rate of growth than the age 65 and over population in the five-mile area surrounding South Tampa Health and Rehabilitation Center. Greenbriar NH, L.L.C. provides population and inventory data that supports that the project will improve access by relocating beds to the subdistrict (6-2) with the fewest available beds per thousand elderly population in District 6 and at a facility where the largest portion of Manatee County s age 65 and over population will can easily have access. The applicant states that access for quality rehabilitation services will be improved as the project will focus on rehab therapies and rapid recovery to return the patient home. Quality of Care: Greenbriar Rehabilitation and Nursing Center received a five out of five star overall inspection quality rating during its most recent rating period. Agency licensure records indicate that during the three-year period ending on December 6, 2013, Greenbriar Rehabilitation and Nursing Center had one substantiated complaint, which was in the administration/personnel category. The applicant demonstrated the ability to provide quality care. 18
Cost/Financial Analysis: Funding for this project and the entire capital budget should be available as needed. This project appears to be financially feasible based on the prior profitable operations of the facility. The project will not have a material impact on competition. Medicaid/Indigent Care: The applicant does not propose to condition the project to the provision of Medicaid or indigent care. Greenbriar Rehabilitation and Nursing Center s Medicaid as a percentage of its total patient days has increased from 45.53 percent during the 12 months ending June 2009 to 51.40 percent in the 12 months ending June 2013. Greenbriar NH, L.L.C. states that the facility s 79-beds will be dually Medicaid-Medicare certified. The facility s existing 60 beds are dually certified. Per the applicant, the 19-bed project will be integrated as part of a 21- bed short-term stay Rapid Recovery unit primarily utilized by Medicare beneficiaries. The applicant s Schedule 7 indicates Medicaid will comprise 56.98 and 59.11 percent of the 19 beds total years one and two patient days, respectively. Greenbriar NH, L.L.C. projects Medicaid will comprise 44.75 percent and 47.30 percent of the 79-bed facility s total year one and two patient days, respectively. Architectural Analysis: CON application #10215, Exhibit 8-1, includes correspondence from the Agency s Plans & Construction office, conveying all necessary architectural approvals for the proposed project. The CON reviewer confirmed that the Agency s office of Plans & Construction has reviewed and approved this project (Number 35/64104-104-9), effective September 12, 2013. 19
G. RECOMMENDATION Approve CON #10216 to add 19 community nursing home beds to Greenbriar Rehabilitation and Nursing Center, through the delicensure of 19 community nursing home beds at South Florida Health and Rehabilitation Center. The total project cost is $1,935,372. The project involves 1,676 GSF of new construction, 30,938 GSF of renovation and a total construction cost of $1,707,669. 20
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 i The original State Agency Action Report (SAAR) decision of December 19, 2013 incorrectly identified South Tampa Health and Rehabilitation Center as South Florida Health and Rehabilitation Center (addendum added March 10, 2014). 21