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STATE AGENCY ACTION REPORT ON APPLICATION FOR

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STATE AGENCY ACTION REPORT ON APPLICATION FOR Powered By Docstoc
					                  STATE AGENCY ACTION REPORT

          ON APPLICATION FOR CERTIFICATE OF NEED



A.   PROJECT IDENTIFICATION

1.   Applicant/CON Action Number

     Victoria Nursing & Rehabilitation Center, Inc./CON #9998
     955 N.W. 3rd Street
     Miami, Florida 33128

     Authorized Representative:     Richard E. Stacey
                                    Vice President
                                    (859) 292-8880


2.   Service District/Subdistrict

     District 11, Subdistrict 1, Miami-Dade County


B.   PUBLIC HEARING

     No public hearing was held or requested regarding the proposed project.

     Letters of Support

     Two letters of support specific to this project are included in the
     application. Guillermo Alonso, M.D., states that Victoria Nursing &
     Rehabilitation Center, Inc. (Victoria) is “by far a very superior facility
     which is very well run and provides excellent patient care”. He further
     states that “explosive growth” in the area justifies an additional 11 beds
     at the facility. John Ramos, President of Assisted Home Living, Inc.
     A.L.F., states that the high demand for nursing home care and the lack
     of beds available in the area often results in seniors being relocated far
     from friends and family. Mr. Ramos supports that Victoria Nursing &
     Rehabilitation Center, Inc. be approved for an additional 11 beds to help
     reduce distant relocation. Both the above letters are signed with October
     2007 dates.
                                             CON Action Number: 9998


     Fifteen letters in support of the facility’s provision of quality care are
     identified as Exhibit 4-3 – Letters of Appreciation from Residents and
     Family. Ten of these letters are handwritten. Two of the 15 are not
     dated, the others all have dates of January 2007 or more recent. Three
     are not signed; they are typed and are indicted as translated. Six of
     these 15 letters are handwritten in a language other than English. In
     summary, these letters are highly supportive of the facility, compliment
     its cleanliness and services, express considerable appreciation and often
     state it will be recommended to others for its high level of satisfaction.

     There are no letters of opposition.


C.   PROJECT SUMMARY

     Victoria Nursing & Rehabilitation Center, Inc. (CON #9998) (Victoria)
     is requesting the transfer of 11 community nursing home beds from CON
     #9906, divided by exemption number E0600017. This transfer adds 11
     community nursing home beds at Victoria by correspondingly reducing
     11 community nursing home beds from New Riviera Nursing &
     Rehabilitation Center, LLC – the latter being a related entity to Victoria.
     The transfer of 11 beds to Victoria results in New Riviera Nursing &
     Rehabilitation Center, LLC constructing a 223-bed skilled nursing
     facility, as opposed to the originally planned 234-bed site. This action
     preserves the existing facility and bed count, for the district and
     subdistrict, neither increasing beds nor adding facilities as both facilities
     are located in Miami-Dade County, Florida. New Riviera Nursing &
     Rehabilitation Center, LLC was not licensed as of June 30, 2007. On
     November 20, 2007 the Agency granted, pursuant to Rule 59C-1.018(3),
     Florida Administrative Code, a 60-day extension of CON #9906. This
     extended the original CON #9906 termination date of December 14, 2007
     to February 11, 2008.

     The applicant predicates upon two conditions – a physical address and a
     Medicaid condition. The project is for the transfer of 11 beds (from an
     original 234 beds) previously approved under CON #9906 for New Riviera
     Nursing & Rehabilitation Center, LLC. The 11-bed transfer is from New
     Riviera Nursing & Rehabilitation Center, LLC, at 6901 Yumuri Street,
     Miami, Florida 33146 to Victoria Nursing & Rehabilitation Center, Inc.,
     at 955 NW 3rd Street, Miami, Florida 33128. The applicant agrees to
     apply the same Medicaid condition to the 11 beds proposed to be
     relocated to Victoria that was agreed upon in CON #9906. The Medicaid
     condition in CON #9906 was a minimum of 22 percent of the total
     annual patient days being provided to Medicaid patients. With Victoria
     currently having a 45.53 percent Medicaid condition on its existing 253-
     bed facility, by accepting a 22 percent Medicaid condition on the
     additional 11 beds, the resultant blended Medicaid condition for

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                                            CON Action Number: 9998


     Victoria’s proposed 264-bed facility, according to the applicant, is 44.32
     percent. The additional 11 beds for Victoria consist of no new
     construction but 2,757 gross square feet (GSF) of renovation at a total
     project cost of $176,968, including renovation cost of $60,500.

     Note: The proposed transfer involves previously approved but unlicensed
     beds that were originally approved prior to the legislatively mandated
     moratorium on additional nursing home beds in the state. A moratorium
     exists on additional community nursing home beds until July 1, 2011. This
     action was taken because the legislature found that the continued growth
     in the Medicaid budget for nursing home care constrained the ability of the
     state to meet the needs of its elderly residents through the use of less
     restrictive and less institutional methods of long-term care.


D.   REVIEW PROCEDURE

     The evaluation process is structured by the certificate of need review
     criteria found in Section 408.035, Florida Statutes. These criteria form
     the basis for the goals of the review process. The goals represent
     desirable outcomes to be attained by successful applicants who
     demonstrate an overall compliance with the criteria. Analysis of an
     applicant's capability to undertake the proposed project successfully is
     conducted by assessing the responses provided in the application, and
     independent information gathered by the reviewer.

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

     Section 59C-1.010(3)(b), Florida Administrative Code, allows no
     application amendment information subsequent to the application being
     deemed complete. The burden of proof to entitlement of a certificate
     rests with the applicant. As such, the applicant is responsible for the
     representations in the application. This is attested to as part of the
     application in the Certification of the applicant.

     As part of the fact-finding, the consultant Steve Love analyzed the
     application in its entirety with consultation from the Financial Analyst
     Melody Miller, who evaluated the financial data and Architect Scott
     Waltz, who evaluated the architectural plans and schematic drawings.


E.   CONFORMITY OF PROJECT WITH REVIEW CRITERIA



                                      3
                                            CON Action Number: 9998


     The following indicate the level of conformity of the proposed project with
     the criteria and application content requirements found in Florida
     Statutes, sections 408.035, and 408.037; applicable rules of the State of
     Florida, and Chapters 59C-1 and 59C-2, Florida Administrative Code.

1.   Is need for the project evidenced by the availability, quality of care,
     efficiency, accessibility and extent of utilization of existing health
     care facilities and health services in the applicant’s service area?
     ss. 408.035(2), 408.035(7), Florida Statutes.

     The need for the 11 community nursing home beds proposed for transfer
     (the 11 beds being a subset of the original 234 beds approved for New
     Riviera Nursing & Rehabilitation, LLC) was originally addressed in the
     application by the CON #9906 applicant - New Riviera Nursing &
     Rehabilitation, LLC. The Florida Legislature extended a moratorium
     until July 1, 2011 on the issuance of CONs for increases in the number
     of community nursing home beds. Due to the moratorium, a fixed need
     pool was not published and the number of community nursing home
     beds will remain at the same level in the state. CON #9906 proposed
     licensure at New Riviera Nursing & Rehabilitation, LLC and
     corresponding delicensure at Greynolds Park Manor Rehabilitation
     Center (closed on July 13, 2006) of an exact number of nursing home
     beds so that there was no net increase in facilities or beds in the
     district/subdistrict. This transfer of 11 beds increases bed availability
     toward the northeast of New Riviera and reduces bed availability toward
     the southwest of Victoria in equal numbers, generating no net change in
     the district/subdistrict.

     District 11, Subdistrict 1 (Miami-Dade) is comprised of 52 licensed
     community nursing home facilities. As of July 1, 2007, District 11,
     Subdistrict 1 had a total of 7,998 licensed and 420 CON approved
     community nursing home beds. For the most recent reporting period,
     July 2006-June 2007, the licensed beds within the district experienced
     an average occupancy rate of 90.98 percent and 91.47 percent for the
     subdistrict. The table below illustrates the annual utilization of the
     applicant, subdistrict and district:




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                                                               CON Action Number: 9998


             Annual Utilization Total for the Applicant, Subdistrict 1 and District 11
                                       July 2006-June 2007
                                                                 Patient       Total      Medicaid     Medicaid
       Facility                                   Bed Days        Days        Occup.        Days        Occup.
       Victoria Nursing & Rehab Center (Miami)        92,345        88,982   96.36%        48,890       54.94%
                                  Subdistrict 1    2,917,722    2,668,778    91.47%      1,747,833      65.49%
                                    District 11    3,005,322    2,734,074    90.97%      1,794,004      65.62%
       Source: AHCA’s publication of “Florida Nursing Home Utilization by District and Subdistrict July
       2006-June 2007”.


       The following table shows the growth in population of District 11,
       Subdistrict 1 from July 2007 to July 2012. The table shows that the age
       65+ population of the subdistrict will grow by11.87 percent and the age
       75+ population of the subdistrict will grow by 10.08 percent:

                              District 11, Subdistrict 1 Population Growth
                                          July 2007-July 2012
                                            % of                             % of                           % of
 Subdistrict &   Total Pop.   Total Pop.    Total        65+       65+       65+        75+        75+      75+
   District        2007         2012       Growth       2007      2012      Growth     2007       2012     Growth
 Subdistrict 1    2,469,223   2,635,384     6.73%    336,928     376,924    11.87%    161,853    178,169    10.08%
 District 11      2,548,426    2,716,184    6.58%     350,253   393,280     12.28%    167,755    184,979    10.27%
Source: AHCA Publication, Population Estimates, September 2007.


       With regard to access to care, the applicant states that access is impeded
       when patients must be transferred to facilities farther from their homes.
       As shown previously, Victoria has a higher than average occupancy for
       the most recent 12-month period (ending June 30, 2007), relative to
       other skilled nursing facilities in the district and subdistrict. As
       previously stated, the applicant is proposing that the 11-bed addition to
       Victoria will comply with the Medicaid condition agreed upon in CON
       #9906.

       The applicant summarizes need justification primarily on six points. It
       indicates approval has no net impact on the total bed count for the
       subdistrict, addresses a growing elderly population, reallocates beds to a
       highly utilized facility (greater than the district and subdistrict for the 12
       months ending June 30, 2007), increases capacity at Victoria (a
       tracheotomy care and ventilator care provider), minimizes cost due to
       relatively less expensive renovation in already existing and licensed space
       with no impact on Select Medical Corporation’s eighth floor operations
       and improves functional design/decompression at the sacrificing facility
       (New Riviera Nursing and Rehabilitation Center, Inc.). The applicant’s
       ability to deliver quality of care is discussed below in Item E.2.




                                                    5
                                             CON Action Number: 9998


2.   Does the applicant have a history of providing quality 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? ss. 408.035(3),
     408.035(10), Florida Statutes.

     The applicant, Victoria Nursing & Rehabilitation Center, Inc. (Victoria) is
     an existing skilled nursing facility with a quality of care history in
     Florida. It is a sister facility of the original CON holder – New Riviera
     Nursing & Rehabilitation Center, LLC. According to the applicant, the
     company’s principals are Ralph L. Stacey, Jr. and Richard E. Stacy, Sr.
     In addition to Victoria and New Riviera, the other Florida skilled nursing
     facility (SNF) owned and operated by these same principals is Riverside
     Care Center. It is further stated these same principals own and operate
     a SNF in Kentucky and in Ohio. Though the applicant states that health
     standards are met and a high degree of respect is afforded the principals,
     the applicant does not specifically state that the principals have never
     had any of their Florida facility licenses denied, revoked, or had a
     nursing home placed into receivership.

     Neither Victoria Nursing & Rehabilitation Center, Inc. (Victoria), nor
     any of the principals’ Florida SNFs were found in AHCA’s Nursing
     Home Watch List website at
     http://ahca.myflorida.com/Nursing_Home_Guide/index.shtml, as of
     December 10, 2007. This means as of the date shown, Victoria and the
     other two SNFs owned and operated by the principals were not operating
     under bankruptcy protection and did not have a conditional status
     during the prior 30 months. A conditional status indicates that a facility
     did not meet, or correct upon follow-up, minimum standards at the time
     of an inspection of the applicant’s facility. More specific to Victoria,
     according to the U.S. Department of Health and Human Services’
     Medicare website at http://www.medicare.gov, the facility had five
     deficiencies, as of the December 11, 2007 on-line run date. The
     deficiencies cited did not pose an immediate jeopardy to residents’ health
     or safety. Victoria received four out of five stars in its overall inspection
     of performance measures according to AHCA’s Nursing Home Guide at
     http://www.floridahealthstat.com/. This was as of the December 11,
     2007 on-line run date. A review of Agency licensure records, as of
     December 11, 2007, indicates that the facility had three confirmed
     complaints during the past three years. The confirmed complaints were
     in the following areas: medicine/errors/formulary (one); pressure sores
     (one) and resident care (one). An additional two complaints were
     confirmed without deficiencies.

     The applicant states a quality improvement program begins with mission,
     vision and values statements (Section E.2.5 of the application). The
     applicant also includes a description of its Continuous Quality

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                                            CON Action Number: 9998


     Improvement (CQI) Plan (Exhibit 4-4 in Section E.2.18 of the application).
     The applicant explains that through CQI meetings the stated 17 “critical
     areas” of quality are reviewed by a CQI committee. The Governor’s Panel
     on Excellence in Long Term Care has developed the “Gold Seal Program”
     which awards and recognizes nursing homes that demonstrate excellence
     in long-term care over a sustained period. Victoria is not rated by the
     Agency as a Gold Seal Provider.

3.   What resources, including health manpower, management
     personnel, and funds for capital and operating expenditures, are
     available for project accomplishment and operation? ss. 408.035(6),
     Florida Statutes.

     This review is for the transfer of 11 skilled nursing facility beds from
     previously approved CON #9906, New Riviera Nursing & Rehabilitation
     Center, LLC to the applicant located approximately eight miles away,
     Victoria Nursing & Rehabilitation Center, Inc., in District 11, Nursing
     Home Subdistrict 1, Miami-Dade County, Florida. Originally approved
     for the construction of a new 234-bed skilled nursing facility, CON #9906
     was divided into two parts consisting of 223 and 11 beds by Exemption
     #E0600017. The 223-bed facility will be developed by the original CON
     holder, New Riviera Nursing & Rehabilitation, LLC, while 11 beds will be
     transferred to the applicant - Victoria Nursing & Rehabilitation Center,
     Inc. The costs of the transfer project of $176,968 will not be borne by the
     applicant. The landlord, Victoria Towers, Inc., a related party, will
     finance the project with an irrevocable standby letter of credit for
     $177,000. The operating costs in year two of $26,351,900 will be the
     financial responsibility of the applicant, Victoria Nursing & Rehabilitation
     Center, Inc.

     The audited financial statements of the applicant, for the period ending
     December 31, 2005 and 2006 were analyzed for the purpose of
     evaluating the applicant’s ability to provide the operational funding
     necessary to implement the project. The audits show operating losses for
     both 2005 and 2006, which resulted in the certified public accountant
     issuing a qualified opinion. Equity for ongoing operations of the
     applicant has been provided by the owners. Financial statements for the
     owners and Victoria Towers, Inc. were not included with this application.




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                                       CON Action Number: 9998


Conclusion:
Based on the information provided in the application, the applicant
shows financial weakness in both the short and long-term. However,
funding for the project is assured.

Short-Term Position:
The applicant’s current ratio of 0.3 indicates that current assets are less
than current liabilities and result in a negative working capital of $7.0
million, a weak position. The ratio of cash flow to current liabilities is
approximately zero which indicates operating cash flow although positive
is not material when compared to current liabilities, a weak position.
Overall the applicant has a weak short-term position. (See Table below).

Long-Term Position:
The ratio of long-term debt to net assets of negative 0.4 indicates that
total liabilities exceed net assets. This is a weak position and may impair
the applicant’s ability to acquire additional debt if needed in the future.
The most recent year had revenues in excess of expenses of a negative
$2.6 million, which resulted in a negative operating margin of 12.1
percent. Overall the applicant has a weak long-term position. (See Table
below).

Capital Requirements:
The applicant’s capital projects on Schedule 2 total $226,968. This total
includes the project costs of $176,968 which will be funded by the
landlord, and $50,000 for routine capital budget which will be funded by
the applicant.

Available Capital:
Victoria Towers, Inc., the applicant’s landlord, has obtained an
Irrevocable Letter of Credit in the amount of $177,000 that will be used
for project funding. A Letter of Commitment pledging the $177,000 to
the applicant was included with the application from the Director and
Officer of Victoria Towers, Inc., Richard Stacey. Therefore, sufficient
funds are available to cover the funding of this transfer project.

As discussed above, the short and long-term position of the applicant is
weak. The discussion in the notes to the financial statements
acknowledges this weakness and indicates that management will be
undertaking the following strategies to improve the applicant’s financial
position:

•   Management plans to refinance certain long term debt to enable the
    applicant to continue as a going concern.




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                                                                      CON Action Number: 9998


                •   Management is filing an application for state approval to transfer 11
                    skilled nursing beds from an affiliate to utilize vacant space within the
                    applicant’s facility to generate additional revenues.

                Staffing:
                Chapter 400.23, Florida Statutes, requires a minimum licensed nursing
                staffing of 1.0 hours of direct care for each resident per day and a
                minimum certified nursing assistant staffing of 2.9 hours of direct care
                for each resident per day. The table below reflects calculations based on
                the applicant’s proposed staffing from Schedule 6 and projected
                occupancy from Schedule 5.

                                           Projected Nurse Staffing
                        FTE                  Minimum                 1st Year      2nd Year
                    Nurses/Aides           Requirements            YE 06/30/09   YE 06/30/10
                                         1.0 hour of direct
                        Nurses            care per resident         1.68 hours    1.67 hours
                                         2.9 hours of direct
                         Aides            care per resident         3.45 hours    3.44 hours
                Source: CON #9998, Financial Schedules 5 and 6.


                For the first year of operation following approval of this project, the
                applicant projects a total of 77.3 FTE nursing staff (RNs and LPNs) and
                158.8 FTE nursing aides. The applicant projects a total of 77.3 FTE
                nursing staff (RNs and LPNs) and 158.8 FTE nursing aides for the second
                year of operation of the 264-bed skilled nursing facility. This indicates
                no change in the total nursing staff compliment over the two years. As
                shown in the above table, both FTE positions satisfy the minimum
                nursing licensure requirements.

                Regarding recruitment, the applicant provides in its application copies of
                agreements with local post-secondary nursing schools: Kaiser Career
                College; Florida National College; International Training Centers, Inc.;
                and Florida International University. The facility serves as a practium
                site for nursing students from these schools. The applicant also states it
                accepts applications on a continuous basis, considering these applicants
                first when positions become available. It further states it advertises in
                the Miami Herald and El Nuevo Herald, “when necessary”1.
                Concerning retention efforts, the applicant claims such features as a
                competitive salary, seven holidays per calendar year and a benefit
                package that includes health, dental and vision coverage along with
                other related benefits. Some of these include convenient continuing
                education unit (CEU) opportunities and employee incentive programs.




1   CON #9998, Page #E.3., Resources, 3


                                                               9
                                                      CON Action Number: 9998




                     Victoria Nursing & Rehabilitation Center - CON #9998
                                                      12/31/2006            12/31/2005
     Current Assets                                      $2,988,941           $2,661,308
     Cash and Current Investment                                 $0                   $0
     Total Assets                                        $2,993,811           $2,661,308
     Current Liabilities                                 $9,951,999           $7,717,559
     Total Liabilities                                 $14,129,508          $10,897,063
     Net Assets                                       ($11,135,697)          ($8,235,755)
     Total Revenues                                    $21,689,962          $21,083,363
     Interest Expense                                     $203,703            $1,012,430
     Excess of Revenues Over Expenses                  ($2,620,085)          ($1,812,069)
     Cash Flow from Operations                             $32,672            ($710,825)
     Working Capital                                   ($6,963,058)          ($5,056,251)


                                      FINANCIAL RATIOS
                                                      12/31/2006            12/31/2005
     Current Ratio (CA/CL)                                      0.3                  0.3
     Cash Flow to Current Liabilities (CFO/CL)                  0.0                  -0.1
     Long-Term Debt to Net Assets (TL-CL/NA)                   -0.4                  -0.4
     Times Interest Earned (NPO+Int/Int)                      -11.9                  -0.8
     Net Assets to Total Assets (TE/TA)                    -372.0%              -309.5%
     Operating Margin (ER/TR)                               -12.1%                 -8.6%
     Return on Assets (ER/TA)                               -87.5%                -68.1%
     Operating Cash Flow to Assets (CFO/TA)                   1.1%                -26.7%


4.   What is the immediate and long-term financial feasibility of the
     proposal? ss.408.035 (8), Florida Statutes.

     A comparison of the applicant’s projections to itself was determined to be
     the best approach, using the February 2007 Medicaid Cost Report.

     The applicant projected per diem rates to increase by an average of 3.3
     percent per year through June 2010. The price adjustment factor used
     was based on the new CMS Market Basket Price Index as published in
     the 3rd Quarter 2007 Health Care Cost Review.

     The information in the February 2007 cost report indicates the facility
     operated at a $1.7 million loss (negative $19 per patient day), or a
     negative 7.8 percent margin. The applicant is projecting a $329,600 gain
     ($4 per patient day) with a 1.2 percent operating margin. It appears that
     the applicant included other non-nursing home revenues and associated
     expenses in the amount of $259,641 (barber and beauty services, gift
     shop, etc.) in the data reported for the February 2007 Medicaid Cost

                                                 10
                                        CON Action Number: 9998


Report. To remain consistent, this review includes the applicant’s
projections for other non-nursing home revenues and associated
expenses.

The applicant believes that this project will contribute to the
improvement of the overall profitability for the following reasons:

•   Medicare increased the RUG classifications from 44 to 53. This
    change provided for funding of higher intensity and complex
    rehabilitation cases, resulting in an increase of reimbursement which
    tends to support an increase in the Medicare rate.

•   Medicaid rebasing and increased per diem began July 1, 2007 and
    resulted in a $7.00 per patient day increase; the applicant believes
    this increase is more closely aligned with costs incurred. We looked
    at the applicant’s projected Medicaid rate for 2010 of $217 per patient
    day and find that an increase of 6.94 percent over the period is
    consistent with the rebasing. The applicant’s projections for the total
    occupancy rate of 96 percent are consistent with the rate of 96.36
    percent listed in the Florida Nursing Home Utilization by district and
    Subdistrict July 2006 – June 2007. The total occupancy rate appears
    reasonable. The Medicaid occupancy rate projected of 54.4 percent
    appears consistent with the rate of 54.94 percent on the currently
    licensed 253 beds as listed in the Florida Nursing Home Utilization by
    District and Subdistrict July 2006 – June 2007, considering the
    addition of 11 beds in this transfer project.

•   The applicant’s Medicare participation at the end of fiscal year 2006
    was approximately 17 percent, and the applicant plans to increase
    Medicare participation to 20 percent with the transfer project. This is
    consistent with the applicant’s projections for Medicare participation
    in both years of operations.

The average increase in net revenue and cost per patient day from the
February 2007 cost report is projected as 3.01 and 2.65 percent
respectively. Considering the recent changes in Medicare and Medicaid
reimbursement, the increase in net revenue per patient day does not
seem unreasonable.

Condition Compliance: The applicant has a current condition of 45.53
percent of total annual patient days for Medicaid on the currently
licensed 253 beds. The applicant has agreed to the 11 transfer beds
condition contained in CON #9906, providing a minimum of 22 percent
total patient days to Medicaid recipients. Therefore, the blended rate for
the resulting 264-bed facility subsequent to the 11-bed transfer would be
a minimum Medicaid condition of 44.55 percent. As just discussed


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                                        CON Action Number: 9998


above, the applicant is projecting 54.4 percent of patient days will be
Medicaid. Therefore, the applicant’s projections meet the current and
future blended conditions on this facility.

                                                                       COST REPORT
                                                                         VALUES
                              Jun-10         YEAR 2                     ADJUSTED
CON #9998                     YEAR 2        ACTIVITY     Feb-07       FOR INFLATION
                                             PER PT.
COST REPORT DATA             ACTIVITY         DAY        ACTUAL       YEAR 1    YEAR 2
ROUTINE SERVICES              26,263,000          284        299         326       334
ANCILLARY SERVICES            14,785,700          160         79          86        88
OTHER OPERATING REVENUE          283,700             3         4           4         4
  GROSS REVENUE               41,332,400          447         381         415     426


DEDUCTIONS FROM REVENUE       14,650,900          158             0         0         0
  NET REVENUES                26,681,500          288         248         270     277


EXPENSES
  ADMINISTRATIVE               4,446,800           48          69          75      77
  ANCILLARY                    4,388,100           47          40          44      45
  PATIENT CARE                14,917,600          161         131         143     146
  PROPERTY                     1,953,500           21          23          25      26
  OTHER                          645,900            7           4           4       4
TOTAL EXPENSES                26,351,900          285         267         291     298
  OPERATING INCOME               329,600            4         -19         -21      -21
                                                 1.2%
PATIENT DAYS                      92,553
TOTAL BED DAYS AVAILABLE          96,360                 Feb-07
TOTAL NUMBER OF BEDS                 264                 ACTUAL
PERCENT OCCUPANCY                 96.05%                   90.0%

PAYER TYPE                  PATIENT DAYS     % TOTAL
SELF PAY                              305       0.3%
MEDICAID                          50,374       54.4%       90.0%
MEDICARE                          18,508       20.0%        5.0%
INSURANCE                               0       0.0%
HMO/PPO                           20,307       21.9%
OTHER                               3,059       3.3%
TOTAL                             92,553       100.0%


Conclusion: The project appears to be financially feasible.




                                 12
                                             CON Action Number: 9998



5.   Will the proposed project foster competition to promote quality and
     cost-effectiveness? ss. 408.035(9), Florida Statutes.

     This project is a transfer of portion of previously approved CON #9906,
     New Riviera Nursing & Rehabilitation Center, LLC, for 11 skilled nursing
     facility beds, within a distance of eight miles, between related parties to
     the applicant, Victoria Nursing & Rehabilitation Center, Inc., in District
     11, Nursing Home Subdistrict 1, Miami-Dade County, Florida. The
     applicant is a large facility, currently licensed for 253 beds, and the
     project transfer will increase the bed total to 264 beds. Since the
     applicant is already competing in the area, this project is not expected to
     materially add to the competition that already exists within this
     subdistrict.

     Conclusion: Competition is not a factor. Beds are being transferred
     between related entities with no net change in the number of beds within
     the subdistrict. Therefore, increased competition is not likely to be
     realized.

6.   Are the proposed costs and methods of construction reasonable?
     Do they comply with statutory and rule requirements? ss.
     408.035(10), Florida Statutes; Ch. 59A-3 or 59A-4, Florida
     Administrative Code.

     The applicant proposes to transfer 11 skilled nursing beds from New
     Riviera Nursing and Rehabilitation Center in Coral Gables to Victoria
     Nursing & Rehabilitation Center in Miami. The transferred beds would
     be located on the fifth floor displacing administrative offices and record
     storage. The construction type is listed on the schematic floor plan as
     National Fire Protection Association (NFPA) Type I (332).

     Eight of the 11 beds will be in handicap accessible semi-private rooms
     and the other three are in private rooms. The private rooms have
     attached private toilet rooms. There is an existing shower room on the
     floor which is not being modified.

     The project summary on the plan indicates compliance with current
     codes. Some additional architectural, mechanical and electrical physical
     plant standards will need to be addressed in greater detail as the project
     is developed, but the physical constraints of the spaces should
     accommodate these requirements.

     Based on the analysis of actual cost data of a similar project, the
     estimated construction costs appear to be within the expected range.



                                      13
                                           CON Action Number: 9998


     The information provided in the project completion forecast appears to be
     reasonable.

7.   Does the applicant have a history of providing health services to
     Medicaid patients and the medically indigent? Does the applicant
     propose to provide health services to Medicaid patients and the
     medically indigent? ss. 408.035(11) Florida Statutes.

     The applicant provides a table to describe its past three-year history
     (through June 2007) concerning its total patient days, Medicaid patient
     days and Medicaid percentage of total patient days (Table 9-1, Section
     E.7.1 of the application). For this three-year period, the applicant’s
     Medicaid occupancy rate averaged 57.30 percent. According to Agency
     records, the applicant’s Medicaid occupancy rate averaged 60.99 percent
     for the five-year period ending June 2007, compared to the subdistrict’s,
     65.49 percent and the district’s 65.62 percent. The applicant proposes to
     condition CON approval to a minimum of 44.32 percent of the 264 bed
     facility’s total annual patient days being provided to Medicaid patients.
     However, the actual blended Medicaid condition with 11 beds @ 22
     percent beds and 253 beds @ 45.53 percent would be 44.55 percent, not
     44.32 percent.

     According to Financial Schedule 7, the applicant is projecting that in
     each of the first two operating years following the proposed transfer,
     Victoria will provide 54.40 percent of total patient days to Medicaid
     patients. If achieved, this percentage would exceed (by 9.85 percent) the
     conditioned percentage of a minimum 44.32 percent, as stated by the
     applicant and found in Schedule C.


F.   SUMMARY

     Victoria Nursing & Rehabilitation Center, Inc. (CON #9998) is
     requesting transfer of 11 community nursing home beds from CON
     #9906, divided by exemption number E0600017. This transfer adds 11
     community nursing home beds at Victoria by correspondingly reducing
     11 community nursing home beds from New Riviera Nursing &
     Rehabilitation Center, LLC. Both are sister facilities, owned and
     operated by the principals - Ralph L. Stacey, Jr. and Richard E. Stacy,
     Sr. The transfer of 11 beds to Victoria results in New Riviera Nursing &
     Rehabilitation Center, LLC constructing a 223-bed skilled nursing facility
     (SNF), as opposed to the originally planned 234-bed site. This action
     results in no change in the existing district and subdistrict skilled
     nursing facility and bed count. New Riviera Nursing & Rehabilitation




                                     14
                                        CON Action Number: 9998


Center, LLC is not licensed as of January 2, 2008. On November 20,
2007, the Agency granted, pursuant to Rule 59C-1.018(3), F.A.C., a 60-
day extension of CON #9906, establishing a revised termination date of
February 11, 2008.

According to notes in Schedule C of the application, the applicant
proposes a minimum 44.32 percent of total annual patient days to
Medicaid patients and a physical location of the 11 community nursing
home beds at 955 NW 3rd Street, Miami, Florida 33128. The applicant
agrees to apply the same Medicaid condition to the 11 beds proposed to
be relocated to Victoria that were agreed upon in CON #9906. This
would result in a blended Medicaid condition, between the 11 beds set
for transfer to Victoria and the existing Medicaid condition already at
Victoria, of 44.55 percent, not 44.32 percent as stated by the applicant.
The additional 11 beds for Victoria consist of no new construction but
2,757 gross square feet (GSF) of renovation at a total project cost of
$176,968, including renovation cost of $60,500.

After weighing and balancing all applicable review criteria, the following
relevant factors are listed with regard to the proposed CON transfer of 60
skilled nursing beds.

Quality of Care

Victoria Nursing & Rehabilitation Center, Inc. is not recognized by the
Agency as a Gold Seal Provider. The facility did not appear on AHCA’s
Nursing Home Watch List on-line, as of December 10, 2007. Per the U.S.
Department of Health and Human Services’ Medicare website at
http://www.medicare.gov, the facility had five deficiencies, as of a
December 11, 2007 on-line run date. Victoria received four out of five
stars in its overall inspection of performance measures according to
AHCA’s Nursing Home Guide at http://www.floridahealthstat.com/. This
was as of December 11, 2007. A review of Agency licensure records, as
of December 11, 2007, indicates that the facility had three confirmed
complaints during the past three years. The confirmed complaints were
in the following areas: medicine/errors/formulary (one); pressure sores
(one) and resident care (one). An additional two complaints were
confirmed without deficiencies. An overview of the facility’s continuous
quality improvement and other quality assurance measures was
provided.




                                 15
                                        CON Action Number: 9998


Cost/Financial Analysis

Equity for ongoing operations of the applicant has been provided by the
owners. Financial statements for the owners and Victoria Towers, Inc.
(the latter being the landlord of the facility) were not included with this
application.

The applicant has weak short and long-term positions, recognizes these
weaknesses and is taking steps to improve its financial position;
however, funding for the project is assured and as presented, the project
is financially feasible.

Competition is not a factor. Beds are being transferred between related
entities with no net change in the number of beds within the subdistrict.
Therefore, increased competition is not likely to be realized. The facility
is already competing in the area, and thus is not expected to materially
add to the competition that already exists.

Architectural Analysis

The 11 skilled nursing beds being transferred from their current Coral
Gables location to the Victoria facility in Miami are located on the fifth
floor of the facility. Eight of the beds will be in handicap accessible semi-
private rooms and the other three are in private rooms. The private
rooms have attached private toilet rooms and an existing shower room on
the floor will not be modified. The construction type is listed on the
schematic floor plan as National Fire Protection Association (NFPA) Type I
(332).

The project summary on the plan indicates compliance with current
codes. Some additional architectural, mechanical and electrical physical
plant standards will need to be addressed in greater detail as the project
is developed, but the physical constraints of the spaces should
accommodate these requirements.

Based on the analysis of actual cost data of a similar project, the
estimated construction costs appear to be within the expected range.
The project completion forecast appears to be reasonable.

Medicaid/Indigent Care Commitment

The applicant proposes that the 264-bed facility (an existing 253-bed
operation plus the transfer of 11 community nursing home beds onto the
fifth floor) will provide a blended Medicaid condition of a minimum of
44.32 percent of its total annual patient days to Medicaid residents.
However, the blended Medicaid condition is 44.55 percent and not 44.32
as proposed by the applicant. According to Financial Schedule 7, the

                                 16
                                             CON Action Number: 9998


     applicant is projecting that in each of the first two operating years
     following the proposed transfer, Victoria will provide 54.4 percent of total
     patient days to Medicaid patients.


G.   RECOMMENDATION

     Approve CON #9998 to transfer 11 beds authorized under CON
     #9906/E0600017 to be added to the existing Victoria Nursing &
     Rehabilitation Center, Inc. at 955 N.W. 3rd Street, Miami, Florida 33128.
     The project consists of 2,757 gross square feet (GSF) of renovation at a
     total project cost of $176,968, including renovation cost of $60,500.

     CONDITION: A minimum of 44.55 percent of the total annual patient
     days in the 264-bed facility shall be provided to Medicaid residents.




                                      17
                                          CON Action Number: 9998



           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
Chief, Bureau of Health Facility Regulation




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