Recommended Order — 26-000407CON

26-000407CONFladivadminhrg8 oct. 2026

Texte intégral

STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
HOSPICE OF THE TREASURE
COAST, INCORPORATED,
Petitioner,
vs.
AGENCY FOR HEALTH CARE
ADMINISTRATION,
Respondent,
and
VNA HOSPICE OF INDIAN RIVER
COUNTY, INC.; AND BREVARD HMA
HOSPICE, LLC, D/B/A MEDERI
CARETENDERS HOSPICE,
Intervenors.
/
Case No. 26-0407CON
RECOMMENDED ORDER
Pursuant to notice, a final hearing was conducted on June 10 through 12,
15 through 19, 22, and 25, 2026, in Tallahassee, Florida, before Garnett W.
Chisenhall, a duly designated Administrative Law Judge of the Division of
Administrative Hearings.
APPEARANCES
For Hospice of the Treasure Coast, Incorporated:
Marc Ito, Esquire
Chad Dunn, Esquire
Thomas Schulte, Esquire
Pennington, P.A.
215 South Monroe Street, 2nd Floor
Tallahassee, Florida 32301
2
For the Agency for Health Care Administration:
Richard Saliba, Esquire
Maurice Boetger, Esquire
Agency for Health Care Administration
Mail Stop 7
Fort Knox Building III
2727 Mahan Drive
Tallahassee, Florida 32308
For VNA Hospice of Indian River County, Inc.
Seann Frazier, Esquire
Ian Waldick, Esquire
Parker, Hudson, Rainer, & Dobbs, LLP
101 East College Avenue, Suite 302
Tallahassee, Florida 32301
For Brevard HMA Hospice, LLC, d/b/a Mederi Caretenders Hospice
Geoffrey D. Smith, Esquire
Stephen B. Burch, Esquire
Sabrina B. Dieguez, Esquire
Smith & Associates
709 South Harbor City Boulevard, Suite 540
Melbourne, Florida 32901
STATEMENT OF THE ISSUES
Whether either of two applicants seeking a certificate of need (“CON”) to
establish a hospice program in Indian River County, Florida, should be
approved or denied based on a balanced review of applicable review criteria;
and, whether the evidence presented at the final hearing rebutted the legal
presumption that a new program should be approved because the Agency for
Health Care Administration (“AHCA” or “the Agency”) relied upon an
inflated estimate of the need for hospice services when it published a fixed
need pool.
3
PRELIMINARY STATEMENT
On August 1, 2025, AHCA published a Notice of Hospice Program Fixed
Need Pool, announcing a need for one additional hospice program in Service
Area 9A, Indian River County, for the January 2027 Hospice Planning
Horizon. The Agency’s announcement of a fixed need pool invited any party
that identified an “error” in the fixed need pool numbers to provide notice to
the Agency. No party filed a Notice of Error or a Petition to Challenge the
Fixed Need Pool.
Brevard HMA Hospice, LLC d/b/a Mederi (“Mederi”) and Hospice of the
Treasure Coast, Incorporated (“Treasure Coast”) timely filed Letters of
Intent, Initial Applications, and Omissions Responses seeking approval of a
certificate of need to establish a new hospice program in Indian River County.
On December 19, 2025, AHCA published its notice of intent to approve
Mederi’s application and to deny applications submitted by Treasure Coast
and other applicants.
Treasure Coast timely filed a Petition for Formal Administrative Hearing
challenging AHCA’s approval of Mederi’s application and the denial of its
application. The Agency transferred Treasure Coast’s Petition to the Division
of Administrative Hearings on January 22, 2026.
VNA Hospice of Indian River County, Inc. (“VNA”), Service Area 9A’s sole
existing provider, filed a Motion to Intervene in the proceedings, alleging that
VNA would be substantially affected by the approval of either CON
Application, and urging that both applications be denied.
In addition to the primary issues related to the need for an additional
hospice provider and the merits of the competing applications after applying
4
applicable review criteria, several ancillary issues were also raised in this
proceeding. Treasure Coast and Mederi argued that any opportunity to rebut
the legal presumption created by the publication of a fixed need pool had
been waived, and that VNA lacked standing to participate in formal
administrative proceedings because it would not be substantially affected by
the approval of either CON application. Mederi also solicited testimony and
documentary evidence concerning a never-consummated merger between
VNA and Treasure Coast. VNA and Treasure Coast argued that talks of a
potential merger never became substantive or serious, and that a merger
between VNA and Treasure Coast did not relate to any applicable review
criteria.
Prior to the final hearing in this matter, Mederi filed a Motion in Limine
Regarding Need for a New Hospice Program in the Service Area and a Motion
in Limine Regarding VNA Contribution Margin Analysis on May 20, 2026.
That same day, VNA filed a Motion in Limine Regarding Expert Opinions
and Exhibits Offered by Dr. Amy Moss and a Motion in Limine Regarding
Prior Discussions of Possible VNA and Treasure Coast Merger or Affiliation.
Each party responded to the other’s Motions in Limine on May 27, 2026.
Mederi filed a “Supplemental Response to VNA’s Motion in Limine Regarding
Prior Discussions of Possible VNA and Treasure Coast Merger or Affiliation”
on May 28, 2026, which VNA moved to strike on June 2, 2026. Ultimately, on
June 5 and 8, 2026, the undersigned issued orders denying each of the
motions in limine and VNA’s motion to strike.
The parties submitted a Joint Pre-Hearing Stipulation in advance of the
final hearing. Where relevant, the stipulated facts therein have been
incorporated into this Recommended Order.
5
The final hearing was held on June 10 through 12, 15 through 19, 22, and
25, 2026. Joint Exhibits 1-6 were admitted into evidence.
Mederi presented testimony of Casey Rhodes; Jules Galiouras; Lori Stagg;
Heather Thompson, accepted as an expert in hospice quality assurance;
Tina Slatterly; Fortuna Tremante; Dr. Amy Moss, accepted as an expert in
hospice and palliative medicine; Rick Knapp, accepted as an expert in health
care finance, including financial impact analysis; Bryan Niehaus, J.D.,
accepted as an expert in health care planning; and Brecken Anderson.
The deposition transcripts and/or designations of Summer Stapleton,
Beth Goodwin, Jennifer Creel, Jackie Kendrick, Thomas Lillis, and
Glenn Beville, were provisionally admitted, subject to a post-hearing
process.1 Mederi Exhibit Numbers 3-6, 8-11, 12 (pp. 1-21, and 26), 13 (all
pages except 1-2), 17, 20, 21, 22A-22H, 23-28, 34-39, 49-51, 92, 125-132, 143-
146, 151-153, 162-168, and 183 were admitted into evidence.
Treasure Coast presented testimony from Jackie Kendrick, accepted as an
expert in hospice administration; Shannon Cooper, accepted as an expert in
hospice clinical operations, hospice quality, hospice education, and hospice
operations; Theresa Fesler, accepted as an expert in hospice community
outreach and hospice marketing; Agnes Palmer, accepted as an expert in
hospice fundraising and hospice foundation funded programs;
Shaun Williams; Lisa Gunggoll, accepted as an expert in hospice volunteer
programs and hospice veterans programs; Thomas Davidson, accepted as an
expert in health care finance and health care planning; Jacki Nardone,
accepted as an expert in hospice and community bereavement counseling
programs; Oralea Marquardt, accepted as an expert in pediatric hospice;
Jamie Seiter; Jennifer Creel, accepted as an expert in hospice nursing and
1 On August 27, 2026, the undersigned issued an Order on the parties’ deposition
designations.
6
hospice clinical care operations; William Snyder; Kenneth Byler; and
Dyanne Davis. The deposition transcripts and/or designations of
James McLemore, Lundy Fields, Jules Galiouras, and Lori Stagg, were
provisionally admitted, subject to a post-hearing process. Treasure Coast
Exhibit Numbers 2, 4, 7, 29, 31-38, 40, 49, 50, 52-53, 55-58, 62, 64-65, 68, 69
(p. 1-7), 70 (pp. 1-3), 71 (pp. 1-4), 72-73, 75 (pp. 1-5) and 101 were admitted
into evidence.
VNA presented testimony of Lundy Fields; Elton Johnson;
Elizabeth Sofranko Adams; Patricia Beth Richards, accepted as an expert in
human resources; Carol Kanarek, accepted as an expert in fundraising in
Indian River County; Daniel Carter, accepted as an expert in health planning
and health finance; and Luz Molina Lopez. The deposition transcripts and/or
designations of Ewald Bender, James McLemore, Glenn Beville,
Thomas Lillis, and Jules Galiouras, and Beth Goodwin were provisionally
admitted, subject to a post-hearing process. VNA Exhibit Numbers 1, 7-10,
13-18, 22, 25-27, and 63 were admitted into evidence.
AHCA presented the testimony of James McLemore, its Certificate of
Need Unit Manager.
During the final hearing, Treasure Coast made an ore tenus motion to
strike a portion of Mr. Fields’s testimony, which it followed with a written
motion to that effect on June 24, 2026. VNA and Mederi filed Responses in
opposition on July 1, 2026. On August 6, 2026, that Motion was denied.
The hearing concluded on June 25, 2026. The undersigned set the deadline
for Proposed Recommended Orders at 30 days after the filing of the complete
final hearing transcript. The 10-volume final hearing transcript was filed on
July 16, 2026. Following brief, unopposed extensions requested by Mederi
7
and Treasure Coast, the parties submitted Proposed Recommended Orders
on September 8, 2026.
Unless stated otherwise, all statutory references shall be to the 2025
version of the Florida Statutes.
FINDINGS OF FACT
Based on the oral and documentary evidence adduced at the final hearing,
the entire record of this proceeding, reasonable inferences drawn from that
record, and matters subject to official recognition, the following Findings of
Fact are made:
I. Hospice Care
1. Hospice is a type of healthcare dedicated to alleviating suffering in
terminally ill patients. Hospice care is palliative care. Palliative care relieves
or eliminates a patient’s pain and suffering. It differs from curative care,
which seeks to cure a patient’s illness or injury. See 42 C.F.R. § 418.24(d);
§§ 400.6005 and 400.601(6) and (7), Fla. Stat.
2. Florida considers a patient with a life expectancy of one year or less to
be terminally ill and eligible for hospice care. § 400.601(10), Fla. Stat. To be
eligible for Medicare payment for hospice services, a patient must have a life
expectancy of six months or less. 42 C.F.R. § 418.20; 42 C.F.R. § 418.22(b)(1).
3. Medicare is the largest payor source for hospice services.2 Other sources
include Medicaid, private insurance, managed care plans including Medicaid
Managed Care, other government payors, and charity. Because government
payors are by far the largest source of reimbursement for hospice providers,
2 To be eligible for Medicare payment for hospice services, patients must be certified by at
least two physicians to have a terminal illness with a prognosis of six months or less to live.
Patients can be re-certified by physicians after admission to hospice for additional benefit
periods beyond the initial 180 days if they remain terminal with a six month or less life
expectancy.
8
there is no price competition between hospice providers. All hospice providers
receive the same reimbursement for the care they provide.
4. Medicare has established Conditions of Participation (“COP”) that
specify the minimum requirements and services that all hospices must meet
in order to be eligible for reimbursement. In addition to the Medicare COP,
individual states, including Florida, establish the licensure standards that
hospices must meet. National accrediting agencies, including the Joint
Commission and the Community Health Accreditation Partnership or
“CHAP,” also set forth standards to ensure high quality operating standards
for hospices.
5. Those Medicare COP require hospices to provide four “levels of care”
which may be reimbursed by Medicare. The levels are routine home care,
general inpatient care, crisis care (also called continuous care), and respite
care.
6. Routine Care, also called “Home Care,” is the predominant form of
hospice care. Routine Care is for patients when their symptoms are being
appropriately managed and controlled without the need for more intense
services under the “continuous care” or “general inpatient” levels of service.
A hospice may provide routine care wherever the patient lives. The location
could be a residence, a skilled nursing facility (“SNF”), an assisted living
facility (“ALF”), some other residential facility, or even a homeless camp.
The vast majority of care provided by hospice providers is routine home care.
7. Continuous Care, sometimes called “crisis care,” is provided in a home
care setting or in any setting where patients reside. The purpose of
continuous home care is to achieve palliation and management of acute
medical symptoms. Continuous home care is only furnished during brief
periods of crisis as described in 42 C.F.R. § 418.204(a), and only as necessary
to maintain the terminally ill patient at home. 42 C.F.R. § 418.302(b)(2) and
(e)(3).
9
8. General Inpatient Care (also known as “GIP” care) is the hospice level
of service provided in a facility, generally in either a hospital, a skilled
nursing unit, or a freestanding hospice inpatient unit. Like “continuous care,”
to qualify for GIP care, a patient must have symptoms that are not able to be
managed through the routine home care level of service. Hospices must offer
around-the-clock, skilled nursing coverage for patients receiving general
inpatient care.
9. GIP care is much more resource and labor-intensive than routine home
care. Although hospice providers receive a higher per diem rate of pay for
GIP care than for routine home care, GIP care is not as profitable given the
high overhead costs associated with providing this intense care in a facility
setting.
10. Respite care is caregiver relief. It allows patients to stay in an
inpatient setting for up to five days to provide caregivers respite.
See § 400.609(4), Fla. Stat.; 42 C.F.R. § 418.302(b)(3).
11. Hospices can offer additional, uncompensated services that are not
required by Florida licensure laws or federal Medicare requirements.
Hospices often establish programs to meet the needs of particular
populations, such as the Hispanic, African American, Jewish, veteran, and
HIV/AIDS communities.
12. Enrolling patients in hospice care as early as possible enables the
patients and their families to receive the most benefit from hospice care’s
holistic approach to meeting clinical, spiritual, and psychosocial needs at the
end of life.
II. The CON Process for Hospices
13. Florida requires a CON to establish a hospice program.
§ 408.036(1)(d), Fla. Stat. Once a CON is issued, a hospice program must
become licensed and meet Florida’s hospice licensure standards. Ch. 400,
Part IV, Fla. Stat.; Fla. Admin. Code Ch. 59A-38.
10
14. AHCA is the state agency charged with administering Florida’s CON
program, including reviewing and rendering initial determinations on hospice
CON applications. §§ 408.031-408.045, Fla. Stat.
15. AHCA is also required to establish uniform need methodologies for
CON-regulated services such as hospice care. § 408.034(3), Fla. Stat.
Rule 59C-1.0355 codifies AHCA’s uniform need methodology for hospice
programs. The rule defines 27 hospice service areas (“Service Areas”), and
AHCA uses the need methodology in rule 59C-1.0355(4)(a) to calculate the
numeric need for hospice programs for each of the 27 Service Areas.
The results of those calculations determine whether there is a fixed need pool
(“FNP”) of one, or zero, in each of the 27 Service Areas.
16. AHCA runs this FNP formula twice yearly in each hospice service area
to determine whether to publish a need for an additional hospice provider.
17. AHCA relies on data published by other agencies to make its
calculations. The death data used by the formula is published by the Florida
Department of Health, Office of Vital Statistics, at least three months prior to
the publication of the FNP. Population estimates used by the formula are
published by the Office of the Governor at least three months prior to
publication of the FNP. Fla. Admin. Code R. 59C-1.0355(4)(a).
18. While daunting in its length and complexity, the Agency’s hospice
need methodology can succinctly be summarized as follows: AHCA makes a
projection of future hospice need in a service area which is abbreviated as
“(HPH)”; AHCA then subtracts from that projection the actual number of
hospice admissions in the service area, which is abbreviated “(HP).” If the
result of that subtraction is 350 or greater, AHCA publishes an FNP for an
additional program for that service area.
19. HPH is calculated by determining the projected number of deaths in
four categories—(1) cancer, 65 and older; (2) cancer, under 65; (3) non-cancer,
65 and older; and (4) non-cancer, under 65. In calculating the number of
deaths for HPH, the rule calls for AHCA to use data from the most recent
11
calendar year for which data is available from the Department of Health,
Office of Vital Statistics, at least three months prior to publication of the
FNP. Fla. Admin. Code R. 59C-1.0355(4).
20. AHCA’s methodology assumes that the average death rate for the
most recent three years will remain the same going forward into the planning
horizon. If rates of death were higher than normal during the examined
three-year period, then the Agency’s methodology assumes that the inflated
death rates will continue without end. See Fla. Admin. Code R. 59C-
1.0355(4)(a).
21. The methodology then projects the percentage of people within those
four categories that would elect hospice care, which is calculated by applying
the statewide penetration rate for those four categories to a service area’s
community. Those penetration rates, or P-values, are calculated by using the
entire state’s admissions in each of the four categories divided by the entire
state’s deaths in each of those four categories.
22. HP is calculated by using semi-annual utilization reports that are
required to be completed by each licensed hospice program in the state on or
before July 20 of each year and January 20 of the following year. “The July
report shall indicate the number of new patients admitted during the 6-
month period composed of the first and second quarters of the current year,”
and the “January report shall indicate the number of new patients admitted
during the 6-month period composed of the third and fourth quarters of the
prior year.”
23. Prior to 2022, once an FNP was published, “[a]ny person who
identifies an error in the [FNP] numbers must advise the Agency of the error
within 10 days of the date the [FNP] was published in the Florida
Administrative Register.” Fla. Admin. Code R. 59C-1.008(2)(a)2. (eff.
12/30/2020).
24. AHCA’s Certificate of Need Unit Manager, James McLemore, testified
that, prior to 2022, FNP challenges could be based on a wide variety of
12
alleged errors. For example, an FNP challenger could question the accuracy
of death data, the population data, and/or the utilization data.
25. However, since 2022, once an FNP is published “[a]ny person who
identifies a mathematical or data input error made by the Agency in its
calculation of the [FNP] numbers must advise the Agency of the error within
ten (10) days of the date the [FNP] was published in the Florida
Administrative Register.” Fla. Admin. Code R. 59C-1.008(2)(a)2. “Error” in
this context is now defined to “not include inaccuracies in reports which
provide the underlying data required to calculate the [FNP] numbers if such
reports were not produced by the Agency.” Id.
26. As a result, the grounds for challenging an FNP are now much
narrower than under the prior version of rule 59C-1.008. Specifically, only
“mathematical or data input errors made by the Agency in its calculation” of
need are sufficient to initiate and sustain an FNP challenge.
III. The CON Process at Issue in the Instant Case and AHCA’s Selection of
Mederi
27. AHCA determined that the net need for Service Area 9A for the
January 2027 planning horizon was 470, resulting in a published need of one
new hospice program in the service area. VNA did not challenge that FNP
determination.3
28. Because the rule requires death data from the most recent calendar
year that was available at least three months prior to the publication of the
FNP, AHCA’s determination that there was a need for one additional hospice
program in Service Area 9A relied, in part, on the final death reports from
2021, 2022, and 2023.
3 As discussed in more detail below, VNA did not attempt to challenge the FNP in this
proceeding. In other words, VNA did not seek to change the FNP for “1” additional hospice to
a different number. Instead, VNA sought to rebut the presumption of need created by the
FNP because the data relied upon by the Agency and its need formula was skewed by
pandemic-era data that falsely inflated the expected number of deaths and, therefore, the
expected need for additional hospice service in the future.
13
29. During the final hearing in this matter, VNA presented testimony of
its health care planner, Daniel Carter, who was accepted as an expert in
health planning and health finance.
30. Mr. Carter credibly testified regarding the sharp increase in deaths in
Florida as a result of the global COVID-19 pandemic in 2020, 2021, and 2022.
The excess deaths during the pandemic far exceeded the number of deaths
that would normally be expected. The statewide number of deaths jumped
nearly 55,000 in just two years, from 206,975 in 2019, to 261,246 in 2021, as
a result of the pandemic.
31. Because the Hospice Rule’s need formula uses the rolling three-year
historical statewide death rate in projecting future deaths in each service
area, the excess deaths during the COVID pandemic in 2021 and 2022 were
included in the FNP calculation for the August 2025 batching cycle.
32. The effect of including COVID-era death data in the FNP formula can
be observed by review of AHCA’s statewide hospice patient projections in the
August 2025 batching cycle and the very next one in February 2026.
In August 2025, AHCA utilized a 3-year average death rate of 0.010871 for
the state and projected that there would be 192,435 hospice patients in
Florida on a January 2027 planning horizon. However, just six months later,
AHCA utilized a 3-year average death rate of 0.010221 for the state and
projected there would be 6,180 fewer hospice patients—186,255—on the July
2027 planning horizon.4
33. This 3.2% drop in projected hospice admissions in six months does not
align with predictions of sustained, much higher than usual, death rates.
The spike and dramatic fall in death rates used to calculate hospice need
4 Similarly, the compound annual growth rate (“CAGR”) for deaths in Service Area 9A from
2015-2019 was 1.96%. Since the pandemic, the growth in annual deaths has returned to a
lower level than pre-COVID, with a CAGR of 1.72% from 2015-2025.
14
demonstrates the once-in-a-lifetime effect of the COVID-19 pandemic.5
AHCA’s assumption that high rates of COVID-era deaths will continue into
the future resulted in an over-projection of expected deaths, and an obvious
overstatement of hospice need.
34. The effect of this spike in statewide deaths caused by the global
COVID-19 pandemic in 2020, 2021, and 2022 on the need projection in
Indian River County is that the Hospice Rule’s need formula projected
297 more hospice patients on the January 2027 planning horizon than would
be expected based on the pre-COVID historical 1.36% annual death rate.
This is exclusively the result of utilizing a 3-year average death rate of
0.015724 for Indian River County on the January 2027 planning horizon,
compared to a 3-year average death rate of 0.014974 for the county on the
July 2027 planning horizon.
35. That trend can be observed into the most recent February 2026
batching cycle, where the need number dropped as 2021 COVID-peak death
data was no longer considered by the Hospice Rule’s need formula. In other
words, the use of COVID-era data to predict future deaths skewed the data
and caused inflated, unrealistic projections. Calculations using updated
death data made just six months later show no need for additional hospice
services in Indian River County.
36. Considering the historical growth rate before the global COVID-19
pandemic and after its conclusion, and VNA’s historical growth rate, VNA
will be able to meet the need that is likely for hospice patients in Indian
River County on the Hospice Planning Horizon.
37. Based on a skewed upward projection of need for hospice services in
Indian River County for the January 2027 planning horizon, AHCA reviewed
and preliminarily approved Mederi’s CON Application.
5 Even AHCA has recognized the unprecedented and devastating scale of COVID-19’s effects.
In July of 2020, AHCA took the unprecedented step of entirely cancelling the second
batching cycle for Hospital Facilities and Hospice Programs pursuant to Florida Department
of Health Emergency Order 20-004.
15
38. James McLemore, AHCA’s CON Unit Supervisor, who has worked in
AHCA’s CON Unit for approximately 32 years, testified that AHCA’s decision
to approve Mederi’s CON Application was based upon weighing and
balancing all the statutory and rule review criteria. He found that Mederi’s
application had the most detailed amount of data with regard to the needs
specific to Service Area 9A, and that Mederi’s CON Conditions demonstrated
that Mederi would best address the underserved populations in Service Area
9A.
39. Specifically, Mr. McLemore stated that Mederi’s CON Application best
addressed the minority communities who are currently being underserved by
hospice. Mederi also had extensive information regarding how it would
improve upon VNA’s current outreach to these underserved minorities and
how it would improve upon VNA’s current short length of stay for hospice
patients.
40. Mr. McLemore stated that Mederi differentiated itself from the other
applicants, including Treasure Coast, through its dedicated rural rapid
response team and by having an existing home health provider already in the
service area.
41. Mr. McLemore testified that, comparatively, Mederi would bring a
new approach in providing services while Treasure Coast and VNA are very
similar in their model of care. Both are large, non-profit hospice systems;
utilize a hospice house model of care; rely heavily on donations to their
respective non-profit foundations for funding; and have a relatively lower
average length of stay (“ALOS”) and median lengths of stay (“MLOS”) for
their patients.
42. Mederi offers a different model of care that does not rely on donors and
has a specific focus on earlier enrollment into hospice care. Mederi is a
subsidiary of United Healthcare Group (“UHG”), a publicly traded company,
with substantial financial, operational, and technological resources, including
resources dedicated to identifying patients earlier in the disease process to
16
allow those patients to access hospice service earlier. This has resulted in
Mederi having a longer ALOS and MLOS for its patients compared to either
VNA or Treasure Coast.
43. Weighing all the statutory and rule criteria, Mr. McLemore found that
Mederi best met the applicable statutory and rule criteria.
IV. Findings Pertaining to Mederi
44. Mederi is an existing, for-profit hospice provider in Service Area 7A,
Brevard County. Mederi is part of the Optum Division of UHG, a publicly
traded national health care company.
45. With regards to hospice, Optum has 300 locations in 40 states, with
seven locations in Florida. Optum has a “deep bench” of seasoned hospice
professionals with decades of experience.
46. While the Medicare COP set the minimum standards for hospice care,
Optum has developed a set of hospice best practices to exceed those
minimums and further ensure patient care excellence among its hospice
providers. Examples of these best practices include: ensuring that patients
are promptly seen within no more than four hours of a referral; ensuring
consistency in the patient care staff that visits the patient, rather than a
rotation of different staff; providing a welcome call to the patient and family
within three days of admission; requiring that staff spend the first
ten minutes of every visit actively engaging with the patient and family
without the use of tablets or other devices; ensuring that patients have timely
24/7 access to address questions, concerns, or problems; and generally
ensuring proper patient communication, establishing proper visit frequencies,
and setting minimum visit times for staff to spend with the patient and
family on every visit.
47. Optum has a national contract with Care XM, a software and clinical
triage services company, to provide additional support to expedite hospice
admissions through Optum’s Customer Connections Intake (“CCI”) program.
The CCI team provides clinical triage, holds daily calls with each hospice
17
location, communicates with referral sources, and handles the initial
admission process from gathering of the required documentation and intake
information to scheduling the initial admission visit.
48. As a part of Optum’s existing Brevard operations, Mederi currently
operates a full continuum of health care services adjacent to Indian River
County including home health, private duty nursing, non-hospice palliative
care, and hospice services. Mederi currently receives referrals for hospice
services in Brevard from referral sources such as physicians, SNFs, ALFs,
and Sebastian Hospital, that also routinely provide care to residents of
northern Indian River County.
49. As a result of the recent acquisition of Amedisys, Inc., Optum also
operates the Amedisys hospice in Brevard County.
50. Mederi’s Brevard County non-hospice palliative care program plays a
key part in the continuum of care by getting patients enrolled into hospice
care earlier in the disease process. As it relates to hospice care, non-hospice
palliative care is often the beginning for patients that have a life-limiting
illness. Palliative care acts as a bridge to hospice care by providing a gentle
transition for patients who are not yet hospice eligible based on life
expectancy or are anxious or hesitant to immediately elect hospice.
51. Since opening its palliative care program in Brevard County, Mederi
has increased its hospice admissions and almost doubled the number of
hospice patient days. Mederi’s ALOS has increased from approximately
90 days prior to implementing its palliative care program to 108 days.
The palliative care program is the number one referral source for the hospice
program. Mederi has conditioned its CON Application on implementing a
non-hospice palliative care program in Indian River County. VNA does not
currently offer a non-hospice palliative care program to residents of Indian
River County.
52. Mederi also operates a separately licensed home health agency in
Indian River County. Since 2023, it has served 1,247 patients and has
18
received over 13,680 referrals from its established network of referral sources
including cardiologists, skilled nursing facilities, assisted living facilities, and
other health care providers in the county.
53. Thus, if its CON Application were to be approved, Mederi would have
a full continuum of home care services available in both Brevard County and
adjoining Indian River County, including home health, private duty nursing,
non-hospice palliative care, and hospice care.
54. Mederi operates a Level 5 “We Honor Veterans Program,” which is the
highest level that can be achieved. Through this program, Mederi routinely
offers specialized programs and services for veterans, including pinning
ceremonies and memorial services among other recognition ceremonies.
Mederi is the top-level sponsor of the Brevard County Honor Flight which
arranges for veterans to visit veterans’ memorials and be recognized for their
service to the country. Mederi conditions its CON approval on extending its
Level 5 Veterans’ program and Honor Flight Participation to Indian River
County.
55. Mederi meets Medicare COP requirements for bereavement support
and makes its bereavement and grief support available to the community at
large, including bilingual support, as well as specific bereavement programs
for children. Mederi employs hospice volunteer services and offers a host of
complimentary therapies, including pet therapy, aroma therapy, massage
therapy, acupuncture, and music therapy.
V. Findings Pertaining to Treasure Coast
56. Treasure Coast is an existing, not-for-profit hospice provider in Service
Area 9B, serving St. Lucie, Martin, and Okeechobee Counties.
Treasure Coast filed CON Application No. 10917, which was preliminarily
denied.
57. Health and Palliative Services of the Treasure Coast, d/b/a Treasure
Health (“Treasure Health”), is Treasure Coast’s parent company and has
three hospice licenses: Treasure Coast; Hospice of Martin and St. Lucie, Inc.;
19
and Hospice of St. Francis, Inc. Treasure Health also has two palliative care
companies, a counseling company, and two foundations.
58. Treasure Coast was founded in 1982 to be a community hospice built
and run by the community. In 2004, Treasure Coast and Hospice of Martin
and St. Lucie merged into one unified organization–Hospice of the Treasure
Coast–strengthening its capacity to deliver care efficiently and consistently
across Martin, St. Lucie, and Okeechobee Counties. In 2024, Treasure Health
completed a strategic partnership with St. Francis Hospice of the Space
Coast. Together, the two nonprofit providers now serve more than
7,000 patients annually and employ nearly 700 clinical and administrative
professionals across Brevard, Martin, St. Lucie, and Okeechobee Counties.
59. Treasure Coast operates multiple inpatient units to provide a complete
continuum of care for its patients. Treasure Coast has two inpatient units in
Martin County with eight beds each, one inpatient unit in St. Lucie County
with sixteen beds, and a twelve-bed unit in Titusville in Brevard County.
60. Treasure Coast has an extremely diverse workforce. Over 50% of
Treasure Coast’s workforce is minority, and Treasure Coast has bilingual
staff that speak Spanish, Creole, and French.
61. Treasure Coast has a history of growing utilization in its existing
service areas. In Service Area 9B, Treasure Coast was the primary reason
that the service area’s penetration rate increased from 64% in 2020 to 72% in
2024.
62. Likewise, since acquiring St. Francis on October 1, 2024,
Treasure Coast has grown St. Francis’s market share in Brevard County,
Service Area 7A, which is Mederi’s service area. St. Francis has been in
operation for almost fifty years and has achieved its highest census under
Treasure Coast’s leadership.
63. Treasure Coast has existing hospice programs in counties to the north
and south of Indian River County. Gaining licensure in Indian River County
20
would mean that Treasure Coast would have a contiguous geographic region
allowing for it to support the patients and families.
64. Due to its close proximity to Indian River County, Treasure Coast is
knowledgeable about the Indian River County community, serves the larger
Indian River County community, and has hospice marketing and business
development liaisons in the community. Treasure Coast has several existing
referral sources in Indian River County that refer patients who do not reside
in Indian River County to Treasure Coast.
65. Like VNA, Treasure Coast focuses heavily on hospital referrals.
Treasure Coast’s VP of Business Development and Community Relations,
Theresa Fessler, testified that Treasure Coast educates hospital doctors
about the ability to discharge patients, who are actively and imminently
dying, from a hospital into one of the Treasure Coast hospice houses.
66. This focus upon imminently dying patients at hospitals has led
Treasure Coast to have low overall patient length of stay very similar to
VNA’s. Specifically, in 2025, Treasure Coast had a MLOS of 14 days,
meaning that half of Treasure Coast’s patients die within 14 days of electing
hospice. Its ALOS was only 57 days, and 42.5% of its patients received GIP
level of care.
67. Like VNA, Treasure Coast operates a large, non-profit fundraising
foundation, the Treasure Health Foundation, that helps fund services like
indigent care, its veterans’ program, its community and child bereavement
programs, its pediatric program, and its hospice houses.
68. The Treasure Health Foundation conducts extensive fundraising
efforts that mirror almost exactly the methods and fundraising VNA uses to
gain donations.
69. As with VNA, Treasure Coast’s bequests from grateful families are
crucial to its operations with bequests ranging from $1 million to $3 million
each year.
21
70. Publicly available tax filings, Form 990s, show that in the latest
reported year, 2023, the Treasure Health Foundation received over
$4,456,000 in contributions and grants and had $39,779,400 in net assets.
The current net assets of the Treasure Health Foundation are $41 million.
71. Treasure Coast’s CEO and senior leadership team are very talented
and dedicated to serving hospice patients. Treasure Coast would capably run
a hospice operation in Indian River County.
VI. Findings Pertaining to VNA
72. VNA has been the sole hospice provider in Service Area 9A,
Indian River County, since 1986. VNA is a not-for-profit healthcare provider
that also offers home health and private care services in Indian River and
Brevard Counties.
73. VNA offers a full continuum of end-of-life care in Indian River County.
In addition to hospice services, VNA also offers home health and private care
service lines.
74. VNA has an inpatient facility hospice house that has been opened
since 2000, with a warm, comfortable and tranquil setting for end-of-life.
While VNA has previously offered home health in Brevard County, serving
Indian River County residents is its main priority. VNA’s home health service
line is the largest home health agency in Indian River County. 8-10% of
VNA’s home health patients convert to become hospice patients.
75. VNA follows the “Servant Leadership” model, placing patient needs as
the utmost priority, with direct caregivers the next priority, the support team
following, and executives at the “bottom” of the “pyramid.” VNA’s CEO
Lundy Fields has illustrated this philosophy in obtaining Certified Nursing
Assistant (“CNA”) licensure since assuming the role of CEO in 2018, and he
works a shift as a CNA in VNA’s hospice house every month.
76. This comprehensive commitment to offering holistic care for their
patients—and the greater Indian River County community—was present
throughout the testimony of all VNA witnesses. For example, Elton Johnson,
22
VNA’s Director of Sales, testified that VNA has several liaisons that are
dedicated to working inside the Cleveland Clinic Indian River Hospital to
make sure that families referred to hospice have timely access to the
information they need for an informed decision regarding care. In the first
six months of the current fiscal year, VNA admitted an average of
161 hospice patients per month, and about 53% of those patients were
admitted from Cleveland Clinic’s Indian River Hospital or the other hospital
in Service Area 9A, Orlando Health’s Sebastian River Hospital.
77. Mr. Carter credibly testified that VNA’s hospice patient population is
“bi-modal”—just under half of VNA’s patients have a shorter length of stay,
and the remainder have a longer length of stay. Although Mederi criticizes
VNA’s relatively short average length of stay, that misleading average is
ultimately the result of this bi-modal distribution. In fact, when examining
the number of patient days of care VNA provides, approximately 80% of those
days of care are provided to patients with a hospice stay in excess of 60 days.
That means that eight out of ten times a VNA nurse goes into the field to see
a patient, they are seeing a long-stay patient. VNA is serving the short-stay
patients that many other hospice providers avoid, while simultaneously
serving the long-stay patients that Mederi targets.
78. This bi-modal distribution of VNA patient stays shows that: (a) VNA is
serving the need in the community to serve patients discharged from a
hospital that expire shortly after discharge; and (b) its community education
and awareness campaigns are effective in educating residents of Service Area
9A about the benefits of receiving hospice care as early as possible in the
terminal disease process.
79. VNA serves all patients in need, regardless of expected length of stay
or profitability.
80. VNA also offers home health services to Indian River County
residents. VNA’s home health agency is the largest in Indian River County
and sees over 3,600 home health patients annually. Although it also served
23
Brevard County residents for a time, VNA divested its Brevard County home
health agency.
81. Although the program is now making a surplus, VNA’s home health
agency has had negative operating margins in years past.
82. Beth Goodwin, VNA’s Director of Nursing for Home Health, testified
during her deposition that VNA’s home health agency takes patients that
other providers, including Mederi’s home health agency in Indian River
County, turn away, such as patients with lymphedema and PleurX catheters.
Between turning away patients with these conditions and only serving a 2-
3% share of the market, Mederi’s home health agency would not be able to
replace VNA’s if VNA was forced to shutter it to contain financial losses.
83. In addition to being a community benefit, VNA’s home health agency
is also a referral source for hospice, with 8-10% of VNA’s home health
patients becoming hospice patients.
84. To ensure that VNA is reaching historically underserved populations,
the company created a new position—cultural healthcare advocate—to
provide culturally sensitive programming for minority residents primarily in
Fellsmere, Sebastian, and Wabasso. Luz Molina-Lopez has filled that role.
She is also in charge of translating programmatic materials to Spanish to
ensure that they are translated in a culturally appropriate way.
Culturally sensitive Spanish translation of programmatic materials is
particularly important because Spanish-speaking communities often do not
understand the full scope of services provided in hospice care in the
United States, instead thinking that hospice is simply “where you take people
to die.” To combat misconceptions, Ms. Molina-Lopez developed a Spanish-
language brochure to address “Myths versus Reality” of hospice care provided
by VNA.
85. VNA’s cultural outreach efforts have been effective at increasing
hospice utilization among underserved Hispanic and African American
residents of the service area. Over the past year alone, VNA has been able to
24
increase its hospice census from about 6-8% Hispanic and African American
patients to 16-18%.
86. Although VNA has historically been active in community health
education in Indian River County, those efforts had not previously been
tracked. Ms. Molina-Lopez utilized her prior experience as Technology Asset
Manager at Cleveland Clinic Indian River to comprehensively inventory the
events that VNA hosts in the community, 134 in fiscal year 2026 and in
excess of 200 so far in this fiscal year. These events have taken place across
Indian River County—from Vero Beach to the underserved minority
communities in Fellsmere, Wabasso, Gifford, and Sebastian.
87. In addition to VNA’s three service lines, VNA’s Director of Community
Health Services, Liz Sofranko-Adams, testified about VNA’s mobile health
clinic program which has provided deeply discounted urgent care services to
Indian River County residents for over 30 years. Ms. Sofranko-Adams has
been involved with VNA’s mobile health clinic as a volunteer since 1993 and
as a staff member since 1995.
88. The mobile health clinic is a VNA-branded bus that has been
converted into a mobile urgent care clinic, with a reception area and
examination room onboard. It is staffed with a bus driver also serving as a
receptionist, an APRN conducting the examinations, and a medical assistant
that assists with patient intake and examinations.
89. Although the mobile clinic charges nominal fees for examinations,
VNA frequently waives the charge for patients that cannot afford it.
90. VNA’s mobile health clinic sees about 3,000 patients per year, with
about half of those patients being white and about 25% each being Hispanic
or African American. However, nearly all of the patients seen by VNA’s
mobile health clinic are socioeconomically disadvantaged.
91. The mobile clinic has a set schedule of locations that it visits weekly
and publishes flyers in both English and Spanish to ensure it is reaching as
many patients in need as possible. Over the years, VNA has discovered that
25
more central locations near pharmacies were most effective to reach patients,
as patients go to the clinic when they are sick and in need, rather than when
it is in their neighborhood.
92. Ms. Sofranko-Adams also directs VNA’s community health efforts,
which are carried out by a team of nurses that travel around the community
to provide health screenings and other types of community outreach.
The health screenings include lipid, hemoglobin, A1C and blood glucose, and
blood pressure screenings. The other types of community outreach include
things like assisting residents with medication, providing rides to medical
appointments, and providing community education on chronic disease,
blood pressure, diabetes, hyperlipidemia, and the like.
93. VNA provides much needed healthcare services to residents of
Indian River and surrounding counties, often at an operational loss. In recent
history, VNA’s consolidated financial statements show that its hospice service
line has been the only service line generating an operating profit.
This hospice profit serves to underwrite significant losses from VNA’s other
programs, particularly home health. Even with the net income generated by
VNA’s hospice service line, the VNA Foundation still needs to provide annual
contributions to cover VNA’s significant, consolidated operating losses
resulting from its other service lines.
94. The operational reality is that, without profit generated by hospice,
VNA cannot continue money-losing programs forever, despite the enormous
benefit they offer local residents. For instance, although VNA had a home
health program in Brevard County in years past, it recently divested that
program because it was not financially viable and so that it could better focus
on serving Indian River County patients. In Fiscal Year 2023, the Brevard
County home health program alone had an operating loss of $1.8 million,
contributing to VNA’s consolidated operating loss of $4.3 million.
After discontinuing the program, VNA still experienced a consolidated
26
operating loss of $1 million in Fiscal Year 2024, which is less than the prior
losses from the Brevard County home health program alone.
95. Although Mederi touts its existing home health service line in Indian
River County, it has a small market share of 2-3%. If VNA were to shutter its
Indian River County home health line as a result of adverse financial impact
from approval of a new hospice program, Mederi would not be able to replace
it in the market.
96. VNA’s hospice has higher quality data in most aspects than Treasure
Coast or Mederi. VNA is the sixth highest ranked hospice in Florida in terms
of Consumer Assessment of Healthcare Providers and Systems (“CAHPS”)
responses indicating a willingness to recommend VNA’s services to others.
VNA visits a higher percentage of its patients in the last days of life than
Mederi or Treasure Coast.
97. Neither Mederi nor Treasure Coast offers any programs that are
meaningfully different from VNA’s current and planned offerings.
98. Mr. Carter testified that in his review of Mederi’s and Treasure
Coast’s CON Applications, none of the applicants’ proposed conditions offers
any programming that would be substantially different from what VNA
already offers in the service area. In fact, Mederi’s proposed financial
commitments totaled only approximately $235,000 over the first three to five
years, which pales in comparison to the VNA Foundation’s Fiscal Year 2024
operating subsidy to VNA’s operations of nearly $3.03 million.
99. Ms. Molina-Lopez reviewed the conditions to Mederi’s and Treasure
Coast’s CON Applications and did not believe any would meaningfully
increase utilization of hospice services by historically underserved Hispanic
and African American populations in Indian River County. Based on her
experience, devoting resources to those communities are only part of the
solution to improving access to care, but the main issue is building long-term
trust in the communities. Many of the proposed programs are already offered
by VNA.
27
100. Ms. Kendrick confirmed that Treasure Coast is not proposing to offer
primary care outreach to underserved communities in Indian River County,
and that Treasure Coast is not proposing a dedicated cultural liaison or
similar position. Although Treasure Coast employs some existing staff that
“either live in or near Indian River,” its CON Application does not project
hiring any new liaisons to serve Service Area 9A.
VI. Findings Pertaining to the Impact on VNA of Approving another Hospice
Provider for Indian River County
101. Mr. Carter credibly testified that VNA would expect to lose
approximately $2.73 million in year 2 if Mederi’s CON Application were
approved, and $2.62 million in year 2 if Treasure Coast’s were approved.
In reaching this conclusion, Mr. Carter assumed that 100% of patients
projected to be served by Mederi and Treasure Coast in their CON
Applications would otherwise have been served by VNA, as the sole existing
provider in Service Area 9A.
102. Mr. Carter also calculated a per-admission contribution margin—the
amount of revenues received less variable expenses associated with patient
care—based on each applicant’s projected average length of stay. Mederi’s 86-
day projected average length of stay resulted in $8,317 in lost revenue per
admission, and Treasure Coast’s 60-day projected average length of stay
resulted in $6,578 in lost revenue per admission. Even though Treasure
Coast projects higher admissions than Mederi, Mederi projects more patient
days of care, which increases lost revenue because hospice claims are paid on
a per diem basis.
103. Even conservatively assuming that VNA’s annual admissions will
continue to grow, as argued by Mederi and Treasure Coast, Mr. Carter still
projected VNA would lose 155 admissions to Mederi in year 2 and 225 to
Treasure Coast in year 2, if either CON Application were approved.
Those lost admissions would result in $1.29 million and $1.48 million,
respectively, in lost revenue to VNA in year 2.
28
104. Although Mederi argued that VNA could offset any revenue lost by
Mederi’s proposed 328 admissions in year 2 by simply increasing its own
average length of stay, that assumes that VNA would be able to increase
service to the very long-stay patients that are Mederi’s primary target.
In other words, Mederi’s approval will add competitive pressure for the same
long-stay patients that it argues VNA should pursue to increase its average
length of stay—making that task much more difficult.
105. Mederi’s argument also obscures the true adverse impact by patient
day to VNA’s operations. At VNA’s current 40.3-day average length of stay,
it would need to add 617 admissions to replace Mederi’s 75.9-day average
length of stay for projected year 2 admissions.
106. In addition to the direct, adverse financial impact to VNA caused by
lost revenue from hospice admissions, VNA will also be adversely affected by
approval of an additional, unneeded hospice provider from a staffing
perspective. VNA’s Vice President of People and Culture, Beth Richards,
testified as an expert in Human Resources about the expected adverse impact
to staffing. Ms. Richards joined VNA in 2022 when it was facing AHCA’s
preliminary approval of Mederi’s CON Application. Although that
preliminary approval was ultimately overturned by litigation, Ms. Richards
immediately undertook strategic planning initiatives at VNA to understand
the Indian River County healthcare staff market and VNA’s needs.
These initiatives included work to understand current compensation for
VNA’s approximately 485 active employees to ensure that the organization
remains competitive in the market, and maintains its employee engagement
initiatives, positioning in the market, and recruitment.
107. Ms. Richards explained that for a hospice provider like VNA “RNs
are always [needed] and not always available.” Recruiting LPNs, nurse aides,
and home health aides is also a challenge. Although approximately
1,650 actively licensed nurses work in Indian River County, only
approximately 180 to 300 have home health or hospice experience.
29
And although VNA is the third-largest employer of nurses in Indian River
County, it competes with hospice providers in other counties for that limited
pool of hospice-experienced nurses.
108. Ms. Richards also expects entry of a new hospice provider into the
Indian River County market to increase hospice nurse wages by 10 to 20
percent. Overall, VNA expects that entry of a new hospice provider into the
service area would raise wages and increase VNA’s payroll expenses by
between $450,000 and $750,000 annually going forward.
109. Although VNA does not currently offer staff retention or sign-on
bonuses, those strategies would be a large part of its approach to responding
to approval of a competing hospice. Those retention bonuses—which are
limited to a 36-month impact—alone would cost approximately an additional
$235,000 annually. Based on the staffing and salary projections in Mederi’s
CON Application—which represent about a 32% increase from VNA’s current
salaries for its staff—the annual cost to VNA to keep pace with salaries and
remain competitive would be about $500,000 to $800,000 more per year than
Ms. Richards initially internally projected.
110. A new hospice program would not only have staffing effects, but
would also cause disruption to VNA’s volunteer base. Although volunteers
are not paid by VNA, there are substantial costs associated with training
them, on par with the training provided to a new employee. For instance,
Mr. Carter testified that VNA would stand to suffer an adverse impact of
175 lost volunteers in year 2 if Treasure Coast’s CON Application were
approved.
111. Carol Kanarek, a volunteer with VNA for the past 35 years and a
member of the Board of Directors of the VNA Hospice Foundation for the last
five, testified that VNA would also expect adverse impact to its charitable
fundraising efforts if Treasure Coast’s CON Application were approved.
Ms. Kanarek was accepted as an expert in fundraising in Indian River
County.
30
112. The VNA Hospice Foundation engages in an annual written
fundraising appeal to between 3,000 and 5,000 donors, sponsors an annual
“Golf-a-Thon,” pursues corporate grants and sponsorships, and occasionally
pursues capital campaigns for a particular specified need.
113. Although annual revenue varies, the VNA Hospice Foundation has
raised about $3 million annually through charitable giving, with about half of
that generated by the annual written appeal. The Golf-a-Thon alone raised
over $500,000 in donations this year. Through its efforts over the years, the
VNA Hospice Foundation has been able to amass an investment fund worth
between $30 million and $38 million.
114. The VNA Hospice Foundation also receives bequests from estates,
which amount to approximately 8-10% of annual revenue—about $300,000
per year. The Foundation has received bequests up to $2 million.
Most individuals and organizations that donate to VNA have some personal
connection to VNA.
115. The Foundation spends the money it raises in ways that benefit
VNA’s patients and the Indian River community, including supporting VNA’s
charity hospice care, wish fulfillment program, music therapy program for
patients and the broader community, We Honor Veterans program, adult
bereavement program, and children’s bereavement camp, “Camp Chrysalis,”
which is led by an employed child life specialist. The Foundation also
provides funding assistance to VNA’s mobile health clinic, as funding from
the Indian River Hospital District “is always questionable.”
116. As many of its charitable donations come from grateful families of
patients, VNA Hospice Foundation is concerned about the impact to its
fundraising efforts from approval of a competing not-for-profit hospice like
Treasure Coast. With 800 different not-for-profit organizations in
Indian River County, “it is a very competitive community for fundraising
dollars.” Given her experience, Ms. Kanarek does not expect that any
patients served by Treasure Coast would donate to VNA’s Foundation—they
31
would likely donate to Treasure Coast’s. And the adverse impact to VNA’s
charitable fundraising would grow as Treasure Coast’s census increases.
117. Even Treasure Coast’s prior CFO testified that, during the
exploration of a possible merger, he discovered that VNA was “dependent on
donated dollars.”
VII. Merger Discussions between VNA and Treasure Coast
118. Throughout this litigation, Mederi has speculated that VNA and
Treasure Coast may merge into a single organization, arguing that since
VNA and Treasure Coast explored the possibility of formally affiliating in the
run-up to the FNP’s publication, that such a merger is bound to happen.
Ultimately, Mederi’s concerns were not proven. Mederi’s speculation that a
merger will occur was not supported by the evidence adduced at the final
hearing.
119. Mr. Fields and Ms. Kendrick explored the possibility of merging in
2021, but that did not come to fruition.
120. Discussions of a potential affiliation reignited in late 2023. Mr. Fields
explained that one concern driving VNA to explore merging with another
hospice was fear of a “hospice carve-in” for Medicare Advantage plans that
would result in an overall reduction in reimbursement for services. VNA
wanted more leverage in negotiations with Medicare Advantage plans to
secure better reimbursement rates.
121. Mr. Fields explained that talks with Treasure Coast continued
throughout 2024, with VNA providing financial information to Treasure
Coast and expecting Treasure Coast to prepare a business plan to understand
what a merged organization might look like. VNA was unwilling to include
its charitable foundation as part of any eventual deal. While some members
of VNA’s Board of Directors were initially excited about the possibility of a
merger, the Board became discouraged by the end of 2024 because Treasure
Coast presented a proposed post-merger organizational structure that would
have given it exclusive control over the VNA Foundation. Losing control of its
32
foundation was “a deal breaker” for VNA. VNA Board members also grew
frustrated by being provided with organizational charts from Treasure Coast
instead of the business plan they had requested.
122. Remaining hopeful that they could work out a mutually agreeable
deal, VNA continued to provide additional financial information to Treasure
Coast and continued to seek business plans and performance projections from
it. After Treasure Coast provided a three-year projection of post-merger
performance to VNA, “there were no other discussions” about a potential
merger. A merger never occurred and one is not planned for the future.
123. In fact, by August 2025, VNA was already pursuing affiliation with
another provider, “which was moving very fast.” They had “already moved
away from Treasure Coast.”
124. Ms. Kendrick confirmed in her testimony that Treasure Coast is not
currently in talks to merge with VNA. Ms. Kendrick testified that
explorations of a possible merger or formal affiliation with VNA had occurred
on and off throughout her entire tenure as CEO, since late 2019 or early
2020. After several attempts to persuade VNA to join collaborations with
Treasure Coast and other hospices, Ms. Kendrick found that Mr. Fields and
VNA “just [were] not interested in anything outside of Indian River.”
Although VNA’s then-board chair seemed interested in the possibility of a
merger with Treasure Coast, Ms. Kendrick’s impression was that it would
never have gained approval from the entire board.
125. If Treasure Coast and VNA were to merge, Treasure Coast’s board
expected that VNA and all of its affiliated holdings would be acquired under
the Treasure Health umbrella, as was the case with Treasure Coast’s recent
merger with St. Francis Reflections Hospice in Brevard County. However, it
soon became clear that VNA wanted to keep its Foundation and real estate
holdings independent. Ms. Kendrick was worried that if the VNA Foundation
remained independent, it could choose to stop subsidizing VNA’s operations—
33
and money-losing service lines—at any time and Treasure Coast would be
stuck with the responsibility for unprofitable services.
VIII. Findings Regarding the Relevant Statutory and Rule Criteria
Governing Consideration of CON Applications
126. In reviewing CON applications, section 408.035, Florida Statutes,
requires the Agency to consider several factors. The factors relevant to the
instant case are the following: (a) “[t]he need for the health care facilities
being proposed”; (b) “[t]he availability, quality of care, accessibility, and
extent of utilization of existing health care facilities in the service district of
the applicant:” (c) “[t]he ability of the applicant to provide quality of care and
the applicant’s record of providing quality of care”; (d) “[t]he availability of
resources, including health personnel, management personnel, and funds for
capital and operating expenditures, for project accomplishment and
operation"; (e) “[t]he extent to which the proposed services will enhance
access to health care for residents of the service district”; (f) “[t]he immediate
and long-term financial feasibility of the proposal”; (g) “[t]he extent to which
the proposal will foster competition that promotes quality and cost-
effectiveness”; and (h) “[t]he applicant’s past and proposed provision of health
care services to Medicaid patients and the medically indigent.”
127. The greater weight of the evidence established that: (a) Mederi and
Treasure Coast are capable of providing quality care to hospice patients in
Indian River County; and (b) Mederi and Treasure Coast have the resources
necessary to operate a successful hospice program in Indian River County.
There was no persuasive evidence that Mederi or Treasure Coast’s proposed
hospice programs lacked long-term financial feasibility.
128. As for the “need for the health care facilities being proposed,”
the greater weight of the evidence established that AHCA’s determination of
a need for an additional hospice provider in Indian River County was skewed
by the increase in deaths attributable to the COVID-19 pandemic and
resulted in a false determination of need in Indian River County. As noted
34
above, the most recent February 2026 batching cycle, which did not include
any COVID-era death data, showed an absence of any need for additional
hospice services in Indian River County.
129. With regard to “[t]he availability, quality of care, accessibility, and
extent of utilization of existing health care facilities in the service district of
the applicant,” the greater weight of the evidence established that VNA is
performing well in meeting the need for hospice services in Indian River
County. There was no persuasive evidence of any material deficiency in
VNA’s provision of hospice services. In a similar manner, there was no
persuasive evidence that any groups within Indian River County seeking
hospice services are unable to access them. As a result, the greater weight of
the evidence does not establish that “[t]he proposed services will enhance
access to health care for residents of the service district.”
130. As for whether entry of Mederi or Treasure Coast into Indian River
County “will foster competition that promotes quality and cost-effectiveness,”
there was no persuasive evidence that VNA’s hospice services are lacking in
quality or that VNA is not a cost-efficient provider.
131. When considering the criteria in section 408.035 as a whole, the
undersigned finds that the greater weight of the evidence demonstrates that,
in terms of the January 2027 Hospice Planning Horizon, there is no need for
an additional hospice program in Indian River County. This finding is based
on: (a) the substantial uncertainty pertaining to AHCA’s calculation of a need
for one additional hospice provider in Indian River County for the January
2027 Hospice Planning Horizon; and (b) the lack of any persuasive evidence
of any meaningful deficiency in VNA’s provision of hospice services in Indian
River County.
132. Rule 59C-1.0355 of the Florida Administrative Code sets forth
criteria to use when evaluating competing applications for a hospice CON.
Application of that criteria to the facts of the instant case does not result in a
35
finding that Mederi or Treasure Coast should be given preference for a new
hospice program in Indian River County.
133. If the undersigned had found that there was a need for an additional
hospice provider in Indian River County, then the greater weight of the
evidence leads the undersigned to concur with AHCA’s determination that
Mederi should receive the CON. This finding is supported by the
undersigned’s determination that Treasure Coast, as a not-for-profit hospice
provider substantially reliant on donations, would severely damage VNA’s
fundraising operation.
CONCLUSIONS OF LAW
134. DOAH has jurisdiction over the subject matter of this proceeding and
of the parties pursuant to sections 120.569 and 120.57(1), Florida Statutes.
IX. VNA’s Standing to Participate in this Proceeding
135. In order for an existing hospice provider to have standing to
intervene in a CON proceeding, it must show that it will be “substantially
affected” by approval of the CON application(s) at issue. § 408.039(5)(c),
Fla. Stat. In order to be substantially affected by the outcome of a proceeding,
a party must show: (a) an injury in fact of sufficient immediacy; and (b) that
the person’s substantial injury is of a type or nature that the proceeding is
designed to protect. Agrico Chem. Co. v. Dep’t of Envtl. Reg., 406 So. 2d 478
(Fla. 2d DCA 1981).
136. VNA has proven, by a preponderance of the evidence, that it has
standing to participate as a party in this proceeding. As discussed above,
approval of either Mederi or Treasure Coast would be expected to have an
adverse financial impact on VNA’s existing operations. VNA could expect
increased staffing costs, loss of hospice volunteers to a new provider, and lost
charitable fundraising revenue. This is the type of injury that the instant
proceeding is designed to protect, and that is substantial enough to establish
standing.
36
X. VNA Rebutted AHCA’s FNP Determination
137. VNA seeks to rebut the presumption of need created by the Agency’s
publication of a fixed need pool. As explained below, VNA has rebutted the
need by a preponderance of the evidence.
138. Hospice providers can challenge AHCA’s publication of a Fixed Need
Pool within 10 days of publication if they identify an “error” in the
calculation. Fla. Admin. Code R. 59C-1.008(2)(a)2.
139. Prior to 2022, “error” was undefined in this context and challengers
had raised issues such as the reliability of need projections which had been
skewed by unique anomalies created by the global COVID-19 pandemic.
See, e.g., Seasons Hospice and Palliative Care of Pinellas Co., LLC v. Ag. for
Health Care Admin, et al., Case No. 21-0888 (DOAH, June 16, 2021; AHCA
July 23, 2001).
140. In Seasons, challengers to a fixed need pool publication argued that
the effects of COVID data should be considered in a challenge to a fixed need
pool publication. Opponents argued that only mathematical errors could be
raised. In response, the Honorable W. David Watkins offered the following
comment that was adopted by the Agency in a final order:
76. AHCA and Intervenors have argued consistently
and vehemently that the proper scope of an FNP
challenge is only as to the calculation and use of the
data required by the rule formula, and not as to
other factors, citing, inter alia, Hope Hospice and
Community Services, Inc. v. Agency for Health Care
Administration, et al., DOAH Case No. 08-6218
(2009), 	per 	curiam 	affirmed 	Hope 	Hospice 	and
Community Services, Inc. v. Agency For Health Care
Administration, 23 So. 3d 1185 (Fla. 1st DCA, 2009).
According 	to 	AHCA 	and Intervenors, 	the 	errors
asserted by Petitioners do not fall within this scope
of a calculation or data error, and therefore would
not be contemplated as a proper challenge to the
FNP numbers, according to AHCA’s precedent.
37
77. If AHCA and Intervenors are correct regarding
the limited scope of an FNP proceeding, no challenge
could be brought to an FNP that is based upon
changes 	in 	need 	methodologies, 	population
estimates, bed inventories, or other factors which
would 	lead 	to 	different 	projections 	of 	need.
In addition to an inability to raise such arguments
in the context of an FNP challenge, AHCA and
Intervenors also will undoubtedly argue that those
same 	prohibitions 	apply 	in 	future 	litigation
concerning 	the 	approval 	or 	denial 	of 	CON
applications. If they are correct, the FNP rule is
infallible and the opportunity to file a meaningful
FNP challenge is illusory.
Seasons, pp. 28-29, ¶¶ 76-77.
141. Judge Watkins then concluded that “AHCA’s rules very clearly allow
for the identification of error in the FNP numbers and provide a broad scope
for such challenges in subsection (2)(a)3.” Id. at p. 29, ¶ 78. Judge Watkins
left open the possibility of raising such challenges in a fixed need pool
challenge:
79. Reading rule 59C-1.008(2)(a) in its entirety, as
the undersigned must, and based on AHCA’s rules
and 	applicable 	authority 	and 	precedent, 	the
undersigned concludes that the errors identified by
Petitioners are challengeable errors under rule 59C-
1.008(2)(a), and that this is the proper forum to
address the errors raised by Petitioners.
Id. at p. 29, ¶ 79.
142. In response, the Agency changed its rules. Since the Agency amended
rule 59C-1.008(2)(a)2. in 2022, the permissible grounds for challenging an
FNP publication are much narrower. While the previous version of AHCA’s
Rule 59C1.008(2)(a) contained no definition of what types of “errors” might be
identified and litigated in an FNP challenge, the Agency’s current version of
the rule now limits such “errors” to “mathematical or data input” and defines
38
them as excluding “inaccuracies in reports which may provide the underlying
data required to calculate the [FNP] numbers if such reports were not
prepared by the Agency.” Fla. Admin. Code R. 59C-1.008(2)(a)2. (2021);
Fla. Hospice & Palliative Care Ass’n v. Agency for Health Care Admin., No.
22-0790RP (Fla. DOAH June 23, 2022) (upholding validity of amendments to
rule 59C-1.008(2)(a)2.).
143. Among the reports used by the Agency to calculate the FNP for new
hospice programs is a report on deaths which have occurred in Florida.
See Fla. Admin. Code R. 59C-1.0355(4)(a). Any error or anomaly in such data
may no longer serve as the basis for challenging an FNP.
144. For purposes of the Hospice Rule’s numeric need formula, “current”
deaths are defined as “the number of deaths during the most recent calendar
year for which data are available from the Department of Health, Office of
Vital Statistics at least 3 months prior to publication of the [FNP].”
Additionally, the Hospice Rule defines “Projected” deaths as “the number
derived by first calculating a 3-year average resident death rate, which is the
sum of the service area resident deaths for the three most recent calendar
years available from the Department of Health, Office of Vital Statistics at
least 3 months prior to publication of the [FNP], divided by the sum of the
July 1 estimates of the service area population for the same 3 years.”
145. Thus, the Agency relies upon death data from reports not prepared
by the Agency, but by the Florida Department of Health’s Office of Vital
Statistics. Pursuant to the Agency’s rule governing FNP challenges, no party
may allege that the reliability or accuracy of death data constitutes an “error”
which may be identified and corrected by the Agency in an FNP challenge.
See Fla. Admin. Code R. 59C-1.008(2)(a)2.
146. In this case, VNA seeks to rebut the Agency’s determination that
there is in fact a need for an additional hospice provider in Service Area 9A.
Mederi and Treasure Coast argue that VNA has waived any challenge to
need in this case by failing to challenge the FNP publication. On the other
39
hand, VNA has consistently argued that it is not challenging the FNP
publication, but is instead “rebutting” the presumption of need created by
publication of the FNP.
147. It is well settled that “AHCA’s publication of a [FNP] reflecting a
numeric need for one new hospice program creates a rebuttable presumption
that there is a need for a new hospice program in” the service area. Hospice of
the Fla. Suncoast, Inc. v. Agency for Health Care Admin., DOAH Case No. 15-
5556CON, 2016 WL 4764940, at *34 (Fla. DOAH Sept. 8, 2016; AHCA Oct.
12, 2016); accord. Affinity Care of Palm Beach County v. Agency for Health
Care Admin., DOAH Case No. 25-475CON, at p. 2 (Fla. DOAH June 3, 2025)
(Order Granting Joint Motion in Limine) (“A positive FNP amounts to a
rebuttable presumption of need.”); VITAS Healthcare Corp. of Cent. Fla., Inc.
v. Agency for Health Care Admin., DOAH Case No. 04-3858CON, 2005 WL
1416853, at *23 (Fla. DOAH June 14, 2005; AHCA July 7, 2005); Osceola Reg.
Hosp., Inc. v. Agency for Health Care Admin., DOAH Case No. 13-0163CON,
2014 WL 344968, at *9 (Fla. DOAH Dec. 10, 2013; AHCA Jan 24, 2014) (“The
publication of fixed need is not determinative, and creates a rebuttable
presumption as to need.”). Cf. Compassionate Care Hospice of Gulf Coast, Inc.
v. State, 247 So. 3d 99, 100 (Fla. 1st DCA 2018) (explaining a fixed need of
zero new hospice programs creates a rebuttable presumption that no new
hospice provider is needed).
148. Therefore, the FNP is merely a starting point to the examination of a
community’s true needs. The First District Court of Appeal has explained:
The 	bed-need 	formula 	is 	part 	of 	a 	rule 	having
general statewide application and should be viewed
as 	the 	beginning 	point 	for 	determining 	need.
The formula is so broad in scope that it cannot be
treated as taking into consideration all the peculiar
conditions found in a particular area sought to be
served by the applicant. While the bed-need formula
shifts the burden from HRS to the applicant to show
a need where none is shown by calculations under
the formula, HRS should not simply stand on these
40
calculations 	and 	abandon 	its 	responsibility 	to
consider and weigh the other criteria.
Balsam v. Dep’t of Health & Rehab. Servs., 486 So. 2d 1341, 349 (Fla. 1st
DCA 1986).
149. Rebutting the presumption of need created by the Agency’s FNP is
not merely a theoretical possibility. There have been several cases where
providers have presented sufficient evidence to rebut the presumption of need
created by a positive FNP. See, e.g., Columbia Hosp. Corp. of S. Broward v.
Agency for Health Care Admin., Case Nos. 94-1020, 94-1021, ¶ 310 (Fla.
DOAH Jan. 31, 1996; AHCA Mar. 6, 1996) (After need for additional open
heart surgery program had been projected, the ALJ found that “[i]n this case,
Westside's opponents have presented sufficient evidence to rebut the
presumption.”); Punta Gorda HMC, Inc. v. Agency for Health Care Admin.,
Case Nos. 98-1134, 98-1142, 98-1145, 98-1497 and 98-3420RX, ¶ 155 (Fla.
DOAH Sep. 16, 1999; modified in part, Case Nos. CON 8913 & 8914 (AHCA
Feb. 9, 2000) (concluding that the “presumption has been rebutted in this
case”). These cases demonstrate that a published FNP is not infallible.
An FNP may be rebutted by evidence of any kind such as the substantial
adverse impact on the existing providers to the geographic accessibility and
capacity of existing providers in the service area.
150. In reviewing competing CON applications, AHCA must consider all
statutory review criteria in section 408.035, Florida Statutes.
Those “statutory criteria have a free-floating value that may vary sufficiently
linked to the facts of a case.” Compassionate Care Hospice, 247 So. 3d at 101.
“[T]he appropriate weight to be given to each individual criterion is not fixed,
but rather must vary on a case-by-case basis, depending upon the facts of
each case.” Collier Med. Ctr., Inc. v. State, 462 So. 2d 83, 84 (Fla. 1st DCA
1985).
151. The first statutory review criterion is “[t]he need for the health care
facilities being proposed.” § 408.035(1), Fla. Stat. The publication of an FNP
41
does not mean that no evidence concerning “need” may be introduced at the
final hearing. The presumption of need may be rebutted. See, e.g. Humhosco,
Inc. v. Dep’t of Health and Rehab. Servs., 476 So. 2d 258, 261 (Fla. 1st DCA
1985).
152. Placing too much emphasis on a need formula and failing to consider
other criteria under the statutes constitutes reversible error. See Balsam, 486
So. 2d at 1349, citing Humana, Inc. v. Dep’t of Health and Rehab. Servs., 469
So. 2d 889, 891 (Fla. 1st DCA 1985); and Dep’t of Health and Rehab. Servs. v.
Johnson & Johnson Home Health Care, Inc., 447 So. 2d 361, 363 (Fla. 1st
DCA 1984). Rules which have been interpreted to foreclose full consideration
of need, by replacing that statutory requirement with a rigid rule formula,
have been found invalid. Johnson & Johnson Home Health Care, 447 So. 2d
at 363 (rule requiring each existing provider to meet certain levels of service
before a CON could issue was arbitrary and violated statute governing CON
review).
153. VNA’s argument that use of COVID-era death data in the fixed need
formula unrealistically inflated hospice admission projections on the
applicable hospice planning horizon is exactly the type of argument that must
be considered. And as explained above, VNA has convincingly rebutted the
presumption and demonstrated that the projected hospice admissions are
unlikely to materialize.
XI. Balancing of Criteria
154. Mederi and Treasure Coast both, as the CON applicants, have the
burden of demonstrating that their applications should be granted. Boca
Raton Artificial Kidney Ctr. v. Dep’t of Health and Rehab. Servs., 475 So. 2d
250 (Fla. 1st DCA 1985).
155. Review of competing CON applications requires “a balanced
consideration of all the statutory criteria” in section 408.035, Florida
Statutes. See Balsam, 486 So. 2d at 1349.
42
156. The criteria in section 408.035(1)-(7) and (9) apply in this case, and
the parties have stipulated as to financial feasibility in paragraph (6).
157. The weight assigned to each criterion varies on a case-by-case basis—
they “have a free-floating value that may vary if sufficiently linked to the
facts of a case.” Compassionate Care Hospice, 247 So. 3d at 101.
158. VNA argues that the most important criteria in section 408.035 are
the lack of need for an additional hospice provider and the extent to which
addition of an additional hospice provider will reduce access to health care for
residents of the service area. See §§ 408.035(1) & (5), Fla. Stat. On the other
hand, Mederi and Treasure Coast both argue for rigid adherence to the
presumption of need for an additional hospice provider resulting from
publication of an FNP and that addition of a new provider will foster
competition promoting quality and cost effectiveness. See §§ 408.035(1) & (7),
Fla. Stat.
159. On balance and after considering all applicable statutory criteria in
this case, the first criterion, “the need for the health care facilities being
proposed,” should be afforded the most weight for the reasons explained in
the Findings of Fact above. See § 408.035(1), Fla. Stat. It was proven, by a
preponderance of the competent, substantial evidence in the record, that
there is no need for an additional hospice program in Indian River County.
The FNP projections are unrealistically inflated by the use of COVID-era
death data that will not re-occur and should receive little weight. If an
unnecessary hospice program is approved, it is likely to adversely affect
access to healthcare for Indian County residents, particularly impoverished
residents that rely on the charitable provision of healthcare. See § 408.035(5),
Fla. Stat.
160. Contrary to Mederi’s and Treasure Coast’s urging, the competition
criterion deserves the least weight, as there is functionally no price
competition between hospice providers given the Medicare reimbursement
model, and there is little room for quality competition in a market that is
43
Case No. 26-0407CON
already served by one of the highest-quality providers in the state.
See § 408.035(7), Fla. Stat. Neither applicant offers any new or better hospice
service than those already offered by VNA. No payor will receive a more
competitive price, and no patient will receive higher quality services as a
result of a new approval. In fact, the adverse impact caused by the approval
of an unneeded hospice program will reduce the beneficial services that VNA
is currently able to offer, with no concomitant benefit.
RECOMMENDATION
Based on the foregoing Findings of Fact and Conclusions of Law, it is
RECOMMENDED that the Agency for Health Care Administration issue a
final order denying the CON applications of Hospice of the Treasure Coast,
Inc. and Brevard HMA Hospice, LLC d/b/a Mederi Caretenders Hospice.
DONE AND ENTERED this 8th day of October, 2026, in Tallahassee,
Leon County, Florida.
S
G. W. CHISENHALL
Administrative Law Judge
DOAH Tallahassee Office
Division of Administrative Hearings
2001 Drayton Drive
Tallahassee, Florida 32311
(850) 488-9675
www.doah.state.fl.us
Filed with the Clerk of the
Division of Administrative Hearings
this 8th day of October, 2026.
44
COPIES FURNISHED:
Kim Annette Kellum, Esquire
(eServed)
Thomas M. Hoeler, Esquire
(eServed)
Shevaun Harris, Secretary
(eServed)
Geoffrey D. Smith, Esquire
(eServed)
Chad Wayne Dunn, Esquire
(eServed)
Richard Joseph Saliba, Senior Attorney
(eServed)
Seann M. Frazier, Esquire
(eServed)
Maurice Thomas Boetger, Senior Attorney
(eServed)
Agency Clerk
(eServed)
Glenn Wallace Rininger, Chief Legal
Counsel
(eServed)
Stephen B. Burch, Esquire
(eServed)
Sabrina B. Dieguez, Esquire
(eServed)
Marc Ito, Esquire
(eServed)
Thomas "Trey" Joseph Schulte, Esquire
(eServed)
Ian E. Waldick, Esquire
(eServed)
NOTICE OF RIGHT TO SUBMIT EXCEPTIONS
All parties have the right to submit written exceptions within 15 days from
the date of this Recommended Order. Any exceptions to this Recommended
Order should be filed with the agency that will issue the Final Order in this
case.

Poursuivez vos recherches dans ChatGPT ou Claude

Connectez Omnilex pour rechercher dans le corpus juridique depuis votre assistant IA.