minutes state health facilities council wednesday, … july... · 2018. 10. 17. · members...

Lucas State Office Building, 321 E. 12th Street, Des Moines, IA 50319-0075 515-281-7689 www. idph.iowa.gov

DEAF RELAY (Hearing or Speech Impaired) 711 or 1-800-735-2942

Gerd W. Clabaugh, MPA Director

Kim Reynolds Adam Gregg Governor Lt. Governor

MINUTES

STATE HEALTH FACILITIES COUNCIL

WEDNESDAY, JULY 25, 2018 LOCATION: IOWA LABORATORY FACILITY, CONFERENCE CENTER, ROOM 208

DMACC CAMPUS, ANKENY

9:00 AM Roll Call

MEMBERS PRESENT: H.W. Miller, M.D, Chairperson; Roberta Chambers; Steve Dengle; Brenda Perrin and

Connie Schmett.

STAFF PRESENT: Becky Swift and Kristi Traynor, Counsel for the State

I. APPROVAL OF MINUTES OF PREVIOUS MEETING A motion by Perrin, seconded by Chambers to approved the minutes of July 16, 2018, carried

unanimously by voice vote.

II. PROJECT REVIEW (Cost Over-run) 1. Strategic Behavioral Health, Bettendorf, Scott County: Re-review of a project approved

7/20/2017 to build a 72-bed psychiatric hospital at a cost of $14,978,723. Cost over-run of

$3,198,263. (21% of the approved $14,978,723)

Staff report by Becky Swift. The applicant was represented by Doug Fulton, Brick Gentry Law;

and Scott Williams and Rob Elsner (via telephone), Strategic Behavioral Health. The applicant

made remarks and answered questions posed by the Council. A motion by Chambers, seconded

by Dengle, to approve the cost overrun carried 5-0.

III. EXTENSION OF PREVIOUSLY APPROVED PROJECTS 1. Strategic Behavioral Health, Bettendorf, Scott County: Build a 72-bed psychiatric hospital –

$14,978,723 (Approved 7/20/2017; First Extension Request)

Staff Report by Becky Swift. The applicant was represented by Doug Fulton, Brick Gentry Law;

and Scott Williams and Rob Elsner (via telephone), Strategic Behavioral Health. The applicant

made remarks and answered questions posed by the Council. A motion by Perrin, seconded by

Schmett to grant a 12 month extension carried 5-0.

2. CCRC of West Des Moines, West Des Moines, Dallas County: Build a 40-bed nursing facility - $4,923,000 (Approved 2/25/2016; Fourth Extension Request)

Staff report by Becky Swift. The applicant was represented by Gib Wood, CCRC of West Des

Moines. The applicant made remarks and answered questions posed by the Council. A motion by

Chambers, seconded by Dengle to grant a 3 month extension with a request that the applicant

appear at the October meeting of the Council to provide a progress report, carried 3-2. Perrin and

Schmett voted no.

IV. PROJECT REVIEW 1. Western Home Services, Inc., D/B/A Western Home Communities, Cedar Falls, Black Hawk

County: Add 10 nursing facility beds

$1,500,000

Staff report by Becky Swift. The applicant was represented by Ed McIntosh, Dorsey & Whitney;

and Wendy Ager, Matt Garcia, and Jerry Harris, Western Home Communities. The applicant

made a presentation and answered questions posed by the Council. A motion by Dengle,

seconded by Perrin to enter exhibits presented by the applicant in support of oral testimony into

the record carried unanimously by voice vote.

No affected parties appeared at the hearing.

A motion by Chambers, seconded by Schmett to Grant a Certificate of Need carried 5-0.

2. Martin Luther Home D/B/A Luther Manor Communities, Dubuque, Dubuque County: Convert 16 assisted living beds to 16 nursing facility beds

$150,000

Staff report by Becky Swift. The applicant was represented by Ed McIntosh, Dorsey & Whitney;

Janet Warren, Luther Manor Communities; Barbara Barker, Luther Manor Communities,

Hillcrest Campus; Nathan Greiner, Luther Manor Communities, Asbury Campus.

The applicant made a presentation and answered questions posed by the Council. A motion by

Perrin, seconded by Dengle to enter exhibits presented by the applicant in support of oral

testimony into the record carried unanimously by voice vote.


A motion by Dengle, seconded by Chambers to Grant a Certificate of Need carried 5-0.

3. Mercy Medical Center – Dubuque, Dubuque County: Acquisition of a linear accelerator and CT simulator

$5,200,000

Due to a conflict of interest, Connie Schmett recused herself from the hearing.

A potential conflict of interest regarding the participation of Roberta Chambers was brought to

the attention of the Council by Doug Gross of Brown Winick Law on behalf of UnityPoint –

Finley Hospital in Dubuque. The potential conflict involved the employment as CEO and interim

CEO respectively by Mercy Hospital affiliates Wayne and Decatur County Hospitals, of her son-

in law Daren Relph. Gross argued that Chambers should recuse herself due to this conflict. Alissa

Smith, Dorsey & Whitney, representing Mercy Dubuque provided rebuttal. Chambers then made

statements based on 641 IAC 202.5(6) that she has no person bias or prejudice; has not acted as

counsel to either entity; has no financial interest in the project; that the decision to hire Relph as

the interim CEO at Decatur County Hospital was made at the county level, not by Mercy Des

Moines; that an affiliation agreement is a way for small, rural hospitals be part of a think tank and

purchasing agreement; and that there was no legally sufficient cause for her to refrain from

hearing the application. Chambers asked the Council to vote on whether she had conflict. After

discussion, a motion was made by Dengle, seconded by Perrin, to allow Chambers to participate

in the hearing. The vote carried 3-0 with Chambers abstaining.

Staff report by Becky Swift. The applicant was represented by Alissa Smith, Dorsey & Whitney;

Kay Takes, Luann Mottet, Dr. Eric Engelman, Chad Kruse, Mercy Dubuque and Dr. Richard

Deming, Mercy Des Moines. The applicant made a presentation and answered questions posed

by the Council. A motion by Perrin, seconded by Dengle to enter exhibits presented by the

applicant in support of oral testimony into the record carried unanimously by voice vote.

Affected parties in support included Susan Weber-Hagemann, Melissa Klinkkammer; Dr. Mark

Janes, Denny Grant, Deb Kennedy, Julie Grutz, Kairee Graves, and Rod Schlader.

Affected parties in opposition included Doug Gross, Brown Winick Law, representing UnityPoint

Finley; and John Wilke, Ted Townsend; Michel Kelly, Dr. Bobby Koneru; Laura Duerr

representing UnityPoint Finley. The opposition made a presentation and responded to questions

posed by the Council. A motion by Dengle, seconded by Chambers to enter an email from

Wellmark presented by the opposition in support of oral testimony into the record carried

unanimously by voice vote. A motion by Chambers, seconded by Perrin to enter additional

exhibits presented by the opposition in support of oral testimony into the record carried

unanimously by voice vote.

Additional affected parties in opposition included Mike Donahue, Ellen Bigalow, Dr. Thomas

Lally, Susan Dolter and Dr. Bill McGinnis. Dr. McGinnis appeared via video. A motion by

Dengle, seconded by Chambers to enter a transcript of Dr. McGinnis’ testimony into the record

carried unanimously by voice vote.

The applicant, represented by Alissa Smith, Kay Takes, Dr. Richard Deming, Dr. Eric Engelman

and Chad Kruse, provided rebuttal and closing remarks.

A motion by Chambers, seconded by Dengle to Grant a Certificate of Need carried 3-1. Perrin

voted no.

The Chairperson reminded the Council that the July 26 meeting would begin at 8:30 AM.

A motion by Perrin, seconded by Chambers to adjourn carried unanimously by voice vote.

The meeting was adjourned at 8:05 PM

IOWA DEPARTMENT OF PUBLIC HEALTH


IN THE MATTER OF A REQUEST BY

STRATEGIC BEHAVIORAL HEALTH

BETTENDORF, IOWA

TO MODIFY A CERTIFICATE OF NEED

This matter came before the State Health Facilities Council for review on Wednesday, July 25, 2018.

The request proposes the modification of an approved project. The request is to increase the cost of the proposal. On July 20, 2017, the Council granted a certificate of need to Strategic Behavioral Health to construct a 72 bed inpatient psychiatric hospital at a cost of $14,978,723. The Council granted a 12 month extension in July 2018. This request proposes an increase of $3,198,263 for a total project cost of $18,176,986.

The record includes the request prepared by the project sponsor and all testimony presented. The applicant was represented by Doug Fulton, Brick Gentry Law; and Scott Williams and Rob Elsner (via telephone), Strategic Behavioral Health. The applicant made remarks and answered questions posed by the Council.

No affected parties appeared.

The Council, after hearing the above mentioned testimony and after reading the record voted 5-0 to grant a modification to the original Certificate of Need.

FINDINGS OF FACT

1. Strategic Behavioral Health was granted a Certificate of Need on July 20, 2017, to

construct a 72 bed psychiatric hospital in Bettendorf, Iowa, at a cost of $14,978,263.

2. In June 2018 the department received an extension request from the applicant that

reported closing on the land in October 2017, approval of building plans in March 2018,

and subcontractors selected. The Council granted a 12-month extension in July 2018.

3. A revised Exhibit 3 outlining the cost overrun was submitted in June 2018. The applicant

reports the cause of the cost overrun resulting from some redesign to the building, to add

space and improve safety; market cost escalation; increases in civil costs due to site work;

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increased furnishings and increased and added computers for the electronic medical

record; features not included in the original budget; and increased interest costs directly

attributable to the increased capital costs.

4. The estimated total cost of the project is now $18,176,986, a 21.4% increase in the

original total project costs.

5. The applicant reports that the projected date of completion has changed from January

2019 to February 2020.

CONCLUSION

The Council concludes that the proposed change to the originally approved project represents an increase of approximately 21.4 percent in the cost of the project, but does not substantially alter the nature and scope of the originally approved project.

Pursuant to 641 IAC 202.14, the Council therefore approves the request to modify the Certificate of Need originally granted July 20, 2017, to $18,176,986 as the approved cost of the project.

No changes that vary from or alter the terms of the approved application including a change in the approved dollar cost shall be made unless requested in writing to the department and approved. Failure to notify and receive permission of the department to change the project as originally approved may result in the imposition of sanctions provided in Iowa Code section 135.73 (IAC 641 202.14).

Dated his 7 day of September 2018 / /16

Mil er, M.D., Chairperson State Health Facilities Council Iowa Department of Public Health

cc: Health Facilities Council Department of Inspections & Appeals, Health Facilities Division

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IN THE MATTER OF THE CERTIFICATE OF NEED EXTENSION FOR

STRATEGIC BEHAVIORAL HEALTH

BETTENDORF, IOWA

) ) ) DECISION ) ) )

This matter came before the State Health Facilities Council for review on Wednesday, July 25, 2018. The applicant was represented by Doug Fulton, Brick Gentry Law; and Scott Williams and Rob Elsner (via telephone), Strategic Behavioral Health.

The project, the construction of a 72 bed psychiatric hospital was originally approved on July 20, 2017. The original completion date for the project was January 2019. The new completion date for the project is February 2020. Strategic Behavioral Health closed on the land in October 2017. Building plans were submitted to the local building authority and were approved in March 2018. Plans were approved by the State Fire Marshal's Office in February 2018. Subcontractor bids were received in May 2018, with selection made the same month. The Guaranteed Maximum Price and contract proposal were provided from the General Contractor in June 2018. Construction was scheduled to begin in July 2018. To date $2,687,137 has been spent on the project.

The project sponsor submitted a revised Exhibit 3 outlining a cost overrun in June 2018. This request proposed an increase in cost of $3,198,263 (21.4% of the approved $14,978,723) which required further review and approval by the Council. The Council voted to grant a modification to the original Certificate of Need.

The Council, after reading the extension request and hearing comments by staff and the applicant, voted 5-0 to Grant an Extension of Certificate of Need per 641 Iowa Administrative Code 202.13. The decision was made on the basis that sufficient progress has been made.

The extension is valid for 12 months.

day of September 2018

67 )

.(i À A, eller, . / D., Chairperson

State Health Facilities Council Iowa Department of Public Health

Dated this

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IN THE MATTER OF THE

) CERTIFICATE OF NEED EXTENSION FOR

)

) DECISION CCRC of WEST DES MOINES, LLC )

) WEST DES MOINES, IOWA

This matter came before the State Health Facilities Council for review on Wednesday, July 25, 2018. The applicant was represented by Gib Wood of Scenic Development.

The project, construction of a 40 bed nursing facility as part of a Continuing Care Retirement Community, was originally approved on February 25, 2016, at an estimated cost of $4,923.000. The original completion date for the project was June 2018. Due to issues with the parcel of land on which the facility was to be built and the need to build a public road to the site, the location for the project has changed. In July 2017, the applicant entered into a Purchase and Sale agreement for the purchase of land that is approximately one mile from the original site in Dallas County, but is within the Waukee City limits. This site was ultimately deemed to be unsuitable for the project. On January 8. 2018, the applicant entered into a Purchase and Sale agreement to purchase an alternate site, which had only recently become available. The parcel is approximately a half mile from the original site. The applicant engaged a civil engineer to evaluate this parcel and it was concluded that it is suitable for the project. In April 2018 the applicant authorized the design team to complete construction drawings and in May 2018, these drawings were complete. In June the West Des Moines City Council unanimously approved the project. The applicant, in an effort to develop the project cost effectively, entered into a joint venture with UnityPoint Health- Des Moines to develop the project. The project itself will remain unchanged and Scenic Development, the parent company of the CCRC of West Des Moines, will continue to manage the project. The commitment letter from Green Belt Bank and Trust, was renewed in Marcy 2018 and extends to the new location. The new completion date for the project is December 2019. To date $184,661 has been spent on the project.

Due to delays and changes in the project location, the Council requested that a representative of the applicant participate in the October 2018 Health Facilities County meeting to answer questions posed by Council members.

The Council, after reading the extension request and hearing comments by staff and the applicant, voted 5-0 to Grant an Extension of Certificate of Need per 641 Iowa Administrative Code 202.13. The decision is based upon a finding that progress has been made in developing the project.

The extension is valid for three (3) months.

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Dated this 7 day of September 2018

H. . Miller, M.D., Chairpe son State Health Facilities Council Iowa Department of Public Health




IN THE MATTER OF THE APPLICATION OF

WESTERN HOME SERVICES D/B/A DECISION

WESTERN HOME COMMUNITIES

CEDAR FALLS, IOWA


The applicant proposes the addition of 10 nursing facility beds at an estimated cost of $1,500,000.

Western Home Communities applied through the Iowa Department of Public Health for a Certificate of Need.

The record includes the application prepared by the project sponsor and written analysis prepared by Iowa Department of Public Health staff and all the testimony and exhibits presented at the hearing. Becky Swift of the Iowa Department of Public Health summarized the project in relation to review criteria. Ed McIntosh, Dorsey & Whitney; and Wendy Ager, Matt Garcia and Jerry Harris, Western Home Communities, were present representing the applicant. The applicant made a presentation and answered questions.


The Council, after hearing the above-mentioned testimony and after reading the record, voted 5-0 to grant a Certificate of Need. As a basis for their decision the Council, considering all the criteria set forth pursuant to Iowa Code Section 135.64 (1 and 2) (2017) made the following findings of fact and conclusions of law:

FINDINGS OF FACT

1. Western Home Communities ("WHC") is a non-profit continuing care retirement

community ("CCRC") with two campuses, south and downtown, in Cedar Falls.

2. WHC will add 10 nursing facility beds to Martin Health Center which is located on their

downtown campus in Cedar Falls, Black Hawk County, Iowa.

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3. Martin Health Center was constructed in 1992 for 100 residents in semi-private rooms. In

May 2018, 60 of these beds were moved to The Suites on the WHC south campus,

leaving Martin Health Center with 40 nursing beds. The additional 10 beds at Martin

Health Center would allow WHC to serve 24 residents per each of the two floors of the

facility, plus have the flexibility to accommodate couples.

4. The plan is to renovate space, without adding any square footage, to create a total of 48

private rooms, two of which would accommodate couples, for a total of 50 licensed beds

in a Household Model setting.

5. While WHC — Martin Health Center - will primarily serve Black Hawk County, it is

adjacent to seven rural counties. In addition at least 25,000 people live in the rural areas

and small communities of Black Hawk County and this project will provide nursing care

within a short distance of their homes.

6. All the beds will be Medicare and Medicaid certified.

7. WHC - Martin Health Center - has maintained an average occupancy rate of 92 percent

for the past three years. It was noted during testimony that there is a current waiting list

of 47 individuals and that the waiting time for beds averages 18 months to two years. It

was further noted that this creates problems for current residents of their independent and

assisted living units, some of whom have to go elsewhere for nursing care.

8. Studies done by LeadingAge show that CCRC's need one nursing bed for every four

units of housing in order to meet the demand from within their own continuum. WHC

states that they have a ratio of one nursing home bed for every 5.5 units of housing.

9. The calculated bed need formula indicates a current underbuild in live of the seven

counties around Black Hawk County. The underbuild for Black Hawk County is 214

beds. Overall the eight-county area, as calculated by the bed need formula, is underbuilt

by 669 beds. See the following table for additional bed information.

Nursing Facility Beds by County Number Needed by CON Formula/Number Licensed/Difference

County

Projected 2023 Population Age 65+

# of NF Beds needed per bed need formula

# of licensed & approved

Difference — Formula vs. Licensed & Approved*

NF Beds as of June 2018

Black Hawk 23,889 1,348 1,134 -214 Benton 5,391 380 182' -198

2

Bremer 5,559 307 250 -57

Buchanan 4,051 280 136 -144

Butler 3,654 253 273 20

Fayette 4,889 339 319 -20 Grundy 3,052 212 126 -86 Tama 4,042 282 312 30 Totals 54,527 3,401 2,732 -669 *A positive (+) number means the county is overbuilt and a negative (-) indicates an underbuild

Includes 10 approved but not yet licensed beds at Keystone Nursing Care Center

10. Over the span of the last three years, the total number of beds in the eight county area has

increased by 61 beds. There has been an increase of 32 beds in the past three years for

Black Hawk County. See the following table for additional details.

Nursing Facility Beds by County Difference in Number Between June 2015 and June 2018

County # of NF Beds (facilities) as of June 2015

# of NF Beds (facilities) as of June 2018

Difference in # of NF Beds

Black Hawk 1102 (11) 1,134 (11) 32 Benton 172 (3) 172 (3) 0 Bremer 260 (4) 250 (4) -10 Buchanan 136 (2) 136 (2) 0 Butler 273 (6) 273 (6) 0 Fayette 280 (4) 319 (5) 39 Grundy 126 (3) 126 (3) 0 Tama 312 (5) 312 (5) 0 Totals 2,661 2,722 61

11. There are currently 2,732 licensed and approved nursing facility beds in the eight-county

area, with 147 licensed beds in dedicated CCDI units. Additionally, there are 79 NF beds

in hospital-based settings.

Number of CCDI Beds by Coun

County # of CCDI Beds (facilities)

Black Hawk 52 (2) Benton 19 (1) Bremer 30 (1) Buchanan 0 Butler 0 Fayette 10 (1) Grundy 0 Tama 36 (2)

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Totals 147 (7)

Data Sources: Department of Inspections & Appeals — Summary of Long Term Care Facilities

12. There are 11 nursing facilities in Black Hawk County, ranging in occupancy from 98% to 79% for an average of 86%. The seven contiguous counties report occupancies ranging from 62% (Buchanan County) to 88% (Benton County). In a phone survey conducted in

June 2018, there were several facilities that reported a low daily census. Reasons provided included using semi-private as private rooms, not wanting to give up the license

for beds even though the census is low, a decline in referrals, and census being down in

the area overall. Some facilities could not explain their low occupancy numbers.

Phone Survey of Nursing Facilities Located in & Contiguous to Black Hawk County

Conducted June 2018

Facility by County Licensed

Beds Current

Occupancy Percent

Occupied

Black Hawk County

Cedar Falls Health Care Center 82 65 79%

County View NF/SNF 114 90 79%

Friendship Village Retirement Center 72 63 88%

Harmony House Health Care Center NF/SNF 66 60 91%

LaPorte City Specialty Care 46 45 98%

Manorcare Health Services of Waterloo 97 80 82%

Martin Health Center, Inc. 132 130 98%

NewAldaya Lifescapes 135 130 96%

Northcrest Specialty Care 94 83 88%

Pinnacle Specialty Care 100 84 84%

Ravenwood Specialty Care 196 149 76%

TOTAL 1134 979 86%

Benton County

Belle Plaine Specialty Care 66 42 64%

Keystone Nursing Care Center 45 45 100%

The Vinton Lutheran Home 61 60 98%

Virginia Gay Hospital HSP-NF 40 39 98%

TOTAL 212 186 88%

Bremer County

Denver Sunset Home 31 29 94%

Hillcrest Home Inc. 71 41 58%

Tripoli Nursing & Rehab 28 22 79%

4

Woodland Terrace 120 99 83%

TOTAL 250 191 76%

Buchanan County

ABCM Rehab Center of Independence West 86 37 43%

ABCM Rehab Center of Independence East 50 33 66%

Buchanan County Health Center HSP-NF 39 38 97%

TOTAL 175 108 62%

Butler County

Clarksville Skilled Nursing and Rehab Ctr 42 33 79%

Dumont Wellness Center 38 30 79%

Maple Manor Village 50 28 56%

Rehabilitation Center of Allison 60 30 50%

Shell Rock Senior Living 44 33 75%

Valley View Community 39 22 56%

TOTAL 273 176 64%

Fayette County

Good Samaritan Society — West Union 71 42 59%

Grandview Healthcare Center 93 54 58%

Maple Crest Manor 55 44 80%

Mercy Living Plus 39 31 79%

Oelwein Health Care Center 61 52 85%

TOTAL 319 223 70%

Grundy County

Creekside 55 43 78%

Grundy Care Center 40 30 75%

Oakview Home 46 44 96%

Parkview Manor Care Center 40 39 98%

TOTAL 181 156 86%

Tama County

Premier Estates of Toledo 75 64 85%

Sunny Hill Care Center 57 50 88%

Sunnycrest Nursing Center 50 35 75%

Sunrise Hill Care Center 76 62 82%

West Brook Acres 54 53 98%

TOTAL 312 264 85%

13. The following table displays other levels of service available in the eight-county area.

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County RCF Beds (Facilities)

Home Health Agencies

Adult Day Services

Assisted Living Units (Facilities)

ALWD

Black Hawk 25 (2) 4 65 (2) 456 (4) 298 (2) Benton 78 (2) 3 0 84 (3) 72 (1) Bremer 0 1 0 202 (4) 35 (1) Buchanan 0 0 20 (1) 84 (2) 104 (1) Butler 0 1 0 168 (5) 74 (1) Fayette 90 (1) 1 0 98 (2) 154 (3) Grundy 0 0 0 56 (2) 80 (1) Tama 0 1 0 30 (1) 0 TOTALS 193 (5) 11 85 (3) 1,178 (23) 817 (10)

Data source: DIA web site

14. There were three letters of support received. These letters, from the clinical coordinator at Western Home Communities and also daughter of a Martin Health Center resident; a physician; and the Cedar Falls Mayor, cited the quality care provided, the growth of

Western Homes Communities in the community, the quality workplace, furtherance of

the Western Homes mission, the need to solidify the Western Home Communities'

downtown campus, the shift to primarily private rooms, and the shift to the Household Model of care from the traditional medical model as reasons for their support.

15. There were four letters of opposition received. These letters from the administrators of

Cedar Falls Health Care Center, Clarksville Skilled Nursing and Rehabilitation Center, NewAldaya Lifescapes and Westbrook Acres cite the many facilities in the area that could accommodate the need, static or declining census numbers, increases in assisted living and home health agencies hindering on nursing facilities in the area, and the

hardship additional beds at Martin Health Center would create on other facilities in the area as reasons for their opposition.

16. WHC works cooperatively with other skilled nursing facilities and assisted living communities in and around Black Hawk County. WHC has transfer agreements with all three hospitals in the area, as well as contracts with Cedar Valley Hospice, UnityPoint Hospice and St. Croix Hospice.

17. WHC indicates that they will add 2.7 FTE staff — two .5 CNA's and 1.7 hospitality/ cooks at Martin Health Center. WHC's hosts a Prepare to Care class on site. A full-time clinical staff development coordinator teaches the class and students are paid for their

time. This course has resulted in about 35-50 new CNA"s per year, each working a minimum of 20 hours per week. WHC also has benefits that help recruit and retain new staff include scholarship programs, tuition reimbursement, and flexible work schedules.

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18. WHC has $500,000 cash on hand for the project and they will borrow $1,000,000. They

included a letter from Bank Iowa in Waterloo, indicating Bank Iowa had evaluated

historical operations, balance sheet and experience of WHC together with budgeted

operations and concluded that subject to the sufficiency of any and all necessary third

party reports and credit approvals, a loan would be available for the proposed project.

The initial rate offered, fixed for ten years, is 4.25 percent. Noted by WHC is that the

request for 10 additional beds allows them to create more private rooms in the most

affordable manner possible.

19. WHC will renovate space, including resident rooms, and which will not result in any new

square footage. The applicant notes a total of $1,500,000 in facility costs. They indicate

a turn-key cost of $30,000.

20. The applicant does not anticipate an operating deficit as a result of this project.

CONCLUSIONS OF LAW

In determining whether to issue a certificate of need, the Council considers the eighteen criteria listed in Iowa Code § 135.64(1)(a)-(r). In addition, the legislature has provided that the Council may grant a certificate of need only if it finds the following four factors exist:

a. Less costly, more efficient or more appropriate alternatives to the proposed institutional health service are not available and the development of such alternatives is not practicable;

b. Any existing facilities providing institutional health services similar to those proposed are being used in an appropriate and efficient manner;

c. In the case of new construction, alternatives including but not limited to modernization or sharing arrangements have been considered and have been implemented to the maximum extent practicable;

d. Patients will experience serious problems in obtaining care of the type which will be furnished by the proposed new institutional health service or changed institutional health service, in the absence of that proposed new service.

1. The Council concludes that less costly, more efficient or more appropriate alternatives to the proposed health service are not available and the development of such alternatives is not practicable. The Council notes WHC — Martin Health Center has operated at near capacity for the past three years, and at the time of the staff survey in June 2018, it was at 98% capacity. The Council also notes that WHC has a waiting list for beds. The Council concludes that Western Home Communities — Martin Health Center is operating at capacity and that alternatives are not available. Iowa Code Sections 135.64(1) and 135.64(2)a.

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2. The Council concludes that existing facilities providing health services similar to those proposed will continue to be used in an appropriate and efficient manner and will not be impacted by this project. The calculated bed need formula indicates a current underbuild in five of the seven counties around Black Hawk County. The underbuild for Black Hawk County is 214 beds. Overall the eight-county area, as calculated by the bed need formula, is underbuilt by 669 beds. The phone survey conducted by Department staff indicates an overall occupancy in Black Hawk County of 86%. The Council traditionally requires utilization over 85% to indicate appropriate occupancy rates of long term care facilities. Here, the County utilization rate of 86% along with little opposition from existing facilities, no affected parties in opposition appearing at the hearing, 98% occupancy of the Martin Health Center, supports a conclusion that existing facilities are being utilized in an efficient manner. Iowa Code Sections 135.64(1) and 135.64(2)b.

3. The Council concludes that the proposed project involves renovation only and no new construction. The Council concludes that alternatives including modernization and sharing arrangements have been considered and implemented to the maximum extent practicable. Iowa Code Sections 135.64(1) and 135.4(2)c.

4. The Council concludes that patients will experience problems in obtaining care of the type which will be furnished by the proposed health service, in the absence of that proposed service. The Council notes that WHC has a waiting list of up to 2 years and is turning away potential residents due to its consistently high census and the desire by residents for private rooms. The Council also notes that Martin Health Center is being converted from an institutional model to a Household model of care, where daily living is more resident focused. The Council concludes those from within the WHC continuum, as well as those in the community seeking nursing care will experience problems obtaining the type of care provided by Martin Health Center without the addition of 10 beds. Iowa Code Sections 135.64(1) and 135.64(2)d.

The facts, considered in light of the criteria contained in Iowa Code Section 135.64 (1 and 2) (2017), led the Council to find that a Certificate of Need should be awarded.

The decision of the Council may be appealed pursuant to Iowa Code Section 135.70 (2017).

It is required in accordance with 641 Iowa Administrative Code 202.12 that a progress report shall be submitted to the Iowa Department of Public Health six (6) months after approval. This report shall fully identify the project in descriptive terms. The report shall also reflect an amended project schedule if necessary.

The Certificate of Need is valid for a twelve (12) month period from the date of these findings. This is subject to the meeting of all requirements of the Iowa Department of Public Health. Requests for extension of a Certificate of Need must be filed in writing to the Iowa Department of Public Health from the applicant no later than forty-five (45) days prior to the expiration of the Certificate. These requests shall fully identify the project and indicate the current status of the project in descriptive terms.

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No changes that vary from or alter the terms of the approved application including a change in the approved dollar cost shall be made unless requested in writing to the department and approved. Failure to notify and receive permission of the department to change the project as originally approved may result in the imposition of sanctions provided in Iowa Code section 135.73 (641 Iowa Administrative Code 202.14).

Dated this


(A- in er, M. D., Chairperson



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MARTIN LUTHER HOME D/B/A LUTHER MANOR COMMUNITIES

ASBURY, IOWA

) )

) DECISION ) ) )


The applicant proposes the conversion of 16 assisted living beds to nursing facility beds at an estimated cost of $150,000.

Luther Manor Communities applied through the Iowa Department of Public Health for a Certificate of Need.

The record includes the application prepared by the project sponsor and written analysis prepared by Iowa Department of Public Health staff and all the testimony and exhibits presented at the hearing. Becky Swift of the Iowa Department of Public Health summarized the project in relation to review criteria. Ed McIntosh, Dorsey & Whitney; Janet Warren, Luther Manor Communities; Barbara Barker, Luther Manor Communities, Hillcrest Campus; and Nathan Greiner, Luther Manor Communities, Asbury Campus, were present representing the applicant. The applicant made a presentation and answered questions.


The Council, after hearing the above-mentioned testimony and after reading the record, voted 5-0 to grant a Certificate of Need. As a basis for their decision the Council, considering all the criteria set forth pursuant to Iowa Code Section 135.64 (1 and 2) (2017) made the following findings of fact and conclusions of law:

FINDINGS OF FACT

1. Luther Manor is a non-profit continuing care retirement community ("CCRC") with two

campuses, Grand Meadows in Asbury and I lillcrest in Dubuque.

2. Luther Manor Communities ("Luther Manor'') will increase their licensed nursing facility

capacity at their Grand Meadows facility, located in Asbury, Iowa, by converting 16

assisted living beds to 16 nursing facility beds.

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3. The Grand Meadows facility opened in 2017 with 64 assisted living units, 50 independent

living townhomes and 16 nursing facility beds. The nursing facility beds immediately

filled upon opening, but 16 of the assisted living units have not been filled. The addition

of 16 nursing facility beds will bring the total to 32.

4. When Grand Meadows opened Luther Manor believed that all 16 of the nursing beds

would be used for short-term skilled care, however they currently have five beds

occupied by long-term care residents. The additional 16 nursing facility beds will provide

skilled care and long-term care for residents on the Grand Meadows campus who age in

place and want to remain on that campus.

5. The rooms in the Grand Meadows assisted living facility were originally built to meet

nursing facility standards, making the conversion cost effective.

6. All of the beds will be Medicare and Medicaid certified.

7. The census for Grand Meadows in 2017 was 88.1 percent and Luther Manor projects an

average occupancy rate of 81.3 percent in 2018, with a rate of 87.5 in 2019 and 2020. At

the time of a staff survey conducted in June 2018, Grand Meadows had 100% occupancy.

8. The primary service area of Luther Manor are the CCRC's (Grand Meadows and

Hillcrest) and the Dubuque area, however the project will also serve residents from

Clayton, Jackson and Delaware Counties.

9. During testimony is was noted that there is a current waiting list of 53 individuals for

Luther Manor facilities, that Luther Manor is the preferred provider in the community,

and that they have to send people to other facilities due to lack of nursing facility beds. It

was further noted that there is a lack of availability for residents of Luther Manor's

independent and assisted living facilities, and that there is a demand for beds within the

Luther Manor continuum.

10. The calculated bed need formula indicates a current underbuild in all of the four counties

around Dubuque County. The underbuild for Dubuque County is 117 beds. Overall the

five-county area, as calculated by the bed need formula, is underbuilt by 543 beds. See

the following table for additional bed information.

Nursing Facility Beds by County Number Needed by CON Formula/Number Licensed/Difference

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County

Projected 2023 Population Age 65+

# of NF Beds needed per bed need formula

# of licensed & approved

Difference — Formula vs. Licensed & Approved*

NF Beds as of 7/18

Dubuque 18,688 1042 925 -117 Clayton 4,316 299 245 -54

Delaware 3,989 278 191 -87 Jackson 4,830 334 195 -139

Jones 4,619 322 176 -146

Totals 36,442 2,275 1,732 -543 *A positive +) number means the county is overbuilt and a negative (-) indict tes an underbuild

I 1. Over the span of the last three years, the total number of beds in the five county area has

increased by two beds. There has been an increase of 16 beds in the past three years for

Dubuque County. See the following table for additional details.

Nursing Facility Beds by County Difference in Number Between June 2015 and June 2018

County # of NF Beds (facilities) as of 7/15

# of NF Beds (facilities) as of 7/18

Difference in # of NF Beds

Dubuque 909 (9) 925 (10) 16 Clayton 245 (4) 245 (4) 0 Delaware 191 (2) 191 (2) 0 Jackson 209 (3) 195 (3) -14 Jones 176 (2) 176 (2) 0 Totals 1,730 (20) 1,732 (21) 2

12. There are currently 1,732 licensed and approved nursing facility beds in the five-county

area, with 169 licensed beds in dedicated CCDI units. Additionally, there are 54 NF beds

in hospital-based settings.

Number of CCDI Beds by Coun

County # of CCDI Beds

(facilities) Dubuque 56 (4) Clayton 16 (1)

Delaware 36 (1) Jackson 37(1) Jones 24 (1)

Totals 169 (8) Data Sources: Department of Inspections & Appeals —

Summary of Long Term Care Facilities

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13. There are 12 nursing facilities in Dubuque County, ranging in occupancy from 100%

(Grand Meadows) to 58% for an average of 80%. There were facilities in the county that reported low occupancy rates of 58% (ManorCare Health Services) and 59% (Ennoble

Skilled Nursing and Rehab). These facilities reported using semi-private as private rooms, the entire area being low, and occupancies running low all year as reasons for their low census. Two facilities in Dubuque County, ManorCare Health Services and

Ennoble Skilled Nursing and Rehab, reported, respectively, censuses of 58 and 59

percent. If these facilities are suppressed, the census for Dubuque County increases to 86%. The four contiguous counties report occupancies ranging from 62% (Clayton County) to 85% (Jackson County). In the phone survey conducted in June, there were several facilities that reported a low daily census. Reasons provided included using semi-

private as private rooms, and being on the border with Wisconsin and not being able to take WI Medicaid residents. Some facilities could not explain their low occupancy numbers.

Phone Survey of Nursing Facilities Located in Dubuque County & Counties Contiguous to Dubuque County

Conducted June 2018

Facility by County Licensed Beds

Current Occupancy

Percent Occupied

Dubuque County

Bethany Home 66 64 97%

Dubuque Specialty Care 98 60 61%

Ennoble Skilled Nursing and Rehab 102 60 59%

Grand Meadows — Asbury Campus 16 16 100%

Hawkeye Care Center Dubuque 80 60 75%

Luther Manor Communities 103 99 96%

Manorcare Health Services 99 57 58%

Mercy Medical Center —Dubuque SNF 14 12 86% Mercy Medical Center —Dubuque HSP-NF (Dyersville location) 40 38 95%

Shady Rest Care Center 70 52 74%

Stonehill Care Center 214 190 89%

Sunnycrest Manor 77 75 97%

TOTAL 979 783 80% Clayton County

Elkader Care Center 44 23 52% Great River Care Center 50 25 50%

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Guttenberg Care Center 93 57 61%

Strawberry Point Lutheran Home 58 47 81%

TOTAL 245 152 62%

Delaware County

Edgevvood Convalescent Home 58 50 86%

Good Neighbor Home 133 109 82%

TOTAL 191 159 83%

Jackson County

Crestridge Care Center 75 72 96%

Maquoketa Care Center 52 42 81%

Mill Valley Care Center 68 51 75%

TOTAL 195 165 85%

Jones County

Anamosa Care Center 76 59 82%

Monticello Nursing and Rehab Center 100 68 68%

TOTAL 176 127 72%

14. The following table displays other levels of service available in the five-county area.

County RCF Beds (Facilities)

Home Health Agencies

Adult Day Services

Assisted Living Units (Facilities)

ALP/D

Dubuque 66 (1) 4 75 (3) 469 (5) 319 (4) Clayton 44 (1) 1 0 131 (6) 56 (1) Delaware 60 (1) 1 25 (1) 128 (2) 0 Jackson 0 0 30 (I) 36 (1) 79 (1)

Jones 51 (1) 2 0 80 (2) 0

TOTALS 221 (4) 8 130 (5) 844 (16) 454 (6) Data source: DIA web site

15. There were seven letters of support received. Letters were from the City Administrator,

City of Asbury; Luther Manor Communities residents (3 letters); Medical Social Worker,

Mercy Medical Center-Dubuque; and Medical Director, Grand River Medical Group.

These letters cite the expansion of Luther Manor's CCRC into the City of Asbury with

this expansion offering a well-balanced community for seniors; the CCRC, with the

availability of nursing care when needed, being a major factor in the decision to move to

Luther Manor; difficulty placing a resident at Luther Manor Communities for skilled care

due to high census numbers; Luther Manor Communities/Grand Meadows being a top

choice for placement and bed availability at a premium; the need to have rehabilitation

services nearby; and residents of the CCRC having to go elsewhere for skilled care due to

a lack of available beds as reasons for their support.

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16. There were three letters of opposition received and a historical census. The letters, from

the Administrators of Dubuque Specialty Care, HCR ManorCare, and Mill Valley Care

Center cite a reduction in nursing facility utilization, no need for additional nursing beds

in the area, more beds placing an undue hardship on existing facilities, declining census

numbers, a market too small to support additional NF beds, the abundance of options

individuals have to nursing care such as assisted living and home care as reasons for their

opposition. The historical census, from Ennoble Manor, showed average daily census

percentages from 67.6 in 2015 to 63.5 in 2017.

17. Luther Manor accepts residents from hospitals and from its independent living and

assisted living communities. They have transfer agreements with University of Iowa

Hospitals and Clinics and Mercy Medical Center and UnityPoint Finley Hospital in

Dubuque. They also have a contractual agreement with Hospice of Dubuque.

18. Luther Manor will increase the staff at Grand Meadows from 21.5 to 35.5, adding staff in

the areas of nursing, dietary, housekeeping, maintenance and activities. A recently added

position of Recruiting and Retention Coordinator will focus efforts on building

relationships with the local high school CNA program and exposure of the facility at job

fairs and other events as ways of recruiting staff. Luther Manor strives to offer the highest

wages in long-term care and a rich benefits package to employees.

19. Luther Manor has $150,000 cash on hand for the project, which includes the purchase of

moveable equipment. They indicate a turn-key cost of $9,375.

20. The applicant does not anticipate an operating deficit as a result of this project.

CONCLUSIONS OF LAW




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1. The Council concludes that less costly, more efficient or more appropriate alternatives to the proposed health service are not available and the development of such alternatives is not practicable. The Council notes Luther Manor Communities— Grand Meadows has operated at over 80% in its first two years and at the time of the staff survey in June 2018, it was at 100% capacity. The Council also notes that Luther Manor has a waiting list for beds. The Council concludes that Luther Manor Communities — Grand Meadows is operating at capacity and that alternatives are not available. Iowa Code Sections 135.64(1) and 135.64(2)a.

2. The Council concludes that existing facilities providing health services similar to those proposed will continue to be used in an appropriate and efficient manner and will not be impacted by this project. The calculated bed need formula indicates a current underbuild in all four of the counties around Dubuque County. The underbuild for Dubuque County is 117 beds. Overall the five-county area, as calculated by the bed need formula, is underbuilt by 543 beds. The phone survey conducted by Department staff indicates an overall occupancy in Dubuque County of 80%. Two facilities in Dubuque County, ManorCare Health Services and Ennoble Skilled Nursing and Rehab, reported, respectively, censuses of 58 and 59 percent. If these facilities are suppressed, the census for Dubuque County increases to 86%. The Council traditionally requires utilization over 85% to indicate appropriate occupancy rates of long term care facilities. Here, the County utilization rate of 86% (with two facilities suppressed) along with little opposition from existing facilities, no affected parties in opposition appearing at the hearing, and 100% occupancy at Grand Meadows, supports a conclusion that existing facilities are being utilized in an efficient manner. Iowa Code Sections 135.64(1) and 135.64(2)b.

3. The Council concludes that the proposed project does not involve new construction. The Council further concludes that alternatives including modernization and sharing arrangements have been considered and implemented to the maximum extent practicable. Iowa Code Sections 135.64(1) and 135.4(2)c.

4. The Council concludes that patients will experience problems in obtaining care of the type which will be furnished by the proposed health service, in the absence of that proposed service. The Council notes that Luther Manor has a waiting list and is turning away potential residents due to its high census; also noted is the desire by residents for private rooms. The Council also notes that Luther Manor — Grand Meadows is built in the Household Model of care, where daily living is more resident focused. The Council concludes those from within the Luther Manor continuum, as well as those in the community seeking nursing care will experience problems obtaining the type of care provided by Grand Meadows absent the conversion of the 16 beds. Iowa Code Sections 135.64(1) and 135.64(2)d.

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Dated this


t6 C V . Miller, M.D., Chairperson


cc: Health Facilities Council Department of Inspections & Appeals, ilealth Facilities Division

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IOWA DEPARTMENT OF PUBLIC HEALTH STATE HEALTH FACILITIES COUNCIL


MERCY MEDICAL CENTER - DUBUQUE ) DECISION

DUBUQUE, IOWA

This matter came before the State Health Facilities Council for hearing on Wednesday, July 25, 2018.

The application proposes the initiation of radiation therapy services through acquisition of a linear accelerator and CT simulator at an estimated cost of $5,200,000.

Mercy Medical Center - Dubuque applied through the Iowa Department of Public Health for a Certificate of Need.

The record includes the application prepared by the project sponsor and written analysis prepared by Iowa Department of Public Health staff and all the testimony and exhibits presented at the hearing. Becky Swift of the Iowa Department of Public Health summarized the project in relation to review criteria. Alissa Smith, Dorsey & Whitney; Kay Takes, Dr. Eric Engelman, Luann Mottet and Chad Kruse, Mercy Medical Center — Dubuque; and Dr. Richard Deming, Mercy Des Moines. were present representing the applicant. The applicant made a presentation and answered questions.

Affected parties in support included Susan Weber-Hagemann, Melissa Klinkkammer, Dr. Mark Janes, Denny Grant, Deb Kennedy, Julie Grutz, Kairee Graves, and Rod Schlader.

Affected parties in opposition, Doug Gross, Brown Winick Law, representing UnityPoint Finley; Ted Townsend, John Wilke, Michel Kelly, Dr. Bobby Koneru and Laura Duerr, UnityPoint Finley; and Mike Donahue, Ellen Bigalow, Dr. Thomas Lally, Susan Dolter and Dr. Bill McGinnis appeared at the hearing.

The Council, after hearing the above-mentioned testimony and after reading the record, voted 3-1 to Grant a Certificate of Need. As a basis for their decision the Council, considering all the criteria set forth pursuant to Iowa Code Section 135.64 (1 and 2) (2017) made the following findings of fact and conclusions of law:

FINDINGS OF FACT

1. Mercy Medical Center — Dubuque ("Mercy Dubuque") proposes to initiate radiation therapy services through the acquisition of a linear accelerator and CT simulator as a part of a new comprehensive cancer center that will be added to the hospital.

2. This is the second application by Mercy Dubuque for this equipment. The first application, heard in October 2017, was denied in a written decision issued December 18, 2017 (December 2017 Decision). Mercy Dubuque submitted the second application in March 2018 for the May meeting but due to a Council member conflict, which resulted in the lack of a quorum, the application was not able to be heard and was postponed until the July meeting.

3. UnityPoint Finley Hospital (-Finley-), also located in Dubuque, is less than one mile from Mercy Dubuque, serves the same geographic service area as Mercy Dubuque, and currently offers radiation therapy services on two linear accelerators at their Wendt Cancer Center.

4. Following the October 2017 CON hearing, Mercy Dubuque reached out to Finley to discuss opportunities to collaborate. Mercy Dubuque states that a meeting was held on December 10, 2017, and additional correspondence took place, but the alternatives suggested by Finley did not meet their needs. Mercy Dubuque followed up by letter in late December 2017, by offering two additional alternatives for collaboration, including the purchase of one of Finley's linear accelerators so that there could be one accelerator on each of their campuses, but this letter went unanswered. Another meeting was held in June 2018 between the President of Mercy Dubuque and the Interim CEO of Finley and correspondence was exchanged regarding a joint venture, which was rejected by Mercy Dubuque. Mercy Dubuque states in letter dated July 7 to Finley, we are at an impasse in reaching agreement on a way to work together to provide cancer care in Dubuque.-

5. Mercy Dubuque's cancer center proposes to include radiation therapy and cancer-related support services offered by the hospital, as well as medical oncology services to be provided in leased space in the cancer center by Medical Associates Clinic, an independent medical practice in Dubuque. Mercy Dubuque's goal for the new cancer center is to provide cancer care under one roof, which they state is currently not available in the Dubuque area.

6. The applicant indicates Mercy and Medical Associates Clinic have a close, trusted working relationship and have had high rates of success in four joint ventures in the area.

7. Mercy Dubuque is a 328 licensed acute care regional hospital with locations in both Dubuque and Dyersville. Mercy Dubuque states that they are the leading health care provider in the Dubuque service area with majority of the market split. Mercy Dubuque noted during testimony that they have 67% of the inpatient market for cancer care.

8. Mercy Dubuque has a demonstrated history of serving those who are medically underserved, including those in rural areas. Mercy Dubuque noted that in 2017, they provided community benefit, which includes charity care at no cost, unpaid cost of Medicaid and other programs, as well as other programs for the poor, totaling $3,416,000.

9. The geographic service area for this project includes all of Dubuque County and portions of Delaware, Clayton and Jackson counties in Iowa; Grant County in Wisconsin; and Jo Daviess County in Illinois. Mercy Dubuque states that this area includes approximately 225,376 people and that approximately 94.3% of all of their discharges in the first three quarters of

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2017 came from this area. Noted during testimony is that Mercy Dubuque owns or is affiliated with several rural Critical Access Hospitals ("CAH") in the area.

10. During testimony Finley noted that Mercy Dubuque significantly inflated the population of the service area by stating that their projections include 100% of the population in the six counties, and overlooks the fact that many people in those counties have access to radiation therapy in communities that are closer to them. Finley also noted that no county of comparable size has more than one radiation therapy program.

11. Mercy Dubuque noted during testimony that in 2012 Finley submitted a Certificate of Need application for cardiac catheterization and at that time stated the population of the area to be approximately 247,000. They also noted that at the time Mercy Dubuque was the only hospital in Dubuque that provided cardiac catheterization and they were concerned about how the Finley project would impact their volume. The Finley application was approved in May 2012. Mercy Dubuque stated that both hospitals now have strong cardiac catheterization programs.

12. Dubuque has a higher than average incidence of cancer, at a rate 12.7% above the state average.

13. Mercy Dubuque states that American Cancer Society data shows that most cancer patients will require radiation therapy treatments daily, five days a week for five to eight weeks. They further state that a survey of Mercy Health Network cancer centers found that the number of daily radiation treatments per first course of radiation therapy in Iowa averages 25. Based on the formula in 641 IAC 203.3(3)(a)(4), Mercy Dubuque states that approximately 50% of patients who have been diagnosed with cancer will need radiation therapy as a component of their cancer treatment; only 25% of patients will be treated with radiation therapy upon first diagnosis. These figures were supported in testimony provided by Dr. Deming at the hearing. Also noted during testimony was that Dr. Charles Lynch, Medical Director and Principal Investigator at the State Health Registry of Iowa/lowa Cancer Registry. supported the 50% figure.

14. Dubuque has an aging population and according to Truven Health Analytics' Demographic Expert 2.7, it is estimated that Dubuque's 65+ population will grow by 13% in the next five years and that by 2022 residents who are 65+ will have grown to 21% of the service area. The applicant states that data from the Surveillance, Epidemiology, and End Results (SEER) Program of the National Cancer Institute shows that the median age of cancer patients at diagnosis is 65, and the incidence of invasive cancer increases significantly for people who are 65 and older.

15. Mercy Dubuque noted during testimony that while cancer mortality is declining the number of people diagnosed and living with cancer is increasing meaning more treatment, including radiation therapy, will be needed over time.

16. Mercy Dubuque stated that radiation and medical oncology care are fragmented in the Dubuque area and out-patients who prefer Mercy have to travel to multiple locations for their

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cancer care; many leave the area for better coordinated care. They also noted that in-patients at Mercy with cancer have to be transported to Finley for radiation therapy during their stay. Noted during testimony was that there were 276 in-patient transfers to Finley in the last three years. Also noted was that each of these transfers takes approximately one hour round trip, which is burdensome to the patient.

17. Mercy Dubuque has plans to obtain accreditation through the American College of Surgeon's Commission on Cancer ("CoC') as a Comprehensive Community Cancer Program. CoC accreditation provides a national standard for measuring and reporting quality in cancer service delivery. According to testimony provided at the hearing, Mercy Dubuque would be the first accredited cancer center in northeast Iowa. Also noted during testimony is that patients currently do not have access to clinical trials in the Dubuque area. The addition of the accredited comprehensive cancer center would allow trials to take place.

18. It was noted during testimony that becoming an accredited Comprehensive Community Cancer program is a rigorous, multi-step process with benefits including better outcomes for patients and increased confidence among patients, physicians and the community in the treatment being provided.

19. During testimony it was noted that patients are having difficulties with navigating between Mercy Dubuque and Finley for cancer treatment. Mercy Dubuque and Finley do not share medical staff and do not use the same type of electronic health record, which can make communication difficult. Additionally, Mercy Dubuque notes that patients can be confused and frustrated when they do not know whom to call when they have questions about their cancer care. Mercy Dubuque notes that having coordinated care under one roof would reduce or eliminate these problems. They also noted that in the new center there would be one interdisciplinary team, including a nurse navigator, which would work with the patient.

20. During testimony it was noted that Finley's charges for radiation care average 36% higher than other cancer care centers offering radiation therapy treatment.

21. 641 Iowa Administrative Code 203.3(3)(a)(1) states that the minimum utilization for radiation therapy with a low energy linear accelerator "should serve a population of at least 200,000 persons, and treat at least 300 new patients annually within three years after initiation of the service." This chapter further provides that medium energy accelerators should treat a minimum of 500 patients annually, and high energy accelerators should treat a minimum of 750 patients annually.

22. According to a health physicist in the Bureau of Radiological Health at the Iowa Department of Public Health, most linear accelerators in Iowa are medium megavoltage units with a range up to 18 MEV's.

23. 641 Iowa Administrative Code 203.3(3)(b)(1) states, "There should be no additional megavoltage units of comparable size approved unless each existing megavoltage unit of that size within 90 minutes travel time of the proposed unit is performing at least 6,000 treatments per annum.- In addition, 641 Iowa Administrative Code 203.3(3)(b)(4) provides as follows:

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-There should be no additional megavoltage radiation therapy units of comparable size within 90 minutes surface travel time of existing units which would reduce the projected volume of treatments per annum in existing units of comparable size to less than 6,000 treatments per annum and which would result in less than 300 projected new patients per annum for that existing unit. The applicant will attempt and demonstrate that an attempt was made to determine with the cooperation of existing providers whether such a reduction would occur."

24. During testimony, Mercy Dubuque's Coordinator of Business and Clinical Analytics indicated that Mercy has always used the population figure of 225,376 as their market size and that this was not an inflated number nor a redefined market for this project. He also noted that he'd confirmed the number of new cancer cases in this area by using data from the Iowa, Wisconsin and Illinois Cancer Registries; the National Cancer Institute; the American Cancer Society; and The Advisory Board Company, and not claims data as was used by Finley. He also validated the projected increase of at least 1.7% growth in new cancer cases per year by using the same data, which he stated accurately projected the number of people diagnosed with cancer. He further stated that the data Finley used from the Iowa Hospital Association and Medicare tool were incomplete, and did not include freestanding cancer centers nor data from other states. He also indicated that his projections were based on patients from all six counties in the Mercy Dubuque service area, not just Dubuque County.

25. Mercy Dubuque noted new cancer cases and projected radiation therapy treatments by providing actual and projected information about the entire population to be served by all providers in the service area from 2015-2017. They note new cancer cases in 2015 being 1,373 and radiation therapy treatments being 17,163. In 2017, those numbers increased to 1,420 and 17,750 respectively. Noted during testimony was that new cancer cases in 2018 were projected to be 1,444.

26. During testimony Mercy Dubuque noted approximately 54.8% outmigration for cancer care. They noted that through May 2018, it is projected that 393 people left the Dubuque area for cancer treatment. Mercy further noted that of the 717 projected patients receiving radiation therapy through May 2018, only 324 received treatment at the Wendt Cancer Center, which indicates that 393 received their treatment elsewhere.

27. In 2016, Finley reported 366 actual radiation therapy patients and 8,039 radiation therapy treatments on two linear accelerators. During testimony Finley reported 324 actual radiation therapy patients and 6,110 radiation therapy treatments in 2018 annualized based on data from January to May. They further noted steady new patient consultations at the Wendt Center, but declining radiation therapy treatments.

28. According to the Iowa Department of Public I lealth, in addition to the two linear accelerators at UnityPoint — Finley Hospital in Dubuque (Wendt Cancer Center), there are 16 linear accelerators at locations roughly 90 miles from the proposed site: one at Mercy Medical Center — Clinton, one at Radiation Therapy Center of the Quad Cities in Bettendorf, two at Genesis in Davenport, two at Covenant Medical Center in Waterloo, as well as five in Iowa

5

City (UIHC and Iowa City Cancer Treatment Center) and five in Cedar Rapids (Mercy Medical Center and St. Luke's).

29. Mercy Dubuque states that combining the expertise of the oncologists and nursing staff at Medical Associates Clinic with radiation therapy and supportive services of Mercy Dubuque, the cancer center will be cooperatively managed by Mercy Dubuque and Medical Associates Clinic to enable truly integrated and comprehensive care for cancer patients. They go on to state that this will greatly enhance the patient experience, reduce possible imaging duplication, reduce costs and improve care for cancer patients in the service area. The distinguishing feature between the proposed Mercy Dubuque cancer center and other local services will be that the Mercy Dubuque comprehensive cancer center will provide services covering the full spectrum of care and resources for cancer patients, including prevention and aftercare.

30. It was noted during testimony that the Wendt Cancer Center is not currently accredited, though it has been operational for 31 years. It was also noted that Wendt is seeking accreditation as a radiation therapy center, but not a comprehensive cancer center, which is what Mercy Dubuque proposes to be. In further testimony it was stated that cancer care must be multidisciplinary, integrated and patient centered, and that radiation oncologists are no longer just "tumor treaters,- and must be part of that integrated system of care.

31 During testimony it was stated that Mercy Dubuque and Wendt Cancer Center use different electronic medical record systems, so Mercy does not have ready access to patient records regarding what treatments were provided. It was noted that patients sometimes get and carry paper records back and forth between the two facilities. Also noted was that the lack of shared records can cause duplication in services, such as imaging.

32. There were 230 letters of support received in 2017 and 2018 from patients and families, healthcare providers, government and community leaders, and community members; and eight individuals who testified at hearing regarding patient experiences. These letters and testimony cite the following factors in support of the project: the inconvenience and stress of having to be transported by ambulance from Mercy to Wendt Cancer Center or another hospital and having to deal with different systems, some out of state, for treatment; the need for a comprehensive cancer treatment facility in the area; the need for integrated care; the ability to provide a higher quality patient experience; the need for patient records to be in one place; the need for consistent patient coordination; cost; and the ability to attract and retain top talent in cancer care in comprehensive care center. There was testimony provided at the hearing by affected parties in support regarding delays in receiving radiation therapy treatment at the Wendt Center, with wait times of over a week following diagnosis; the Wendt Center being overbooked; and feeling that cancer care at the Wendt Center was fragmented. A physician who testified at the hearing noted that he and his colleagues had noticed a decline in care at the Wendt Center in the past 5-6 years.

33. It was stated during testimony that based on a study conducted by the Advisory Board Company of 62 cancer centers in the United States, the average wait time from diagnosis to the first radiation treatment is 3.7 days, however figures provided by Medical Associates

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Clinic in a review of 31 patients referred to Finley for radiation therapy, showed the average wait time to see the radiation oncologist at the Wendt Cancer Center was 12 days. It was noted that this wait can cause patient anxiety, unresolved symptoms and the possibility of the cancer spreading.

34. There were 158 letters of opposition received in 2017 and 2018 from healthcare providers, including a letter from Brown Winick Law on behalf of UnityPoint Finley; businesses; current and former patients of Finley; and community members. The letters cite the following factors in opposition to the project: the proposal constitutes an unnecessary and duplicative service; there is not enough patient volume to support two radiation centers in Dubuque; the proposal will dilute quality of care; proximity of Mercy to Finley; a 16% decline in radiation therapy volume at Wendt Cancer Center; the need for community collaboration; the difficulty in recruiting staff; and increased costs. Many of these letters provide support to the Wendt Cancer Center as well.

35. During opposition testimony, Finley reported that their two linear accelerators were being used at only 47% capacity in 2017, and that they are seeing a decline in the volume of radiation therapy treatments at Wendt Cancer Center. Finley also provided data that the age adjusted cancer mortality rate in this service area is declining and the age adjusted invasive cancer incidence rate in this service area is stable.

36. Mercy Dubuque indicated in their application that Medical Associates Clinic would recruit and hire a radiation oncology physician who would provide care and oversight to the Mercy Dubuque radiation therapy department through a professional services agreement. The applicant further stated that clinical care and the coordinated provision of related services would be managed though an Oncology Integration Council with equal representation from Mercy Dubuque and Medical Associates Clinic. Mercy Dubuque noted that in addition to a Radiation Oncologist, staff to be hired include radiation physicists, dosimetrists, radiation therapists and radiation oncology nurses. Mercy noted during testimony that they are willing to discuss staff sharing with Finley.

37. Mercy Dubuque states that the cost of the linear accelerator is not expected to exceed $3.2 million, the cost of the CT simulator is expected not to exceed $800,000 and the cost of the associated vault is anticipated to be $1.2 million for a total cost of $5.2 million. Mercy Dubuque notes that the process to select the make and model of equipment has begun and that selection will be made upon CON approval.

38. Mercy Dubuque has cash on hand for the project and does not anticipate an operating deficit.

39. There have been changes in the application, the testimony provided by the applicant and affected parties, and the health care community since the December 2017 denial which support a different outcome. More detailed information regarding need, utilization, costs, and delays in the current system were provided in this application and at hearing. The applicant provided detailed information in this application and at hearing regarding its plans to obtain accreditation through the American College of Surgeon's Commission on Cancer as a Comprehensive Community Cancer Program and the benefits of this accreditation for patients in this service area. Finally, more detailed information regarding the difficulties

7

patients are experiencing attempting to navigate the two health systems was introduced with this application. All of these factors support granting the application.

CONCLUSIONS OF LAW






1 The Council concludes that less costly, more efficient or more appropriate alternatives to the proposed health service are not available and the development of such alternatives is not practicable. The Council concludes that alternatives to the proposed health service have been explored and rejected by Mercy Dubuque because they would not allow the hospital to provide comprehensive cancer care which includes radiation therapy on its campus. The Council further notes that costs to patients increase when they leave the Mercy-Dubuque system or the area for comprehensive cancer treatment, and to Mercy Dubuque when in-patients have to be transported to Finley for radiation treatment. The Council also concludes that Finley's charges for radiation care are 36% higher than the average. Iowa Code Sections 135.64(1) and 135.64(2)a.

2. The Council concludes that existing facilities providing health services similar to those proposed are being used in an appropriate and efficient manner. The Council concludes that in general numbers at radiation treatment programs are increasing. The Council finds that the cancer incidence rates and population data support a conclusion of appropriate and efficient use and continued use of existing facilities.. The Council concludes that there is not an accredited comprehensive cancer center in the Dubuque area and that this application therefore involves comprehensive cancer treatment services which differ from those offered by existing facilities. Iowa Code Sections 135.64(1) and 135.64(2)b.

3. The Council concludes that the proposed project does not involve new construction. Iowa Code Sections 135.64(1) and 135.4(2)c.

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4. The Council concludes that patients will experience serious problems in obtaining care of the type which will be furnished by the proposed new institutional health service or changed health service, in the absence of that proposed service. The Council notes that the purchase of the equipment for radiation therapy is one aspect of a comprehensive cancer care center that will be opened by Mercy Dubuque. The Council further notes that currently cancer patients needing radiation therapy treatment have to go to Finley Hospital, where the average wait time for treatment is 12 days, or travel to another health center to receive this treatment. This has caused undue delays in treatment, fragmentation and lack of coordinated care, and additional cost and stress to patients and their families. The Council further notes over 200 letters of support received from patients and their families, healthcare providers, community members and others, for the Mercy Dubuque project. The Council concludes that patients have experienced, and will continue to experience, serious problems in obtaining radiation therapy services and comprehensive cancer care of the type that would be offered by Mercy Dubuque in the absence of the proposed service. Iowa Code Sections 135.64(1) and 135.64(2)d.






Dated this day of September 2018

i 1/1

er, M.D., hairperson ealth Facilities Council

Iowa Department of Public Health

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cc: State Health Facilities Council Iowa Department of Inspections and Appeals: Health Facilities Division

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minutes state health facilities council wednesday, … july... · 2018. 10. 17. · members...

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