STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

INDIAN RIVER COUNTY HOSPITAL ) DISTRICT, )

)

Petitioner, )

)

vs. ) CASE NO. 83-1677

)

DEPARTMENT OF HEALTH AND )

REHABILITATIVE SERVICES, )

)

Respondent, )

and )

) AMERICAN HEALTHCORP, INC. and ) AMERICAN HEALTHCORP OF VERO ) BEACH, INC., )

)

Intervenor - Respondents. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held in the above case before the Division of Administrative Hearings, by its duly designated Hearing Officer, DONALD R. ALEXANDER, on October 28, 1983 in Tallahassee, Florida.

APPEARANCES

For Petitioner: Paul H. Amundsen, Esquire

3636 One Biscayne Tower

The South Biscayne Boulevard Miami, Florida 33131

For Respondent: Jay Adams, Esquire

Building One, Room 406 1323 Winewood Boulevard

Tallahassee, Florida 32301

For Intervenor: Michael J. Cherniga, Esquire Respondents Post Office Drawer 1838

Tallahassee, Florida 32302 BACKGROUND

This matter began when petitioner, Indian River County Hospital District, filed a petition on April 27, 1983 with respondent, Department of Health and Rehabilitative Services, seeking a Section 120.57(1) hearing to establish entitlement to having its application for a certificate of need considered in the same batching cycle as intervenor-respondent, American Healthcorp of Vero Beach, Inc. 1/ The matter was referred by respondent to the Division of

Administrative Hearings on June 1, 1983 with a request that a Hearing Officer be assigned to conduct a formal hearing.

By notice of hearing dated June 28, 1983 a final hearing was scheduled for July 28, 1983 in Tallahassee, Florida. A On July 18, 1983 petitioner filed a motion for leave to file amended petition in which it sought to add as an issue the question of whether a "moratorium" was erroneously imposed by respondent and, after it was lifted, whether HRS had any justification for not considering the application of petitioner and intervenor-respondents in the same review cycle. The motion was granted by order dated July 27, 1983. However, because of the newly added issue, the final hearing was continued to October 28, 1983 at the request of respondent and intervenor-respondents.

At the final hearing petitioner presented the testimony of John T. Hoyt, executive director of petitioner's facility, and Michael C. Carroll, an expert in health care planning, and offered petitioner's exhibits 1 and 2; both were received in evidence. At the conclusion of petitioner's case-in-chief, respondent and intervenor-respondents moved to dismiss the petition on the ground petitioner had failed to make a prima facie case in support of its claims. This motion was granted by the undersigned. The basis for that ruling is discussed in the conclusions of law portion of this recommended order. The transcript of hearing was filed on November 10, 1983. There were no proposed findings of fact and conclusions of law filed by the parties.

Prior to the final hearing, a number of motions were raised and disposed of by the undersigned. As is pertinent here, by order dated July 12, 1983 a motion to dismiss the petition filed by intervenor-respondents was denied, and a request for official recognition of various documents related to this case and a related circuit court action was granted. A second motion for official recognition was granted by order dated July 27, 1983. Still pending is petitioner's motion to strike intervenor-respondents' affirmative defenses to the amended petition.

Most of the operative facts were stipulated to by the parties in a prehearing stipulation filed on October 25, 1983. Attached to that stipulation are exhibits A-N, which are copies of various pieces of Department correspondence relating to this case.

The issue herein is whether petitioner's application for a certificate of need should be in the same batching cycle as that of intervenor-respondents.

Based upon the evidence, the following findings of fact are determined: FINDINGS OF FACT

1. Petitioner, Indian River County Hospital District (IRCHD), is a special taxing district created by the Legislature. IRCHD maintains and operates the Indian River Memorial Hospital at 1000 36th Street, Vero Beach, Florida. IRCHD is regulated by respondent, Department of Health and Rehabilitative Service (HRS), and is required by law to obtain a certificate of need (CON) from HRS to add additional beds to its hospital facility.

   
   

2. On February 11, 1983, the Secretary of HRS signed a document entitled "Department of Health and Rehabilitative Services Office of Planning and Development Decision Memorandum". This document enacted the following recommendation to the Secretary:

   That HRS impose an administrative moratorium on the construction of new hospitals or additions to licensed bed capacities for the next complete hospital cycle for which letters of intent are due February 13 and decisions are rendered in June.

   
   

   The document cited the following reasons for imposing a moratorium: (a) local health councils would be motivated to begin and complete their planning efforts,

   1. certificate of need decisions would be made on the merits of the proposals,

   2. current litigation load would be reduced, and (d) future litigation would be reduced with the establishment of a decision base by rule. With the moratorium in effect, HRS stated this time would enable it to "(adopt) as rule the Department's bed need methodologies and the elements of the Local Health Council district plans which relate to certificate of need decisions."

   
   

3. On February 14, 1983 Office of the Deputy Assistant Secretary for Health Planning and Development of HRS received a letter of intent from intervenor-respondent, American Healthcorp, Inc. (American), which is the owner of American Healthcorp of Vero Beach Inc., also an intervenor in this proceeding, advising that American intended to construct a new 120-bed, general acute care hospital in the Vero Beach area. The letter of intent was dated February 13, 1983 and was transmitted by a cover letter dated February 14, 1983 from Health Consulting Associates, Inc. Both letters were stamped as "received " by HRS on February 14, 1983.

   
   

4. Both Subsection 351.494(5), Florida Statutes, and Rule 10-5.08(1), Florida Administrative Code, require that a letter of intent be submitted by an applicant "at least 30 days prior to filing an application." Those authorities also provide that a failure to file within those time constraints will cause an application to be placed in the next following review cycle. In order to be placed in the next available batch review cycle beginning on March 15, American had to file its letter of intent no later than thirty days prior to March 15, 1983. That day fell on Sunday, February 13, a day when HRS was closed. Recognizing that the thirtieth day fell on a Sunday, the president of American's consulting firm, Autha Forehand, wrote HRS on January 10, 1983 to confirm that the official deadline was February 14, 1983 rather than February 13, a Sunday. An attorney for HRS orally advised Forehand in mid- January that February 14 was indeed the proper date. This is consistent with HRS policy that where the date for filing letters of intent falls on a Saturday, Sunday or holiday, the filing deadline is extended to the first workday following the weekend or holiday.

   
   

5. On February 25, 1983 the following notice was published by HRS in the Florida Administrative Weekly:

   
   

   PUBLIC NOTICE

   The Florida Department of Health and Rehabilitative Services, effective February 11, 1983, is not accepting for processing letters of intent and will not accept applications relating to construction of new hospitals or additions to licensed hospital bed capacity for the certificate of need batching cycle for which letters of intent were due February 13 and for which decisions were scheduled for

   June, 1983. Contact Marjorie Turnbull, Deputy Assistant Secretary for Health Planning and Development at, (904)

   487-2513, for further information.

   
   

6. On March 4, 1983 HRS received from American a document entitled "Application for a Certificate of Need for Vero Beach Medical Center, submitted by American Healthcorp of Vero Beach, Inc., March 3, 1983" with an appropriate filing fee.

   
   

7. By letter dated March 7, 1983, HRS responded to American's letter of intent filed on February 14. That letter stated in pertinent part as follows:

   
   

   Receipt is acknowledged effective Feb- ruary 14, 1983, of your letter of intent to construct a 120 bed general acute care hos- pital in Vero Beach, Indian River County, at an estimated cost of $16-18 million.

   
   

   On February 11, 1983, this Department imposed an administrative moratorium on Certificate of Need applications for the construction of new hospitals or any other addition in licensed bed capacity. This moratorium is effective as of that date and will apply to all such letters of intent filed with this office as of February 13.

   
   

   To date, the Department has been unable

   to adopt bed need methodologies as rule due to a series of challenges. The moratorium will remain in effect for the upcoming batching schedule in order to resolve these challenges, promulgate rules and permit local health councils to adopt the facilities por- tion of their local health plans.

   
   

   In that your proposal is for new hospital construction, your application will not be considered by this office until the next available hospital batching schedule (June 15, 1983 application file date). Your letter of intent will be retained as valid correspon- dence for entry into the September hospital review cycle decision month. Should you desire to withdraw your letter of intent, please advise this office and the Local Health Council in writing. If you wish to be reviewed in the above decision cycle, please submit your application to this office and

   the appropriate Local Health Council according to the following schedule:

   
   

   Application filed by June 15, 1983.

   Application complete by August 15, 1983. Month for final Department action is September 1983.

8. On March 14, 1983 HRS received a letter of intent from IRCHD advising that it intended, inter alia, to add 70 medical/surgical beds at its hospital facility in Vero Beach.

   
   

9. By letter dated March 18, 1983 HRS returned American's application. The letter referred to HRS's previous correspondence of March 7, 1983 and cited the February 11 moratorium as the reason for returning the application.

   
   

10. HRS responded to IRCHD's letter of intent by letter dated March 29, 1983. It provided in pertinent part as follows:

    
    

    Receipt is acknowledged effective March 14, 1983, of your letter of intent for expansion of ancillary and support services, addition of 70 medical/surgical beds and an on-site community health care resource center, Indian River County.

    
    

    This Department imposed an administrative moratorium on the review of Certificate of Need Applications for the construction of new hospitals, excluding replacement facilities with no increase in licensed bed capacity, and those involving an addition to the licensed bed capacity of an existing facility.

    
    

    The moratorium was signed on February 11, 1983, and applied to all such letters of intent filed wish this office by February

    14 which would have resulted in the filing of an application by March. All applicants affected by the moratorium have been advised

    that their letters of intent, unless otherwise withdrawn at their request, would be retained as valid entry into the September decision month hospital review cycle. All such applications are to be filed by June 15.

    
    

    In order to preserve the proper sequence of review and the competitive posture of these applications, letters of intent filed by May 16, which would have normally resulted in the filing of an application by June 15, will be retained as valid entry into the November decision month hospital review cycle.

    
    

11. On June 14, 1993 IRCHD delivered to HRS its CON application and the appropriate fee. Thereafter by letter dated June 23, 1983 HRS returned the application and fee to IRCHD. The letter referred to HRS's previous correspondence of March 29 and stated that IRCHD's letter of intent would be "retained as valid correspondence for entry into the November hospital review cycle decision month unless (HRS) is otherwise notified that (IRCHD) wish(es) to withdraw (its) letter of intent."

12. On June 14, 1983 American resubmitted its application and fee. This was acknowledged by a letter from HRS on June 22, 1983, in which it advised American that the review process of its application had begun. Proposed agency action on the application should be finalized by November, 1983.

    
    

13. On June 24, 1983, HRS published the following announcement in the Florida Administrative Weekly:

    
    

    NOTICE

    The Department of Health and Rehabilitative Services wishes to announce the following:

    The Department Imposed an administrative moratorium on February 11, 1983 for the purpose of enabling the Department to develop rules relative to specific bed need deter- minations to allow Local Health Councils to incorporate them in their district health plans. During this development process, Certificate of Need applications for the construction of new hospitals involving

    the addition of licensed beds and applications proposing the addition of beds to existing facilities, which would have resulted in June 1983 decisions, will not be reviewed by the Department until September 1983 as stated in the original notice of the moratorium.

    Because rules have now been developed and district health plan will be in place by September, the moratorium is being lifted.

    
    

14. When American filed its letter of intent on February 14, no formal decision had been made by IRCHD to file an application for a Con on its own behalf, nor had it designated a particular batch review cycle it would attempt to enter.

    
    

    CONCLUSIONS OF LAW

    
    

15. The Division or Administrative Hearings has jurisdiction of the subject matter and the parties thereto pursuant to Subsection 120.57(1), Florida Statutes.

    
    

16. Petitioner has cited two grounds as a basis for obtaining relief. The relief requested is to be placed in the same batch review cycle as is American. First, Petitioner generally contends that HRS deviated from the requirements of Rule 10-5.08(1), Florida Administrative Code, by allowing American to file its letter of intent on Monday, February 14, 1983, which was only 29 days prior to filing its application, instead of Sunday, February 13. Second, IRCHD contends that the moratorium was "unlawfully applied" to it and, once it was lifted, HRS had "no rational reason or regulatory justification" to not consider the applications of IRCHD and American in the same batch review cycle. It should be noted that there was no testimony presented at the final hearing concerning either allegation. Each point will be discussed separately.

    
    

17. As to the first point, the principal issue is simply whether HRS's interpretation of its rule and statute was erroneous, thereby permitting, American to file its letter of intent only 29 days prior to filing its application (instead of 30) and to be placed in the March 15 review cycle. In

    this regard, there is no evidence of record to indicate that the action of HRS was improper. Indeed, the interpretation is reasonable, and one which is in accord with both long established judicial standards and common sense. Those decisions hold that here the last day for filing falls on Sunday or a legal holiday, the time period is extended to the following secular or business day. See, for example, Stockslager v. Daly Aluminum Products, Inc., 256 So.2d 97, 98 (Fla. 1971); Moorey v. Eytchison & Hoppes, Inc., 338 So.2d 558, 599 (Fla. 2nd DC 1979); Page Heating and Cooling, Inc. v. Goldman Homes, Inc., 338 So2d 265, 266 (Fla. 1st DC 1976) . Accord: IRCHD v. DHRS & American Healthcorp, Inc. DOAH Case No. 83-1274, Final Order entered 6/17/83. To hold otherwise would require respondent to perform the impossible task of processing an application on the weekend when its offices are closed. Accordingly, it is concluded that HRS's Interpretation of the statute and rule was reasonable and proper, and that American's application was timely filed for review in the March 15 batching cycle.

    
    

18. IRCHD next contends that the moratorium imposed by HRS in February, 1983 was "unlawfully applied", and that after the moratorium was lifted, HRS had no "regulatory justification" on "rational reason" for not considering the applications of IRCHD and American in the same batch review cycle. It is important to note that IRCHD does not contend that the moratorium was agency nonrule policy, that it was applied to IRCHD, and that there is no record foundation to support that incipient policy. The operative facts of record reflect that the moratorium was imposed, with adequate justification, upon all applicants for CON's effective February 11, 1983. There is no evidence whatsoever to indicate that the action of HRS was unlawful, or arbitrarily applied to IRCHD alone. Importantly, had the moratorium not been imposed, American's application would still have been in an earlier batching cycle than IRCHD's, for the latter application was not filed until thirty days after that of American. Then the moratorium was lifted, the status quo was kept in place insofar as catching cycles were concerned. Although IRCHD contends there was no basis for them considering the two applications in separate batch review cycles, it presented no evidence to show such action was improper other than the fact that the heretofore established sequence of review had been maintained. Moreover, there was no evidence to show that, once the moratorium was lifted, IRCHD was treated differently from other applicants, or that its competitive posture had changed in relation to others, who were similarly affected by the moratorium. There being an absence of evidence to support the allegation in the petition, it is concluded the same must fail.

    
    

19. It is concluded that American's application was timely filed for the March 15, 1983 batch review cycle, that IRCHD's application was filed in the next succeeding batch review cycle, and that after the moratorium was lifted, the proper sequence of review and competitive posture of the two applications were properly retained. Therefore, the petition should be denied.

    
    

20. In view of the above result, petitioner's motion to strike intervenor's affirmative defense is rendered moot and should be denied.

RECOMMENDATION

Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the petition of Indian River County Hospital District be

DENIED and that the present review cycle for its application and that of

Intervenor-respondents be retained.

DONE and ENTERED this 21st day of November, 1983, in Tallahassee, Florida.

DONALD R. ALEXANDER

Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 21st day of November, 1983.

ENDNOTE

1/ American Healthcorp of Vero Beach, Inc. is a wholly subsidiary of American Healthcorp. Inc., also an intervenor-respondent in this case.

COPIES FURNISHED:

Paul H. Amundsen, Esquire

One Biscayne Tower, Suite 3636

2 South Biscayne Boulevard Miami, Florida 33131

Jay Adams, Esquire Assistant General Counsel Department of HRS

1323 Winewood Boulevard

Tallahassee, Florida 32301

Fred W. Baggett, Esquire

and Michael J. Cherniga, Esquire Post Office Drawer 1838 Tallahassee, Florida 32302

Donald R. Alexander, Hearing Officer Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32302

Harden King, Agency Clerk Department of HRS

1323 Winewood Boulevard Building One, Suite 407 Tallahassee, Florida 32301

Docket for Case No: 83-001677CON

Orders for Case No: 83-001677CON