STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

SOUTH SARASOTA COUNTY MEMORIAL ) HOSPITAL ASSOCIATION, INC., d/b/a ) VENICE HOSPITAL, )

)

Petitioner, )

)

vs. ) CASE NO. 83-3577

)

DEPARTMENT OF HEALTH AND )

REHABILITATIVE SERVICES, )

)

Respondent, )

and )

) SARASOTA COUNTY PUBLIC HOSPITAL ) BOARD, d/b/a MEMEORIAL HOSPITAL, ) SARASOTA, )

)

Intervenor. )

)

)

RECOMMENDED ORDER

The formal hearing in this Certificate Of Need (CON) case was held in Sarasota, Florida by Stephen F. Dean, assigned Hearing Officer of the Division of Administrative Hearings. This case arose when Department of Health and Rehabilitative Services (DHRS) denied the application for CON by South Sarasota County Memorial Hospital Associates d/b/a Venice Hospital (Venice Hospital).

Venice Hospital requested a formal hearing on its application and Sarasota County Public Hospital Board, d/b/a Memorial Hospital, Sarasota (Sarasota Memorial) intervened asserting that Venice Hospital did not meet the criteria for approval set forth in rule and statute. Intervenor did not have a competing application pending, and the proceedings were not comparative. All parties submitted posthearing findings of fact, which were read and considered. Those findings not incorporated herein are found to be subordinate, cumulative, immaterial, unnecessary, or not supported by the evidence.

ISSUE

The ultimate issue is whether the application of Venice Hospital for a CON should be approved. The factual issue is whether Venice Hospital meets the criteria set forth in the statute and rules.

APPEARANCES

For Petitioner: Kenneth F. Hoffman, Esquire

Dave Watkins, Esquire

646 Lewis State Bank Building Tallahassee, Florida 32301

For Respondent: Douglas Mannheimer, Esquire

318 North Calhoun Street Tallahassee, Florida 32302

For Intervenor: Robert A. Weiss, Esquire

The Perkins House

118 North Gadsden Street Tallahassee, Florida 32301

and

Lamar Matthews, Esquire 1550 Ringling Boulevard

Sarasota, Florida 33578

FINDINGS OF FACT GENERAL

1. On June 14, 1983 Petitioner, Venice Hospital, filed an application for a CON to establish a cardiac catheterization laboratory (CCL) at its facility in Venice, Florida for a capital expenditure of $157,000.00, as amended at hearing.

   
   

2. Petitioner's application was reviewed by DHRS pursuant to Rule 10-5.11, Florida Administrative Code, and the applicable statutory provisions. On September 28, 1983, DHRS denied Petitioner's application. The Petitioner filed a timely Petition for formal hearing on the denial of this application.

   
   

3. Memorial Hospital, Sarasota, Florida, is a 726 bed public hospital in the same service district as Petitioner. Memorial filed a timely Petition to intervene in this cause which was granted. Memorial offers cardiac catheterization and open heart surgical services.

   
   

   Service Accessibility, Rule 10-5.11(15) (h), Florida Administrative Code, (FAC)

   
   

4. The service area involved in this Petition is District 8 of the DHRS which includes Collier, DeSoto, Lee, Sarasota, Glades, Hendry, and Charlotte Counties. There are three existing labs in District 8; Memorial located in Sarasota County; Lee Memorial and Ft. Myers Community Hospital located in Lee County (T-15.)

   
   

   Service Availability Rule 10-15.11(15)(g)

   FAC

   
   

5. The Petitioner currently provides a range of angiographic studies to include caridography, cardiac anteriography, pulmonary arteriography, cardiac output studies, intracardiac pressure studies, and can provide immediate intracardiac cardiac pacemaking in cases involving cardiac arrest. The Petitioner provides for a range of noninvasive services to include hematological studies, electrocardiographic studies, chest x-rays, blood gas studies, pathology and blood chemistry analysis, nuclear cardiological studies, and echo cardiographic. The Petitioner's staff is also capable of doing pulmonary function testing and microbiological studies.

   
   

6. Petitioner will provide staff to man the proposed CCL on an on-call basis 24 hours a day, seven days a week (T-316.)

7. The Petitioner will provide cardiac catheterization services to Medicare, Medicaid and indigent patients in need, (T-317.) and independent of their ability to pay.

   
   

   Quality of Service, Rule 10-5.11 (15)(i), FAC

   
   

8. Petitioner is accredited by J.C.A.H.

   
   

9. Petitioner will have the qualified, trained personnel needed to operate the proposed CCL. Petitioner will train its personnel and keep them trained through appropriate in-service training sessions. (T-317, T-297.)

   
   

10. The qualifications of Dr. Chandana Bopitiya to be Director of the laboratory were controverted. The Petitioner presented evidence that the laboratory Director would be Board certified or Board eligible and receive specific training in cardiovascular radiology. Because of the procedures currently performed at the hospital, it employs support personnel with the other critical skills necessary to form a cardiac catheterization team to include cardiovascular medication, radiographic techniques, angiographic principles, catheterization equipment and instrumentation, and the anatomy and physiology of the cardiovascular system. As stated, the Petitioner already employs support staff for performing blood case studies, handling blood samples and monitoring the patient's physiological state.

    
    

11. The Petitioner does not have an approved agreement with Sarasota Memorial, the nearest open heart surgical provider. Petitioner refers its cardiac patients to Sarasota Memorial to handle open heart surgery. It had an agreement with Sarasota Memorial to handle these patients prior to this petition having been filed.

    
    

12. A minimum number of procedures is established by the rules in recognition of the need of a cardiac catheterization team to regularly utilize and hone its skills. The number of procedures that would be performed was a matter of dispute; however, based upon the number of patients referred from the Venice area currently to Sarasota Memorial and the projections for growth in the Venice area, at least 150 cardiac catheterization be performed at the proposed CCL within three years following the initiation of the Petitioners' services.

    
    

    Service Costs, Rule 10-5.11(15)(j) FAC

    
    

13. The Petitioner would provide cardiac catheterization at a cost of

    $775.00. This is less than the cost of this procedure at Sarasota Memorial ($1,200.00) and St. Joseph's Hospital in Tampa ($1,000-$1,200.00). (See Petitioners' Exhibit 5, Table 7 and and Tx 71.) This is below a reasonable charge for this service of $1,000.00 per procedure. (See Tx 508.) The cost of the CCL was increased to $289,955 due to equipment added to the laboratory by the applicant to meet criticisms concerning its technical adequacy.

    
    

    Relation with State and Local Plan Rule 10-5.11(15)(k), FAC

    
    

14. No evidence was presented concerning any local health planning and guidance which differed from the guidelines stated in Rule 10-5.11, Florida Administrative Code.

    Need Determination, Rule 10-5.11(15)(1), FAC

    
    

15. The 1984 need would be 1,754 procedures a year using the formula provided in Rule 10-5.11(15)(1), Florida Administrative Code. However, the number of procedures performed in this area in the current year (2,170) exceeds this projection based upon the formula. (See T-226.) The situation in District

    8 is outside the norms. (T-234.) The 1981 use rate understates the current use by approximately 500 procedures in 1983, or an error factor of thirty three percent (33 percent). If the 1983 data were used there would be a need for 3.6 labs in the area, i.e., dividing the total number of procedures (2,170) performed by 600.

    
    

    Additional Criteria, Rule 10-5.11(15)(o), FAC

    
    

16. Granting the instant Petition would not reduce the number of procedures performed at the existing labs below an average of 600 per lab district wide.

    
    

17. There was no evidence of the Petitioner performing any pediatric cardiac catheterization.

    
    

    CONCLUSIONS OF LAW

    
    

18. This Order is entered pursuant to the provisions of Section 120.57(1), Florida Statutes. The DHRS regulates the issuance of CON pursuant to Chapter 381, Florida Statutes and in accordance with Rule 10-5.11, Florida Administrative Code. CCL are specifically governed by subsection 15 of Rule 10- 5.11, Florida Administrative Code. The findings of fact have been discussed in the order in which they occur

    
    

19. The facts were discussed in relationship to designated portions of Rule 10-5.11(15), Florida Administrative Code which implements the provisions of Section 381.494(6)(c) and (d), Florida Statutes. The facts presented show that the Petitioner complies with the provisions of Rule 10-5.11(15) Florida Administrative Code. Petitioner showed it would provide the required range of related medical and clinical services, would be assessable in terms of both time and space, and would be competitive in terms of costs as required by subparagraphs (g), (h) and (j) of Rule 10-5.11(15), Florida Administrative Code. Petitioner also demonstrated that approval of the CCL was not inconsistent with any local plans on the Florida State Health Plan, and that there were no plans for pediatric cardiac catheterization contrary to subparagraphs (k) and (m) of 10-5.11(15), Florida Administrative Code. The Petitioner did prove that it would meet the service quality standards of Rule 10-5.11(15)(i), Florida Administrative Code to the extent of their current activities. There are several of the criteria listed under subparagraph (i) that can only be assessed upon the representations of the Petitioner, i.e., the generally available resources of man power, equipment, funds, and projections of workload.

    Regarding projected workloads, there was no serious argument that Petitioner would not do 300 procedures per year within three years of initiation of service. Evidence was received upon which it can be reasonably concluded that Petitioner can obtain trained personnel and appropriate equipment to equip the CCL. The Petitioner is already certified by JCAH and provides the services required by the rule to be provided or asserts it will provide said services. The representations of Petitioner are credible given its past conduct and current abilities. It is therefore concluded that Petitioner has complied with or will comply with subparagraph (i) of Rule 10-5.11(15) Florida Administrative Code. Because CCLs already exist in the area, subparagraph (n) is not

    applicable. No pediatric cardiac catheterizations are performed, and therefore a large portion of subparagraph (o) is not applicable. It was shown that the proposed CCL would not reduce the number of procedures below an average of 600 procedures per CCL in the area. Petitioner showed the criteria of Rule 10- 5,11(15)(o), Florida Administrative Code were met.

    
    

20. Finally the facts revealed that current usage exceeds the predicted need using the formula provided in subparagraph (1) by 33 percent. In this case, special circumstances exist regarding the computation of need. Using current data, the area would support 3.6 or 4 CCLs. Therefore, the issue of need is determined to be a special circumstance and not subject to limitation by the formula. The actual facts support a finding of need.

    
    

21. Concerning the statutory provisions, the rules addressed above are amplifications of the statutory provisions contained in Sections 381.494(6)(c) 1, 2, 3, 4, 5 and 6, Florida Statutes. Petitioner proved it met the criteria set forth in these subparagraphs when it proved compliance with the rule. The provisions of Section 381.494(6)(c) 7, 10, 11 and 13 and 381.494(6)(d), Florida Statutes address special circumstances which were not shown to exist or not raised as points of controversy in this case. The criteria set forth in Section

    381.494 (6)(c) 8, 9 and 12, Florida Statutes were controverted and are at issue.

    
    

22. There was no credible evidence introduced demonstrating a lack of available resources to successfully operate the proposed and existing facilities within the area. The Petitioner, as stated above, asserts it will provide the resources to operate the facility. In the absence of contrary evidence, this provision is proven as required by subparagraph 8, supra.

    
    

23. Concerning financial feasibility, the proof was complicated by the amendment of the petition to provide an enhanced facility which met technical objections raised by the intervenor. This raised the costs. However, even with the added costs the project was marginally feasible, i.e., would break even. This is sufficient given the overall financial situation at the Petitioner's hospital. The proposal is financially feasible within the time frame dictated by this rule.

    
    

24. There would be an impact on the Intervenor. It would lose 70 cases per year which would add approximately $2.50 to the cost of a bed per day at its hospital. However, any decision by Intervenor to increase prices would be offset by the cost competition of Venice which offers this procedure at a price significantly lower than Intervenor or other hospitals in the area. Simple loss of business is not an adverse impact under the statute. The Petitioner proved it met the standard of subparagraph 12, supra.

    
    

25. Lastly, the Petitioner must demonstrate need. This is the criteria upon which DHRS apparently based its denial. The facts show the need actually exceeds currently the projection based upon the formula using the 1981 use data. Clearly, this constitutes a situation which is out of the ordinary, and the determination of the need should be based upon projections based upon current data. Such projections show a need for a cardiac catheterization laboratory as indicated by the discussion above in relationship to the rules. In this case, Petitioner sustained that burden to show need. The CON should be granted.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law the Hearing Officer would recommend that this CON be granted with appropriate

conditions relating to the maintenance of staff and the level of training of the staff which must be met and maintained in order for Petitioner to continue the operation of the laboratory.

DONE and RECOMMENDED this 26th day of October, 1984 in Tallahassee, Florida.

STEPHEN F. DEAN, 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 26th day of October, 1984.

COPIES FURNISHED:

Kenneth F. Hoffman, Esquire David Watkins, Esquire

646 Lewis State Bank Building Tallahassee, Florida 32301

Douglas Mannheimer, Esquire

137 North Calhoun Street Tallahassee, Florida 32302

Robert A. Weiss, Esquire The Perkins House

118 North Gadsden Street Tallahassee, Florida 32301

and

Lamar Matthews, Esquire 1550 Ringling Boulevard

Sarasota, Florida 33578 Courtesy Copy to:

William B. Wiley, Esquire

666 Lewis State Bank Building Tallahassee, Florida 32301

=================================================================

AGENCY FINAL ORDER

=================================================================

STATE OF FLORIDA

DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES

SOUTH SARASOTA COUNTY MEMORIAL HOSPITAL ASSOCIATION, INC., d/b/a VENICE HOSPITAL,

Petitioner,

vs. CASE NO. 83-3577

DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES,

Respondent,

and

SARASOTA COUNTY PUBLIC HOSPITAL BOARD, d/b/a MEMORIAL HOSPITAL, SARASOTA,

Intervenor.

/

FINAL ORDER

This cause came on before me for the purpose of issuing a final agency order. The Hearing Officer assigned by the Division of Administrative Hearings (hereinafter referred to as "DOAH") in the above-captioned case has submitted a Recommended Order to the Department of Health and Rehabilitative Services (hereinafter referred to as "HRS"). A copy of that Recommended Order is attached hereto as Exhibit A. A Post Hearing Order was also issued by Hearing Officer Dean and is attached hereto as Exhibit B.

Intervenor, Sarasota County Public Hospital Board, d/b/a Memorial Hospital Sarasota (hereinafter referred to as "Memorial") and Respondent, HRS, filed Joint Exceptions to the Recommended Order. A copy of the Joint Exceptions is attached hereto as Exhibit C. Petitioner, South Sarasota County Memorial Hospital Association, Inc., d/b/a Venice Hospital (hereinafter referred to as "Venice") filed a Response to Joint Exceptions. A copy is attached hereto as Exhibit D. Petitioner, Venice, also filed Exceptions to the Recommended Order. A copy is attached hereto as Exhibit E. Intervenor, Memorial, filed a Motion To Strike Exceptions to Recommended Order. A copy is attached hereto as Exhibit F. Venice submitted A Response To Motion To Strike. A copy is attached hereto as Exhibit G. Respondent HRS filed Amended Exceptions to Recommended Order. A copy is attached hereto as Exhibit H. Intervenor, Memorial, filed a Motion To Strike Amended Exceptions to Recommended Order. A copy is attached here to as Exhibit I.

I RULING ON MOTION

Rule 28-5.205, Fla. Admin. Code, authorizes motions to strike in opposition to a petition. Fla. R. Civ. P. 1.140 (f) permits a party to move to strike redundant, immaterial, impertinent or scandalous matter from any pleading at any time. Fla. R. Civ. P. 1.150(a) permits a party to move to strike any pleading or part thereof which he deems to be a sham. Fla. R. Civ. P. 1.100 (a) lists all pleadings and affirmatively states "no other pleading shall be allowed." Exceptions are not listed as pleadings. The Florida Rules of Civil Procedure may or may not be applicable in this instance. In any event, it is clear that the rules authorizing a motion to strike authorize the motion only to strike either a petition or a pleading. Exceptions to a Recommended Order is not a pleading or a petition, therefore, the Motion of Intervenor Memorial to Strike Exceptions to the Recommended Order filed by Venice Hospital, and the Motion of Memorial to strike Amended Exceptions to Recommended Order filed by HRS, are not authorized and are DENIED.

II

RULING ON EXCEPTIONS

1. Joint Exceptions of Memorial and HRS. Rule 10-5.11 (15)(h)3, F.A.C., states "A patient's eligibility for cardiac catheterization shall be independent of the ability to pay." The Hearing Officer found that the Petitioner had met its burden in establishing this fact. Rule 10-5.11(15)(i) 2 and 2. f., F.A.C., provides "support staff for monitoring physiologic data and alerting the physician of any changes" [must] be available to perform . . . during cardiac catheterization procedures." Hearing Officer Dean found that Petitioner has met its burden in establishing this fact. The Hearing Officer found that Petitioner doesn't presently have an approved agreement with Sarasota Memorial. Rule 10- 5.11(i)(5)(a), F.A.C., requires that applicants for a cardiac catheterization laboratory in a facility not performing open heart surgery must submit, at the time of application "a written referral agreement with a facility providing open heart surgery services which is within 30 minutes travel time by emergency vehicle under average travel conditions." Referral agreement is not defined in the rule, however, the Hearing Officer found the Petitioner did have such an agreement prior to filing of its petition. Of course, a successful applicant could not function without such an agreement. Rule 10-5.11(15)(j) requires that cost data be comparable. The Hearing Officer found the Petitioner had met its burden by establishing this fact. For these reasons, Joint Exceptions of Respondent numbered 1 through 4, and 6 are not persuasive.

The Order of Hearing Officer Dean dated the 6th day of November clarifies any possible misconception as to the meaning of the phrase "there was no serious argument that Petitioners would not do 300 procedures per year within three years of initiation of services." According to the November 6 Order, the foregoing means "not less than 300 procedures would be performed within three years after service is initiated. This is not inconsistent with the statement that "at least 150 cardiac catheterization (procedures) be performed at the proposed CCL within three years following the initiation of the Petitioner's service. "At least" means, "at lowest estimate" Black's Law Dictionary, and could therefore encompass the higher figure. For this reason, Joint Exception number 7 is not persuasive.

Rule 10-5(15)(1), F.A.C., sets forth the formula to be used in determining the need for cardiac catheterization capacity in a service area as: "Nx = Uc x Px." Nx stands for the projected procedures to be delivered in the target year;

Uc represents the 1981 use rate in the service area. The application by Hearing Officer Dean of 1983 data rather than 1981 data makes it clear that his conclusion that there would be a need for 3.6 labs is based on facts outside of the need methodology. Rule 10-5.11(15)(f), F.A.C., states that applications for cardiac catheterization laboratories will be considered in relation to applicable statutory and rule criteria. One such criteria, 381.494(6)(c)2, Florida Statutes, addresses the issues of availability, accessibility, extent of utilization and like services. The use of more current (1983) utilization than that prescribed in the rule is justified to properly address this criterion.

The 1983 data indicate increased utilization, resulting in decreased accessibility and availability to cardiac cath services by at least 90 percent of the District population within a 2-hour travel time (10-5.11)(15)(h).

Hearing Officer Dean concluded that special circumstances exist which do not subject the issue of need to the limitation of the need methodology contained in the rule. A reasonable interpretation of this conclusion is that the result of using the 1981 use rate is a clear underestimation of the need for additional services in the area resulting in some inaccessibility which justifies the granting of the Certificate of Need despite a showing of no need under the rule methodology. Any other interpretation would mean the Hearing Officer had applied an unauthorized non-rule methodology. The finding of fact at Paragraph

15 is tantamount to a finding that other heart catheterization laboratories are not reasonably accessible or available to Petitioner's patients. Therefore, Joint Exceptions of HRS and Memorial numbered 5 and 8 are persuasive.

Error of the Hearing Officer, if any, in allowing Sarasota County Public Hospital Board, d/b/a Memorial Hospital, to intervene as a party litigant, is harmless. Therefore, the request of Petitioner for a conclusion that Sarasota lacked standing to intervene is denied.

FINDINGS OF FACT

The Department hereby adopts and incorporates by reference the findings of fact set forth in the Recommended Order.

CONCLUSIONS OF LAW

Paragraph 4 of Conclusions of Law in the Recommended Order (found at page

7) is modified to read:

The rule methodology does not indicate need, however, the evidence indicated that the existing cardiac catheterization laboratory at Sarasota Memorial is operating at a capacity range. Therefore, unless additional capacity is created in the northern portion of DHRS District 8, the access portion of the rule will not be met since 90 percent of the district population would not be within two hours of available catheterization services.

With the inclusion of this language at Paragraph 4 and the deletion of the language presently contained in Paragraph 4, the conclusions of law contained in the Recommended Order are adopted.

ORDERED that a certificate of need be issued to Petitioner conditional upon its entering into a valid referral agreement as required by Rule 10- 5.11(i)(5)(a), F.A.C.

DONE and ORDERED this 12th day of 1985, in Tallahassee, Florida.

DAVID H. PINGREE

Secretary

A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO JUDICIAL REVIEW WHICH SHALL HE INSTITUTED BY FILING ONE COPY OF A NOTICE OF APPEAL WITH THE AGENCY CLERK OF HRS, AND A SECOND COPY, ALONG WITH FILING FEE AS PRESCRIBED BY LAW, WITH THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE THE AGENCY MAINTAINS ITS HEADQUARTERS OR WHERE A PARTY RESIDES. REVIEW PROCEEDINGS SHALL BE CONDUCTED IN ACCORDANCE WITH THE FLORIDA APPELLATE RULES.

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a copy of the foregoing has been sent to the following named people by U.S. Mail, at 3:30 p.m. o'clock, this 13th day of February, 1985.

COPIES FURNISHED:

Kenneth F. Hoffman, Esquire David Watkins, Esquire

646 Lewis State Bank Building Tallahassee, Florida 32301

Douglas L. Mannheimer, Esquire

137 North Calhoun Street

P. O. Drawer 11300

Tallahassee, Florida 32302-3300

Robert A. Weiss, Esquire The Perkins House

118 North Gadsden Street Tallahassee, Florida 32301

and

Lamar Matthews, Esquire 1550 Ringling Boulevard

Sarasota, Florida 33578

William B. Wiley, Esquire

666 Lewis State Bank Building Tallahassee, Florida 32301

Stephen F. Dean, Hearing Officer Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

LESLEY MENDELSON, Agency Clerk Department of Health and

Rehabilitative Services 1323 Winewood Boulevard Building One, Suite 407 Tallahassee, Florida 32301 904/488-2381

Docket for Case No: 83-003577CON

Orders for Case No: 83-003577CON