STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
REHAB HOSPITAL SERVICES CORPORATION, )
)
Petitioner, )
)
vs. ) CASE NO. 84-1038
)
DEPARTMENT OF HEALTH AND )
REHABILITATIVE SERVICES, )
)
Respondent. )
)
RECOMMENDED ORDER
Pursuant to notice, the above matter was heard before the Division of Administrative Hearings by its duly designated Hearing Officer, Donald R. Alexander on September 11 and 12, 1985, in Daytona, Beach Florida.
APPEARANCES
For Petitioner: Charles D. Hood Jr., Esquire
Post Office Box 191
Daytona Beach, Florida 32015
For Respondent: Leslie F. Mendelson, Esquire
Building One Room 407 1323 Winewood Boulevard
Tallahassee, Florida 32301 BACKGROUND
This matter began on August 15, 1983 when petitioner, Rehab Hospital Services Corporation filed an application with respondents Department of Health and Rehabilitative Services, seeking a certificate of need to construct a 40-bed comprehensive medical rehabilitation hospital in Volusia County Florida at an estimated cost of $7.2 million. 1/ On January 19, 1984 respondent issued proposed agency action denying the application on the grounds "there exist(ed) an excess of 55 rehabilitation beds" in the service district, and because the "occupancy standard presented in Chapter 10-5.11(24)c, FAC, of 85 percent. . has not been met."
Respondent disputed these factual allegations and requested a formal hearing pursuant to Subsection 120.57(1), Florida Statutes, to contest the agency's proposed action. The matter was forwarded to the Division of Administrative Hearings by respondent on March 21, 1984, with a request that a hearing officer be assigned to conduct a formal hearing. By notice of hearing dated April 26, 1984, a final hearing was scheduled for July 2 and 3, 1984 in Tallahassee, Florida.
On May 31, 1984, Memorial Regional Rehabilitation Centers Inc., which operates a rehabilitation hospital in Jacksonville, Florida, filed a petition to
intervene. Intervention was granted on August 22, 1984. The parties mutually agreed to continue the hearing and the same was rescheduled to November 5 and 6, 1985 in Daytona Beach, Florida. At the request of the parties, the final hearing was rescheduled to January 10 and 11, 1985 at the same location.
Thereafter, petitioner requested the matter be continued, and it was accordingly rescheduled to April 9-12, 1985 in Daytona Beach. At the request of petitioner it was again rescheduled to May 1-3, 1985. At respondent's request, the matter was rescheduled to June 12-14, 1985 and after one further request for a delay by petitioner, it was finally rescheduled to September 12 and 13, 1985 in Daytona Beach, Florida.
During the course of a prehearing conference held on September 3, 1985, the undersigned granted respondent's motion to dismiss intervenor, Memorial Regional Rehabilitation Center, Inc., for failing to demonstrate that its substantial interests were affected by this proceeding. This was confirmed by an order entered on September 4, 1985.
At final hearing petitioner presented the testimony of Tommy Ray Futch, Kenneth F. Barber, Fred J. Huerkamp, Ward Koutnik, Daniel J. Sullivan, Dr. Ray McKinney Patterson, Dr. Shafaat Ahmed, Dr. John A. Ortolani, Dr. Mark F. Rottenberg, Dr. S. V. Satyanarayana, Steven Kenneth Wilson, Dr. James Kenneth Shea, Daniel D. Smith and Dr. Eugene Paul Alban. It also offered petitioner's exhibits 1-34 and 36-38. All were received except exhibit 23 which was not moved into evidence. Respondent presented the testimony of Reid Jaffe and offered respondent's exhibits 1 and 2. Both were received in evidence.
The transcripts of hearing (four volumes) were filed on October 17, 1985. Proposed findings of fact and conclusions of law were filed by the parties on November 6, 1985. A ruling on each proposed finding of fact has been made in the Appendix attached to this Recommended Order. 2/
By agreement of the parties, the relevant statutory and rule criteria required to be satisfied by petitioner are those contained in Subsections 381.494(6)(c)1.,2.,4.-6.,8.,9.,11 and 12., Florida Statutes (Supp. 1984), and Rule 10-5.11(24), Florida Administrative Code.
The issue is whether petitioner's application to construct a 40-bed comprehensive medical rehabilitation hospital in Volusia County, Florida, satisfies the foregoing criteria and should be granted.
Based upon all of the evidence, the following findings of fact are determined:
FINDINGS OF FACT
Introduction
On August 15, 1983, petitioner, Rehab Hospital Services Corporation (Rehab), filed an application with respondent, Department of Health and Rehabilitative Services (HRS), seeking a certificate of need authorizing the construction and operation of a 40-bed comprehensive medical rehabilitation hospital in Volusia County, Florida. The proposed cost was then estimated to be
$7.2 million. A rehabilitation facility is one which provides a program of comprehensive medical rehabilitation services and which is designed, equipped, organized and operated to deliver such services. According to Rule 10-5.11(24), Florida Administrative Code, a comprehensive medical rehabilitation service is defined as "intensive care providing a coordinated multi-disciplinary approach
to patients with severe physical disabilities such as spinal cord injury, brain injury, stroke, multiple sclerosis, cerebral palsy, hemiplegia, quadriplegia, paraplegia, and other physical disabilities which require an organized program of integrated and coordinated services."
After reviewing the application, HRS issued its proposed agency action on January 19, 1984 wherein it proposed to deny the application for the following general reasons:
Using the rehabilitation bed need methodology presented in Chapter 10-5.11(24)c, FAC, and subtracting away from this need the current number of rehabilitation beds in the service
districts there exists an excess of 55 rehabilitation beds. Further, the occupancy standard
presented in Chapter 10-5.11(24)c, FAC,
of 85 percent, for existing rehabilitation beds before additional beds can be approved has
not been met.
The agency's decision prompted this proceeding.
Applicants Proposal
Petitioner is an experienced health care provider. It currently owns and operates some nine hospitals throughout the United States, of which at least seven are comprehensive rehabilitation facilities. Most recently, Rehab was issued a certificate of need to construct and operate a tenth rehabilitation facility in Melbourne, Florida.
Rehab proposes to construct a 40-bed comprehensive medical rehabilitation hospital in Volusia county. Although a specific site has not been determined, the facility will probably be built in Daytona Beach just north of U.S. 92 and south of Mason Avenue. The revised cost is $6.9 million. In the new facility, Rehab intends to offer or make available at a minimum the following rehabilitation services: physician services, nursing services, physical therapy, speech therapy, prosthetic orthopedic and stroke devices and services, inhalation therapy, psychological services, occupational therapy, skilled rehabilitation nursing care, dietary services, social work and vocational evaluation work adjustment. The facility will be accredited by the Commission on Accreditation of Rehabilitation Facilities (CARF). All necessary specialized staff will be available and hired by Rehab.
Daytona area acute care hospitals will provide hospital services such as high technology radiology, IV preparation and drug toxic testing. In addition, Rehab will be able to develop cooperative arrangements and a formal referral system with local acute care hospitals, neurologists, orthopedists, psychiatrists, local physicians and community organizations such as Easter Seals.
After the proposed agency action was issued, but prior to final hearing, Rehab and Memorial Regional Rehabilitation Center, Inc. (Memorial), a rehabilitation hospital in Jacksonville, entered into a joint venture whereby Memorial would transfer twenty of its unused licensed beds to Rehab for its new facility. The agreement further provided that the two would be equal partners in the new venture. Therefore, Rehab is seeking to add only twenty beds to the District count.
Applicant's primary service area will be Volusia County, which had a 1980 population of 329,000. That figure is projected to increase 37 percent by the year 1990. The only other center of population in the service district is Jacksonville, where the population was 594,000 in 1980. Given this maldistribution of population within the service district, the projected growth in the Daytona area, and the fact that only one other rehab facility is located within the district, Rehab contends that a new facility in the Daytona area is justified.
Competing Facilities
The proposed facility lies within HRS District IV which includes Baker, Nassau, Duval, Clay, St. Johns, Flagler and Volusia Counties. The two principal population centers within District IV are Jacksonville and Daytona. At the present time there is only one existing comprehensive medical rehabilitation hospital within District IV. That facility is Memorial in Jacksonville. Memorial, which initially opposed but now supports the application, is licensed to operate a 128-bed facility. However, its physical plant can accommodate only
110 beds. In addition to Memorial, there are two rehab facilities in the Orlando area, which lies in adjacent District VII. These are Florida Hospital and Humana Lucerne with 49 and 35 beds, respectively. However, Humana Lucerne confines its admissions principally to spinal cord injuries, while Florida Hospital focuses chiefly upon stroke victims.
Need for Facility in Relation to State and District Health Plans (Subsection 381.494(6)(c)1.,F.S.)
The applicable State Health Plan (Plan) was not made a part of this record by either party. However, the application states that the Plan does not include criteria or standards for the determination of comprehensive physical rehabilitative bed need. Although the agency witness stated that the Plan "reiterates the criteria that are found in Chapter 10-5.11(24)," he did not provide any specific references in the rule or Plan to support this statement, or how the proposal was inconsistent with the Plan. Accordingly, it is found that the Plan has no applicability to this proceeding, and applicant need not demonstrate that its proposal is consistent with the Plan.
The District IV Health Plan (DHP) is prepared by the Health Planning Council of Northeast Florida, Inc. (Council). Copies of relevant portions of the 1985, 1984 and 1983 DHP's were introduced into evidence as petitioner's exhibits 11, 12 and 13, respectively. The parties have stipulated that the 1985 DHP contains two relevant recommendations: (a) that HRS not give consideration to approving additional comprehensive rehabilitation beds in District IV through the year 1986, at which time the Council would again review this recommendation, and (b) that HRS consider the transfer of comprehensive medical rehabilitation beds from Duval County to Volusia County as long as the total number of beds in the district does not increase. It is apparent, then, that Rehab's proposal is only partially consistent with the District Health Plan.
In making the above two recommendations, the Council's Executive Director acknowledged that there "is very little interaction between the northern and southern population concentrations" of the District, as well as "the health delivery systems located therein." Further, he agreed that the health delivery systems in Jacksonville and Daytona are essentially independent from one another. The 1985 Plan also premised its recommendations in part upon the assumption that HRS rules "allow an exception to the need methodology if 10
percent of the population live more than two hours normal travel time from a center. Populous Volusia County does not qualify for the exception because other centers outside the district are within the two hour limitation." In fact, there are no HRS rules defining accessibility to be when 90 percent of a district's population lives within two hours driving time of a rehabilitation facility. The Council also made no travel time studies to verify its assumption relative to the two hour travel time within the district, made no investigation as to the number of Volusia County residents utilizing non-district hospitals, and was not aware of admission policies for rehab patients at other facilities outside the district, or the fact that one Orlando hospital principally confines its rehab admissions to spinal cord cases. The DHP also recognizes that if rapid growth continues, "a comprehensive rehab center for the area may become appropriate" at some point in time. In view of the flaws in the assumptions which underpin the DHP recommendations, the consistency or inconsistency of Rehab's proposal with the DHP should be given only minimal weight in relation to the other applicable statutory and rule criteria.
A proposal does not need to be consistent with the district and state health plans whenever there are "emergency circumstances which pose a threat to the public health." In this case, there are no such emergency circumstances, and therefore the exception does not apply.
Availability Quality of Care, Efficiency, Appropriateness, Accessibility, Extent of Utilization, and Adequacy of Like and Existing Health Care Services in the Service District (Subsection 381.494(6)(c)2., F.S.)
Rule 10-5.11(24), Florida Administrative Code, establishes the methodology for determining and projecting the need for rehabilitation beds within a district. It is noted that, unlike other methodologies which determine need on a subdistrict basis, need is calculated for rehab beds on a district- wide basis. The parties have stipulated that the present inventory of rehabilitation beds in District IV is 128, all licensed for Memorial's facility in Jacksonville. Using the formula in paragraph (b)1. of the rule, it results in a district- wide need of 79 beds in the planning horizon year of 1990. This in turn produces 49 excess beds at the present time in District IV since the present inventory numbers 128 beds. Therefore, even though Memorial does not have available the entire complement of 128 beds this portion of the rule has not been satisfied.
Rule 10-5.11(24) contains "other factors to be considered in determining a need for comprehensive medical rehabilitation services, in addition to relevant statutory and rule criteria." These factors are set forth in subparagraph (b)2. of the rule. In addition, standards and criteria relative to unit size, occupancy, accessibility programs and services, accreditation, variable and optional services, and transfer and referral agreements must also be considered. These are contained in subparagraphs (b)3.-6. of the rule.
In relation to the criteria set forth in subparagraph (b)2.a.-d. studies compiled by Rehab, as set forth in its exhibit 31, reveal that Volusia's population is projected to grow by 37 percent between 1980 and 1990, and that the 65 and over age segment is forecast to be the fastest growing segment of the population. This is particularly significant since testimony by Daytona area physicians established that a great number of their patients in need of rehabilitative services come from the elderly segment of the population. In addition, Volusia is projected to have 792 rehabilitation discharges in 1990 as compared with 883 in Duval. This indication of disabling conditions and chronic
illness suggests a need for rehabilitation beds in the southern portion of the district. With respect to trends in utilization by third party payers, Rehab proposes to make its facility available to all level incomes and to seek a Medicaid contract. By doing the latter, it projects 53 percent Medicare patients in its first year of operation. Next, through testimony from Daytona area physicians it was established that the "existing and projected inpatients in need of rehabilitation services" are on the rise, and provide further support for the establishment of a new facility. Finally, Rehab proposes to have available a "specialized staff" as required by the rule. Accordingly, the criteria in subparagraphs (b)2.a.-d. have been satisfied and militate towards favorable action on the application.
Rule 10-5.11(24)(b)3.a. requires that any new facility have no less than forty beds. Subparagraph (b)3.b. requires minimum occupancy of at least 65 percent during the first year of operation while subparagraph (b)3.d. imposes the requirement that a full array of programs and services be offered. Rehab meets all of these criteria. Finally, subparagraph (b)3.b. also provides that no proposal . . . will be approved unless the average annual occupancy rate for all existing comprehensive rehabilitation facilities and units within the . . . service district exceeds 85 percent occupancy for the preceding calendar quarter." Memorial is the only such facility in the district and, although licensed for 128 beds, it has only 110 beds in its facility at the present time. To reach the 85 percent occupancy for the licensed capacity of 128 beds, Memorial would have to fill 109 of the 110 existing beds on average. This would be virtually impossible to accomplish. Because of these unique circumstances, it is found that the 85 percent occupancy standard normally used is an inappropriate standard to apply in this case, and should not be used as a basis to deny the application. This being so, all criteria in subparagraphs (b)3.a.,
b. and d. have been met.
Subparagraph (b)3.c. provides that "applicants for comprehensive rehabilitation services should demonstrate that at least 90 percent of the target population resides within two hours driving time under average traffic conditions of the location of the proposed facility." In this case the target population (Volusia County) is within minutes of the proposed facility and therefore satisfies the rule. On the other hand, exhibit 29, which is the only traffic study in this proceeding, and which was not credibly contradicted, reflects that Orlando and Titusville are the only major cities within a two hour driving time of the facility while Melbourne, Lakeland, Ocala, Gainesville and Jacksonville are outside this zone. Even Orlando is not especially convenient, for it lies around an hour and twenty minutes away. Therefore, there are no hospitals in District IV within two hours driving time, while two are in an adjacent District approximately 80 minutes away. However, one of these (Humana) restricts its admissions to mainly spinal cord injuries (92-95 percent of patients) while the other focuses on stroke victims. Further, both have a primary service area different from that proposed by Rehab. This is evidenced by the fact that Volusia and Flagler County residents most recently constituted only 2 percent and 7 percent, respectively, of total patient days at the two facilities. The accessibility standard is accordingly satisfied.
According to subparagraph (b)3.e., a facility must be accredited by CARF and meet its standards. In this regard, the proposed facility will be accredited. However, HRS points out that Rehab only intends to make physician and psychology services available rather than actually providing them. The provision of such services should be a condition to issuance of a certificate of need, if indeed Rehab is deficient in this respect. Therefore, with that condition, the criterion has been met.
Rehab proposes to offer, where needed, all required variable and optional services enumerated in subparagraphs (b)4. and 5. Finally, Rehab has the ability to develop a formal referral system with acute care hospitals, home health agencies, other providers of vocational rehabilitation facilities and community social services organizations as required by subparagraph (b)6. of the rule.
Testimony by local physicians established that Daytona doctors have difficulty in obtaining admissions in non-local hospitals such as Memorial and the two Orlando hospitals. It was further established that a crucial step in the patient recovery process is the need for family members to visit the patient on a frequent basis. Given these considerations and the two hour travel time to Memorial, it is found that the "like and existing health care services in the service district" are not available, appropriate or accessible within the meaning of the statutory criteria.
Availability and Adequacy of Other Health Care Facilities in the District (Subsection 381.494(6)(c)4., F.S.)
Reasonable and adequate alternatives to hospital placement do not exist. Nursing homes, home health care, Easter Seal and similar programs do not offer a viable alternative to a true rehab center. This is because such services provided in those facilities are in the nature of maintaining the patient rather than restoring the disabled patient to a productive life. Further, the services offered in alternative placements are far less comprehensive in natured and pale in comparison to those offered by a comprehensive medical facility. In view of this, it is found that other health care facilities and services in the district are not available or adequate in terms of providing comprehensive rehabilitative medical services.
Probable Economies & Improvements in Services that may be Derived from Joint or Cooperative Shared Facilities (Subsection 381.494(6)(c)5., F.S.)
HRS suggests that the most economical way to achieve a new facility in Volusia County is by Memorial simply transferring forty of its 128 licensed beds to Rehab. But Memorial does not wish to transfer more than 20 beds since it plans on eventually using 108 beds in future years. It also does not have the financial capability of constructing its own facility in Volusia County. Under the joint venture agreement, however, twenty unused beds will be put to use, at no cost to Rehab, and both Rehab and Memorial will be equal partners in the new facility. The end result is the establishment of a new rehab facility in the Daytona Beach area that will serve one of the two population centers in the district. Even if Memorial were itself to construct a new facility, the cost of the land and building would be at least equal to what Rehab must bear, and therefore no economies would be achieved. The sharing arrangement proposed by Rehab accordingly achieves economies and improvements in service, and therefore satisfies the criterion.
The Need of Applicant for Special Equipment and Services Not Reasonably and Economically Accessible in Adjoining Areas (Subsection 381.494(6)(c)6., F.S.)
A rehab center is designated by HRS as a specialty hospitals and as such, provides a unique or special service for its patients. No other comparable facility is reasonably or economically accessible in an adjoining area. Therefore, this criterion has been satisfied by applicant.
The Extent to Which Proposed Services-Will be Accessible to All Residents of the Service District (Subsection 381.494(6)(c)8., F.S.)
Exhibit 29 clearly reflects that the proposed services will be accessible to the large number of residents in the southern part of HRS District
IV. In 1980, they numbered 329,000 persons, and this number is expected to increase by 36.5 percent by the year 1990. Access time of less than two hours extends to much of the populace within the District. More importantly, the facility will be within minutes driving time for patients and families who reside in the large concentration of population in Volusia and Flagler Counties, which is the primary service area of Rehab. In additions the facility will accept Medicaid and Medicare patients; thereby making it accessible to that segment of the population. Therefore, the criterion is satisfied.
The Immediate and Long-Term Financial Feasibility of the Project (Subsection 381.494(6)(c)9.,F.S.)
At the outset of the hearing the parties stipulated that Rehab has sufficient capital and funds to "construct and open" the proposed facility.
L. Effect of New Facility on Competition and Cost-Effectiveness in Delivery of Health Care Services (Subsection 381.494(6)(c)12.,F.S.)
Rehab operates seven new rehab hospitals through out the country that provide services comparable to that proposed herein. Most recently, it was issued a certificate of need by HRS to construct and operate a new rehab facility in Melbourne, Florida. Its experience in planning and operating such facilities is not seriously questioned. Based on utilization figures of 65 percent during year one and 85 percent in year two, which are not contradicted and cost experience from its other hospitals, applicant projects a profit between the sixth and seventh months of operation. These projections have not been shown to be unreasonable. Even though it projects only a 1 percent combined indigent and bad debt experience, 53 percent Medicare reimbursement, and .14 percent insurance revenues, these projections are not unrealistic given the fact that unlike an acute care facility patient transfers are prescreened prior to admission. Accordingly, it is found that the project is financially feasible within the meaning of the statute.
K. Entities Providing a Substantial Part of Services to Residents Outside Service District (Subsection 381.494(6)(c)11.,F.S.)
Although the two specialty hospitals (Florida Hospital and Humana) in District VII provide services to residents outside of their districts these services do not constitute a "substantial" part of their overall service to area residents. For example, since 1983, Volusia and Flagler County patients using Florida Hospital's facility have diminished to approximately 2 percent of its total patient days during the first half of 1985. In the case of Humana, Flagler and Volusia patients represented only 7 percent of that facility's
admissions for the ten months ending June 1, 1985. Therefore, because non- District IV facilities provide only a very small part of their services to District IV patients, there will be no impact on these facilities within the purview of this criterion.
Approval of the new hospital will not adversely affect Memorial the only rehab facility in District IV. In fact, Memorial supports the application. The effect on Humana, and Florida Hospital should also be negligible since only a very small number of District IV patients now use their facilities. Indeed, the numbers of Volusia area residents using the Orlando facilities has been declining in recent years.
Since many patients in Volusia County are now discharged to alternative facilities due to a lack of accessible rehab facilities the delivery of health services and quality of care should improve with the addition of a rehab facility in Daytona. By having a "local" rehab facility, patients will receive comprehensive care that will restore them to their highest functioning potential rather than the patient simply being "maintained" in a nursing home, home health agency or regular hospital facility. This in turn should reduce health care costs incurred when the patient receives maintenance vis a vis restorative care. Accordingly, it is found that the effect on competition will be positive, and that the delivery of health care services and quality of care will be improved.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction of the subject matter and the parties thereto pursuant to Subsection 120.57(1), Florida Statutes.
In this case, like all other certificate of need cases, the petitioner has "the burden of proving it meets the statutory criteria and is entitled to a CON." Boca Raton Artificial Kidney Center, Inc., et al. v. Department of Health and Rehabilitative Services, et al. 475 So.2d 260, 262 (Fla. 1st DCA 1985). By agreement of the parties the following statutory criteria contained in Subsection 381.494(6)(c) Florida Statutes (Supp. 1984) apply:
The need for the health care facilities and services and hospices being proposed in relation to the applicable district plan and state health plan adopted pursuant to Title XV of the Public Health Service Act, except in emergency circumstances which pose a threat to the public health.
The availability, quality of care, efficiency, appropriateness, accessibility, extent of utilization, and adequacy of like and existing health care services and hospices in the service district of the applicant.
* * *
The availability and adequacy of other health care facilities and services and hospices in the service district of the
applicant, such as outpatient care and ambulatory
or home care services, which may serve
as alternatives for the health care facilities and services to be provided by the
applicant.
Probable economies and improvements in service that may be derived from operation of joint, cooperative, or shared health care resources.
The need in the service district of the applicant for special equipment and services which are not reasonably and economically accessible in adjoining areas.
* * *
. . . the extent to which the proposed services will be accessible to all residents of the service district.
The immediate and long-term financial feasibility of the proposal.
* * *
The needs and circumstances of those entities which provide a substantial portion of their services or resources, or both, to individuals not residing in the service district in which the entities are located or in adjacent service districts. Such entities
may include medical and other health professions, schools, multidisciplinary clinics,
and specialty services such as open-heart
surgery, radiation therapy, and renal transportation.
The probable impact of the proposed project on the costs of providing health services proposed by the applicant, upon consideration of factors including, but not limited to, the effects of competition on the supply of health services being proposed and
the improvements or innovations in the financing and delivery of health services which
foster competition and service to promote quality assurance and cost-effectiveness.
In addition, the parties have stipulated that the requirements of Rule 10- 5.11(24), Florida Administrative Coded are also relevant.
Subsection 381.494(6)(c)1. Florida Statutes (Supp. 1984), requires that the agency consider the need for the proposed hospital facility "in relation to the applicable district plan and state health plan." The state health plan has no applicability to rehabilitation hospitals, and therefore this portion of the criterion need not be considered. The evidence establishes that the proposal is not consistent with the district health plan to the extent that
applicant intends to add twenty new beds to the District IV bed count. Otherwise, it is in accord with that plan. This inconsistency must be tempered, of course, with the various infirmities which underlie the basic premises of the plane and which tend to detract from the validity of the plan's recommendations.
The next relevant statutory criterion, Subsection 381.494(6)(c)2., requires that the "availability, quality of care, efficiency, appropriateness, accessibility, extent of utilization, and adequacy of like and existing health care services . . . in the service district of the applicant" be considered. Here the evidence reveals that the only "like and existing" rehabilitation facility in District IV is in Jacksonville, which is more than two hours travel time away. The evidence also shows that Daytona area physicians have difficulty in admitting patients in non-Daytona hospitals, and that rehabilitation patients require support and family visitation in the recovery process. Given these considerations, it is concluded the like and existing health care services within the district are unavailable, inappropriate and inaccessible. Because of this, the quality of care, extent of utilization and efficiency of the Jacksonville facility become immaterial, for the facility is not reasonably accessible to the Daytona Beach area center of population.
Subsection 381.494(6)(c)4., Florida Statutes (Supp. 1984), requires that the "availability and adequacy of other health care facilities and services. . . in the service district of the applicant, such as outpatient care and ambulatory or home care services, which may serve as alternatives for the health care facilities and services to be provided by the applicant" be considered. In the case at bar, the evidence reflects that alternatives to hospital placement do not exist for patients requiring the specialty services of a comprehensive medical rehabilitation hospital. This is because home health care, nursing homes, Easter Seal and the like do not offer the comprehensive services that the rehabilitation patient requires. Therefore, it is concluded that this criterion has been met.
Subsection 381.494(6)(c)5., Florida Statutes (Supp. 1984) requires an inquiry into whether "probable economies and improvements in service. . . may be derived from the operation of . . . shared health care resources." According to the evidence, probable economies will be derived by virtue of a joint venture between Rehab and Memorial whereby twenty beds will be transferred to the new facility at no cost. Moreover, the evidence reflects that an improvement in service will occur because of the establishment of a facility which is readily accessible to the Daytona population area. In view of this, it is concluded that the foregoing criterion has been satisfied.
The next applicable criterion requires that, when reviewing an applications the "need in the service district. . . for special equipment and services which are not reasonably and economically accessible in adjoining areas be considered. Subsection 381.494(6)(c)6., F.S. The evidence of record reveals that applicant will be licensed as a specialty hospital, and provide special rehabilitation services to its patients. In adjoining areas there are only two other facilities, one of which focuses on spinal injury cases, and the other on stroke victims. Both are at least one hour or more driving time from the Daytona center of population, and are inconvenient for family visitation. Moreover, the evidence supports a finding that Daytona physicians have experienced difficulty in getting patients admitted to these facilities despite HRS prescribed admission standards. Given these limitations, it is concluded that neither specialty hospital is reasonably and economically accessible to the target population and therefore the criterion has been met.
The parties have stipulated that only a portion of Subsection 381.494(6)(c)8., Florida Statutes (Supp. 1984), is relevant. That portion requires a determination as to "the extent to which the proposed services will be accessible to all residents of the service district." The evidence shows that Rehab will be easily accessible, in terms of travel time, to the large population center in the Daytona area, and that its services will be available to the segment of population that is covered by Medicaid and Medicare programs. Therefore, it is concluded that this criterion has been satisfied by the applicant.
"The immediate and long-term financial feasibility of the proposal" must be considered under Subsection 381.494(6)(c)9., Florida Statutes (Supp. 1984). In this regard, the evidence establishes that Rehab is an experienced and successful planner and operator of rehab facilities throughout the United States. Most recently, its proposal to construct a new rehab facility in Melbourne was approved by HRS. Based upon the testimony of Rehab's planning experts, which is accepted as being the more credible and persuasive testimony on the subject, it is concluded the project is financially feasible on both an immediate and long-term basis.
Subsection 381.494(6)(c)11., Florida Statutes (Supp. 1984), requires that consideration be given to "the needs and circumstances of those entities which provide a substantial portion of their services or resources, or both, to individuals not residing in the service district in which the entities are located or in adjacent service districts." In this case, only two such facilities exists both being in Orlando, which lies within an adjoining service district. However, the evidence shows that neither provides "a substantial portion of their services or resources. . . to individuals not residing in the service district." Indeed, Volusia and Flagler County residents make up a very small percentage of their total patient mix, and that such percentages have been declining in recent years. Accordingly, it is concluded that this criterion has been met.
Finally, under Subsection 381.494(6)(c)12., Florida Statutes (Supp. 1984), "the probable impact of the proposed project" on competition, quality assurance and cost-effectiveness in the delivery of health care services must be considered. As noted above, the impact on the two facilities in an adjacent service district is negligible, and the only "competitor" in District IV is Rehab's partner in a joint venture to establish the new facility. By establishing the facility in the Daytona area, the delivery of rehabilitation services will be cost-effective and the quality of care will be improved. Therefore, the final statutory criterion has been satisfied.
Rule 10-5.11(24), Florida Administrative Code, contains the exclusive bed need methodology for rehabilitation hospitals. In additions subparagraphs (b)2.-6. of the rule contain "[o]ther factors to be considered in determining a need for comprehensive medical rehabilitation services, in addition to relevant statutory and rule criteria."
If the mathematical formula prescribed in para- graph (b) of the rule is followed, the formula reflects a need of only 79 beds district-wide in 1990, which is the planning horizon year in this proceeding. The present licensed bed inventory in evaluation process. However, here we are dealing with a special type of service, whose need is determined on the basis of district-wide criteria. In this case, District IV stretches from Nassau County, which lies north of Jacksonville, to Volusia County. The District is unique in the sense that the two principal areas of population (Daytona and Jacksonville) lie at
opposite ends of the districts and the district contains only a single rehab facility in the Jacksonville population center. That facility is inaccessible to Daytona area residents, and facilities in adjoining districts cannot or do not satisfy the needs of the Daytona area residents. Then took it is noted that the population center in question is quite large (329,000), and is expected to grow by another 37 percent by the planning horizon year of 1990. Finally, applicant proposes to add only twenty beds to the District bed counts and to provide a speciality service which is sorely needed in that part of the District. Given these factual circumstances, it is concluded that for purposes of this case the satisfied statutory and rule criteria weigh more heavily in the certificate of need review process than do the two unsatisfied criteria, and that the application should be approved. Collier Medical Center, Inc., supra.
3/
Based on the foregoing findings of fact and conclusions of law it is RECOMMENDED that the application of Rehab Hospital Services Corporation for
a certificate of need to construct and operate a 40-bed comprehensive medical
rehabilitation facility in Volusia County, Florida be GRANTED subject to the condition in conclusion of law paragraph 14 and finding of fact paragraph 18.
DONE and ORDERED this 7th day of January, 1986, 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 7th day of January, 1986.
ENDNOTES
1/ The original application sought to establish a 60-bed facility. This was later amended to a 40-bed facility.
2/ Petitioner filed a "Proposed Recommended Order" and "Post-Hearing Brief." Only those proposed findings of fact in the former pleading have been addressed in the Appendix.
3/ This conclusion is consistent with prior agency action in DOAH Case No. 83- 3712, Rehab Hospital Services Corporation v. Department of Health and Rehabilitative Services. In that case, HRS issued a CON to the same applicant even though all rule and statutory criteria were not met. (Petitioner's exhibit 38)
APPENDIX TO RECOMMENDED ORDER IN CASE NO. 84-1038 PETITIONER:
Proposed findings of fact 1-27 have been essentially adopted and are covered in this Recommended Order.
RESPONDENT:
1. Proposed findings of fact 1, 8, 9, 19, 20, 23-27, 29, 33, 35-38, 42-46,
49 and 53-55, have been essentially adopted and covered in this Recommended Order.
2. Proposed finding of fact 2-7, 10, 13, 21, 39, 40, 47, 48, 50, 59, 62 and 63 have been rejected as being irrelevant to a determination of the issues herein.
Proposed finding of fact 11 has been rejected as being irrelevant since audiology service is an optional rather than a required service.
Proposed finding of fact 15-18, which relate to CARF standards have not been specifically incorporated into this Recommended Order since a general finding has been made that the new facility will be accredited by CARF.
Proposed finding of fact 21 has been rejected since the State Plan was not introduced into evidenced and there was no evidence to show that the applicant's proposal was inconsistent with any specific portion of the Plan.
Proposed finding of fact 28 has been rejected as being contrary to the weight of the evidence in that witness Sullivan stated that the substance of the proposed finding was only correct in a very "indirect" way.
Proposed finding of fact 34 has been rejected as being contrary to the weight of the evidence in that Rehab projects a 65 percent occupancy in its first year of operation.
The first and last sentences in proposed finding of fact 41 have been accepted. The remainder has been rejected as being contrary to the weight of the evidence.
Proposed finding of fact. 51 has been rejected since it duplicates proposed finding of fact 32.
Proposed finding of fact 52 has been partially rejected as being contrary to the weight of the evidence in that referrals of patients from Volusia County to Jacksonville and Orlando hospitals are few, and are accomplished only with difficulty.
Proposed finding of fact 56 has been rejected as being contrary to the weight of the evidence.
Proposed finding of fact 57 has been partially accepted while the remainder has been rejected as being duplicative and irrelevant.
The first sentence of proposed finding of fact 58 has been partially accepted. The remainder has been rejected as being irrelevant.
Proposed finding of fact 60 has been rejected as being irrelevant or contrary to the weight of the evidence.
Proposed finding of fact 61 has been rejected as being irrelevant or duplicative in nature.
COPIES FURNISHED:
Charles D. Hood, Jr., Esquire Post Office Box 191
Daytona Beach, FL 32015
Leslie F. Mendelson, Esquire Bldg. One, Room 407
1323 Winewood Blvd.
Tallahassee, FL 32301
David Pingree, Secretary Department of Health and Rehabilitative Services
1317 Winewood Boulevard
Tallahassee, FL 32301
| Issue Date | Proceedings |
|---|---|
| Jan. 07, 1986 | Recommended Order (hearing held , 2013). CASE CLOSED. |
| Issue Date | Document | Summary |
|---|---|---|
| Apr. 22, 1986 | Agency Final Order | |
| Jan. 07, 1986 | Recommended Order | Application for Certificate Of Need to construct a 40-bed comprehensive medical rehabilitation hospital in Volusia County granted |
