STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FLORIDA HOSPITAL ASSOCIATION, INC. )

)

Petitioner, )

)

vs. ) CASE NO. 86-1O14RP

)

DEPARTMENT OF HEALTH AND )

REHABILITATIVE SERVICES, )

)

Respondent. )

)

FINAL ORDER

This case arises as a rule challenge pursuant to Section 120.54(4), Florida Statutes. Notice was provided and on April 28, 1986, a formal hearing was held before Hearing Officer Ella Jane P. Davis to consider the validity of proposed rule 1OD- 86.008 of Respondent agency, Department of Health and Rehabilitative Services.

APPEARANCES

For Petitioner, Harold F. X. Purcell Florida Hospital Oertel & Hoffman P. A. Association: Post Office Box 6507

Tallahassee Florida 32314-6507

For Respondent, Richard A. Patterson Department of Assistant General Counsel Health and Department of Health and Rehabilitative Rehabilitative Services Services: 1323 Winewood Boulevard

Building One, Room 407 Tallahassee Florida 32301

Petitioner offered the oral testimony of Larry Jordan Jaime Caldwell, Terry Davis and Richard Law. Petitioner had seven exhibits admitted in evidence.

Respondent offered the oral testimony of Larry Jordan Jaime Caldwell and Terry Davis. Respondent had seven exhibits admitted in evidence.

Proposals of the parties have been considered and suggested facts ruled upon in the appendix hereto.

FINDINGS OF FACT

1. The Petitioner herein petitioned the Division of Administrative Hearings seeking a determination of the validity of proposed Rule 100-86.008, Florida Administrative Code, in accordance with Section 120.54(4), Florida Statutes.

2. Petitioner has demonstrated its standing to participate in the formal hearing to consider the validity of Rule 100- 86.008, Florida Administrative Code. The parties stipulated that to determine standing, no proof of the facts with regard to standing as alleged within the original Petition would be required and that these might be taken as admitted. Petitioner is a non-profit corporation organized and maintained for the benefit of the 220 governmental- investor-owned- and nonprofit hospitals which comprise its membership and all of Petitioner's 220 members are hospitals subject to the verification requirements of Section 395.031, Florida Statutes and the Proposed Rule. Respondent Department of Health and Rehabilitative Services' (DHRS') contention that Petitioner cannot show injury in fact since only 31 hospitals are currently verified and only 30 more are expected to seek verification within the next biennium is without merit. In the first placed that latter 30 applicants figure is determined to be arbitrary and capricious elsewhere within this order. DHRS also suggests that even if all of the 31 already verified trauma centers were members of Petitioners which they are not, this figure cannot constitute a "substantial number" as discussed in Florida Home Builders Association v. Department of Labor and Employment Security, 412 So.2d 351 (Fla. 1982) of a membership as high as 220. This suggestion begs the question. DHRS thereby illogically assumes that in every case, the more members a Petitioner represents, the less standing to represent them Petitioner has. DHRS' last contention that Petitioner cannot show standing in fact because the trauma center verification program is voluntary in nature is also without merit. To accept DHRS' position that there is no standing since the program is voluntary in nature and no hospital is forced or required to apply for verification would, carried to its reasonable end, mean that no hospital would ever have standing to challenge the Proposed Rule even though the Proposed Rule clearly affects those hospital members of Petitioner who will soon face biennial recertification or reclassification plus other members who may hereafter desire initial certification. Petitioner has standing to bring this challenge. The Economic Impact Statement supports this finding as does the prior participation of Petitioner in the rule-making process.

   
   

3. The challenge to the subject rule as offered by Petitioner was timely made. The parties by stipulation have waived the time limitations set forth in Section 120.54(4), Florida Statutes.

   
   

4. The thrust of Petitioner's allegations are that Proposed Rule 100-

   86.008 is arbitrary, capricious, without rational basis in fact and constitutes an invalid exercise of delegated legislative authority by imposing higher verification fees upon hospitals which desire verification of their emergency rooms as trauma centers than are reasonably needed or authorized under Chapter 395, Florida Statutes. Furthers Petitioner claims that the Economic Impact Statement for this proposed rule is inadequate and unfair and has "impaired the correctness of the rule adoption proceedings," primarily upon the allegation that there is no relationship of fee by proposed rule to the statutory authorization and purpose.

   
   

5. Petitioner challenges an amendment to Rule 10D-86.008 which seeks to increase the cost of the verification fee which must be paid by each hospital emergency room applicant for every initial verification, for any reclassification and for continued verification every two years as a "trauma center.

   
   

6. Using strike-throughs for the deletions and underlining for the additions, the proposed rule seeks to amend current Rule 10D-86.08 as follows:

   10D-86.008 Fees.

   
   

   1. The Department shall charge fees to each applicant hospital. The fee shall be submitted with each application. All such fees will be used solely to defray the cost of the verification program. The following fee schedule shall apply to initials reclassification and continued verification applications:

      
      

      (a) Level I ... 3,000.00

      $11,000.00

      
      

      (b) Level II ... 2,000.00

      $11,000.00

      
      

      (c) Level III ... 1,500.00

      $11,000.00

      
      

7. Statutory authorization for the existing and for the proposed rule is found in Section 395.031, Florida Statutes, which provides in pertinent part, as follows:

   
   

   * * *

   (3) Any hospital licensed in the state that desires to be verified as a trauma center shall submit to the department a request for verification as a trauma center.

   * * *

   (5) Biennially thereafter- the department shall review the trauma center to verify its compliance with the standards set forth by subsection (6). The department shall notify the hospital of such verification. If the department finds that the trauma center does not comply with those standards the department shall within 30 days, notify the hospital of its findings. Within 30 days after receiving such findings the hospital may request a hearing in which to contest the findings of the department. The hearing shall be held in accordance with chapter 120. If a hospital does not desire to contest the findings of the department but desires to continue its verification as a trauma center, the hospital shall be given 90 days in which to comply with the standards set forth in subsection (6). After verification of compliance with those standards- the department shall continue the verification of the hospital as a trauma center or verify a reclassification of the trauma center pursuant to the standards set forth in subsection (6).

   * * *

   (7) The cost of verification shall be borne

   by the applicant, based on a fee schedule set by the department not to exceed the cost of verification. (Emphasis supplied.)

8. The trauma center verification program (see Chapter 100- 86, Florida Administrative Code) establishes procedures and fees to verify that facilities and services-of licensed hospitals that apply for trauma center verification meet current standards of the American College of Surgeons. DHRS is the only state agency with any responsibility for verification of trauma centers. A hospital may offer the same services as are offered by a bona fide trauma center without being verified but it may not hold itself out as a trauma center without being verified by DHRS. Upon this limited basis, the program is voluntary as to the hospitals applying and is administered by DHRS' Emergency Medical Services Section.

   
   

9. The Emergency Medical Services Section (EMS) is divided into two subsections. One is "Regulatory Services" in which all licensing functions other than trauma center verification are placed and includes such diverse matters as licensing of ambulance services, non-emergency transportation services, emergency medical technicians and paramedics. The licensing of trauma centers is logistically placed within "Program Development," which subsection administers certain grants and which has as its principal function general planning activities pursuant to EMS' statutory responsibility to produce a state plan for emergency medical services.

   
   

10. DHRS characterizes the categories of trauma center as follows: a Level I Trauma Center" is the top level and requires a surgeon in the emergency room 24 hours per day as well as a demonstrated commitment to research and training in the area. A "Level II Trauma Center" is quite similar to the Level I center except that it does not have the mandatory commitment to trauma research and training. A "Level III Trauma Center" is largely found in rural areas where the population base is insufficient to support a Level I or Level II trauma center, but represents a maximum commitment to trauma center service based on available resources. Although only a single application form is utilized, it may be logically inferred that the category or level" of verification sought by the applicant to be verified will affect the size, scope, detail, and supporting documentation of its initial application and likewise will affect the scope of the agency procedure leading either to verification or denial of the initial application of each applicants and to any reclassification or continued verification of a previously verified trauma center. This inference was apparently codified in the existing rules by charging application fees graduated by level of verification requested. It is recognized by DHRS that the three respective levels have different configurations of services, equipment, and general effort towards the treatment of trauma and that a Level I application is "significant" in comparison to the other levels. Nonetheless, the proposed rule amendment seeks to establish only the same fee amount or "cost of verifying" the application for all applicants regardless of level of verification requested.

    
    

11. When the original trauma center verification program fees were promulgated (Rule 100-86.08), on-site visits (live inspections by an accreditation or verification team) to applicants' trauma centers and program overhead were not calculated into the fees as established because on-site visits were not originally contemplated by the verification program as a whole.

    
    

12. When the original trauma center verification program fees were promulgated, it was anticipated that 65 or 70 trauma centers would apply for verification over the first biennium. This estimate was based on a survey of all licensed hospitals. However, in the first year, only 15 trauma centers applied for verification.

13. However, the trauma center verification process, as planned into the next biennium, (1985-1987) now contemplates application and document reviews plus on-site visits as direct costs and overall program overhead as indirect costs.

    
    

14. The new proposed fee schedule within Proposed Rule 10D- 86.008 was derived by using anticipated expenses for the 1935- 1987 biennium as a base. DHRS anticipated the total amount needed for the trauma center verification program and program compliance as $329,904. This figure lumps together salaries, expenses and travel for employees of DHRS' Emergency Medical Services Section within the trauma center verification program, physician review of applications, trauma center on-site visits, legal expenses for denial hearings pursuant to Section 120.57(1) and (2), Florida statutes, and expenses of contracting with a medical records consultant and medical director. DHRS candidly admits that these expenses have been calculated into the new proposed fee schedule and maintains that these expenses should be calculated into any fee schedule established. Petitioner's view is that it is only the costs attributable to the actual processing of individual applications which may properly be included as a "cost of verification ... borne by the applicant" pursuant to Section 395.031(7), Florida statutes, and asserts that inclusion of any other costs is arbitrary, capricious, excessive, and not statutorily justified.

    
    

15. By its proposed findings of fact as well as by the direct evidence of all of its witnesses, DHRS acknowledges that it has considered the cost of compliance 1/ in devising the non-graduated fee schedule within the Proposed Rule.

    
    

16. In calculating the proposed fee schedule, DHRS divided the total amount needed for program operation and compliance (the $329,904 previously referenced) by the estimated number of trauma centers (the 15 per year based on the first year's experience multiplied by 2 for the two-year biennium horizon) to yield a verification fee per trauma center of $10,996.80. The agency then rounded this amount to $11,000 per anticipated applicant for the 1985-1987 biennium, and thus the non-graduated fee in the Proposed Rule was devised. This method does not bear any logical or rational relationship to the size, scope, detail and supporting documentation of the applications as they vary among Levels I, II, and III. Nor can it be said that this method takes into consideration any of the logical or rational differences inherent in the paperwork processing and physician review as it differs by level applied for, or in the type of projected on-site compliance review of the physical plants of applicants for the differing levels. Moreover, although it may be appropriate to begin with the assumption that 15 is a representative idea of the number of initial applications that may require processing in each year, there is simply no documentation or rationale provided by the agency to determine whether the number of initial applications will diminish or increase as the finite number of potentially verifiable hospitals is approached. Therefore, this divisor figure of 15 x 2 borders on mere estimation or speculation and is not statutorily justified. It is not saved by an intention without guarantee of a biennial review of the rule. Unless it somehow embraces a rational projected calculation of reclassifications from one level to another and biennial reviews for compliance with the verification standards, the 15 x 2 figure is further skewed. Since there is testimony that EMS can only hope to do 6 annual on-site reviews at random (presumably encompassing all three categories) , the (15 x 2 30) divisor remains askew, arbitrary, capricious and unjustified.

17. It is interesting that DHRS acknowledges, to a point at least that the 11,0O0 fee schedule figure is inaccurate. Specifically, despite DHRS' rounding up to the nearest thousand dollar amount so as to reach $11,000, it is DHRS' position that its procedure for establishing the non-graduated fee schedule actually underestimates or understates the amount required to fund the verification program. Neither rounding "up" versus rounding "down" nor rounding to the nearest even $1,000 as opposed to the nearest dollar amount was specifically raised as an issue by the parties. However, since it is partly through DHRS' contention that it has actually understated the amount required to fund the verification program that DHRS attempts to parry Petitioner's assertion that DHRS is seeking to cause trauma center verification applicants to bear the cost of the entire trauma center program instead of merely requiring applicants to bear the cost of the single application verification function of that program, some assessment of this "rounding" methodology is in order. DHRS has not demonstrated any specific reason to "round" in this manner, nor how "rounding" relates, if at ally to understatement of fees needed or how it relates, if at ally to precise calculation of the funding amounts actually required. It is easy to appreciate that $11,000 looks better in a printed, codified rule and is easier to administer than an odd number but even those shallow rationales have not been advanced by those rule drafters who testified.

    
    

18. Even if one could accept the reasoning that because of the high amounts of fixed costs for the improved verification program DHRS is somehow justified in spreading the cost of the entire verification program equally among all applicants instead of graduating the fees by level, there remains the unrefuted testimony of Mr. Lawn an accepted expert in the area of accounting matters in state government, that the Statement of Justification does not identify which costs are fixed and which costs are variable and does not determine the relevant range of activity which affects allocation of fees to the number of applicants. Thus, the conclusion must still be reached that the

    $11,000 fee is unreasonable, without rational basis in fact, and without statutory justification.

    
    

19. As calculated by Larry Jordan, EMS Administrator, and as reflected in the Statement of Justification prepared by Terry Davis, Program Analyst within the EMS Section, Programs Subsection, and supervisor of the trauma center verification Program, part of the $329,904 figure reflects salaries, expenses, and travel. That portion for salaries is represented as $187,995. Supposedly, the relevant portion of six individual employees' actual salaries was a component. On the other hand, full time equivalents (FTEs) were devised according to the percentage of time Larry Jordan would or could permit these EMS Section employees to devote to the trauma center verification program. FTEs derived in the context of rational experience or mathematical certainty may constitute a portion of a valid formula for fixing a fee schedule but that cannot be said to have occurred with regard to this Proposed Rule. The methodology employed for calculating these particular FTEs lumps a lot of "guesstimating" and conjecture with very little viable quantification of time allotments. Jordan determined, on the basis of what he described as "an educated guess" after review of a staff roster with Terry Davis that although

    7.8 FTEs were required for program compliance only 2.5 FTEs could be allotted to the trauma center verification program. It is largely upon the basis of all of DHRS' witnesses' evidence in connection with this FTE computation that the determination must be reached that when agency personnel refer to the calculation of "costs of compliance" they do not mean merely biennial review pursuant to Section 395.031(5) to ensure that subsection (6) statutory standards continue to be met by a hospital once it has been verified as a trauma center. Inclusion of those types of compliance cost figures in the verification program

    is clearly authorized by the statute. No, rather, the DHRS drafters use the word "compliance" with the implied meaning of encompassing all of the operations of the EMS Section relative in any respect to trauma center matters. In line with its position that the proposed fee schedule is understated, DHRS suggested at hearing that contrary to the Statement of Justification, actual experience has shown that a slightly higher amount of employee time is devoted to the trauma center verification program than is reflected by the 2.5 FTE figure: 2.5 FTEs (allowed) as opposed to 2.73 FTEs (actual) which Mr. Caldwell calculated at hearing would result in a $12,556.79 fee per application for the 1986-1988 biennium. This is not the biennium originally calculated for the rule or projected in its published Statement of Justification. As serious as this is; confession of an originally inaccurate FTE computation figure and inaccurate Statement of Justification is problematic in light of the total lack of logic and rationality with regard to the method of arriving at either the original 2.5 or the recalculated 2.73 FTE figure. The time sampling study does not render

    2.73 FTEs rational. 2/

    
    

20. Mr. Jordan, who could not even describe the process of application approval or rejection is credited in the original FTE calculation for the Statement of Justification with 20 percent of his time and salary component devoted to the verification program. Jaime Caldwell Program Development Supervisor, also could not describe the process of application approval or rejection and his testimony reflects that rather than the 40 percent credited in the original FTE calculation for his time and salary component for direct supervisory responsibility over trauma center verification matters, he, Caldwell was equally at ease assessing his own time and salary component as either 35 percent or between 3 and 5 percent. The change and range assigned by Mr. Caldwell is as unsupported as the initial 40 percent assessment made by Jordan and Davis together in April 1985. (Davis actually denied having significant input to the initial assessment). This discrepancy and range are not explainable reconcilable, or justified on the basis of Mr. Caldwell's vague testimony concerning a recent time sampling based on the overall trauma center program which embraces far more than just the trauma center verification process and procedures. 3/

    
    

21. Of those who testified, only Terry Davis had a working knowledge of the existing process by which a trauma center verification application is initially approved or denied. He personally handles all applications from the time one is received until it is approved or denied. Using the maximum amount of time estimated by Mr. Davis, it has taken roughly 12 hours of his time spread over the 60 days provided by statute to process each of the applications received. Davis also denied that Jordan's estimate of his (Davis') time at 100 percent for the verification program was accurate. Davis confirms that the involvement of both Jordan and Caldwell has been infrequent. No witness could delineate with any certainty what, if any, involvement a secretary, a word processor, and Mr. Jordan's personal secretary did in relation to actually processing trauma center verification applications. Although Mr. Davis volunteered someone must do his typing during the application process, this record exhibits no justification for assigning percentages of 60 percent, 20 percent, and 10 percent respectively of each of these clerical employees' time to the verification program for purposes of arriving at an FTE component. These figures appear to have sprung directly from "up front" line item budgeting based on position assignments which by actual testimony are directly contrary to experience that these positions do not participate directly or to any meaningful

    degree in the verification process. Based on this evidence, and also upon the tacit admission of both Caldwell and Davis that the FTEs reflect EMS employees' percentage of time in the trauma center program as a whole, the methodology employed to obtain the FTE figures must be deemed to be arbitrary and capricious.

    
    

22. As calculated by Larry Jordan and as reflected in the Statement of Justification prepared by Terry Davis, expenses and travel were also calculated using FTEs and the percentage of trauma center verification program time for each employee was multiplied by the relevant object category in the Legislative Budget Request: Standards for New Positions 1985-1987. This figure is skewed by the 2.5 FTE figure for all of the reasons already discussed and is likewise arbitrary and capricious. It is also arguable, but not conclusively demonstrated, that this figure is skewed arbitrary, and capricious in anticipated travel and expenses by duplication of some costs and expenses as regards the physician and medical records consultant to be assigned to on-site reviews. See infra.

    
    

23. In the Statement of Justification, with respect to "Physician Review of Applications," a figure of eight applications per year was selected based on anticipation that since there are 8 trauma centers in Jacksonville, Florida and the present trauma center verification program's Medical Director, Dr. Raymond Alexander resides in Jacksonville and is employed at a Level I trauma center there potential conflicts of interest exist if any of these entities become applicants for any of the three levels of verification and that if any did, the agency would have to contract with a different physician for review of these eight applications at $200 per application reviewed. It was also anticipated that due to fluctuations in workload and the desire of Dr. Alexander that some Level I applications elsewhere in the state receive a backup application review by another physician, these situations might also require contracting with physicians other than Dr. Alexander. Although DHRS' motives are commendable at first glance it strains credibility that out of 15 per year (total 30) eight (total 16) will come from the finite "Jacksonville 8" number or arrive at a peak workload period. There is no evidence of record what criteria besides Dr. Alexander's request will be used to decide which Level I applicants will get dual reviews and there is a suggestion that there is going to be duplication of effort on these applications for the purpose of avoiding even the appearance of conflict. There is no evidence of record to show how reclassification or continued verification reviews or on-site reviews, if any, work into this figure either. Nonetheless, the parties appear to accept this figure of 16 spread over the biennium.

    
    

24. If the figure of 16 is accepted, a remainder of 14 applications (based on DHRS' questionably anticipated 30 applications for the biennium horizon) remain for Dr. Alexander's review. DHRS assigned a 50 percent time allotment (based on Dr. Alexander's annual $42,600 contract) to its Statement of Justification. Incongruously, Dr. Alexander's contract itemizes 15 percent of his time for the combined duties of listing other physicians willing to review applications and his own time reviewing these applications. Petitioner desires the inference to be drawn that either Dr. Alexander is being paid slightly more than $3,000 per application review ($42,600 divided by 14) as compared to $200 per review by other physicians or that the 15 percent figure should be used instead of the 50 percent time/salary component. Neither inference is fully supported by the record as a whole nor by mathematics. However, even assigning the deference due to the discretion afforded an agency in the exercise of its rulemaking authority, that quality of deference will not withstand Larry Jordan's characterization of this 50 percent figure as coming from the

    attachment at the "front end" of an arbitrary percentage. Although submission of subsequent reports by Dr. Alexander supposedly justify that 50 percent figure as being paid from the trauma center verification activities budget, these reports are not before the undersigned, and Mr. Jordan admits that no analysis was done to establish this 50 percent figure in relation to time/salary solely related to verification. Therefore, the use of this figure of 50 percent is at least arbitrary and capricious in that there is nothing to substantiate what it means with regard to actual medical director duties concerning verification.

    
    

25. In the Statement of Justification, with respect to "Trauma Center Site Visits", Larry Jordan determined that an on- site visit for each application is necessary in order to comply with the statutory mandate of Section 395.031(5) that DHRS ensure that the statutory standards set forth in Section 395.031(6) are maintained by trauma centers subsequent to their initial verification. This is permissible discretion within the agency administering the statute.

    Upgrading its methods of meeting its statutory mandate is a laudable goal of the executive branch and ought not to be violated except where it can be clearly shown that the method exceeds the statutory mandate. That has not been shown here with regard to establishing on-site reviews for the future. Jordan decided to phase in on-site visits commencing with 6 per year. Nothing in this decision to start with 6 a year first has been demonstrated to be arbitrary, capricious, or outside the statutory mandate. However, the dollar amount is another matter. The dollar amount for this upgraded procedure was taken from information from the Joint Committee on Accreditation of Hospitals who conduct similar hospital site visits for accreditation purposes of entire hospitals. Relative to the on- site inspection fee cost calculation contained in the Statement of Justification which is set forth as $54,736 (including a medical records consultant figure discussed infra.) there is no clear indication of whether this figure is based on a prognosis of entire hospital review as with the model accreditation team or upon review of just the emergency room. Trauma is a life-threatening injury a/k/a surgical disease. Since availability of surgeons, surgery rooms, and anesthesiologists as opposed to emergency room physicians is crucial to trauma center qualification it is conveivable that more than just emergency rooms will be inspected but there is insufficient indication even by job description of exactly who will be assigned to the team, what the on-site reviews will cover, what the team duties will entail or how the balance of the $54,736 figure relates to these items. Past agency experience with a single on-site review using existing agency personnel resulted in total expenses of $400.00. The agency also regularly meets the Section 395.006(3)(a) directive to inspect whole hospitals at a cost of not more than $12.00 per bed. By contrast with this information- EMS' component of cost for on-site review of trauma centers is arbitrary, capricious, excessive, and not statutorily justified.

    
    

26. In the Statement of Justifications with respect to "Legal Expenses for Denial Hearings," Larry Jordan estimated that $6,000 was a minimal amount that would-be needed for denial hearings. Although testimony is clear that there had never been a denial hearing or even a denial of a trauma center application, provision for such hearings is clearly set out in Section 395.031(4) and (5), and it is naive in the extreme to assume that in meeting its statutory mandate, the agency will never deny any initial applications reclassification- or continued verification application or that of those denied none will ever seek a hearing in accord with Chapter 120, Florida Statutes. There is, however, no rationale within the record for why the figure of $6,000 was arbitrarily selected.

    
    

27. In the Statement of Justification, with respect to "Medical Records Consultant Contract," it was determined that such a position is necessary to the

    trauma center verification program and would be paid approximately $16,000 per year. The asserted justification for a medical records consultant is to support the proposed six on-site visits per year. This purpose is plausible and reasonable within the discretion normally afforded agencies and supportable by the laudable goal to upgrade the method of meeting this agency's statutory mandate already discussed, but DHRS has neither legislative nor budgetary authorization for the medical records consultant position and this renders speculative its inclusion at this time in the calculations for the fee schedule rule. Even recognizing that sometimes an indication that the position can be supported by outside fees is a necessary prerequisite to getting an agency position authorized, inclusion of this speculative cost in this fee schedule is not justified by the statute which requires that the verification program fees to applicants not exceed its cost.

    
    

28. Petitioner has adequately demonstrated that an undesignated amount of time of various employees utilized in calculating the FTE function was devoted to legislation, rules drafting, grant disbursal, and meetings of the EMS Advisory Council not directly related to the trauma center verification program and that these elements included within the FTE calculation have skewed the fee need calculations and rendered the fee excessive and not statutorily justified.

    
    

29. The record does not support DHRS' contention that the fee increase is necessary to cover its operation deficit or that the cash deficit discussed in the Statement of Justification applies to the verification program alone.

    
    

30. It is Petitioner's view that DHRS, in fact performing two distinct functions concerning trauma centers, one of which may be designated "the trauma center program" encompassing every activity of DHRS' Emergency Medical Services Section relative to trauma center matters (including preparation of a statewide medical services program, drafting, analysis, and lobbying of legislation, public education, service in connection with the mandate of the EMS Advisory Council, preparation, negotiation, and litigation concerning promulgation of this and other rules, and non-specific administrative time) and the other function being the "trauma center verification program" pursuant to which applications filed with the EMS Section are received and approved or denied. Petitioner further contends that it is only costs attributable to the latter function, the cost of processing individual applications of hospitals for trauma center verification which may properly be included as a "cost of verification borne by the applicant" pursuant to Section 395.031(7), Florida Statutes. Petitioner seems to suggest that only the 12 hours of Mr. Davis' time multiplied by the number of projected applications should be calculated into the proposed fee. Petitioner's view is too narrow in regard to the full mandate of the statute. The trauma center verification program cannot operate in a vacuum and except as set out in previous findings of fact Petitioner has failed to demonstrate that any elements used in the agency's calculations are not integral parts of the verification program. However, for all the reasons set forth in the preceding findings of fact it is clear that an excessive, arbitrary and capricous calculation of components have rendered the rule itself arbitrary and capricious and its fee schedule excessive to the point of being confiscatory.

    As such, the fee schedule embodied in the Proposed Rule exceeds the statutory mandate of Sub-Section (7).

    
    

31. The foregoing findings are not altered by Respondent's negotiating during the rule making process a $9,000 reduction from an originally anticipated

    $20,0OO ungraduated fee by the deletion of two additional plans to upgrade the trauma center verification program.

    CONCLUSIONS OF LAW

    
    

32. The Division of Administrative Hearings has jurisdiction of the parties and the subject matter of this cause.

    
    

33. Petitioner offered timely challenge to Rule 100-86.008, Florida Administrative Code.

    
    

34. Petitioner has standing to participate in this proceeding which examines the validity of proposed Rule 100- 86.008, Florida Administrative Coded under authority of Section 120.54(4), Florida Statutes.

    
    

35. The challenges which have been lodged against the proposed rule are couched in terms of being arbitrary, capricious, excessive, and not authorized by the supporting statute.

    
    

36. In considering these challenges to proposed Rule 100- 86.008, Florida Administrative Code the decision of Agrico Chemical Company v. Department of Environmental Regulations 365 So.2d 759 (Fla. 1st DCA 1979) cert. den. 376 So.2d

    74 (Fla. 1979) challengers of the rule who must bear the burden of proof by a preponderance of the evidence and identifies Section 120.54(4), Florida Statutes as contemplating the ability to comment on the rule's acceptability in examining whether the rule is an invalid exercise of delegated legislative authority and that the rule may be examined (to determine if the rule is arbitrary and capricious. See also Humana, Inc. v. Department of Health and Rehabilitative Services, 469 So.2d 889 (Fla. 1st DCA 1985), Department of Natural Resources v. Sailfish Club of Florida Inc. 473 So.2d 261, (Fla. 1st DCA 1985). Capricious action is one that does not comport with adequate thought, or reasoning, or rationality. One might presume to elaborate that what is illogical is likewise capricious. Arbitrariness in the decision making process occurs when the outcome of the rule enactment is not borne out by the facts or logic.

    
    

37. The validity of rules normally will be sustained as long as they are reasonably related to the purpose of the enabling legislation and are not arbitrary or capricious. Florida Beverage Corporation v. Wynne, 306 So.2d 200 (Fla. 1st DCA 1975), Agrico Chemical Company v. Department of Environmental Regulations supra., Jax's Liquors, Inc. v. Division of Alcoholic Beverages and Tobacco, et al. 388 So.2d. 1306 (Fla. 1st DCA 1980, Grove Isles Ltd. v. State, Department of Environmental Regulation, 454 So.2d 571 (Fla. 1st DCA 1984). As stated in Department of Professional Regulation Board of Medical Examiners v. Durrani 455 So.2d 515 (Fla. 1st DCA 1984):

    
    

    The well recognized general rule is that agencies are to be accorded wide discretion in the exercise of their lawful rulemaking authority- clearly conferred or fairly implied and consistent with the agencies' general statutory duties. Florida Commission on Human Relations v. Human Development Center, 413 So.2d 1251 (Fla. 1st DCA 1982)

    An agency's construction of the statute it administers is entitled to great weight and is not to be overturned unless clearly erroneous. Pan American World Airways, Inc.

    v. Florida Public Service Commission, 427 So.2d 716 (Fla. 1983), Barker v. Board of

    v. Florida Public Service Commission, 427

    So.2d 716 (Fla. 1983), Barker v. Board of Medical Examiners, 428 So.2d 720 (Fla. 1st DCA 1983). Where, as here, the agency's interpretation of a statute has been promulgated in rulemaking proceedings, the validity of such rule must be upheld if it is reasonably related to the purposes of the legislation interpreted and it is not arbitrary and capricious. Agrico Chemical Co. v. State, Department of Environmental Regulation, 365 So.2d 759 (Fla. 1st DCA 1979), Florida Beverage Corp. v. Wynne, 306 So.2d 200 (Fla. 1st DCA 1975). Moreover, the agency's interpretation of a statute need not be the sole possible interpretation or even the most desirable one, it need only be within the range of possible interpretations. Department of Health and Rehabilitative Services v. Wright, 439 So.2d 937 (Fla. 1st DCA 1983)(Ervin, C.J., dissenting); Department of Administration v. Nelson, 424 So.2d 852 (Fla. 1st DCA 1982); Department of Health and Rehabilitative Services v. Framat Realty, Inc., 407 So.2d 238 (Fla. 1st DCA 1981).

    
    

    See also General Telephone Co. of Florida v. Florida Public Service Commission, 446 So.2d 1063, 1067 (Fla. 1987).

    
    

38. Respondent promulgated Rule 100-86.008, Florida Administrative Code under the following statutory authority of which judicial notice has been taken.

    
    

39. 395.031 Verification of trauma center, procedure; review.

    
    

    1. For the purposes of this section, the term "department" means the Department of Health and Rehabilitative Services.

    2. It is unlawful for any hospital or other facility to hold itself out as a trauma center except as verified pursuant to this section.

    3. Any hospital licensed in the state that desires to be verified as a trauma center shall submit to the department a request for verification as a trauma center.

    4. The request shall be reviewed by the department to verify whether the trauma center complies with the standards specified in subsection (6). Within 60 days after receiving a request from a hospital for verification as a trauma center, the department shall verify the compliance of the hospital with those standards. The department shall notify the hospital of such verification. If the department finds that the trauma center does not comply with those standards, the department shall, within 30 days, notify the hospital of its findings and furnish

       findings, the hospital may request a hearing in which to contest the findings of the department. The hearing shall be held in accordance with chapter 120. If a hospital does not desire to contest the findings of the department but continues to desire to be verified as a trauma center, the hospital shall be given 90 days in which to comply with the standards set forth in subsection (6). After verification of compliance with those standards, the department shall verify the hospital as a trauma center. If the department fails to act on a request for verification within 60 days, the trauma center shall be considered verified.

    5. Biennially thereafter, the department shall review the trauma center to verify its compliance with the standards set forth by subsection (6). The department shall notify the hospital of such verification. If the department finds that the trauma center does not comply with those standards, the department shall, within 30 days, notify the hospital of its findings. Within 30 days after receiving such findings, the hospital may request a hearing in which to contest the findings of the department. The hearing shall be held in accordance with chapter 120. If a hospital does not desire to contest the findings of the department but desires to continue its verification as a trauma center, the hospital shall be given 90 days in which to comply with the standards set forth in subsection (6). After verification of compliance with those standards- the department shall continue the verification of the hospital as a trauma center or verify a reclassification of the trauma center pursuant to the standards set forth in subsection (6).

    6. The standards for verification of trauma centers are those contained in the current standards of the American College of Surgeons entitled "Hospital and Prehospital Resources' for Optimal Care of the Injured Patient," and any appendices thereto published, as interpreted by rules of the department.

    7. The cost of verification shall be borne by the applicant, based on a fee schedule set by the department not to exceed the cost of verification. (Emphasis supplied).

       
       

40. For the reasons more fully discussed in the above findings of fact to and after assigning all possible deference to the agency's interpretation of the statute, the Proposed Rule is arbitrary and capricious in that the calculations upon which it is based are arbitrary and capricious. Furthers by establishment of an $11,000 ungraduated fee based upon these calculations, the Proposed Rule exceeds its statutory authority in that Section 395.031(7) specifically requires that the fee schedule set by the department shall not exceed the cost of verification. It is therefore,

ORDERED:

Proposed Rule 100-86.000, Florida Administrative Code is an invalid exercise of delegated legislative authority.

DONE and ORDERED this 18th day of July, 1986 in Tallahassee, Florida.

ELLA JANE P. DAVIS

Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 18th day of July, 1986.

ENDNOTES

1/ Section 395.031(6), Florida Statutes, establishes the standards for the verification of trauma centers as those of the American College of Surgeons entitled "Hospital and Prehospital Resources for Optimal Care of the Patient" and any appendices thereto.

2/ See footnote 4 infra.

3/ The Proposed Rule increasing trauma center verification fees was published in the Florida Administrative Weekly's March 7, 1986 volume. However, its Statement of Justification was prepared earlier in April 1985. At hearings DHRS sought to support the proposed rule with Exhibits 5-7 and Jaime Caldwell's testimony relative to a time sampling survey commenced in October 1985. (Only

5-6 were admitted). The time sampling information data was not incorporated and referenced in the Statement of Justification although it was apparently available but merely not codified until the Sunday night before the formal hearing in this cause April 28, 1986, a Monday. The time sampling effort (Exhibit 5) was used by DHRS to support its concept of "understatement" of the FTE figure and DHRS considers the data produced to be "historical facts" based on a different biennium, (1986-1988). Obviously, the data was not used in the formulation of the rule or the preparation of its Statement of Justification or its Economic Impact Statement. DHRS' entire procedure is bewildering: at most it invalidates the Economic Impact Statement, at least, it smacks of gamesmanship. It certainly does not encourage one to believe this rule will be revised every two years. Petitioner argues that as evidence the time sampling study is totally irrelevant and not worthy of consideration. The undersigned has considered it as relevant to Respondent's contention of "understatement" but finds it to be non-probative thereof due to its numerous flaws related by Mr.

Caldwell, including: that it measures employee time not devoted to verification, its measurement only relates to the first week of every month without that week being established as representative, and it is subject to upward manipulation by employees wanting to "look good". As regards certain of the employees "timed," it still could not be established that these particular employees did anything direct or on a regular basis with respect to trauma

center verification. Caldwell also could not readily distinguish on the back-up documents what information had gone into columns for "trauma" and "trauma center program" and into a column for "unallocated." Caldwell also acknowledged that every employee's record-keeping on this allocation of time could have differed due to individual interpretations.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 86-1014RP

The following specific rulings as contemplated by Section 120.59(2) F.S. are made upon the parties post-hearing proposed findings of fact.

Petitioner's Proposed Findings

These were not submitted in numbered sentences or paragraphs and numbers have therefore been assigned by the hearing officer.

Paragraph 1 p.2 Covered in Findings of fact (FOF) 5, 6. Paragraph 2 p.3 Covered in FOF 8.

Paragraph 3 pp. 3-4 Most of this paragraph is argumentation not a proposed finding of fact and accordingly is not necessary to resolution of the issues herein and subordinate. Otherwise, what is not accepted in FOF 11, 13, 18 and

20 is rejected for the reasons given therein and as contrary to the evidence and to the findings of fact made.

Paragraph 4 p.4 What is not accepted in FOF 11, 13, 18 and 20 is rejected for the reasons given therein and as contrary to the evidence and the findings of fact made.

Paragraph 4(a) p.4 Except as covered in FOF 11, 13, 18, and 20 is subordinate and unnecessary to the facts as found.

Paragraph 4(b) p.4 Except as covered in FOF 13 is subordinate and unnecessary to the facts as found. See also FOF 11, 18, and 20.

Paragraph 4(c) pp5-6 Except as covered in FOF 13 is subordinate and unnecessary to the facts as found.

Paragraph 4(d) p.6 Except as covered in FOF 13 is subordinate and unnecessary to the facts as found.

Paragraph 4(e) p.6 Covered in FOF 11, 13, 18 and 20.

Paragraph 4(f) p.6 Covered in FOF 11, 13, 18, and 20.

Paragraph 4(g) p.6 Covered in FOF 11, 13, 18 and 20.

Paragraph 5 pp6-7 This is not a proposed finding of fact but argumentation or a proposed conclusion of law requiring no ruling. See all FOF.

Paragraph 6 p.7 This is not a proposed finding of fact but argumentation or a proposed conclusion of law requiring no ruling. See all FOF.

Paragraph 7 p.7 Covered in part in all FOF referencing the Statement of Justification especially 11, 13, 18 and 20 but otherwise rejected as mere argumentation.

Paragraph 8 p.7-8 Except as covered in FOF 13, rejected as subordinate and unnecessary to the facts as found.

Paragraph 9 p.8 Except as covered in FOF 13, rejected as subordinate and unnecessary to the facts as found.

Paragraph 10 pp.8-9 Except as covered in FOF 13 and 18 rejected as subordinate and unnecessary to the facts as found.

Paragraph 11 p. 9 Except as covered in FOF 13 and 18 rejected as subordinate and unnecessary to the facts as found.

Paragraph 12 pp.9-10 Except as covered in FOF 13 and 18 rejected as cumulative.

Paragraph 13 p.10 Except as covered in FOF 13 and 18 sentence 1 is rejected as cumulative. Sentence 2 is rejected as contrary to the evidence. Sentence 3 is rejected as cumulative.

Paragraph 14 pp.1O-11 Covered in FOF 14. Paragraph 15 p.11 Covered in FOF 14.

Paragraph 16 pp.11-12 Covered in FOF 16. Paragraph 1 p. 12 Covered in FOF 15, 17.

Paragraph 18 p. 12 Covered in FOF 17.

Paragraph 19 pp 12-13 Except as covered in FOF 15 and 17, rejected as contrary to the evidence.

Paragraph 20 pp.13-14 Sentences 1 and 2 are covered in FOF 19. Except as covered in FOF 13, 14, 15, 18, and 21, remainder is rejected as cumulative in part and in part as unnecessary to a resolution of the issues and as subordinate to facts as found.

Paragraph 21 p.14-15 Except as covered in FOF 11, 13, 18 and 20 rejected as contrary to the evidence. Except as covered in FOF 11, 13, 18 and 20 the remainder is rejected in part as cumulative, subordinated and unnecessary and otherwise as merely subordinate and unnecessary where not cumulative.

Paragraph 22 pp.15-16 Except as covered in FOF 7 and 18 is rejected as cumulative, subordinate, unnecessary and mere argumentation.

Paragraph 23 p.16 Covered in FOF 13.

Paragraph 24 pp. 16-17 Except as covered in FOF 13, rejected as mere argumentation.

Paragraph 25 p.17 Except as covered in FOF 13, rejected as mere argumentation.

Respondent's Proposed Findings

1. Covered in FOF 3.

2. Accepted but unnecessary to resolution of the dispute and subordinate to the facts as found. See FOF 2.

3. Accepted but covered in the introductory material.

4. Rejected as contrary to the evidence and the facts as found Covered in all FOF but particularly FOF 2, 12, 13.

5. Covered in FOF 4, 7.

6. Covered in FOF 9, 11.

7. Covered in FOF 10.

8. Covered in FOF 21.

9. Covered in FOF 11. 1O. Covered in FOF 12.

1. Accepted in part and rejected in part as set forth in FOF 13.

2. Rejected as contrary to the evidence and facts found. Covered in FOF 13, 18.

3. Accepted in part and rejected in part as contrary to the evidence as covered in FOF 13.

4. Covered in FOF 14.

5. Covered in FOF 15.

6. Covered in FOF 16.

7. Covered in FOF 14.

8. Covered in FOF 17.

9. Accepted in part and rejected in part as contrary to the evidence as covered in FOF 13.

COPIES FURNISHED:

Harold F. X. Purcell, Esquire Oertel & Hoffman, P. A. Florida Hospital Association Suite C

Post Office Box 6507 Tallahassee, Florida 32314-6507

Richard A. Patterson, Esquire Assistant General Counsel

Department of Health and Rehabilitative Services 1323 Winewood Boulevard

Building 1, Room 407

Tallahassee, Florida 32301

Steve Huss, General Counsel

Department of Health and Rehabilitative Services 1323 Winewood Boulevard

Tallahassee, Florida 32301

William A. Belle Esquire Post Office Box 469 Tallahassee, Florida 32302

Liz Clouds Chief

Bureau of Administrative Code 1802 The Capitol

Tallahassee, Florida 32301

Carroll Webb, Executive Director Administrative Procedures Committee

120 Holland Building Tallahassee, Florida 32301

William Page, Jr.

Secretary

Department of Health and Rehabilitative Services 1323 Winewood Boulevard

Tallahassee, Florida 32301

NOTICE OF RIGHT TO JUDICIAL REVIEW

A party who is adversely affected by this final order is entitled to judicial review pursuant to section 120.68, Florida Statutes. Review proceedings are governed by the Florida Rules of Appellate Procedure such proceedings are commenced by filing one copy of a notice of appeal with the agency clerk of the Division of Administrative Hearings and a second copy, accompanied by filing fees prescribed by law, with the District Court of Appeal, First District, or with the District Court of Appeal in the appellate district where the party resides. The Notice of Appeal must be filed within 30 days of rendition of the order to be reviewed.

Docket for Case No: 86-001014RP

Orders for Case No: 86-001014RP