STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
CHARTER MEDICAL-OCALA, INC., )
)
Petitioner, )
)
vs. ) CASE NO. 86-1466
)
DEPARTMENT OF HEALTH AND )
REHABILITATIVE SERVICES, )
)
Respondent )
)
RECOMMENDED ORDER
Pursuant to written notice a formal hearing was held in this case before Larry J Sartin, a duly designated Hearing Officer of the Division of Administrative Hearings, on November 12-13, 1986, in Tallahassee, Florida.
APPEARANCES
For Petitioner: J. Kevin Buster, Esquire
Ross O. Silverman, Esquire King & Spalding
2500 Trust Company Tower Atlanta, Georgia 30303
For Respondent: Sandra Stockwell, Esquire
Culpepper, Pelham, Turner & Mannheimer
300 East Park Avenue Post Office Drawer 11300
Tallahassee, Florida 32302-3300 PRELIMINARY STATEMENT
The Petitioner, Charter Medical-Ocala, Inc., filed an application for a certificate of need with the Respondent, the Department of Health and Rehabilitative Services, in October of 1985. The Department indicated that it intended to deny the application in February of 1986. The Petitioner timely filed a request for formal administrative hearing to contest this proposed agency action.
At the final hearing, the Petitioner presented the testimony of the following individuals who were accepted as experts in the areas indicated:
NAME EXPERTISE
Gregory A. Williams Psychiatric hospital administration. William Lee Physician recruitment.
Arthur Sullwood, M.D. Psychiatry.
Howard E. Fagin Health planning, feasibility
analysis and health economics.
The petitioner also presented the testimony of William H. Freeman, Jr.
The Petitioner offered exhibits 1-7, which were marked as "Charter" exhibits and accepted into evidence.
The Respondent presented the testimony of C. Edwin Carter, Jr., who was accepted as an expert in health planning as it relates to certificate of need review. The Respondent also offered exhibits 1-5, which were marked as "HRS" exhibits. HRS exhibit 1 was accepted into evidence. A ruling on HRS exhibits 2-5 was reserved.
The parties were ordered to disclose what exhibits they proposed to offer at the final hearing prior to the date of the final hearing. Pursuant to this order, the parties listed the exhibits they proposed to offer in their Prehearing Stipulation. HRS exhibits 2-5 were not listed in the Prehearing Stipulation. Counsel for the Respondent argued that the exhibits were admissible as "rebuttal exhibits." This argument is without merit. If the Respondent's argument is accepted, the requirement that the parties exchange exhibit lists prior to the final hearing would not achieve the purpose of such an order to put the parties on notice of the exhibits the parties intend to offer. No "rebuttal" evidence was offered by the parties. HRS exhibits 2-5 are therefore rejected.
At the commencement of the final hearing the parties filed a Prehearing Stipulation in which certain facts and conclusions of law were agreed upon. Those stipulated facts and conclusions of law which are included in the Prehearing Stipulation are hereby accepted.
The parties also presented several exhibits which were marked as "Joint Exhibits." The parties agreed that these exhibits, which were marked as Joint Exhibits 1A, 1B and 2-8, are to be accepted into evidence to the extent that portions of those exhibits were included with the proposed recommended orders filed by the parties. To the extent that portions of the Joint Exhibits have been included with the proposed recommended orders filed by the parties, they are accepted into evidence.
The parties have timely filed proposed recommended orders. The Petitioner also filed a Brief in Support of Charter's Proposed Recommended Order. The proposed recommended orders contain proposed findings of fact. A ruling on each proposed finding of fact has been made, either directly or indirectly in this Recommended Order or the proposed finding of fact has been accepted or rejected in the Appendix which is attached hereto. In the Appendix it has been indicated where proposed findings of fact which have been accepted have been made in this Recommended Order and why proposed findings of fact which have not been accepted have been rejected.
ISSUES
The issues involved in this case, as stipulated to by the parties, are as follows:
Issues Remaining to Be Litigated
Again, because of their inability to
separate the purely factual issues from those which also involve legal determinations, the
parties have combined below all issues which remain to be litigated.
1A. Was it proper for DHRS to compute the formula for need contained in FACs 10- 5.11(25)(a)1-3 on a subdistrict basis?
1B. Even if the answer is "yes", did DHRS properly use the result of such a
computation as a reason for denying Charter- Ocala's application in this case?
2A. Was it proper for DHRS to take into account both existing and approved beds in computing the occupancy standard formula contained in FACs 10-5.11(25)(d) 5?
2B. Even if the answer is "yes," did DHRS properly use the results of such a
computation as a reason for denying Charter- Ocala's application in this case?
Does the level of Charter-Ocala's indigent care commitment cause its application not to fully meet the requirement in subsection 8 of Fla. Stat. s 381.494(6)(c) that the proposed services "be accessible to all residents of the service district"?
Is the proposed project financially feasible in the long term?
Will the proposed project result in an increase in health care costs?
In light of all factors, should Charter-Ocala's application be granted?
FINDINGS OF FACT
GENERAL
Procedural.
On or about October 15, 1985, the Petitioner filed an application for a certificate of need with the Respondent.
On or about December 26, 1985, the Petitioner filed amendments to its application.
On or about February 27, 1986, the Respondent issued a State Agency Action Report proposing to deny the Petitioner's application.
On March 27, 1986, the Petitioner filed a Petition for Formal Administrative Hearing with the Respondent.
The Petition was forwarded to the Division of Administrative Hearings and was assigned case number 86-1466.
On November 12, 1986, the parties filed a Prehearing Stipulation in which they agreed to certain facts and conclusions of law. The facts agreed upon by the parties are hereby adopted as findings of fact.
The Parties.
The Petitioner is a free-standing 68-bed short-term psychiatric and substance abuse specialty hospital located in Ocala, Florida. The 68 beds consist of 48 short-term psychiatric beds and 20 substance abuse beds. The Petitioner began operating on October 17, 1985.
The Respondent is the agency responsible for determining whether the Petitioner's proposal should be approved.
The Petitioner's Proposal.
In its application, the Petitioner has proposed an expansion of its existing 48 short-term psychiatric beds by 24 beds.
The Petitioner proposed that the 24 additional beds consist of 10 beds in a geriatric psychiatric unit and 14 beds in an adult psychiatric unit.
The total proposed cost of the additional beds was $1,491,850.00. The Petitioner amended the total proposed cost to $1,213,880.00 on December 26, 1985.
At the final hearing, the Petitioner represented that it will operate an adult eating disorder program in the new 14-bed psychiatric unit.
NEED FOR ADDITIONAL SHORT-TERM PSYCHIATRIC BEDS.
A. General.
The Petitioner's existing facility for which additional beds are sought is located in Ocala, Marion County, Florida. Marion County is located in the Respondent's planning district 3.
District 3 consists of Alachua, Bradford, Citrus, Columbia, Dixie, Gilchrist, Hamilton, Hernando, Lafayette, Lake, Levy, Marion, Putnam, Sumter, Suwannee and Union Counties.
The existing providers of short-term psychiatric services in district
3 in addition to the Petitioner consist of Alachua General Hospital, Shands Teaching Hospital, Lake City Medical Center, Munroe Regional Medical Center and Lake Sumter County Mental Health Clinic.
The District III Health Plan divides the district into 2 subdistricts: southern and northern. The southern subdistrict includes Citrus, Hernando, Lake, Marion and Sumter Counties. The northern subdistrict consists of Alachua, Bradford, Columbia, Dixie, Gilchrist, Hamilton, Lafayette, Levy, Putnam, Suwannee and Union Counties.
Marion County is located in the northern portion of the southern subdistrict. Ocala, which is located in the northern portion of Marion County is approximately 20 miles from the border of the subdistricts. B. Rule 10- 5.011(1)(o), Florida Administrative Code.
The projected population of district 3 in 1990 is 972,450.
Based upon the projected population of district 3 in 1990, there is a gross need for 340 short-term psychiatric beds for district 3 in the relevant planning horizon year 1990.
There are 316 licensed and approved short-term psychiatric beds for district 3.
There is a net need for 24 short-term psychiatric beds for district 3 in 1990.
Of the 316 licensed and approved short-term psychiatric beds located or to be located in district 3, 149 are located in hospitals holding a general license and 167 are located in specialty hospitals.
Multiplying the projected 1990 district 3 population by a ratio of .15 beds per 1,000 population indicates a gross need for 146 short-term psychiatric beds in hospitals holding a general license. There will be a net surplus of three beds located in hospitals holding a general license in 1990 (146 beds needed less 149 licensed and approved beds).
Multiplying the projected 1990 district 3 population by a ratio of .20 beds per 1,000 population indicates a gross need for 194 short-term psychiatric beds which may be located in specialty hospitals. There will be a net need of
27 beds which may be located in specialty hospitals (194 beds needed less 167 licensed and approved beds).
The approval of the Petitioner's proposal will not create an imbalance between specialty beds and general beds in district 3 for 1990. There is sufficient need for additional beds in district 3 for approval of the Petitioner's proposal.
Occupancy.
Objective 1.2 of the State Health Plan provides:
dditional short-term inpatient hospital psychiatric beds should not normally be approved unless the average annual occupancy rate for all existing and approved adult short-term inpatient psychiatric beds in the service district is at least 75 percent ... [Emphasis added].
The occupancy rates in 1985 for the existing short-term psychiatric beds in district 3 were as follows: Facility Beds Occupancy Alachua General Hospital 30 77.5 percent Shands Teaching Hospital 42 77.8 percent Lake City Medical Center 9 69.2 percent Munroe Regional Medical Center 18 56.4 percent Lake/Sumter County Mental Health 18 88.0 percent.
The average occupancy rate for the existing facilities listed in finding of fact 27 is 75.5 percent.
There are 151 short-term psychiatric beds approved for district 3 which are not yet operational.
The occupancy rate of the existing and approved beds of district 3 is less than 75 percent. The approved beds should be assumed to have a 0 percent occupancy since they are not in use.
Planning Guideline 2 of the District III Health Plan provides:
Additional inpatient psychiatric services should not be developed until existing or approved services reach the
occupancy standards Specified in the State Inpatient Psychiatric ... Rule.
The occupancy standard Specified in the State Inpatient Psychiatric Rule is 75 percent.
It is reasonable to expect that approved beds will affect existing occupancy rates when the beds become operational.
Consumer demand for short-term psychiatric beds cannot expand indefinitely to meet supply. Since 48 percent of the licensed and approved beds for district 3 are approved beds, it does not make sense to ignore approved beds.
Applying the occupancy standard on a subdistrict basis, licensed beds in the southern subdistrict had an average occupancy rate of 72.2 percent for 1985 (excluding the Petitioner's existing beds). If the 51 approved beds at Community Care of Citrus, 35 approved beds in Hernando County and the 15 approved beds at Lake/Sumter Mental Health are taken into account, the occupancy rate is Substantially lower.
The Petitioner's proposal does not meet the occupancy standards of the state health plan or the district health plan (on a district or subdistrict basis).
Subdistrict Allocation of Bed Need.
Planning Guideline 4 of the District III Health Plan provides:
Needed inpatient psychiatric ... beds will be allocated within the District based on the proportion of need generated in each planning area using the State methodology.
The northern and southern subdistricts are the appropriate planning areas under the district health plan.
The projected population for the southern subdistrict for 1990 is 549,536.
Applying the state methodology to the southern subdistrict, there will be a gross need for 192 short-term psychiatric beds in 1990.
Subtracting the 84 licensed and 101 approved beds yields a net need for 7 short-term psychiatric beds for the southern subdistrict for 1990.
Of the 192 gross beds needed for the southern subdistrict in 1990, 82 should be located in hospitals holding a general license and 110 may be located in specialty hospitals.
There are 66 licensed and 101 approved beds located or to be located in specialty hospitals in the southern subdistrict. Therefore, under the district health plan, there will be a surplus of 57 short-term psychiatric beds located in specialty hospitals in the southern subdistrict in 1990.
All existing and approved short-term psychiatric specialty hospitals for district 3 are or will be located in the southern subdistrict; there are no specialty hospitals located or approved for the northern subdistrict. The Petitioner is the closest specialty hospital to the northern district.
There is insufficient need for the Petitioner's proposal in the southern subdistrict of district 3 under the district health plan.
Until December, 1985, or early 1986, the Respondent's policy and practice was to apply the need formula of Rule 10-5.11(25)(d), Florida Administrative Code, on a district-wide basis, not on a subdistrict basis.
In approximately December, 1985, or early 1986, the Respondent implemented a new policy of reviewing the need for proposed short-term psychiatric services on a subdistrict basis in the applicable district health plan recognized subdistricts.
This new policy was based upon a new interpretation of existing statutes and rules. Specifically, the Respondent relied upon Rule 10-5.011(1), Florida Administrative Code, and Section 381.494(6)(c)1, Florida Statutes, which direct an evaluation of the relationship between proposed services and the applicable district health plan in reviewing certificate of need applications.
The evidence failed to prove: (a,) when the policy was formulated;
(b) who was responsible for the formulation and implementation of the policy; and (c) whether any sort of investigation, study or analysis was performed or relied upon in connection with the policy.
The effect of this policy can be outcome-determinative in that it can cause an application for a certificate of need to be denied.
Prior to the adoption of the policy, the Respondent Promulgated Rule 10-17, Florida Administrative Code, which Provided for sudistricting of district
This rule was repealed.
Geographic Access.
A small portion of the population of district 3 is within a maximum travel time of 45 minutes from the Petitioner's facility. Only 36 percent of the district 3 population is within 45 minutes driving time from the Petitioner's facility.
The Petitioner's facility is located near the center of district 3.
Approximately 60 percent of the population of district 3 is located within 60 minutes travel time from Ocala.
There are excellent transportation routes from parts of the northern subdistrict to Ocala, including Interstate Highway 75 and U.S Highways 27, 301 and 441.
Approximately 73 percent of the Petitioner's Patients during its first year of operation came from the southern subdistrict. Of those Patients, approximately 58 percent were from Marion County and 15 percent were from other southern subdistrict counties, including 10.5 percent from Citrus County and none from Hernando County.
Approximately 15 percent of the Petitioner's patients during its first year of operation came from the northern subdistrict: 8 percent from Alachua County, 1.7 percent from Putnam, 1.2 percent from Bradford, .2 percent from Union, Suwannee and Gilchrist, .7 percent from Columbia and none from Hamilton, Lafayette, and Dixie.
Approximately 12 percent of the Petitioner's patients during its first year of operation came from outside of district 3.
Other Factors
Approximately 16 percent to 17 percent of Marion County's population was 65 years of age or older in 1980. By 1990, the 65 and older population is projected to increase to approximately 22 percent.
Approximately 28 percent of the population of the southern subdistrict is projected to be 65 or older in 1990.
Top of the World, a retirement community, is being developed 10 to 15 miles from the Petitioner's present location.
There is a large population of females aged 18 to 30 attending the University of Florida. The University is located in Gainesville which is within a 40 to 50 minute drive time from the Petitioner's present location.
There are over 83,000 females aged 15-44 residing in Alachua and Marion Counties.
Young adult females have the highest incidence of eating disorders such as bulimia and anorexia.
From a clinical and programmatic perspective, to provide optimal therapy for geriatric and eating disorder patients: (1) the patients should be separated from the general psychiatric population; (2) the staff should be specially trained to deal with the unique problems posed by the two types of patients; and (3) the program and physical surroundings should be specially designed to accommodate the needs of the patients and to facilitate the rendition of services to patients.
The Petitioner represented in its application that the Petitioner has a 16-bed geriatric program. Munroe Regional and Marion-Citrus Mental Health Center and Lake/Sumter Mental Health Supported the Petitioner's original application for its present facility based in part on the Petitioner's representation that 16 beds would be designated as geriatric beds.
A facility for Citrus County with 51 beds has been approved which will have a gerontology program. In Hernando County 35 beds have been approved which includes a gerontology program.
Seven letters of Support were submitted with the Petitioner's application. Only one of those letters mentions geriatric beds.
No mention of an alleged need to provide an eating disorder program was mentioned by the Petitioner in its application.
Eating disorder patients are treated at Shands in Gainesville, Alachua County, Florida.
There are no existing or approved Specialized geriatric or eating disorder programs in district 3.
The Petitioner Should be able to recruit physicians and other medical professionals to staff its proposed programs.
ECONOMIC ACCESS.
The Petitioner's admissions criteria include the ability to pay.
The Petitioner has projected that 1.5 percent of patient revenues from the operation of the 24 additional beds will be attributable to indigent care. This amount is low. Applicants generally propose 3 to 7 percent indigent care.
Generally, Short-term psychiatric Services are accessible to all residents of district 3. The evidence failed to prove, however, that short-term psychiatric Services in specialty hospitals are readily accessible to indigent residents.
Munroe Regional Medical Center and Lake/Sumter County Mental Health provide psychiatric services to indigents. Lake/Sumter was recently granted a certificate of need authorizing it to move to Leesburg and to expand its hospital to include 33 short-term psychiatric beds which will be devoted almost exclusively to the treatment of indigents. These facilities are not specialty hospitals, however.
The Petitioner's projected care of indigents does not include free evaluations and assessments provided at the Petitioner's counseling centers. In light of the fact that the Petitioner takes into account the ability to pay, however, this service will not significantly increase the care provided to indigent patients or accessibility of services to indigents.
During the Petitioner's first year of operation it provided indigent care of approximately 4 percent of total revenues. It is therefore likely that the Petitioner will exceed its projected 1.5 percent indigent care. The Petitioner did not prove how much of an increase can be expected, however.
The Petitioner has a corporate policy never to deny admission to a patient in need of emergency treatment because of inability to pay.
The Petitioner's proposal will not significantly enhance services available to indigents.
FINANCIAL FEASIBILITY AND IMPACT ON COSTS.
8O. If the Petitioner's proposal is considered based upon the need for additional beds in the district, it will be financially feasible. Its projected patient day projections are reasonable based upon district-wide need.
If need is determined only on a district-wide basis, the opening of approved beds will not negatively affect the Petitioner's referral patterns or patient base.
If need is determined only on a district-wide basis, the cost of psychiatric services in district 3 will not be negatively impacted by the Petitioner's proposal.
If need is determined on a subdistrict basis, the Petitioner's proposal will not be financially feasible. There is insufficient need in the southern subdistrict for the Petitioner to achieve its patient day projections on a subdistrict basis.
Planning Guideline 6 of the District III Health Plan provides:
Providers proposing to expand or establish new psychiatric facilities should document that these services will not duplicate or negatively affect existing programs in the region.
In light of the existence of an excess of 57 short-term psychiatric beds for the southern subdistrict based upon a subdistrict allocation of bed need, the Petitioner's proposed new beds will duplicate beds in existence or approved beds.
If need is determined on a subdistrict basis, the cost of psychiatric services in the southern subdistrict will be negatively impacted.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties to, and the subject matter of, this proceeding. Section 120. 57(1), Florida Statutes (1986 Supp.).
This case involves the question of whether the Petitioner should be granted a certificate of need to add 24 short-term psychiatric beds to its existing psychiatric specialty, hospital. The resolution of this question depends upon an application of the criteria set forth in Section 381.494(6)(c), Florida Statutes (1985), and the rules of the Respondent promulgated thereunder.
A balanced consideration of all the statutory criteria must be made. Department of Health and Rehabilitative Services v. Johnson & Johnson Home Health Care, Inc., 447 So.2d 361 (Fla. 1st DCA 1984).
The parties have stipulated that all of the criteria in Section 381.494(6)(c), Florida Statutes (1985), have been met or are not applicable, except portions of Sections 381.494(6)(c)1, 8, 9 and 12, Florida Statutes (1985).
Section 381.494(6)(c)1, Florida Statutes (1985).
General.
Section 381.494(6)(c)1, Florida Statutes (1985), provides that the Respondent is to take into account the following criterion in reviewing applications for certificates of need:
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.
Pursuant to this Section, the Respondent has adopted Rule 10-5. 011(1)(o), Florida Administrative Code. Under this Rule, need for additional short-term psychiatric beds is first determined on a district-wide basis pursuant to a formula provided in Rule 10-5. 011(1)(o)4, Florida Administrative Code (hereinafter referred to as the "Need Formula").
The parties have stipulated that there is sufficient need for the Petitioner's proposal based upon an application of the Need Formula. Based upon an application of the Need Formula there is a need for 24 additional short-term psychiatric beds in district 3 for the appropriate planning horizon year, 1990. In light of the fact that the Petitioner is seeking 24 additional short-term psychiatric beds for district 3 in 1990, there is sufficient numeric need for the Petitioner's proposal under the Need Formula of the Rule.
Rule 10-5.011(1)(o), Florida Statutes (1985), also provides that a minimum of .15 beds per 1,000 population should be located in hospitals holding a general license and that .20 beds per 1,000 population may be located in specialty hospitals. On a district-wide basis, there is a need for 27 additional short-term psychiatric beds in specialty hospitals and a surplus of 3 beds in hospitals holding a general license. In light of the fact that the Petitioner is a specialty hospital, there is sufficient need in district 3 for additional short-term psychiatric beds in specialty hospitals to warrant approval of the Petitioner's proposal.
Section 381.494(6)(c)1, Florida Statutes (1985), also requires a consideration of the district health plan and the state healthplan. The parties dispute the extent to which the district health plan and the state health plan should be considered.
The District Health Plan.
The parties have stipulated that the Petitioner's proposal is consistent with the guidelines and recommendations of the District III Health Plan or that the guidelines and recommendations do not apply, except that the Respondent contends that need pursuant to the Need Formula should be determined on a subdistrict basis and the occupancy standard of the Rule should be computed based on existing and approved beds. The Petitioner has conceded that if the Need Formula of the Rule is applied "strictly on a sub-district basis, that calculation will result in a finding of no need for 24 additional short-term psychiatric beds in specialty hospitals. The Petitioner has also conceded that if the occupancy standard of the Rule is computed on the basis of existing and approved beds, the occupancy standard is not met.
The District III Health Plan divides district 3 into northern and southern subdistricts. The District III Health Plan provides that a need for additional beds determined pursuant to the Need Formula should be allocated between the northern and southern subdistricts of district 3. The Petitioner's proposal is located in the southern subdistrict. Allocating the need determined under the Rule to the southern subdistrict indicates that there is a need for only 7 additional short-term psychiatric beds in the southern subdistrict. Looking at just this fact, there is insufficient need in the southern subdistrict for the Petitioner's proposal.
Additionally, the evidence established that if subdistricting is appropriate there is a surplus of 57 short-term psychiatric beds in specialty hospitals in the southern subdistrict. In light of the fact that the Petitioner is a specialty hospital, there is no need for the Petitioner's proposed expansion based upon a subdistrict allocation of bed need under the district health plan.
The Petitioner has argued that even if subdistricting is proper there are "many factors" which "exist showing a need for the 24 additional beds proposed The factors the Petitioner refers to are factors which are already taken into account by the Need Formula. They do not, therefore, justify a deviation from the Rule methodology as applied on a subdistrict basis. See Health Quest Realty XII v. Department of Health and Rehabilitative Services, 477 So.2d 576 (Fla. 1st DCA 1985).
The Petitioner has also argued that the only way of meeting the district-wide need for 24 beds under the Rule is to allow an expansion of an existing facility. Since there are no specialty hospitals in the northern subdistrict and no other application has been filed to meet the district-wide need of 24 beds, the Petitioner has argued that its proposal should be approved even if subdistricting is proper. In order to accept this argument, it would be essentially necessary to ignore subdistricting. Additionally, if the Petitioner's proposal is granted the northern subdistrict will be 24 beds further away from getting a specialty hospital in its subdistrict. As the Respondent points out, it could take into consideration the fact that no specialty hospital exists in the northern subdistrict and grant a certificate of need to build a specialty hospital in the northern subdistrict even though there is not sufficient need under the Need Formula of the Rule to justify approval of a 50- bed facility, the minimum number of beds generally necessary to warrant approval of a new facility.
Finally, the types of services the Petitioner proposes to offer do not justify approval of its application if need for additional beds is to be determined on a subdistrict basis. First, the evidence failed to prove that geriatric patients are not receiving adequate care at existing facilities or will not be provided adequate care at approved facilities. All the evidence proved is that there are no specialized programs at existing facilities in the southern subdistrict. In light of the fact that the Petitioner represented in its approved application for its existing facility that it would provide geriatric services, any suggestion that its proposal should be approved despite the lack of need for additional beds on a subdistrict basis is highly suspect.
Secondly, the evidence also failed to prove that eating disorder patients are not receiving adequate care at existing facilities. Although the evidence did prove that there are no Specialized eating disorder programs, this does not support a conclusion that eating disorder patients are not receiving
care. Additionally, the Petitioner waited until the institution of this proceeding to propose an eating disorder program. Such a proposal constitutes a significant change in its application and yet no amendment to its application has been made. More importantly, it is too late to make such an amendment to its application. See Rule 10-5.008(3), Florida Administrative Code; and Gulf Coast Nursing Center, Inc., v. Department of Health and Rehabilitative Services, 483 So.2d 700 (Fla. 1st DCA 1986).
Based upon the foregoing, it is concluded that if a subdistrict allocation of need is proper there is insufficient need to justify approval of the Petitioner's proposal.
In determining whether subdistrict allocation of need is proper, it is clear that Section 381.494(6)(c)1, Florida Statutes (1985), and Rule 10- 5.011(1), Florida Administrative Code, provide that the Respondent is to take into account the appropriate local health council plan in reviewing certificate of need applications. These provisions cannot be read in a vacuum, however. In addition to these provisions, Section 381.494(7)(b)1, Florida Statutes (1985), must be considered. Section 381494(7)(b)1, Florida Statutes (1985), provides in pertinent part, the following:
The elements of an approved district plan which are necessary to the review of any certificate of need application shall be adopted by the department as a part of its rules...
The Respondent has not adopted the portion of the District III Health Plan which provides that bed need is to be allocated in district 3 on a subdistrict basis. The Respondent in fact repealed a previously promulgated rule dividing district 3 into subdistricts.
In light of the language of Section 381.494(7)(b)1, Florida Statutes (1985), quoted, supra, it is improper for the Respondent to allocate bed need as determined under the Respondent's rules on any basis provided for in a district health plan without adopting that method of allocation as a rule. This conclusion is consistent, as pointed out by the Petitioner, "with the wealth of Florida case law that evinces a strong preference for agency rulemaking any time an agency follows a practice or policy of general applicability. Balsam v. Department of Health and Rehabilitative Services, 452 So.2d 976 (Fla. 1st DCA 1984)
The Petitioner has argued that allocation of bed need on a subdistrict-basis would also be improper because the policy of subdistricting has not been promulgated as a rule in compliance with Section 120.54, Florida Statutes. Whether this argument is correct is beyond the jurisdiction of this proceeding. This proceeding was instituted pursuant to Section 120.57(1), Florida Statutes (1986 Supp.). No proceeding under Section 120.56, Florida Statutes (1985), challenging an alleged invalid rule has been brought by the Petitioner. The Division of Administrative Hearings is therefore without jurisdiction to determine whether allocation of need on a subdistrict basis constitutes the application of an invalid rule.
The Petitioner has also argued that allocation of bed need on a subdistrict basis may not be relied upon by the Respondent as incipient agency policy. The Petitioner is correct for two reasons. First, to allow the Respondent to allocate bed need on a subdistrict basis would allow the
Respondent to apply portions of the local health council plan without adopting the plan as a rule. This would be contrary to the requirement of Section 381.494(7)(b), Florida Statutes (1985). The Respondent cannot justify its failure to comply with the requirements of Section 381.494(7)(b)1, Florida Statutes (1985), through incipient agency policy.
Secondly, the Respondent has failed to prove the rationality of the policy. See Florida Medical Center v. Department of Health and Rehabilitative Services, 463 So.2d 380 (Fla. 1st DCA 1985). The policy at issue is essentially that the
Respondent will follow a determination of a local health council if the council determines that subdistricting is proper. In this case, subdistricting may be proper. But in other instances, a local health council may provide for subdistricting when subdistricting is not proper. In those instances, the Respondent would still apply subdistricting based upon its policy. A policy of following a determination of a government agency, such as a local health council, over which the Respondent has no control, is not rational. The very purpose of Section 381.494(7)(b)1, Florida Statutes (1985), is to prevent such blind adherence to the determinations of the local health council.
The Petitioner has also argued that the Respondent, in applying subdistricting, is implementing a rule of the local health council and that this constitutes an unauthorized delegation of rulemaking authority. This argument is without merit. If the Respondent may consider the district health plan without adopting the portion of the plan relied upon as a rule, the Respondent may do so only because it Is required to consider the district health plan pursuant to Section 381.494(6)(c)1, Florida Statutes (1985).
Finally the Petitioner has argued that the use of subdistricting is inconsistent with Rule 10-5. 011 (1)(o), Florida Administrative Code. This argument is also without merit The Rule provides for a determination of need based upon the entire district. The district health plan then provides that the district-wide bed need is to be allocated to subdistricts. If the Respondent may consider subdistricting without adopting that portion of the district plan as a rule, allocating the district- wide need to subdistricts established by the district health plan is not inconsistent with the Rule. The Rule requires, as does Section 381.494(6)(c)1, that the district health plan is to be considered.
The District III Health Plan also provides that the occupancy standard provided for in Rule 10-5. 011 (1)(o), Florida Administrative Code, is to be applied to all existing and approved beds and on a subdistrict basis.
Rule 10-5.011(1)(o)4e, Florida Administrative Code, provides that additional beds will not normally be approved unless the average annual occupancy rate for all existing adult beds in the district is at or exceeds 75 percent. The parties have stipulated that this requirement of the Rule has been met. The district health plan requires, however, a consideration of this standard on a subdistrict basis and provides that existing and approved beds must be at 75 percent occupancy. The Petitioner has conceded that if it is proper to consider this requirement of the district health plan that the standard has not been met. The facts support this stipulation.
For the reasons stated, supra, it is concluded that it is not proper for the Respondent to take into account the occupancy requirements of the district health plan. The Respondent has not adopted this requirement as a rule
as required by Section 381.494(7)(b)1, Florida Statutes (1985). If the conclusion that the district plan must be adopted as a rule is rejected, the Petitioner's proposal does not comply with the occupancy standard of the district plan.
Based upon the foregoing it is concluded that allocating need determined under the Need Formula on a subdistrict basis is not proper because the Respondent has failed to adopt the portion of the district health plan providing for subdistricting as a rule as required by Section 381.494(7(b)1, Florida Statutes (1985). Therefore, based upon the need for additional short- term psychiatric beds as determined on a district-wide basis pursuant to the Need Formula, there is sufficient need to warrant approval of the Petitioner's application. If, however, it is concluded as a matter of law that subdistricting is proper, there is insufficient need in the southern subdistrict, the proposed location of the beds sought by the Petitioner, to warrant approval of the Petitioner's application.
It is also concluded that the occupancy standard of the district health plan should not be applied to the Petitioner because it has not been adopted as a rule. If, however, it is concluded as a matter of law that application of the occupancy standard of the district health plan is proper, the Petitioner's proposal does not meet the occupancy standard of the district health plan.
The State Health Plan.
The parties have stipulated that the state health plan has been met or does not apply except, that the Respondent has argued that the occupancy standard established in the state health plan has not been met.
The state health plan provides that existing and approved beds should have an occupancy rate of 75 percent. Section 381.494(6)(c)1, Florida Statutes (1985), clearly requires that the state health plan is to be taken into consideration. Unlike the district health plan, there is no requirement that portions of the state plan must be adopted by the Respondent as a rule. Therefore, the Department must take into account the provisions of the state health plan.
The Petitioner has raised a number of arguments in support of its position that the occupancy standard of the state health plan should not be taken into account. Those arguments fail to take into account the fact that the Respondent is statutorily required to consider the state health plan. The Petitioner's arguments must, therefore, be rejected.
The Petitioner has also argued in its proposed recommended order that, if it is proper to take into account the occupancy of existing and approved beds, it should be assumed that approved beds will achieve the occupancy standard. If such an assumption were proper, the requirement that the occupancy rate of approved beds is to be considered would be superfluous Such an interpretation of the state health plan is not proper.
More importantly, the Petitioner has stipulated that "the occupancy rate of 75 percent is not met if existing and approved (but not yet existing) beds in District III are taken into account under the section of the stipulation labeled "Consistency with State Health Plan." Based upon the Petitioner's stipulation, it is not proper to now consider whether the occupancy standard of the state health plan has been met.
Based upon the foregoing, it is concluded that the Petitioner's proposal is not consistent with the occupancy standard of the state health plan. The occupancy rate during the preceding 12 months of existing and approved beds was below 75 percent.
Section 381.494(6)(c)8, Florida Statues (1985).
The parties have stipulated that all criteria contained in Section 381.494)6)(c)8, Florida Statutes (1985), are met, "except that DHRS contends that the accessibility criterion is not met in that Charter-Ocala's indigent care commitment is too low."
The Petitioner has argued that this criterion is met because existing and approved services in district 3 are adequate to meet the needs of indigents. This argument ignores what is required by Section 381.494(6)(c)8. This criterion requires that the proposed services be accessible to all residents of the service district. It does not require a determination of whether care is available at other facilities to indigents.
The Petitioner has also argued that its proposed care of the indigent population in district 3 meets the criterion. The Petitioner points to its commitment to provide 1.5 percent of its revenues from the additional beds to indigent care, the fact that this is in addition to the 1.5 percent indigent care tax that it pays and the fact that its projection does not include the free evaluations and assessments provided at its counseling centers. Finally, the Petitioner points out that its actual indigent care during the first year of its operation was approximately 4 percent.
The facts support a conclusion that the Petitioner's commitment to providing care to indigents does not meet the requirements of Section 381.494(6)(c)8, Florida Statutes (1985). First, 1.5 percent indigent care is a very low commitment to care for the indigent. Secondly, the payment of an indigent care tax of 1.5 percent does not constitute care to the indigent. It is a tax requirement which must be complied with by the Petitioner and other health care providers. Section 381.494(6)(c)8, Florida Statutes (1985), requires a consideration of actual care to be provided by the applicant to indigents; not the care which may be provided through tax revenues paid to the State. Thirdly, the Petitioner's evaluations and assessments do not provide care to the indigent. The Petitioner failed to prove that if an indigent is determined to be in need of care as a result of such an evaluation that it will be willing to provide the care. In fact, the evidence proved that the Petitioner takes into account a patient's ability to pay in determining whether to admit a patient. Finally, although the evidence did prove that the Petitioner has provided 4 percent indigent care at its existing facility and it is therefore likely that it will provide more than 1.5 percent care to indigents from the proposed additional 24 beds, the fact remains that the Petitioner has only committed to provide 1.5 percent. This commitment is low.
Section 381.494(6)(c)9, Florida Statutes (1985).
The parties have stipulated that Section 381.494(6)(c)9, Florida Statutes (1985), is met, except that the Respondent contends that the Petitioner's proposal will not be financially feasible in the long term because of the possible inability to attract patients and psychiatrists.
The facts support a conclusion that the Petitioner will be able to attract psychiatrists to staff its proposed expansion. The facts also support a conclusion that the Petitioner's proposal will be financially feasible if need for additional short-term psychiatric beds is determined on a district-wide basis. If, however, the Respondent determines as a matter of law that it is proper to allocate bed need on a subdistrict basis, there is insufficient need in the southern subdistrict for the Petitioner to achieve its patient day forecasts. If subdistricting is proper, the Petitioner's proposal will not be financially feasible in the long term.
Section 381.494(6)(c)12, Florida Statutes (1985).
The parties have stipulated that the criterion contained in Section 381.494(6)(c)12, Florida Statutes (1985), is met, except that the Respondent contends that approval of the proposal will result in a rise in costs when 3 approved facilities in the southern subdistrict are placed in operation.
If need for the proposal is determined on a district-wide basis only, it is concluded that the Petitioner's proposal will meet the provisions of Section 381.494(6)(c)12, Florida Statutes (1985). If, however, the Respondent determines as a matter of law that it is proper to allocate need to subdistricts as provided in the district health plan, it is concluded that the Petitioner's proposal will not meet this provision.
Summary.
If need for the Petitioner's proposal is determined only on a district-wide basis, as it has been concluded is proper, the proposal should be approved. The parties have stipulated that all of the provisions of Section 381. 494(6)(c), Florida Statutes (1985), have been met or are not applicable, except for those criteria discussed, supra. As to the criteria upon which there was no agreement, the evidence proved that the proposal is in compliance with all of the contested criteria, except that the Petitioner's proposal does not contain a sufficient commitment to indigent care and the occupancy standard of the state health plan has not been met. It is concluded that, in light of the fact that the Petitioner satisfies all other criteria, its failure to meet these criteria is not sufficient to justify denial of its proposal.
If, however, it is concluded as a matter of law that the district health plan should be applied to the Petitioner's proposal, it is concluded that the Petitioner's proposal should not be approved. Based upon an allocation of the district-wide need to the southern subdistrict, there is insufficient need for the Petitioner's proposal, the Petitioner's proposal is not financially feasible, the proposal will have a negative impact on existing and approved facilities and the cost of providing health care services in the southern subdistrict, the Petitioner's commitment to indigent care is too low and the occupancy standards of the district and state health plans are not met.
Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Petitioner's application for the addition of 24 short-
term psychiatric beds be approved.
DONE and ORDERED this 13th day of March, 1987, in Tallahassee, Florida.
LARRY J. SARTIN
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 13th day of March, 1987.
APPENDIX TO RECOMMENDED ORDER
The parties have submitted proposed findings of fact. It has been noted below which proposed findings of fact have been generally accepted and the paragraph number(s) in the Recommended Order where they have been accepted, if any. Those proposed findings of fact which have been rejected and the reason for their rejection have also been noted. Paragraph numbers in the Recommended Order are referred to as "RO ".
Petitioner's Proposed Findings of Fact:
Proposed Finding RO Number of Acceptance or
of Fact Number Reason for Rejection
1 | RO 7, 9-10 and 12. | |
2 | RO 13-14. | |
3 | RO 13 and 16. | |
4 | RO 17. | |
5 | RO 51. | |
6 | RO 54 and 61. | |
7 | RO 54. | |
8-10 | Irrelevant. | |
11 | RO 58-59. | |
12 | RO 59. | |
13 | The first sentence is accepted | in RO |
60. The second sentence is | ||
irrelevant. | ||
14 | RO 61-63. | |
15 | Irrelevant. | |
16 | RO 20 and 22. | |
17 | RO 43. | |
18 | RO 19. | |
19 | RO 19-21. | |
20 | RO 23. | |
21 | RO 24. | |
22 | RO 28. The last sentence is | |
irrelevant. |
23 RO 1, 9-10 and 12.
24 Irrelevant. It has been stipulated that the quality of care criterion
has been met.
25 RO 64.
26 RO 71.
The first sentence is accepted in RO
70. The second sentence is not supported by the weight of the evidence.
Not supported by the weight of the evidence.
29-30 Irrelevant.
31 RO 55-56.
32 RO 74.
RO 75. The last sentence is not supported by the weight of the evidence.
RO 73 and 76. The Petitioner did not commit to provide 1.5 percent of total revenues it committed to provide 1.5 percent of revenues from the 24 beds. The last
sentence is irrelevant.
35 RO 77.
36 RO 78.
37 Not supported by the weight of the evidence.
38-39 and 41 If need is determined on a district-
wide basis these proposed findings of fact are true. If, however, need is determined on a subdistrict basis these proposed findings of fact are not supported by the weight of the evidence. See RO 80 and 83.
40 Irrelevant.
42-44 Cumulative. See RO 80 and 83.
45 and 46 Not supported by the weight of the evidence.
47-48 Irrelevant. If need is determined on a district-wide basis these proposed findings of fact are true. If, however, need is determined on a subdistrict basis these proposed findings of fact are not supported by the weight of the evidence.
See RO 82 and 85.
Irrelevant.
The first sentence is statement of the law. The last sentence is irrelevant. This is a de novo proceeding. How the Respondent reached its initial decision is irrelevant. The rest of the proposed finding of fact is accepted in RO 50.
Statement of law.
52 RO 45.
53 RO 46.
54 RO 47.
55 Irrelevant.
56 RO 48.
57 RO 49.
Irrelevant.
Conclusion of law.
Irrelevant.
61-62 Prehearing Stipulation.
Irrelevant.
The parties have stipulated that the portion of the rule mentioned in the first sentence is met. The proposed finding of fact is also a discussion of law. It is therefore rejected.
65-67 Consideration of the state health plan is statutorily required. The Respondent does not apply the occupancy standard of the state health plan as a matter of policy, therefore. These proposed findings of fact are therefore irrelevant to the extent that they apply to the determination concerning the state health plan. To the extent that they pertain to the occupancy standard of the district health plan, they are hereby adopted.
Conclusion of law.
Irrelevant.
The first sentence is irrelevant. The second sentence is contained in the Prehearing Stipulation as a stipulated fact.
71 RO 30.
72 Irrelevant and conclusion of law.
73-82 Irrelevant.
Respondent's Proposed Findings of Fact
1 | RO 1, 3-4, 9 and 11 | |
2 | RO 7 and 13. | |
3 | RO 19. | |
4-6 | Prehearing Stipulation. | |
7 8 and | 9 | RO 26. RO 27-28. The last sentence is |
10 | contrary to the facts stipulated to by the parties. The parties have stipulated that existing beds meet the occupancy standard. This proposed finding of fact is therefore unnecessary. RO 29. | |
11 | RO 30 and 32-33. | |
12 | RO 31. | |
13 | RO 16 and 36. | |
14 | RO 34. | |
15 | RO 37-41. There are 84 licensed |
beds not 81.
16-17 Irrelevant.
18 RO 55-56. The evidence established that "at least" 73 percent of the Petitioner's patients originate from the southern subdistrict not that more than 73 percent.
19 RO 43.
20 Hereby accepted.
21 RO 51.
RO 10 and 64.
The first sentence is accepted in RO
65. The rest of the proposed finding of fact is uncorroborated hearsay.
24 RO 67.
RO 12 and 68.
Irrelevant or based upon uncorroborated hearsay.
Not a finding of fact.
Not supported by the weight of the evidence.
29 RO 84-85.
30 Statement of law.
31 RO 72-73.
32 RO 85.
33 RO 83.
COPIES FURNISHED:
Sam Power, Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard
Tallahassee, Florida 32399-0700
Gregory Coler, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard
Tallahassee, Florida 32399-0700
Sandra Stockwell, Esquire
Culpepper, Pelham, Turner & Mannheimer
300 East Park Avenue Post Office Drawer 11300
Tallahassee, Florida 32302-3300
J. Kevin Buster, Esquire Ross O. Silverman, Esquire King & Spalding
2500 Trust Company Tower Atlanta, Georgia 30303
| Issue Date | Proceedings |
|---|---|
| Mar. 13, 1987 | Recommended Order (hearing held , 2013). CASE CLOSED. |
| Issue Date | Document | Summary |
|---|---|---|
| Apr. 27, 1987 | Agency Final Order | |
| Mar. 13, 1987 | Recommended Order | Application for additional 24 short-term psychiatric beds for Marion County approved. DHRS failed to adopt local health plan as a rule. |
