STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

TALLAHASSEE MEMORIAL REGIONAL) MEDICAL CENTER, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 86-4373

) DEPARTMENT OF HEALTH AND ) REHABILITATIVE SERVICES and ) HCAC CORPORATION, )

)

Respondents. )

) APALACHEE CENTER FOR HUMAN ) SERVICES, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 86-4374

) DEPARTMENT OF HEALTH AND ) REHABILITATIVE SERVICES and ) HCAC CORPORATION, )

)

Respondents. )

)

RECOMMENDED ORDER

Pursuant to written notice a formal hearing was held in these cases before Larry J. Sartin, a duly designated Hearing Officer of the Division of Administrative Hearings, on December 7-11, 1987, in Tallahassee, Florida.

The Petitioner in case number 86-4373, Tallahassee Memorial Regional Medical Center, Inc. (hereinafter referred to as "TMRMC"), was represented at the formal hearing by Jean Laramore, Esquire, and C. Anthony Cleveland, Esquire. The Petitioner in case number 86-4374, Apalachee Center For Human Services, Inc. (hereinafter referred to as "Apalachee"), was represented by Ronald W. Brooks, Esquire.

One of the Respondents in these cases, the Department of Health and Rehabilitative Services (hereinafter referred to as the "Department"), was represented by Theodore E. Mack and John Rodriguez, Assistant General Counsel of the Department. The other Respondent, HCAC Corporation (hereinafter referred to as "HCAC") was represented by Darrell White, Esquire.

INTRODUCTION

HCAC filed an application for a certificate of need for a ninety-bed long- term psychiatric facility to be located in Leon County, Florida, with the Department in April, 1986. The Department indicated that it intended to

partially approve the application by granting a certificate of need for a fifty- bed facility. TMRMC and Apalachee both filed the instant proceedings challenging the Department's proposed action.

At the commencement of the formal hearing HCAC made an ore tenus Motion for Continuance. Following argument of the parties, this Motion was denied.

At the formal hearing HCAC presented the testimony of the following individuals, who were accepted as experts in the areas noted after their names: Nelson E. Rodney (clinical psychology and the administration of psychiatric health care facilities, including programmatic aspects), Gene Nelson (health care planning and transportation planning), Anthony Estevez (construction and design of health care facilities, including construction costs estimating), Richard Edwards Gordon, M.D., Ph.D., (psychiatry, including research and evaluation as it relates to long-term care) and Francis Arthur Gomez (health care facilities management, including financial and marketing aspects). HCAC also offered fourteen exhibits. These exhibits were marked as "HCAC" exhibits and accepted into evidence.

The Department presented the testimony of Reid Jaffe who was accepted as an expert in health planning and certificate of need review. The Department offered one exhibit which was marked as "HRS" exhibit 1 and accepted into evidence.

TMRMC presented the testimony of the following individuals, who were accepted as experts in the areas noted after their names: Clyde H. Dorsett (architecture, specializing in assessing physical design of a facility in relation to the proposed programs to be offered), Susan Claire Fite (administration of short-term psychiatric facilities) Joseph Ben Clemons (architecture and the design and estimating of construction costs of health care facilities), William A. Giudice (hospital accounting and financial operations), Paul Vanderbosch (hospital financial analysis and-financial feasibility), Catherine Chimonides (psychiatric nursing, supervising and staffing of nursing staff in psychiatric facilities), John Bryant (mental health services and needs assessment in District 2), J David Moore (psychiatry), Sven Kansman (traffic engineering and travel time studies), Christy J. Sloan (recruitment of health care personnel, including psychiatric), Patrick Edward Cook (psychologist, including the evaluation of the chronically mentally ill) and Jay Cushman (health care planning and health care need methodologies). Judith T. Greenwald and F. A. Munasifi, M.D., also testified on behalf of TMRMC. TMRMC offered 24 exhibits. "TMRMC" exhibits 1-4, 8-11, 13-19 and 21-24 were accepted into evidence. A ruling on the relevancy of TMRMC exhibits 5-7 and 12 was reserved. Those exhibits are hereby accepted into evidence. A ruling on the admissibility of TMRMC exhibit 20 was also reserved. That exhibit is hereby accepted into evidence.

Apalachee presented the testimony of Chris H. Gosen who was accepted as an expert in mental health care planning and program administration, and Elton Scott, who was accepted as an expert in health care economics, including need and utilization analysis, health care finance, financial feasibility and health care reimbursement. Apalachee exhibits 1-4 were accepted into evidence.

Apalachee exhibit 5 was accepted into evidence to the extent that it was determined to be relevant to this proceeding.

Official recognition of Rule 10-5.011(1)(p), Florida Administrative Code, was taken.

The parties stipulated that Sections 381.494(6)(c)5, 7 and 11 and (6)(d)5, Florida Statutes (1985), and Rule 10- 5.011(1)(p)5, Florida Administrative Code, are not applicable in this proceeding.

The parties have filed proposed recommended orders containing 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.

Subsequent to the filing of the proposed recommended orders in these cases, TMRMC filed a Motion to Strike in which it requested that certain portions of HCAC's proposed recommended order be struck. HCAC and the Department filed a Joint Response In Opposition to Motion to Strike in opposition to the Motion.

TMRMC filed a Reply to Joint Response. Based upon the pleadings of the parties and the fact that the parties were not authorized to file any reply to the proposed recommended orders, TMRMC's Motion is hereby denied.

ISSUE

Whether the Department should issue certificate of need number 4502 to construct and operate a fifty-bed long-term psychiatric hospital in Leon County, Florida, to HCAC?

FINDINGS OF FACT

1. HCAC is a corporation formed by Anthony Estevez for the purpose of developing and operating a long-term psychiatric facility in Leon County, Florida. The facility was to be known as HCAC psychiatric Hospital of Leon County. Mr. Estevez owns 100 percent of the stock of HCAC.

   
   

2. The Department is the state agency in Florida authorized to issue certificates of need for long-term psychiatric facilities.

   
   

3. TMRMC is a general acute care hospital located in Tallahassee, Leon County, Florida. TMRMC operates a free- standing short-term psychiatric facility in a two-story, approximately 45,000 square foot, structure located within a block and a half from the main hospital. TMRMC's psychiatric facility is licensed for sixty beds. At present, forty-five of its beds are actually open, with fifteen beds in each of three units. One unit is available for adult patients (including geriatric patients), one is available for adolescent patients and one is available for an open adult unit. The other fifteen beds are available but are not staffed because of a lack of patients.

   
   

4. Apalachee is a private, non-profit corporation. Apalachee provides comprehensive community mental health services to Franklin, Gadsden, Jefferson, Leon, Liberty, Madison, Taylor and Wakulla Counties. Apalachee was established consistent with State and federal guidelines to provide a variety of mental health Services.

   
   

5. On March 17, 1986, a Letter of Intent was filed with the Department notifying the Department of Mr. Estevez's intent to apply for a certificate of need in the March 16, 1986, batching cycle. This Letter of Intent was filed within the time requirements of Florida law.

   
   

6. On April 15, 1986 Estevez filed an application for a certificate of need for a comprehensive, free-standing, ninety-bed long-term psychiatric facility to be located in Leon County, Florida. Leon County is located in the

   Department's District 2. District 2 is made up of Bay, Calhoun, Franklin, Gadsden, Gulf, Jackson, Jefferson, Holmes, Leon, Liberty, Madison, Taylor, Wakulla and Washington Counties. Franklin, Gadsden, Jefferson, Leon, Liberty, Madison, Taylor and Wakulla Counties make up Subdistrict 2B. The other Counties make up Subdistrict 2A. HCAC's application was filed with the Department and the District 2 local health council.

   
   

7. In a letter dated May 15, 1987, the Department requested additional information from HCAC. The information requested by the Department was provided by HCAC on or about June 19, 1986 and June 23, 1986.

   
   

8. On September 23, 1986, the Department issued a State Agency Action Report partially approving HCAC's certificate of need application. HCAC was notified of the Department's decision and was issued certificate of need #4502 by letter dated September 30, 1986.

   
   

9. HCAC had sought approval to construct a ninety-bed facility providing specialty long-term psychiatric services for the chronically mentally disturbed; patients with a ninety-day average length of stay. The facility was to provide care to adolescents, adults and geriatrics. Certificate of need #4502 authorized HCAC to construct a fifty-bed long-term adult, geriatric and adolescent psychiatric hospital in Leon County. The Department approved the facility because of its perception that there is no long-term psychiatric facility serving the geographic area proposed by HCAC to be served.

   
   

10. By letter dated November 13, 1987, the Department issued an amended certificate of need #4502 to HCAC restricting the services to be provided to adult and geriatric long-term psychiatric services. HCAC intends on using thirty-six beds for adults and fourteen beds for geriatric patients.

    
    

11. HCAC did not contest the Department's reduction in the size of the approved facility or the limitation of the scope of services to adult and geriatric patients. At the formal hearing HCAC presented evidence to Support the approved fifty-bed facility Serving only adults and geriatrics. HCAC has not contested the Department's decision to only partially approve HCAC's application. Supporting documentation took into account the smaller size of the approved facility. No substantial change in the scope or emphasis of the facility was made by HCAC other than the elimination of adolescent Services.

    
    

12. HCAC has projected an average occupancy rate of 80 percent for the third year of operation. Because of the failure to prove that there is a need for an additional fifty long-term psychiatric beds for District 2, HCAC has failed to prove that this projection is reasonable.

    
    

13. As of the date of the Department's initial decision and at the time of the formal hearing of these cases Rivendell Family Care Center (hereinafter referred to as "Rivendell") an eighty-bed long-term-psychiatric free-standing hospital located in Panama City, Bay County, Florida, had been open for approximately six weeks. Rivendell's occupancy rate at the time of the formal hearing was approximately twenty-four percent.

    
    

14. Long-term psychiatric services mean hospital based inpatient services averaging a length of stay of ninety days. Long-term psychiatric services may be provided pursuant to the Department's rules in hospitals holding a general license or in a free-standing facility holding a specialty hospital license.

15. Generally, the chronically mentally ill constitute an under-served group. In order to provide a complete continuum of care for the mentally ill, in-patient hospital treatment, including twenty-four hour medical care and nursing services and intensive resocialization or teaching of resocialization skills, should be provided.

    
    

16. The Department has not established a standard method of quantifying need for long-term psychiatric beds in Florida.

    
    

17. The Department's approval of the additional long- term psychiatric beds and facility at issue in this proceeding and the Department's and HCAC's position during the formal hearing that there is a need for HCAC's facility was based generally upon their conclusion that there is a "lack of such a facility to serve the geographic area." During the formal hearing, the Department further justified the need for the facility as follows:

    
    

    Basically it was felt that given the geographic distance or distances between this area, the eastern portion of District II, and the closest facilities, meaning licensed hospitals or facilities authorized by a Certificate of Need to offer long-term adult psychiatric services in a Chapter 395 licensed hospital, that there probably should be one here of a minimal size because we were not firm in, or in surety of the number of patients who might need the service in this area. But we thought that there should be at least a minimally sized long-term psychiatric hospital in this area to serve this area.

    
    

18. HCAC and the Department failed to prove that there is a need for an additional fifty long-term psychiatric beds in District 2. At best, HCAC and the Department have relied upon speculation and assumptions to support approval of the proposed facility. In order to prove need, the characteristics of the population to be served by a proposed health service should be considered. A determination that there is a need for a health service should be based upon demographic data, including the population in the service area, referral sources and existing services. HCAC and the Department did not present such evidence sufficient enough to Support the additional fifty beds at issue in this proceeding.

    
    

19. HCAC did not use any need methodology to quantify the gross need for long-term psychiatric beds in District 2. Nor did HCAC or the Department present sufficient proof concerning existing services, the population to be served, the income or insurance coverage of the Service area population or actual service area referral patterns.

    
    

20. In its application. HCAC premised its proposal, in part, on the assumption that "the Leon County area is an undeserved area with residents being referred to facilities long distances away." HCAC exhibit 2. The evidence does not support this assumption.

21. HCAC also premised its proposal upon its conclusion that it would receive patient referrals from existing institutions. The evidence failed to support this conclusion.

    
    

22. HCAC also premised its proposal upon the fact that long-term psychiatric services have been designated as a licensure category by the Department. This does not, however, create a presumption that there is a need for such services in a particular area.

    
    

23. Based upon the evidence presented at the formal hearing concerning one methodology for quantifying the need for long-term psychiatric beds, there may already be a surplus of long-term psychiatric beds in District 2. Such a surplus of beds may exist whether State hospital beds and ARTS and GRTS program beds are considered. The methodology is based upon national length of stay data for 1980 which was obtained from the National Institute of Mental Health. The methodology did not take into account more current data or Florida specific data. Therefore, use of the methodology did not prove the exact number of long- term psychiatric beds needed for District 2. Although the weight of the evidence concerning the use of the methodology failed to support a finding as to the exact number of long-term psychiatric beds needed in District 2, its use was sufficient to support a finding that there may be a surplus of beds already in existence. The methodology further supports the conclusion that HCAC and the Department have failed to meet their burden of proving that there is a need for the proposed facility.

    
    

24. The weight of the evidence failed to prove whether long-term inpatient psychiatric services, other than those provided at State hospitals, are "within a maximum travel time of 2 hours under average travel conditions for at least 90 percent of the service area's [District 2] population."

    
    

25. The closest long-term inpatient psychiatric facility [other than a State hospital], Rivendell, is located in Panama City, Bay County, Florida. This facility is located in Subdistrict 2A. There is no facility located in Subdistrict 2B. Rivendell is located on the western edge of Subdistrict 2B, however. The weight of the evidence failed to prove that this facility is not within a maximum travel time of 2 hours under average travel conditions for at least 90 percent of District 2's population.

    
    

26. On page seven of the State Agency Action Report approving Rivendell, the Department indicated that "[t]he proposed location insures that 90 percent of the District I and District II population will have access within two hours travel time." This determination was made prior to the initial approval by the Department of HCAC's proposed facility.

    
    

27. If the Florida State Hospital at Chattahoochee (hereinafter referred to as "Chattahoochee"), which is located in District 2, is taken into account, long-term psychiatric services are available within a maximum travel time of 2 hours under average travel conditions for a least 90 percent of District 2's population. Chattahoochee provides long-term inpatient psychiatric hospital care to indigent and private pay patients. The quality of cafe at Chattahoochee is good and a full range of therapeutic modalities typically available at other psychiatric hospitals are available.

28. HCAC and the Department have suggested that there is need for the additional fifty beds at is sue in these cases because of their conclusion that

    90 percent of the population of District 2 is not within two hours under average travel conditions of long-term psychiatric services. The failure to prove this conclusion further detracts from their position as to the need for the proposed facility.

    
    

29. HCAC exhibit 8 is a copy of the goals, objectives and recommended actions contained in the 1985-87 Florida State Health Plan relating to mental health facilities. The evidence in this proceeding failed to support a finding that HCAC's proposed facility will enhance these goals, objectives and recommended actions.

    
    

30. Goal 1 of the 1985-87 Florida State Health Plan is to "[e]nsure the availability of mental health and substance abuse services to all Florida residents in a least restrictive setting." Objectives 1.1, 1.2 and 1.4, and the actions recommended to achieve these objectives are not applicable to HCAC's proposed facility. Objective 1.3 provides that additional long-term inpatient psychiatric beds should not be approved in any district which has "an average annual occupancy of at least 80 percent for all existing and approved long-term inpatient psychiatric beds."

    
    

31. Goal 2 of the 1985-87 Florida State Health Plan is to "[p]romote the development of a continuum of high quality, cost effective private sector mental health and substance abuse treatment and preventive services." The objectives and recommended actions to achieve this goal are not applicable to HCAC's proposed facility.

    
    

32. Goal 3 of the 1985-87 Florida State Health Plan is to "[d]evelope a complete range of essential public mental health services in each HRS district." The objectives and recommended actions to achieve this goal are not applicable to HCAC's proposed facility.

    
    

33. The Florida State Plan for Alcohol, Drug Abuse and Mental Health Services does not specifically deal with private long-term psychiatric services. Instead, it relates specifically to treatment in the state mental health treatment facilities.

    
    

34. The applicable district mental health plan does not specifically address long-term psychiatric services. The plan does, however, recommend that new facilities should indicate a commitment to serving the medically indigent. HCAC has agreed to provide 5.6 percent of its patient days for indigent care. HCAC's commitment to provide 5.6 percent of its patient days for indigent care is consistent with this objective.

    
    

35. Mental Health District Boards have been abolished. The District 2 Alcohol, Drug Abuse and Mental Health Planning Council, however, has published the Alcohol, Drug Abuse, and Mental Health 1986-89 Provisional District Plan.

    It is acknowledged in this Plan that deinstitutionalization and the provision of the least restrictive means of treatment should be promoted. The use of long- term psychiatric inpatient beds does not promote this philosophy.

    
    

36. If a patient is not admitted as part of the 5.6 percent indigent commitment of HCAC and cannot pay the $10,500.00 per month admission charges, HCAC will not admit the patient. Additionally, if a patient is admitted and runs out of funds to pay the daily charges and is not part of the 5.6 percent indigent commitment, the patient will be transferred to another facility.

37. HCAC's facility will be accessible to all residents who can pay for their services or who are part of the 5.6 percent indigent commitment of HCAC. The provision of 5.6 percent indigent care is adequate. HCAC will provide non- discriminatory health care services, to those indigent patients who are covered by HCAC's 5.6 percent commitment.

    
    

38. The Counties which make up Subdistrict 2B, other than Leon County, are below the average national and State poverty levels. In most of the Counties, twenty percent of the population have incomes below the poverty level.

    
    

39. HCAC has not managed any type of psychiatric hospital and currently has no employees. The proposed facility is to be managed by Flowers Management Corporation (hereinafter referred to as "Flowers"). Flowers is a psychiatric management company that has been in operation since 1984. Mr. Estevez owns fifty-one percent of the stock of Flowers and is the Chairman of the Board.

    
    

40. Flowers is operating five Psychiatric/substance abuse facilities: three hospital based and two free-standing pychiatric/chemical dependency facilities. The staff and faculty of Flowers has a strong background in the management of psychiatric facilities.

    
    

41. Flowers has no experience in the management of a long-term psychiatric facility.

    
    

42. Mr. Nelson Elliot Rodney, Flowers' Regional Vice President, will be ultimately responsible for the management of the proposed facility. The administrator of the facility will report to Mr. Rodney. Mr. Rodney will seek to implement the goals outlined in HCAC's certificate of need application for the proposed facility. Mr. Rodney has not designed a psychiatric hospital. Nor has Mr. Rodney worked at or administered a long- term psychiatric hospital.

    
    

43. The overall treatment plan as presented in HCAC's certificate of need application and as presented at the formal hearing lends itself to the development of a good program for long-term psychiatric care. HCAC has associated itself with experts in long-term psychiatric care in order to develop a detailed plan specifically addressing the treatment needs of long-term psychiatric patients. HCAC has the ability to, and will, provide good quality patient care.

    
    

44. Apalachee provides certain programs in Subdistrict 2B which provide alternatives to long-term psychiatric hospitalization: the Geriatric Residential Treatment System (hereinafter referred to as "GRTS") and the Adult Residential Treatment System (hereinafter referred to as "ARTS").

    
    

45. Apalachee's GRTS program, which serves Individuals fifty-five years of age and older, contains a residential component with a total capacity of Seventy geriatric beds. A wide variety of services are provided as part of the GRTS program, including day treatment and case management components.

    
    

46. When Apalachee's ARTS program is fully implemented there will be a total of one hundred sixty-three beds available for the care on long-term mentally ill adults and geriatrics within Subdistrict 2B. The ARTS program serves adults who are eighteen to fifty-four years of age.

    
    

47. Apalachee's GRTS and ARTS programs do not provide the identical services provided in a free-standing long-term psychiatric hospital. The

    programs do provide some identical or similar services, and, to that extent, the programs complement the continuum of psychiatric care available. To the extent that they provide the same type of services, Apalachee's GRTS and ARTS programs serve as alternatives to HCAC's proposed facility.

    
    

48. There is a national shortage of registered nurses. This shortage is particularly acute with regard to psychiatric nurses.

    
    

49. TMRMC has a current shortage of three registered psychiatric nurses, three part-time psychiatric registered nurses, seven flex positions for psychiatric nurses, one full- time nurse technician position and one mental health worker. TMRMC has had difficulty, despite adequate efforts to recruit, recruiting for its psychiatric facility since it opened. It has never been fully staffed with psychiatric nurses.

    
    

50. There is also a shortage of occupational therapists. TMRMC has had an occupational therapist vacancy for seven months.

    
    

51. Mr. Rodney will be responsible for the recruitment of the necessary personnel for the proposed facility. Mr. Rodney indicated that he would utilize recruitment methods similar to those used by TMRMC. Mr. Rodney will also use his experience and contacts in the Dade County, Florida area.

    
    

52. HCAC's salary package is reasonable and HCAC will provide adequate in- service training programs.

    
    

53. Although HCAC will have difficulty in attracting qualified staff, just as TMRMC has had, it will be able to obtain adequate staff for the proposed facility. HCAC may do so, however, at the expense of existing health care providers.

    
    

54. Apalachee provides the following programs in District 2:

    
    

    1. Wateroak--A sixteen-bed long-term psychiatric hospital for the treatment of children and adolescents. It is a licensed Specialty hospital;

       
       

    2. In November of 1987, Apalachee began construction of an acute care facility, which will provide inpatient short- term psychiatric services;

       
       

    3. Case Management Services--Case management services, which include supportive counseling, medication therapy, assistance with transportation and home visitation, are provided to the chronically mentally ill on an outpatient basis. The Services are to be provided where the patients reside;

       
       

    4. Hilltop--A sixteen-bed residential treatment center. Hilltop is a group home living facility for adults eighteen to fifty-four years of age;

       
       

    5. Chemical Dependency Program--Individual, group and family counseling and educational services on an outpatient basis for Individuals with suspected substance abuse problems;

       
       

    6. Emergency Services--Year-round, twenty-four hour a day telephone or face-to-face evaluations to persons with an acute disturbance or who are in need of evaluation for determination of the proper level of care;

       
       

    7. PATH--Positive Alternative to Hospitalization Program, a crises stabilization unit developed as an alternative to short-term psychiatric care;

    8. PPC--Primary Care Center, a nonhospital medical detoxification unit providing short-term detoxification care to alcohol abusers;

       
       

    9. Gerontological Programs--Made up of the GRTS program and an outpatient component. Through the outpatient component, Apalachee uses its outpatient clinics in each County in its service area to provide linkage for therapy and medication and supportive counseling to geriatrics;

       
       

    10. ARTS Program; and

        
        

    11. Designated Public Receiving Facility--Apalachee is the designated public receiving facility for Subdistrict 2B. It screens and evaluates every person admitted to Chattahoochee.

        
        

55. Apalachee's adult mental health programs which are available to indigent patients, directly impact both long and short-term hospital utilization, lowering such utilization. For example, before establishing the services provided to suspected substance abusers, many patients were placed in long-term psychiatric hospitals. Referrals to TMRMC of patients under the Baker Act have been reduced from an average of fifteen to eighteen patients per day to an average of one-half to one person per day. There has also been a decrease in admissions to Chattahoochee since Apalachee established the GRTS and ARTS programs.

    
    

56. At the time of the formal hearing of these cases TMRMC had a census of only twenty-eight adult patients in its short-term psychiatric facility.

    TMRMC's census has been low for the past two years.

    
    

57. TMRMC's short-term psychiatric facility is operating at a loss. Any further loss of patients would have a serious impact on the facility. From October 1, 1986 to July 31, 1987, TMRMC lost $127,337.00 on its short-term psychiatric facility. For the twelve-month period from October 1, 1986 to October 1, 1987, it is reasonably estimated that TMRMC will lose $139,722.00.

    
    

58. TMRMC would like to open the fifteen-bed unit (which is presently closed) of its short-term psychiatric facility. It must increase its census before it can do so. It has been attempting to increase its census by sending out mail-outs and newsletters, sponsoring educational programs advertising, inviting health care professionals to the facility and initiating clinical affiliations with university programs.

    
    

59. Rivendell is an eighty-bed long-term psychiatric facility. Forty of its eighty beds are licensed for adults and geriatric patients. The other forty beds are licensed for children and adolescent patients. Rivendell's census at the time of the formal hearing of these cases was six to eight patients.

    
    

60. Chattahoochee has a total of 823 long-term psychiatric beds for adults and geriatrics.

    
    

61. There are no like and existing long-term psychiatric beds for adults and geriatrics located in Subdistrict

    
    

    2B. The only like and existing long-term psychiatric beds for adults and geriatrics available to residents of District 2 are located in Subdistrict 2A at Rivendell.

62. The proposed HCAC facility will result in increased competition in District 2. This increase in competition will have an adverse impact on suppliers of inpatient psychiatric services.

    
    

63. Admissions to the proposed facility will likely include patients who would be more appropriately hospitalized in a short-term facility. Although HCAC has no plans to admit short-term patients and will attempt to prevent such admissions, mental health professionals cannot accurately predict the length of a patient's stay upon admission. The determination will often require an in- hospital evaluation of the patient. Therefore, patients more appropriately treated in a short-term facility such as TMRMC will end up spending some tide in HCAC's proposed facility.

    
    

64. TMRMC will lose patient days if the HCAC facility is constructed. This will adversely affects TMRMC's occupancy rate, which is already low, and cause further losses in revenue. Given the surplus of long-term psychiatric beds in District 2 and the low occupancy of short-term beds in Subdistrict 2B,

    it will difficult for HCAC to continue in existence without admitting short-term psychiatric patients.

    
    

65. The operation of the proposed HCAC facility will also adversely affect the availability of nurses to staff Apalachee's acute care facility and other Apalachee operations and TMRMC's ability to staff its short-term psychiatric facility. Even the loss of one more full-time registered nurse at TMRMC could cause critical staffing problems.

    
    

66. Because of the lack of need for fifty additional long-term psychiatric beds in District 2, HCAC's proposed facility would also have an adverse affect on Rivendell.

    
    

67. The proposed facility will provide internships, field placements and semester rotations for psychiatrists, psychologists, social workers, nurses and counselors. The facility will work closely with community agencies and community personnel in developing, operating and providing resources for training for community groups, patient groups and personnel. In- service training will be open to selected professionals in the community.

    
    

68. HCAC's proposed facility will have a positive effect on the clinical needs of health professional training programs and schools for health professions in District 2.

    
    

69. The-total estimated cost of the proposed project approved by the Department is $4,108,000.00. HCAC plans on financing 100 percent of the cost of the project with a mortgage loan at 13 percent interest.

    
    

70. Mr. Estevez has had experience in obtaining financing for health care and other commercial projects. In 1987 alone, Mr. Estevez was personally involved in over $20,000,000.00 of financing.

    
    

71. Short-term financial feasibility means the ability to successfully fund a project to ensure that the project will succeed in the short-term. To achieve short-term financial feasibility, there must be sufficient funds to cover any losses incurred during the initial operating period and to cover any short fall in working capital necessary to fund the project.

72. NCNB, a financial institution with which Mr. Estevez has had, and continues to have, a long and profitable association, has indicated interest in financing the proposed project. A financing letter to this effect has been provided. Although the letter does not specifically refer to the proposed project, the weight of the evidence supports a finding that NCNB would be willing to finance the project.

    
    

73. In light of Mr. Estevez's experience in obtaining commercial financing and his relationship with NCNB, it is reasonable to conclude that 100 percent financing of the project can be obtained at 13 percent interest.

    
    

74. The proposed project will have a negative cash balance at the end of its first and second year of operation. Given Mr. Estevez's commitment to the project, sufficient funds for capital and operating expenses will be available to cover these negative cash balances. Although Mr. Estevez did not provide a separate audited financial statement, the weight of the evidence proved that Mr. Estevez has the ability to provide the necessary capital.

    
    

75. In the short-term, HCAC's proposal is financially feasible.

    
    

76. HCAC has projected that it will operate at an average length of stay of ninety days. It will charge an all-inclusive $350.00 per day for its long- term psychiatric services, including all ancillary services.

    
    

77. Initially, HCAC projected the following payor mix: Medicaid of 30 percent; Medicare of 20 percent; and insurance and private pay of 50 percent.

    
    

78. HCAC was informed by the Department that Medicaid reimbursement was not available for psychiatric services in private free-standing psychiatric hospitals. Consequently, HCAC modified its payor mix by eliminating Medicaid from its payor mix.

    
    

79. At the formal hearing of this case, HCAC projected the following payor mix: Medicare of 3.3 percent; indigent of 5.6 percent; and insurance and private pay of 91.1 percent.

    
    

80. Medicare reimburses for psychiatric care in a limited fashion. That is why HCAC reduced its projected Medicare reimbursement to 3.3 percent of its total revenue. Medicare patients generally use the majority of their lifetime reserve Medicare reimbursable days for other types of care, including short-term psychiatric care and acute care.

    
    

81. Persons in need of long-term psychiatric care generally have a poor work history because of their illness interferes with their ability to obtain and maintain employment. Patients have few economic resources of their own.

    
    

82. A patients family structure is often disorganized as a result of the patient's episodes of illness. These episodes strain the family relationship.

    
    

83. Persons in need of long-term psychiatric care are often unable to pay for needed services and their family members are either unable or unwilling to support the person.

    
    

84. There is no facility in Florida with a payor mix of 91 percent insurance and private pay.

85. HCAC's projection of 91.1 percent insurance and private pay is not a reasonable projection. This finding of fact is based upon the high poverty levels within Subdistrict 2B, the lack of need for additional long-term psychiatric beds and the failure to prove that insurance benefits for long-term care are available in District 2.

    
    

86. The State of Florida, Employees Group Health Self-Insurance Plan does not provide coverage for specialty hospitals, such as HCAC's proposed facility. The State of Florida provides 42 percent of the employment in Leon County.

    
    

87. Insurance provided by other employers in the area limits coverage for inpatient psychiatric care to thirty to thirty-one days. These benefits are often exhausted before long- term care becomes necessary.

    
    

88. In order to achieve a 91.1 percent insurance and private pay payor mix, 80 percent to 100 percent will have to be private pay patients. Such a high percentage of private pay patients is not reasonable.

    
    

89. The effective buying income in Leon County in 1986 was approximately

    $22,600.00. In District 2 it was $18,700.00. Madison County and Jefferson County are among the counties heading Florida's poverty rate. Taylor County is the ninth poorest county in the State.

    
    

90. HCAC has projected a 95 percent occupancy rate for its proposed facility within six months of its opening. HCAC has failed to prove that this occupancy rate can be achieved. In light of the high poverty rate in the area, the lack of need for long-term psychiatric services and the inability of patients to pay for such services, this projected occupancy rate is not reasonable.

    
    

91. In light of HCAC's failure to prove that there is a need for the proposed facility or that its payor mix is reasonable, HCAC has failed to demonstrate that its occupancy projection is achievable.

    
    

92. HCAC has projected that 7.3 percent of its gross revenue will be deducted as revenue deductions. Included in this amount are contractual allowances, charity care and bad debts.

    
    

93. Medicare reimburses hospitals for total costs rather than revenue or charges. HCAC, therefore, gas projected approximately $6,000.00 for the first year and $24,000.00 for second year as contractual allowances.

    
    

94. HCAC's projection of deductions from revenue are not reasonable. Bad debt of 1.6 percent is unreasonable compared to the experience at other long- term psychiatric facilities in Florida.

    
    

95. The $350.00 all-inclusive charge is not reasonable. This charge will not be sufficient to cover the proposed facility's costs. HCAC's projected costs for "Supplies and other" and for taxes are reasonable.

    
    

96. HCAC has failed to prove that its proposed facility is financially feasible in the long-term.

    
    

97. The projected and approved cost of construction is $3,965,456.00. HCAC has indicated that the facility will consist of two, one-story buildings connected by a hallway. The facility will have approximately 40,563 gross square footage.

98. The actual site for the project has not been selected or purchased.

    
    

99. The floor plan calls for twenty-five, semi-private rooms for patients. The patient-care building will contain four independent and secure living/program areas connecting to a central core which will contain an atrium open to the outdoors.

    
    

100. There will be approximately 811 gross square feet per bed, which is adequate.

     
     

101. The proposed design is reasonable.

     
     

102. The projected completion forecast of HCAC is reasonable.

     
     

103. The projected costs of completing the building are reasonable.

     
     

104. The building will be built by Project Advisers Corporation (hereinafter referred to as "PAC"). PAC is a health care, commercial and residential construction company. Mr. Estevez owns 100 percent of PAC. Since 1978, PAC has been involved in the construction of St. John's Rehab Center and Nursing Home, South Dade Nursing Home, Hialeah Convalescent Center, South Dade Rehab Hospital and two psychiatric/chemical dependency hospitals for Glenbeigh Hospital.

     
     

105. Generally, there are no differences in the construction requirements between short-term and long-term psychiatric facilities.

     
     

     CONCLUSIONS OF LAW

     
     

106. The Division of Administrative Hearings has jurisdiction of the parties to and the subject matter of this proceeding. Section 120.57(1), Florida Statutes (1987).

     
     

107. Sections 381.705(1)(a)-(n), Florida Statutes (1987), provide the criteria governing certificate of need applications. Other than the subsections which the parties stipulated were not applicable in this proceeding, HCAC's proposed facility must be evaluated in relation to those subsections. A balanced consideration of all the statutory and rule criteria applicable must be made. Humana, Inc. v. Department of Health and Rehabilitative Services, 469 So.2d 889 (Fla. 1st DCA 1985); and Collier Medical Center, Inc. v. Department of Health and Rehabilitative Services, 462 So.2d 83 (Fla. 1st DCA 1985). As the applicant, HCAC had the burden of demonstrating that it is entitled to a certificate of need for its proposed facility. Department of Transportation v.

     J.W.C. Company, Inc., 396 So.2d 778 (Fla. 1st DCA 1981).

     
     

108. Section :381.705(1)(a), Florida Statutes (1987), requires that an application be evaluated with respect to the "need for health care facilities and services...in relation to the applicable district plan and state health plan...." HCAC has failed to satisfy this criterion because it failed to prove that there is a need for its proposed facility. HCAC and the Department attempted to justify approval of the proposed facility based upon the fact that long-term psychiatric services have been classified as a licensure category and the fact that there is no long-term psychiatric facility currently located in Leon County. These facts do not, however, prove that there is a need for

additional long-term psychiatric beds in District 2, Subdistrict 2B or Leon County. In fact, the evidence supported a finding that there is already sufficient long-term psychiatric beds in District 2, which includes Subdistrict 2B and Leon County, without the proposed facility.

1. HCAC's proposal is not inconsistent with any specific portion of the district plan or the state health plan the proposal. It also does not, however, promote any of the goals, objectives or recommended actions in the State Health Plan. HCAC's proposal does satisfy the district mental health plan's recommendation concerning the care of the indigent.

   
   

2. Section 381.705(1)(b), Florida Statutes (1987), requires a consideration of the availability, quality of care, efficiency, appropriateness, accessibility, extent of utilization and adequacy of "like and existing health care services." The only like and existing health care services located in District 2 are provided at Rivendell. Because of the lack of need for additional long-term psychiatric beds in District 2 and the low occupancy at Rivendell, HCAC's proposed facility will adversely affect Rivendell. It is therefore concluded that HCAC has failed to prove that like and existing health care services are not available, providing quality of care, efficient, appropriate, accessible, under-utilized or adequate.

   
   

3. Although long-term psychiatric services are provided at Chattahoochee and by Apalachee, and although the proposed facility will have an effect on those facilities and TMRMC, these entities are not providing long-term psychiatric Services to adults and geriatrics in a manner sufficiently similar to be considered as like and existing services.

   
   

4. Section 381.705(1)(c), Florida Statutes (1987), requires that the applicant be able to provide quality of care. The weight of the evidence proved that HCAC will meet this criterion.

   
   

5. Section 381.705(1)(d), Florida Statutes (1987), requires a consideration of the availability and adequacy of other health care facilities and services which may serve as alternatives to the proposed service. Based upon a consideration of the services being provided by Apalachee, HCAC has failed to prove that alternatives to its proposal are not available and adequate. Although Apalachee does not provide "like and existing" services, it does provide services which serve as an alternative to HCAC's proposed facility.

   
   

6. Section 381.705(1)(h), Florida Statutes (1987), requires a consideration of the availability of resources, including health manpower, management personnel, and funds for capital and operating expenses. The weight of the evidence proved that HCAC's proposal will meet this portion of the criterion. This section also requires a consideration of the extent to which the facility will be accessible to all residents of the service district. Although the evidence proved that there will be a limitation on the accessibility of the facility to indigents, HCAC's agreement to provide 5.6 percent indigent care is adequate.

   
   

7. Section 381.705(1)(i), Florida Statutes (1987), requires a consideration of the immediate and long-term financial feasibility of the project. Although the weight of the evidence proved that the project will be financially feasible in the short-term, the facility will not be financially feasible in the long-term.

8. Section 381.705(1)(1), Florida Statutes (1987), requires a consideration of the probable impact of the project on the cost of providing health services "proposed by the applicant." Because of the lack of need for the project and because of the availability of the Rivendell facility, HCAC has failed to prove that the probable impact of the project on the cost of providing health services proposed by HCAC will not be adverse.

   
   

9. Section 381.705(1)(m), Florida Statutes (1987), requires a consideration of the costs and methods of the proposed construction. HCAC's proposed facility meets this criterion.

   
   

10. Finally, Section 381.705(1)(n), Florida Statutes (1987), requires a consideration of the applicant's past and proposed provision of health care services to Medicaid patients and the medically indigent. To the extent that this criterion applies to this proposed project, it has been met.

    
    

11. In addition to the criteria discussed, supra, the project, which involves a capital expenditure for new health services, must meet the criteria of Section 381.705(2), Florida Statutes (1987). HCAC failed to prove that existing facilities providing inpatient services similar to those proposed are not being used in an appropriate and efficient manner or that patients will experience serious problems in obtaining inpatient long-term psychiatric care if the project is not approved. See Sections 381.705(2)(b) and (d), Florida Statutes (1987).

    
    

12. In addition to the statutory criteria which must be considered, Rule 1O-5.011(1)(p), Florida Administrative Code, must be considered. Pursuant to subsection 3 of this Rule it is provided that additional long-term psychiatric beds will not normally be approved unless certain standards have been met. First, it must be proved that "the average annual occupancy rate for all existing long term hospital psychiatric beds in a Department district is at or exceeds 80 percent for the preceding year. "Rule 1O-5.O11(1)(p)3.a., Florida Administrative Code. Although Rivendell has been in existence for less than a year, it does have existing long term psychiatric beds available and they are not 80 percent occupied. This standard has not, therefore, been met. It would be contrary to the clear and unambiguous language of the rule to ignore the Rivendell occupancy rate.

    
    

13. Rule 10-5.011(1)(p)3.b., Florida Administrative Code, requires that an applicant project an annual average occupancy rate of 80 percent for the third year of operation. Although HCAC has made such a projection, its projection is unrealistic in light of the lack of need for additional long-term psychiatric beds in District 2.

    
    

14. Rule 10-5.011(1)(p)3.c., Florida Administrative Code, requires that long-term inpatient psychiatric services should be available "within a maximum travel time of 2 hours under average travel conditions for at least 90 percent of the service area's population." The evidence in this case failed to prove that 90 percent of the District 2 population is not already within 2 hours of the Rivendell facility. If Chattahoochee is taken into account the evidence proved that at least 90 percent of the District 2 population is already within 2 hours of long-term psychiatric services. Although Chattahoochee may not be considered a "like and existing" service, it is providing long-term psychiatric services to the District 2 population which is all the Rule requires.

    
    

15. Rule 10-5.011(1)(p)3.d., Florida Administrative Code, requires that the type of service and number of proposed beds must be consistent with the

    needs of the community as perceived by the local health council, the mental health district board, the state mental health plan and other available needs assessment data. Approval of HCAC's proposal is not warranted by this provision.

    
    

16. Rule 10-5.011(1)(p)4, Florida Administrative Code, requires that the applicant identify, among other things, the expected source of referrals and the relationship of the proposed service to other components of the community mental health system of the service area. Although HCAC did provide such identification, it failed to prove that its expectations are realistic.

    
    

17. Based upon the foregoing, it is concluded that HCAC has failed to meet its burden of proving that a balanced consideration of the applicable criteria in this case support approval of HCAC's proposed project.

    
    

18. Although TMRMC and Apalachee are not "like and existing" services, they have standing to participate in this proceeding. Because of the shortage of registered nurses in the country, including Leon County, approval of HCAC's facility will have an adverse affect on TMRMC's and Apalachee's ability to staff their facilities. The operation of HCAC's facility will also cause a loss of patient days at TMRMC. See Charter Medical-Jacksonville, Inc. v. Department of Health and Rehabilitative Services, 503 So.2d 381 (Fla. 1st DCA 1987) ; and Baptist Hospital, Inc. v. Department of Health and Rehabilitative Services, 500 So.2d 620 (Fla. 1st DCA 1986).

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED the Department enter a Final Order denying the application of

HCAC for a certificate of need to construct and operated a fifty-bed long-term psychiatric facility in Leon County, Florida.

DONE and ENTERED this 3rd day of May, 1988, 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 3rd day of May, 1988.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 86-4373 and 864374

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 Recommend 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.

HCAC's Proposed Findings of Fact

Proposed Finding Paragraph Number in Recommended Order of Fact Number of Acceptance or Reason for Rejection

1. 5-6. The third through fourth sentence are hereby accepted.

2. 1 and 6.

3 1 and 39.

4 6 and 9

5 7.

6 8-10, 34 and 97.

7 11.

8 11, 14 and 76. The last Sentence is not supported by the weight of the evidence

6. The last sentence is not supported by the weight of the evidence.

10 10 and 69.

11 Hereby accepted.

12 39-40.

13 These proposed findings of fact are cumulative, subordinate and unnecessary. They deal with the weight to be given to other evidence.

14 42.

15-19 Although these proposed findings of fact- are generally true, they are cumulative, subordinate and unnecessary.

1. The first sentence is not supported by the weight of the-evidence. The rest of the proposed findings of fact are hereby accepted.

2. Although the proposed finding of fact contained in the first sentence is generally true, it is cumulative, subordinate and unnecessary. The rest of the proposed findings of fact deal with the weight to be given to other evidence.

3. These proposed findings of fact are not supported by the weight of the evidence.

23-26 Although these proposed findings of fact are generally true, they are cumulative, subordinate and unnecessary.

27 Although this proposed finding of fact is generally true, the weight of the evidence failed to prove that HCAC will be able to achieve its plans.

28-33 Although these proposed findings of fact are generally true, they are cumulative, subordinate and unnecessary.

34 43.

35 51. The last sentence is not supported by the weight of the evidence.

36 52.

37 53.

38 69-70.

39 72.

40 73.

41 74.

42 67.

43 68.

44 34 and 37.

45 104.

46. The first sentence is law. The last sentence is accepted in 105.

47 97 and 99-100.

48 101.

49 103.

50 102.

51 Hereby accepted.

52-53 These proposed findings of fact deal with the weight to be given other evidence.

54 78.

55 79-80.

56 79.

57-58 Not supported by the weight of the evidence.

1. 76. The last sentence is not supported by the weight of the evidence.

2. Not supported by the weight of the evidence.

3. Although generally correct, these proposed findings of fact do not support HCAC's projected utilization.

4. Irrelevant.

5. Not supported by the weight of the evidence.

6. Irrelevant.

65 92.

66 93.

67 94. The last two sentences are not supported by the weight of the evidence.

68 95.

1. Not supported by the weight of the evidence.

2. HCAC's proposed facility and TMRMC are not comparable.

71-75 Not supported by the weight of the evidence.

1. 54 and 59. The last sentence is not supported by the weight of the evidence.

2. The first two sentences are hereby accepted. The last sentence is not supported by the weight of the evidence.

3. Irrelevant.

79-83 Not supported by the weight of the evidence.

84-85 Statement of law.

1. Hereby accepted.

2. 6 and 25. The last sentence is not supported by the weight of the evidence.

88-90 Although these proposed findings of fact are generally true, they are cumulative, subordinate and unnecessary.

91-92 Not supported by the weight of the evidence.

93 Although these proposed findings of fact are generally true, they are cumulative, subordinate and unnecessary. The last two sentences are conclusions of law.

94-95 Not supported by the weight of the evidence.

1. Irrelevant.

2. The first sentence is a conclusion of law. The second sentence is hereby accepted. The last sentence is irrelevant.

3. 13. The last two sentences are conclusions of law.

4. Irrelevant.

100-102 Hereby accepted.

1. Not supported by the weight of the evidence.

2. Hereby accepted.

3. 44. The last sentence is irrelevant.

4. 47. The last sentence is not supported

   by the weight of the evidence.

5. 16. The last sentence is not supported by the weight of the evidence.

108 15.

1. Not supported by the weight of the evidence.

2. Irrelevant.

3. See 23. The last sentence is not supported by the weight of the evidence.

4. Conclusions of law.

5. Not supported by the weight of the evidence.

114 34.

115 29. The last sentence is not supported by the weight of the evidence.

115a 30. The last sentence is not supported by the weight of the evidence.

115b-e 30. The next to the last sentence of e is not supported by the weight of the evidence.

115f Not supported by the weight of the evidence.

116-117 Not supported by the weight of the evidence.

118 Hereby accepted.

The Department's Proposed Findings of Fact

Proposed Finding Paragraph Number in Recommended Order of Fact Number of Acceptance or Reason for Rejection

1 Hereby accepted.

2-3 8-9.

4 Not supported by the weight of the evidence.

5 13 and 25.

1. Not supported by the weight of the evidence.

2. Conclusion of law.

8 31.

9 Not supported by the weight of the evidence.

10-12 Irrelevant.

13 Not supported by the weight of the evidence.

14-16 Conclusions of law. TMRMC's Proposed Findings of Fact

22 Not Supported by the weight of the evidence.

23 54.

24 46 and 54.

25-26 54-55.

27-29 54.

30 54-55.

31 44-45, 47 and 54.

32 Hereby accepted.

33 54-55.

34 55.

35 Irrelevant.

36 56.

37 58.

38 49.

39 48.

40 50.

41-44 Although these proposed findings of fact are generally true, they are cumulative, subordinate and unnecessary.

45-46 65.

47-48 57.

49 58.

50 63-64.

51 Not supported by the weight of the evidence.

52 63-64.

53 63-64.

55 Hereby accepted.

Not supported by the weight of the evidence.

56 65.

57 Not supported by the weight of the evidence.

58 25 and 59.

59 Not supported by the weight of the evidence.

60-62 Although these proposed findings of fact are generally true, they are cumulative, subordinate and unnecessary.

63 25 and 59.

64-68 Although these proposed findings of fact are generally true, they are cumulative, subordinate and unnecessary.

69 Not supported by the weight of the evidence.

70-71 27.

1. Although these proposed findings of fact are generally true, they are cumulative, subordinate and unnecessary.

2. Not supported by the weight of the evidence.

74 18 and 96.

1. Irrelevant.

2. Although these proposed findings of fact are generally true, they are cumulative, subordinate and unnecessary.

77-81 Although generally true, these proposed findings of fact are not relevant to this de novo proceeding.

82 Hereby accepted.

83 84.

84 Hereby accepted.

85-86 Irrelevant.

87 See 69 and 72.

88 94.

89 Hereby accepted.

90 74.

91 94. The last three sentences are not supported by the weight of the evidence.

92-93 Not supported by the weight of the evidence.

94-96 Although these proposed findings of fact are generally true, they are cumulative, subordinate and unnecessary.

97 19.

98-99 18.

1. Hereby accepted.

2. Irrelevant.

3. Hereby accepted.

103 19.

104 Although these proposed findings of fact are generally true, they are cumulative, subordinate and unnecessary.

105 20.

106 21.

107 Hereby accepted.

108-110 See 23.

111 Not supported by the weight of the evidence.

112 85.

113 86.

114 88.

115 89.

116-118 Although these proposed findings of fact are generally true, they are cumulative, subordinate and unnecessary.

119 91.

120 90.

121 96.

122-126 Not supported by the weight of the evidence.

127 Hereby accepted.

128-129 Irrelevant.

130 22.

131 97-98.

132 99.

133-139 Not Supported by the weight of the evidence.

140 95.

141 Not supported by the weight of the evidence.

142 97.

143-146 Not supported by the weight of the evidence.

Apalachee's Proposed Findings of Fact 1 6 and 8-9

2 4.

3(a)-(i)(1) 54.

3(i)(2) 44-45.

3(j) 44 and 54.

3(k) 54.

4 3.

5 1.

6 104.

7 39 and 41.

8 27 and 60.

9 25 and 59.

10(a) Not supported by the weight of the evidence.

10(b) 27.

10(c) 26.

10(d) Not supported by the weight of the evidence.

11 13.

12(a) 81.

12(b) 82-83.

13 6

1. 76 and 87. The second, third, fifth- eighth sentences, the Second Paragraph and the last Paragraph are not Supported by the weight of the evidence.

2. 71 and 74. Other than the first two Sentences of the first Paragraph and the first two sentences of the third Paragraph, these Proposed findings of fact are not Supported by the weight of the evidence.

16(a) 90. The Second Paragraph is not Supported by the weight of the evidence.

16(b) 88.

16(c) 94.

16(d) 76 and 95. Other than the first three sentences of the first Paragraph and the last Paragraph, these Proposed findings of fact are not Supported by the weight of the evidence.

17 48-49 and 65. The Sixth and eighth Sentences and the last Paragraph are not Supported by the weight of the evidence. 44-47 and 54. The last Sentence of the first Paragraph and the last four Sentences of the last Paragraph are irrelevant.

19 62.

19(a) 3, 23, 56-57 and 64. The Second and third Paragraph are Cumulative and

unnecessary.

19(b) 63. The Second Paragraph is Cumulative and unnecessary.

19(c) Cumulative and unnecessary,

19(d) 25, 59, 62 and 66.

19(e) 65.

20 Not Supported by the Weight of the evidence or Cumulative and unnecessary,

21 39 and 41. The last Paragraph is not Supported by the weight of the evidence.

COPIES FURNISHED:

Jean Laramore, Esquire

1. Anthony Cleveland, Esquire Post Office Box 11068 Tallahassee, Florida 32302

   Ronald W. Brooks, Esquire 863 East Park Avenue Tallahassee, Florida 32301

   Theodore E. Mack, Esquire John Rodriguez, Esquire Department of Health and

   Rehabilitative Services 1323 Winewood Boulevard Building One, Room 407

   Tallahassee, Florida 32399-0700

   Darrell White, Esquire Gerald B. Sternstein, Esquire Post Office Box 2174 Tallahassee, Florida 32301

   Sam Power, Clerk Department of Health and

   Rehabilitative Services 1323 Winewood Boulevard

   Tallahassee, Florida 32399-0700

   Gregory L. Coler, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard

   Tallahassee, Florida 32399-0700

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

   AGENCY FINAL ORDER

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

   
   

   STATE OF FLORIDA

   DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES

   
   

   TALLAHASSEE MEMORIAL REGIONAL ) MEDICAL CENTER, )

   )

   Petitioner, )

   )

   vs. ) CASE NO. 86-4373

   ) CON NO. 4502

   DEPARTMENT OF HEALTH AND	)
   REHABILITATIVE SERVICES and	)
   HCAC CORPORATION,	)
   	)
   Respondents.	)
   )
   APALACHEE CENTER FOR HUMAN	)
   SERVICES, INC.,	)
   	)
   Petitioner,	)
   	)
   vs.	) CASE	NO.	86-4374
   	) CON	NO.	4502
   DEPARTMENT OF HEALTH AND	)
   REHABILITATIVE SERVICES AND	)
   HCAC CORPORATION,	)
   	)
   Respondents.	)
   )

   
   

   FINAL ORDER

   
   

   This cause came on before me for the purpose of issuing a final agency order. The Hearing Officer assigned by the Division of Administrative Hearings (DOAH) in the above-styled case submitted a Recommended Order to the Department of Health and Rehabilitative Services (HRS). A copy of that Recommended Order is attached hereto.

   RULING ON EXCEPTIONS FILED BY HCAC

   
   

   1. HCAC excepts to the Hearing Officer's findings in paragraph 12 regarding the lack of need for HCAC's proposed facility. The Hearing Officer's findings of fact are entitled to the same weight as the verdict of a jury. Gruman vs. State, 379 So2d 1313 (2nd DCA 1980). It is the Hearing Officer's function to resolve conflicts in the evidence, judge the credibility of witnesses, draw permissible inferences from the evidence, and make findings of fact; and the agency may not reject a finding unless there is no competent, substantial evidence from which the finding could reasonable be inferred. Heifetz vs. Department of Business Regulation, 475 So2d 1277 at 1281 (Fla. 1st DCA 1985) Exception number one (1) is denied as the findings are supported by competent substantial evidence.

      
      

   2. HCAC excepts to the Hearing Officer's finding in paragraph 18 that need for HCAC's proposed facility was not proved. The finding is supported by competent, substantial evidence; therefore, exception number two (2) is denied.

      
      

   3. HCAC excepts to the last sentence in paragraph 19. The finding is supported by competent, substantial evidence; therefore, exception number three

      (3) is denied.

      
      

   4. HCAC excepts to the last sentence of paragraph 20 regarding referral of Leon County residents to distant facilities. The finding is supported by competent, substantial evidence; therefore, exception number four (4) is denied.

      
      

   5. HCAC excepts to the last sentence of paragraph 21 regarding HCAC's expectation of receiving referrals of patients. The finding is supported by competent, substantial evidence; therefore, exception number five (5) is denied.

      
      

   6. HCAC excepts to the last sentence of paragraph 22 as an incorrect conclusion of law. Exception number six (6) is denied.

      
      

   7. HCAC excepts to findings of fact in paragraph 23 regarding a need methodology. The finding is supported by competent, substantial evidence; therefore, exception number seven (7) is denied.

      
      

   8. HCAC excepts to the Hearing Officer's findings in paragraph 24 and 25 regarding travel time. The finding is supported by competent, substantial evidence; therefore, exception number eight (8) is denied.

      
      

   9. HCAC excepts to the findings in paragraph 27 regarding Florida State Hospital. The finding is supported by competent, substantial evidence; therefore, exception number nine (9) is denied. It is noted that the findings regarding Florida State Hospital are irrelevant to the evaluation of HCAC's proposal. See the ruling on exception number 32.

      
      

   10. HCAC excepts to the last sentence in paragraph 28 regarding travel times. The finding is supported by competent, substantial evidence; therefore, exception number ten (10) is denied.

       
       

   11. HCAC excepts to the last sentence in paragraph 29 regarding the State Health Plan. The finding is supported by competent, substantial evidence; therefore, exception number eleven (11) is denied.

   12. HCAC excepts to finding of fact in paragraph 31. The finding is supported by competent, substantial evidence, therefore, exception number twelve

       (12) is denied.

       
       

   13. HCAC excepts to the last sentence of paragraph 32. The finding is supported by competent, substantial evidence, therefore, exception number thirteen (13) is denied.

       
       

   14. HCAC excepts to the hearing Officer's rejection its proposed findings number 123 and 124- as irrelevant. The hearing Officer's ruling is correct and exception number fourteen (14) is denied.

       
       

   15. HCAC excepts to the last sentence of paragraph 35. The finding is supported by competent, substantial evidence; therefore exception number fifteen

       (15) is denied.

       
       

   16. HCAC excepts to the last two sentences of paragraph 47. The findings are supported by competent, substantial evidence; therefore, exception number sixteen (16) is denied.

       
       

   17. HCAC excepts to finding of fact in paragraph 62 regarding the overlap of the services provided by Apalachee and those proposed by HCAC. The finding is supported by competent, substantial evidence, therefore, exception number seventeen (17) is denied.

       
       

   18. HCAC excepts to finding of fact in paragraph 63. The finding is supported by competent, substantial evidence; therefore, exception number eighteen (18) is denied.

       
       

   19. HCAC excepts to finding of fact in paragraph 64 regarding impact on TMRC's occupancy rate. The finding is supported by competent, substantial evidence; therefore, exception number nineteen (19) is denied.

       
       

   20. HCAC excepts to finding of fact in paragraph 66 regarding impact on Rivendell. The finding is supported by competent, substantial evidence; therefore, exception number twenty (20) is denied.

       
       

   21. HCAC excepts to finding of fact in paragraph 84. finding is supported by competent, substantial evidence; therefore, exception number twenty-one (21) is denied.

       
       

   22. HCAC excepts to finding of fact in paragraph 85 regarding insurance and private pay projections. The finding is supported by competent, substantial evidence; therefore, exception number twenty-two (22) is denied.

       
       

   23. HCAC excepts to finding of fact in paragraph 87 regarding insurance coverage. The finding is supported by competent, substantial evidence; therefore, exception number twenty-three (23) is denied.

       
       

   24. HCAC excepts to the last sentence in paragraph 88 regarding payor mix. The finding is supported by competent, substantial evidence; therefore, exception number twenty-four (24) is denied.

       
       

   25. HCAC excepts to the second sentence in paragraph 90 regarding its projected occupancy rate. The finding is supported by competent, substantial evidence; therefore, exception number twenty-five (25) is denied.

   26. HCAC excepts to the findings in paragraph 91 regarding need, payor mix, and occupancy. The finding is supported by competent, substantial evidence; therefore, exception number twenty-six (26) is denied.

       
       

   27. HCAC excepts to the finding in paragraph 94 regarding bad debt. The finding is supported by competent, substantial evidence; therefore, exception number twenty-seven (27) is denied.

       
       

   28. HCAC excepts to the finding in paragraph 95 regarding the $350.00 charge. The finding is supported by competent, substantial evidence; therefore, exception number twenty-eight (28) is denied.

       
       

   29. HCAC excepts to finding of fact in paragraph 96 regarding financial feasibility. The finding is supported by competent, substantial evidence; therefore, exception number twenty-nine (29) is denied.

       
       

   30. HCAC excepts to the Hearing Officer's citation of the renumbered sections of Chapter 381. Only with regard to subsection 381.705(1)(n) does HCAC allege a substantive change in the law. I conclude that subsection 381.705(1)(n), Florida Statutes should not apply to review of HCAC's application. It is noted in the Recommended Order that the Hearing Officer concluded that HCAC's intent to provide 5.6 percent indigent care is adequate. See paragraph 37. Exception number thirty (30) is granted as to Section 381.705(1)(n), Florida Statutes, and is otherwise denied.

       
       

   31. HCAC excepts to the Hearing Officer's conclusion that the requirement of Rule 10-5.011(1)(p)3.a that no additional beds shall be added unless the "average annual occupancy rate" for existing beds in a district is 80 percent or more, "for the preceding year" is applicable to HCAC's application. HCAC's objection is founded on the fact that only six weeks of data were available because the only existing beds were in a facility that had been open only six weeks.

       
       

   32. I conclude that in the present case the 80 percent occupancy criteria should be accorded no weight. As pointed out by HCAC, a occupancy rate might be relevant for a facility in operation several months, but not for one opened only six weeks. The exception is granted for the reasons stated herein.

       
       

   33. HCAC excepts to the Hearing Officer's conclusion of law that the services offered at Florida State Hospital comply with the requirements of Rule 10-5.011(1)(p)3.c., Florida Administrative code. This conclusion is incorrect; therefore Florida State Hospital does not satisfy the access requirement of the rule. Exception number thirty-two (32) is granted.

       
       

       RULING ON EXCEPTIONS FILED BY HRS

       
       

   34. HRS excepts to the Hearing Officer's conclusion that Rivendell's occupancy rate must be considered under rule 10- 5.011(1)(p)3.a., Florida Administrative Code. The exception is granted for the reasons stated in the ruling on HCAC exception number 31.

       
       

   35. HRS second exception is the same as HCAC exception number 32. The exception is granted.

       FINDINGS OF FACT

       
       

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

       
       

       CONCLUSIONS OF LAW

       
       

   37. The Department hereby adopts and incorporates by reference the conclusions of law set forth in the Recommended Order except where inconsistent with the ruling on the exceptions.

       
       

   38. Based on a balanced weighing of all applicable statutory and rule criteria I conclude that HCAC's application for a CON to authorize a 50 bed, free standing, long term psychiatric hospital in Leon County should be denied.

Based upon the foregoing, it is

ADJUDGED, that HCAC Corporation's application for certificate of need number 4502 be DENIED.

DONE and ORDERED this 8th day of June 1988, in Tallahassee, Florida.

Gregory L. Coler Secretary

Department of Health and Rehabilitative Services

by Assistant Secretary for Programs

COPIES FURNISHED:

Larry J. Sartin Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

Jean Laramore, Esquire

C. Anthony Cleveland, Esquire Post Office Box 11068 Tallahassee, Florida 32302

NOTICE OF RIGHT TO JUDICIAL REVIEW

A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO JUDICIAL REVIEW WHICH SHALL BE INSTITUTED BY FILING ONE COPY OF A NOTICE OF APPEAL WITH THE AGENCY CLERK OF HRS, AND A SECOND COPY, ALONG WITH FILING FEE AS PRESCRIBED BY LAW, WITH THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE THE AGENCY MAINTAINS ITS HEADQUARTERS OR WHERE A PARTY RESIDES. REVIEW PROCEEDINGS SHALL BE CONDUCTED IN ACCORDANCE WITH THE FLORIDA APPELLATE RULES. THE NOTICE OF APPEAL MUST BE FILED WITHIN 30 DAYS OF RENDITION OF THE ORDER TO BE REVIEWED.

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

AGENCY FINAL ORDER

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

STATE OF FLORIDA

DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES

TALLAHASSEE MEMORIAL REGIONAL MEDICAL CENTER,

Petitioner, CASE NO.: 86-4373 CON NO.: 4502

vs.

DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES and HCAC CORPORATION,

Respondents.

/ APALACHEE CENTER FOR HUMAN SERVICES, INC.

Petitioner, CASE NO.: 86-4374 CON NO.: 4502

vs.

DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES and HCAC CORPORATION,

Respondents.

/

FINAL ORDER

This cause came on before me for the purpose of issuing a final agency order. The Hearing Officer assigned by the Division of Administrative Hearings (DOAH) in the above-styled case submitted a Recommended Order to the Department of Health and Rehabilitative Services (HRS). A copy of that Recommended Order is attached hereto.

RULING ON EXCEPTIONS FILED BY HCAC

1. HCAC excepts to the Hearing Officer's findings in paragraph 12 regarding the lack of need for HCAC's proposed facility. The Hearing Officer's findings of fact are entitled to the same weight as the verdict of a jury. Grunan vs. State, 79 So2d 1313 (2nd DCA 1980). It is the Hearing Officer's function to resolve conflicts in the evidence, judge the credibility of witnesses, draw permissible inferences from the evidence, and bake findings of fact; and the agency may not reject a finding unless there is no competent, substantial evidence from which the finding could reasonable be inferred.

   Heifetz vs. Department of Business Regulation, 475 So2d 1277 at 1281 (Fla. 1st DCA 1985). Exception number one (1) is denied as the findings are supported by competent substantial evidence.

   
   

2. HCAC excepts to the Hearing Officer's finding in paragraph 18 that need for HCAC's proposed facility was not proved. The finding is supported by competent, substantial evidence; therefore, exception number two (2) is denied.

   
   

3. HCAC excepts to the last sentence in paragraph 19. The finding is supported by competent, substantial evidence; therefore, exception number three

   (3) is denied.

   
   

4. HCAC excepts to the last sentence of paragraph 20 regarding referral of Leon County residents to distant facilities. The finding is supported by competent, substantial evidence; therefore, exception number four (4) is denied.

   
   

5. HCAC excepts to the last sentence of paragraph 21 regarding HCAC's expectation of receiving referrals of patients. The finding is supported by competent, substantial evidence; therefore, exception number five (5) is denied.

   
   

6. HCAC excepts to the last sentence of paragraph 22 as an incorrect conclusion of law. Exception number six (6) is denied.

   
   

7. HCAC excepts to findings of fact in paragraph 23 regarding a need methodology. The finding is by competent, substantial evidence; therefore, exception number seven (7) is denied.

   
   

8. HCAC excepts to the Hearing Officer's findings in paragraph 24 and 25 regarding travel time. The finding is supported by competent, substantial evidence; therefore, exception number eight (8) is denied.

   
   

9. HCAC excepts to the findings in paragraph 27 regarding Florida State Hospital. The finding is supported by competent, substantial evidence; therefore, exception number nine (9) is denied. It is noted that the findings regarding Florida State Hospital are irrelevant to the evaluation of HCAC's proposal. See the ruling on exception number 32.

   
   

10. HCAC excepts to the last sentence in paragraph 28 regarding travel times. The finding is supported by competent, substantial evidence; therefore, exception number ten (10) is denied.

    
    

11. HCAC excepts to the last sentence in paragraph 29 regarding the State Health Plan. The finding is supported by competent, substantial evidence; therefore, exception number eleven (11) is denied.

    
    

12. HCAC excepts to finding of fact in paragraph 31. The finding is supported by competent, substantial evidence, therefore, exception number twelve

    (12) is denied.

    
    

13. HCAC excepts to the last sentence of paragraph 32. The finding is supported by competent, substantial evidence, therefore, exception number thirteen (13) is denied.

    
    

14. HCAC excepts to the hearing Officer's rejection of its proposed findings number 123 and 124 as irrelevant. The Hearing Officer's ruling is correct and exception number fourteen (14) is denied.

15. HCAC excepts to the last sentence of paragraph 35. The finding is supported by competent, substantial evidence; therefore exception number fifteen

    (15) is denied.

    
    

16. HCAC excepts to the last two sentences of paragraph 47. The finding: are supported by competent, substantial evidence; therefore, exception number sixteen (16) is denied.

    
    

17. HCAC excepts to finding of fact In paragraph 62 regarding the overlap of the services provided by Apalachee and those proposed by HCAC. The finding is supported by competent, substantial evidence-, therefore, exception number seventeen (17) is denied.

    
    

18. HCAC excepts to finding of fact in paragraph 63. The finding is supported by competent, substantial evidence; therefore, exception number eighteen (18) is denied.

    
    

19. HCAC excepts to finding of fact in paragraph 64 regarding impact on TMRC's occupancy rate. The finding is supported by competent, substantial evidence; therefore, exception number nineteen (19) is denied.

    
    

20. HCAC excepts to finding of fact in paragraph 66 regarding Impact on Rivendell. The finding is supported by competent, substantial evidence; therefore, exception number twenty (20) is denied.

    
    

21. HCAC excepts to finding of fact in paragraph 84. The finding is supported by competent, substantial evidence; therefore, exception number twenty-one (21) is denied.

    
    

22. HCAC excepts to finding of fact in paragraph 85 regarding insurance and private pay projections. The finding is supported by competent, substantial evidence; therefore, exception number twenty-two (22) is denied.

    
    

23. HCAC excepts to finding of fact in paragraph 87 regarding insurance coverage. The finding is supported by competent, substantial evidence; therefore, exception number twenty-three (23) is denied.

    
    

24. HCAC excepts to the last sentence in paragraph 88 regarding payor mix. The finding is supported by competent, substantial evidence; therefore, exception number twenty-four (24) is denied.

    
    

25. HCAC excepts to the second sentence in paragraph 90 regarding its projected occupancy rate. The finding is supported by competent, substantial evidence; therefore, exception number twenty-five (25) is denied.

    
    

26. HCAC excepts to the findings in paragraph 91 regarding need, payor mix, and occupancy. The finding is supported by competent, substantial evidence; therefore, exception number twenty-six (26) is denied.

    
    

27. HCAC excepts to the finding in paragraph 947 regarding bad debt. The finding is supported by competent, substantial evidence; therefore, exception number twenty-seven (27) is denied.

    
    

28. HCAC excepts to the finding in paragraph 95 regarding the $350.00 charge. The finding is supported by competent, substantial evidence; therefore, exception number twenty-eight (28) is denied.

29. HCAC excepts to finding of fact in paragraph 96 regarding financial feasibility. The finding is supported by competent, substantial evidence; therefore, exception number twenty-nine (29) is denied.

    
    

30. HCAC excepts to the Hearing Officer's citation of the renumbered sections of Chapter 381. Only with regard to subsection 381.705(1)(n) does HCAC allege a substantive change in the law. 1 conclude that subsection 381.705(1)(n) , Florida Statutes should not apply to review of HCAC's application. It is noted in the Recommended Order that the Hearing Officer concluded that HCAC's intent-to provide 5.6 percent indigent care is adequate. See paragraph 37. Exception number thirty (30) is granted as to Section 381.705(1)(n), Florida Statutes, and is otherwise denied.

    
    

31. HCAC excepts to the Hearing Officer's conclusion that the requirement of Rule 10-5.011(1)(p)3.a that no additional beds shall be added unless the "average annual occupancy rate" for existing beds in a district is 80 percent or more "for the preceding year" is applicable to HCAC's application. HCAC's objection is founded on the fact that only six weeks of data were available because the only existing beds were in a facility that had been open only six weeks.

    
    

    I conclude that in the present case the 80 percent occupancy criteria should be accorded no weight. As pointed out by HCAC, a 24 percent occupancy rate might be relevant for a facility in operation for several months, but not for one opened only six weeks. The, exception is granted for the reasons stated herein.

    
    

32. HCAC excepts to the Hearing Officer's conclusion of law that the services offered at Florida State Hospital comply with the requirements of Rule 10-5.011(1)(p)3.c., Florida Administrative code. This conclusion is incorrect; therefore Florida State Hospital does not satisfy the access requirement of the rule. Exception number thirty-two (32) is granted.

RULING ON EXCEPTIONS FILED BY HRS

1. HRS excepts to the Hearing Officer's conclusion that Rivendell's occupancy rate must be considered under rule 10- 5.011(1)(p)3.a., Florida Administrative Code. The exception is granted for the reasons stated in the ruling on HCAC exception number 31.

   
   

2. HRS second exception is the same as HCAC exception number 32. The exception is granted.

FINDINGS OF FACT

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

CONCLUSIONS OF LAW

The Department hereby adopts and incorporates by reference the conclusions of law set forth in the Recommended Order except where inconsistent with the ruling on the exceptions.

Based on a balanced weighing of all applicable statutory and rule criteria I conclude that HCAC's application for a CON to authorize a 50 bed, free standing, long term psychiatric hospital in Leon County should be denied.

Based upon the foregoing, it is

ADJUDGED, that HCAC Corporation's application for certificate of need number 4502 be DENIED.

DONE and ORDERED this 8th day of June, 1988, in Tallahassee, Florida.

Gregory L. Coler Secretary

Department of Health and Rehabilitative Services

by Assistant Secretary for Programs

Copies furnished to:

Larry J. Sartin Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

Jean Laramore, Esquire

C. Anthony Cleveland, Esquire Post Office Box 11068 Tallahassee, Florida 32302

Ronald W. Brooks, Esquire 863 East Park Avenue Tallahassee, Florida 32301

Theodore E. Mack, Esquire Assistant General Counsel Department of Health and Rehabilitative Services 2727 Mahan Drive

Fort Knox Executive Center

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a copy of the foregoing was sent to the above-named people by U.S. Mail this 10th day of R. S. Power, Agency Clerk Assistant General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Building One, Room 407 Tallahassee, Florida 32399-0700 904/488-2381

NOTICE OF RIGHT TO JUDICIAL REVIEW

A party who is adversely affected by this final order is entitled to judicial review which shall be instituted by filing one copy of a Notice of Appeal with the agency clerk of HRS, and a second copy, along with filing fee as prescribed by law, with the District Court of Appeal in the Appellate District where the agency maintains its headquarters or where a party resides. Review proceedings shall be conducted in accordance with the Florida Appellate Rules.

The Notice of Appeal must be filed within 30 days of rendition of the order to be reviewed.

Docket for Case No: 86-004373

Orders for Case No: 86-004373