STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
UNIVERSITY COMMUNITY )
HOSPITAL, )
)
Petitioner, )
)
vs. ) CASE NO. 87-4760
)
Respondent, )
and )
)
HILLSBOROUGH COUNTY )
HOSPITAL AUTHORITY, )
)
Intervenor. )
) HILLSBOROUGH COUNTY )
HOSPITAL AUTHORITY, )
)
Petitioner, )
)
vs. ) CASE NO. 88-1275
) DEPARTMENT OF HEALTH AND ) REHABILITATIVE SERVICES, )
)
Respondent. )
and )
)
UNIVERSITY COMMUNITY )
HOSPITAL, )
)
Intervenor. )
)
RECOMMENDED ORDER
Pursuant to notice, the above matters were heard before the Division of Administrative Hearings by its duly designated Hearing Officer, Diane A. Grubbs, on May 3-6, 1988, in Tallahassee, Florida.
APPEARANCES
For University Cynthia S. Tunnicliff, Esquire Community Mary E. Haskins, Esquire Hospital: Post Office Drawer 190
Tallahassee, Florida 32302
For Hillsborough John A. Radey, Esquire
County Hospital Elizabeth W. McArthur, Esquire Authority Post Office Drawer 11307
Tallahassee, Florida 32302
For Respondent: Leslie F. Mendelson, Esquire
2727 Mahan Drive, Suite 308
Tallahassee, Florida 32308 BACKGROUND
Case No. 87-4760 arose in October 1986 when petitioner, University Community Hospital (UCH), filed an application with the Department of Health and Rehabilitative Services (HRS) seeking approval of a new thirty-bed comprehensive medical rehabilitation (CMR) unit to be established by converting thirty medical/surgical beds to CMR beds. In conjunction with this application; UCH also requested an exemption from certificate of need (CON) review for certain beds dedicated to rehabilitative care prior to July 1983. On September 23, 1987, HRS denied the application for a CON. On October 1, 1987, HRS determined that nine existing rehabilitation beds at UCH qualified for an exemption from CON review. Thereafter, UCH requested a hearing pursuant to Subsection 120.57(1), Florida Statutes (1987) to contest the denial of its application.
That matter has been assigned Case No. 87-4760. Petitioner, Hillsborough County Hospital Authority d/b/a Tampa General Hospital (TGH), which provides CMR services in Hillsborough County, thereafter intervened in that proceeding. In addition, TGH requested a formal hearing on March 8, 1988, to contest the determination that UCH was entitled to a CON exemption for a nine bed CMR unit. That matter has been assigned Case No. 88-1275. Both cases were consolidated for hearing purposes by order dated May 3, 1988.
By notice of hearing dated November 3, 1987, a final hearing in Case No. 87-4760 was scheduled on December 28, 1987, in Tallahassee, Florida. At the request of UCH, it was rescheduled to March 29-April 1, 1988, at the same location. By consent of all parties, both matters were reset to May 3-6, 1988, at the same location.
At final hearing, UCH presented the testimony of Terry L. Jones, chief administrative officer of UCH, Sarah E. Slohn, director of UCH's physical medicine department and accepted as an expert in the provision of rehabilitative services, Barbara Hayes, director of UCH's rehabilitation unit and accepted as an expert in the provision of rehabilitative services and physical therapy, Linda J. Wendt, accepted as an expert in health care planning, Dr. James Patterson, accepted as an expert in physical medicine and rehabilitation, Reid
S. Jaffe, a supervisor in HRS's office of community health facilities, Norman Stein, UCH's assistant administrator for fiscal services and accepted as an expert in health care financing, and Robert E. Pannell, a planner in HRS's office of comprehensive health planning. It also offered UCH exhibits 1-17. All exhibits were received in evidence. TGH presented the testimony of Newell
France, TGH's chief executive officer, Ronald T. Luke, accepted as an expert in health planning, Paul A. Powers, chief financial officer of TGH and accepted as an expert in health care finance, Terry L. Jones, UCH's chief executive officer, and Jeffrey Garber, TGH's administrative director of rehabilitative services. It also offered TGH exhibits 101-122 & 124-140. All exhibits were received except exhibit 136. HRS presented the testimony of Sharon M. Gordon- Girvon, administrator of HRS's office of community health services and facilities. Finally, joint exhibits 1-17 were received in evidence.
On November 29, 1988, the cases were transferred to the undersigned pursuant to Subsection 120.57(1)(b)11., Florida Statutes (1987) due to the unavailability of the hearing officer who conducted the hearing.
The transcript of hearing (seven volumes) was filed on July 28, 1988.
Proposed findings of fact and conclusions of law were filed by the parties on September 2, 1988. A ruling on each proposed finding is made in the Appendix attached to this Recommended Order.
As amended at hearing, the issues are (a) whether nine rehabilitation beds which were operational at UCH prior to July 1, 1983 should be grandfathered under Subsection 395.003(4), Florida Statutes (1987), (b) whether UCH should be granted a CON for an additional eleven CMR beds, or (c) whether UCH should be granted a CON for twenty CMR beds if the nine beds are not grand fathered.
Based upon all of the evidence, the following findings of fact are determined:
FINDINGS OF FACT
Introduction
On October 15, 1986 University Community Hospital, Inc. (UCH or applicant), which operates an acute care facility in Tampa, Florida, filed an application with respondent, Department of Health and Rehabilitative Services (HRS), seeking a certificate of need (CON) authorizing approval for a new thirty-bed comprehensive medical rehabilitation (CMR) unit to be established by converting and delicensing thirty medical/surgical beds to CMR beds at an estimated cost of $325,240. As a health care provider, UCH is licensed by and subject to the regulatory authority of HRS.
On February 20, 1987, and in conjunction with the above application UCH submitted a written request to HRS seeking exemption of an existing rehabilitation unit from CON review. In its request, UCH represented that its rehabilitation unit was providing CMR services prior to July 1983 and thus was eligible to have those beds grand fathered without the need for CON review.
This was because prior to July 1983, HRS did not consider CMR services as a separate specialty requiring a CON.
After requesting and receiving additional information from the applicant, HRS issued proposed agency action on September 23, 1987, denying the application for a CON. As grounds, HRS stated that "there is a projected District 5 (sic) surplus of 12 rehabilitation beds in the 1991 planning horizon" and that "Tampa General Hospital's 60 rehabilitation beds were occupied at an 84 percent (occupancy) during the preceding calendar quarter; L. W. Blake's 28 rehabilitation beds were occupied at a 74 percent occupancy for the same period; (and) the district had a combined occupancy of 79 percent which is below the 85 percent occupancy standard."
By letter dated October 1, 1987, HRS determined preliminarily that nine existing rehabilitation beds at UCH qualified for an exemption from CON services based on HRS's finding that UCH was operating a nine-bed CMR unit prior to July 1983. This written advice was authored by HRS's administrator of community health services and facilities, Sharon M. Gordon-Girvon.
Hillsborough County Hospital Authority is a public agency operating two acute care hospitals in Tampa, Florida, one being the Tampa General Hospital (TGH). Citing a potential adverse effect on its CMR unit if UCH's application was approved, TGH filed a petition to intervene in support of HRS's proposed agency action on November 6, 1987. This petition was granted on December 18, 1987. In addition, on March 8, 1988, TGH requested a formal hearing to contest
HRS's preliminary determination that UCH was entitled to nine CMR beds by virtue of having operated the same prior to July 1983. In general terms, TGH asserted that HRS had no authority to grant an exemption, but if it did, UCH did not qualify for one. The two cases were consolidated on May 3, 1988.
The Applicant and Protestant
UCH is a community hospital that began service to patients on July 15, 1968. Its facility is located at 3100 East Fletcher Avenue, Tampa, Florida. It is managed by a twenty person board of trustees and currently is licensed by HRS for four hundred and four beds offering medical/surgical, diabetes, oncology, pediatric and rehabilitative services. UCH is accredited by the Joint Commission on Accreditation of Hospitals (JCAH). The facility provides health care services in HRS District 6, an artificially created health planning area that includes Hillsborough, Polk, Manatee, Hardee and Highlands Counties. In January 1987, UCH executed a contract with HRS and became a participant in the Medicaid program. As such, it receives reimbursement from HRS for services provided to Medicaid patients.
Created by special act of the legislature, the Hillsborough County Hospital Authority operates two public, not-for-profit hospitals in Hillsborough County, those being TGH and Hillsborough County Hospital. TGH is a 770-bed facility providing services within HRS District 6. Since it provides sophisticated services to patients who are on average much more severely ill than patients at community hospitals such as UCH, TGH can be described as a tertiary hospital. Since 1984 TGH has operated a CON-approved and licensed sixty-bed CMR unit connected to its main acute care facility and is the only level one trauma center on the west coast of Florida. Also, TGH is the primary provider of indigent care in the district, carrying a disproportionate share of the indigent care burden. In 1987 alone, its indigent care costs totaled almost
$30 million.
C. Grandfathering of Beds
Prior to July 1983, HRS determined whether there was a need for various types of hospital beds (e.g., general medical/surgical, critical care, psychiatric and rehabilitation) under its general acute care bed need rule now codified as Rule 10-5.011(1)(m), Florida Administrative Code (1987). Thus, prior to July 1983, CMR services were not recognized by HRS as a separate bed category for CON and licensure purposes, and the conversion by a hospital of licensed acute care beds to rehabilitation beds did not constitute a change in service.
In January 1982 UCH established a nine-bed rehabilitation unit on the sixth floor of the south wing of its facility. The unit was established because UCH believed there to be a lack of rehabilitation care in the community. These beds came from its licensed medical/surgical inventory. At that time, only TGH offered CMR services in Hillsborough County and had sixteen beds dedicated to that specialty. According to UCH's chief physical therapist, the unit was "full from the first week." In its 1982-83 licensure application, which is a filing that must be made with HRS every two years, UCH reflected that its bed inventory included nine dedicated to rehabilitation care.
On May 16, 1983, UCH, through its counsel, inquired of HRS whether a proposal to convert nine more licensed medical/surgical beds to CMR beds at a cost of less than $600,000 would be subject to CON review. 1/ Also, it requested that, in the event HRS determined that a CON was needed, the request
letter be treated as a letter of intent. One week later, HRS responded by letter and requested further information. Among other things, HRS asked for "a detailed description of rehabilitative care currently being provided in the nine beds dedicated to rehabilitative use." This information was provided to HRS by UCH by letter dated June 6, 1983. It included a lengthy description of the care being provided in the nine beds dedicated to rehabilitative use. According to the response, UCH was providing, among other things, a "comprehensive rehabilitation service, or intensive care providing a coordinated multi- disciplinary approach to patients with severe physical disabilities." This letter was followed on June 30 by another letter from UCH's counsel advising HRS that it understood HRS's position that a project to change the rehabilitation beds to CMR beds would be subject to CON review and that UCH contemplated no such change in service.
Effective June 8, 1983, HRS adopted a rule which prescribed a separate bed need methodology for rehabilitation beds. Effective July 1, 1983, the legislature amended Section 395.003, Florida Statutes (1983), by adding a new subsection (4) which required that all licensees providing rehabilitation services thereafter reflect the number of beds in that category on the face of their hospital license. At the same time, the legislature amended Section 381.706, Florida Statutes (1983), to require CON approval for any change in the number of rehabilitation beds by a provider. Thus, on and after July 1, 1983, CMR services were recognized as a separate bed category for licensure and CON purposes.
On July 19, 1983, or after the above changes took effect, HRS advised UCH that, because UCH had not sought accreditation for its rehabilitation unit from the Commission on Accreditation of Rehabilitation Facilities (CARF), and its unit did not meet the minimum size requirements (twenty beds) for a rehabilitation unit under then-existing HRS Rule 10-5.11(24)(c)3.a., Florida Administrative Code (1983), it had concluded UCH was not providing CMR services as defined by its rule. The letter pointed out also that any effort by UCH to establish an eighteen bed unit would require a CON pursuant to the recent change in the general law. Finally, HRS advised UCH that it could "continue to provide rehabilitative care in the existing unit, using the nine (9) medical/surgical beds dedicated for that care" and that it could also "provide rehabilitative care on the third floor and use an additional nine (9) medical/surgical beds." HRS added that such beds would "not be considered to constitute comprehensive medical rehabilitation care and the beds dedicated to such care will be counted as medical/surgical beds."
Because of a demand for more rehabilitation beds, UCH made a decision to expand its rehabilitation unit in the winter of 1983-84 from nine to fourteen beds. In August 1984 UCH expanded its unit to eighteen beds. It did not seek HRS's approval for either expansion project because of its interpretation of HRS's letter of July 19, 1983, that CON approval was not necessary for units having less than twenty beds.
Responding to the changes in the general law, HRS undertook to inventory the existing rehabilitation beds in the state. To this end, its office of comprehensive planning sent a questionnaire to all hospitals, including UCH, in late 1983 inquiring whether they provided CMR services. To verify the accuracy of the responses, but not for the purpose of determining whether CMR services existed prior to July 1983, HRS checked whether CON authorization had been issued previously to the facility, whether the facility reported CMR services to the newly created Hospital Cost Containment Board, and
whether the facility reported CMR beds in its biannual licensure application. In its reply to the questionnaire, UCH reported it had a twenty-bed rehabilitation unit.
In 1983, UCH requested that the federal Health Care Financing Administration (HCFA), which operates the federal Medicare program, recognize its rehabilitation services as being exempt from diagnostic related groups (DRG). If the request was approved, this meant that UCH could be reimbursed on a cost-basis for services rendered to Medicare patients in its rehabilitation unit instead of under the DRG system which reimbursed the facility on a flat rate basis regardless of the length of stay of a patient. HCFA granted the request for exemption of the nine beds effective October 1, 1983. On October 1, 1984, HCFA recognized an exemption for eighteen beds. This exclusion was renewed after a subsequent survey of the unit in 1985. When these exemptions were granted, HCFA did not enforce a federal requirement that a facility be licensed for CMR services in order for HCFA to recognize the exemption.
In 1984-85, HRS became aware of certain DRG-exempt rehabilitation units in the state that were not licensed by HRS for CMR services. As noted in a later finding, these providers, including UCH, were allowed to seek a CON exemption and demonstrate that they were providing CMR services prior to July 1983. This opportunity was given partly because HCFA began enforcement of its policy that CMR services be licensed by the state before an exemption would be recognized. Indeed, HCFA revoked UCH's exclusion from Medicare's prospective payment system effective October 1, 1987, on the ground UCH's unit was not licensed by the state. It was later reinstated in 1988, for nine beds after HCFA became aware of HRS's preliminary determination on October 1, 1987, that UCH was entitled to a CON exemption. Because of this limited exemption, UCH now accepts no more than nine Medicare patients at any one time in its unit.
On March 18, 1985 UCH's chief executive officer, Terry L. Jones, filed with HRS the facility's biannual licensure application which reflected, inter alia, the facility's then current bed utilization. According to UCH's filing, UCH had three hundred sixty medical/surgical beds, twenty-six pediatric beds and eighteen CMR beds. A copy of the application has been received in evidence as TGH exhibit 102.
After receiving the application, HRS advised UCH by letter dated April 25, 1985, that "(HRS's) records (did) not indicate 18 comprehensive medical rehabilitation beds... Please explain." In reply to this, Jones advised HRS by letter dated April 29, 1985 that "a copy of our authorization for rehabilitation beds is attached." This "authorization" was a copy of HRS's July 19, 1983 letter.
In July 1985 HRS issued License No. 1779 for the continued operation of UCH's facility. In an undated transmittal letter, HRS stated in part:
Please be advised that part of the application pertaining to licensure of 18 comprehensive medical rehabilitation beds is hereby denied because you have failed to obtain a Certificate of Need or exemption from review pursuant to Section 381-493 through 381-499, Florida Statutes (F.S.) and Rule 10-5, Florida Administrative Code (F.A.C.). Certification as an excluded unit by the Department of Health and Human
Services, Health Care Financing Administration does not eliminate the Certificate of Need requirements. (Emphasis added.)
UCH was offered a point of entry to contest this decision.
After receiving the above advice, UCH did not request a hearing but simply inquired of HRS as to whether the eighteen beds should be counted under its general medical/surgical bed component. According to UCH, it did not contest the decision because HCFA continued to recognize UCH's unit as being exempt from the DRG's.
On May 16, 1986, Jones and HRS's licensure supervisor, John Adams, had a telephonic conversation concerning the status of the eighteen rehabilitation beds. To confirm the substance of this conversation, Jones advised Adams by letter as follows:
I wanted to confirm our conversation today regarding our "rehabilitation" beds licensure to avoid any future problems. You suggested that our 18 beds used for rehabilitation are appropriately licensed under medical/surgical. The beds are not Comprehensive Medical Rehabilitation beds and should not be listed under the Rehabilitation section. The beds could be listed under the "Other" category with an explanation that they are medical rehabilitation, but as you suggest, it would probably further confuse the issue.
We intend to continue to offer rehabilitation care with these beds, and understand they do not require a C.O.N. as they are not Comprehensive Rehabilitation Beds. (Emphasis added)
On or about May 6, 1986, someone at HRS's office of licensure and certification amended UCH's 1985-86 licensure application to reflect eighteen "Rehab" beds instead of eighteen CMR beds as originally recorded on the application by UCH.
In early 1986, TGH became concerned that UCH was providing CMR services without the necessary authority from HRS. It voiced these concerns to HRS on several occasions. On April 30, 1986, HRS advised TGH by letter that UCH had "authorization to use eighteen medical/surgical beds for the purpose of rehabilitation of patients in the hospital" but it did "not have approval for a comprehensive rehabilitation center." It added that HRS had been assured by UCH that UCH was not operating a comprehensive rehabilitation center. By letter dated October 6, 1986 TGH's counsel complained again to HRS's secretary that UCH was operating beyond its licensed authority. UCH learned of this complaint and responded by letter to HRS that its unit was established in 1982, nine beds "for rehabilitation purposes" had been approved by HRS in July 1983, and it had received permission to add nine more beds to its unit in 1983 because of its insufficient size (less than twenty beds) and failure to meet CARF standards.
On January 4, 1987, responded to UCH's letter and advised that, based upon a site visit, it now believed UCH was providing CMR services. The letter advised further that HRS had erred in 1983 by telling UCH that its rehabilitation unit was exempt from CON review because of its size (less than twenty units). This was because HRS now construed its Rule 10-5.11(24) governing size of units to apply only to proposed CMR units and not existing CMR units. In view of this error, HRS offered UCH the opportunity to request an exemption of its rehabilitation unit from CON review. This prompted UCH's request for exemption for its nine beds dedicated to rehabilitative care prior to July 1983.
In March 1987, an on-site inspection of UCH's facility was made by Robert E. Pannell, HRS's consultant for health services and facilities. This visit was prompted by UCH's request for exemption made on February 20, 1987. The results of that visit are reflected in a report and recommendation dated July 31, 1987, and received in evidence as joint exhibit 5. According to the report, UCH was providing CMR services prior to July 1983, and was entitled to an exemption. In reaching that conclusion, Pannell utilized ten criteria
developed during the course of previous investigations. Except for the criteria relating to unit size and compliance with CARF standards, which Pannell deemed to be inapplicable, Pannell concluded that UCH satisfied all others. These included the categories of distinct unit, range of services, provision of service prior to June 1983, team approach/team meetings, length of stay over twenty-eight days, separate policies and procedures, types of patients treated and individualized patient goals. These criteria generally track the CMR rule. Pannell's recommendation was reviewed and concurred in by two other HRS administrators, and proposed agency action granting the exemption was issued by HRS on October 1, 1987.
The evidence is conflicting as to whether UCH actually provided CMR services as defined in HRS's rule prior to July 1983. This matter is crucial since eligibility for an exemption is contingent on such a showing.
The UCH rehabilitation unit was not specifically designed for rehabilitation care and did not satisfy the CARF standards prior to July 1983. Indeed, UCH has been upgrading its program and facilities since that date to comply with those standards. In 1986, UCH requested and received from HRS authorization to make a complete renovation of its sixth floor "rehabilitation unit" at a cost of $300,000. After doing so, the unit satisfied CARF standards and later became accredited by JCAH. 2/ Prior to 1986, UCH's rooms were not designed for rehabilitation care and were like those in any medical-surgical unit. For example, they did not allow wheelchair accessibility, there were no central bathing facilities and the individual bathrooms were not wheelchair accessible. As to the requirement that the unit have separate policies and procedures for rehabilitation services, UCH's policy manual on this subject was not drafted until 1984. As to the requirement that the unit have individualized patient goals, UCH's patients did not have an overall rehabilitation patient care plan prior to July 1983. Rather, there were separate patient goals in separate sections of the medical record pertaining to each discipline, such as physical therapy and nursing.
Until the 1986 renovation project was completed, UCH's rehabilitation unit did not have a physical therapy room on the same floor as the patients. Physical therapy, if needed, was provided on the first floor of the facility. Thus, prior to that date, therapy was provided to rehabilitation patients bedside, exactly as medical rehabilitation services are provided bedside to general medical-surgical patients throughout the hospital. Further, the nine
beds dedicated to rehabilitative care were mixed in with non-rehabilitative beds so that a semiprivate room might have one dedicated to rehabilitative care and the other used by a patient not receiving that type of service. According to HRS's supervisor of medical facilities, a rehabilitation unit is not considered to be a physically distinct unit unless all patients and support services are in the same area of a floor and not scattered throughout the hospital. In addition, the area devoted to CMR services must house only patients receiving CMR services.
There is a distinction between medical rehabilitation services and CMR services. Medical rehabilitation services provided in a hospital setting include such services as physical therapy, occupational therapy and speech therapy and are routinely available to patients in general medical-surgical beds. Further, medical rehabilitation services have neither an integration of the disciplines nor the full-time assignment of the various specialties (e.g., physical therapy, occupational therapy, speech pathology, rehabilitation nursing, social services, psychologist and the like) to the care of the patient. In contrast, CMR services are a specialized, intensive type of rehabilitation service that involve a coordinated, multi-disciplinary approach to a person's disability. Indeed, CMR services are defined by statute to be a "tertiary" service that is specialized and concentrated in a limited number of hospitals to ensure the quality, availability and cost-effectiveness of that service. In summary, there is a marked difference between the two in the level of care and intensity of services.
Prior to July 1983 UCH's nine bed unit provided medical, but not comprehensive medical, rehabilitation services to its patients.
Application for Additional Beds - Statutory and Rule Compliance
Need for New Beds - Subsection 381.705(1)(a), F.S.
At hearing, UCH amended its request to seek only twenty CMR beds. If the amended application is approved, UCH will convert and delicense a comparable number of medical/surgical beds from its inventory. There are no capital costs associated with the project.
As noted earlier, UCH lies within HRS District 6 which is composed of Hillsborough, Polk, Manatee, Hardee and Highlands Counties. Presently, the only existing CMR units in the District are sixty beds at TGH and twenty-eight beds at L. W. Blake Hospital in Bradenton, Florida. In addition, just prior to final hearing in this cause, Winter Haven Hospital (in Polk County) opened a twenty- four bed CMR unit at its facility giving a total of one hundred twelve beds in the District.
The need for new facilities is measured in relation to the applicable district plan and state health plan. The district (local) plan, while having broad policy goals applicable to health planning in general, is nonetheless inapplicable since it fails to address the need for rehabilitation services. Rule 10-5.011(1)(n), Florida Administrative Code (1987), is the HRS specialty bed need rule applicable to CMR services. The methodology has been incorporated into the state health plan and is an important consideration in the evaluation process. Under this rule, the bed need or surplus is projected five years into the future from the application filing year. In this case the so-called planning horizon against which the need for CMR beds is to be tested is July 1991.
According to HRS's proposed agency action to deny the application, there is a projected surplus of twelve rehabilitation beds in District 6 in the 1991 planning horizon. In addition, the proposed agency action found that the occupancy rate for TGH's unit was 84 percent during the "preceding calendar quarter," L. W. Blake Hospital had a 74 percent occupancy rate for the same period, and the district as a whole had a combined occupancy rate of 79 percent which is below the HRS 85 percent occupancy standard.
Bed need or surplus for the district is calculated by first determining the number of projected acute care discharges, broken down by age group, from hospitals in the district for the horizon year. The rule then sets as a standard 3.9 CMR beds per 1,000 acute care discharges in the target year, with those beds occupied at an average rate of 85 percent, assuming an average length of stay of twenty-eight days. In this case, the formula yielded a gross need for 1991 of one hundred beds.
The above targeted bed supply (gross need) was then compared to the actual inventory of existing and approved beds. As indicated in finding of fact 32, the actual inventory of CMR beds in District 6 was one hundred twelve beds thus indicating a surplus of twelve CMR beds. Therefore, no need was shown for UCH's proposed new CMR beds. To this extent, the application is inconsistent with the state health plan.
Besides the bed need calculation, Rule 10-5.011(1)(n)2.c.(II) addresses the utilization of existing providers in a second way and provides that, even if the formula produces a need for new CMR beds, no such beds shall be authorized "unless the average annual occupancy rate for all existing comprehensive rehabilitation facilities and units within the Department service district exceeds 85 percent occupancy for the preceding calendar quarter." This standard is somewhat confusing since it uses the phrases "average annual occupancy rate" and "preceding calendar quarter" in the same sentence thereby raising the question of which time period to use. However, HRS's practice is to use the occupancy rate for the preceding calendar quarter when applying the rule to this type of application. Also, it interprets the words "preceding calendar quarter" to mean the quarter preceding the scheduled decision date on the application. Therefore, HRS determined the occupancy rate of existing district providers for the calendar quarter preceding February 27, 1987, which was the scheduled decision date on UCH's application. During this time period, TGH's sixty beds were 84 percent occupied while L. W. Blake's occupancy rate for its twenty-eight beds was 74 percent, or a weighted average of 81 percent. This was below the required district standard of 85 percent. Had HRS used the occupancy data for the calendar quarter preceding the actual decision date of September 4, 1987, the two hospitals still had a weighted average of 81 percent, or well below the necessary rate. Neither calculation includes the twenty-four beds recently opened in Polk County. Thus, occupancy was not at a level to counterbalance the oversupply of CMR beds in District 6.
In an effort to show need on another basis, UCH presented evidence concerning those factors enumerated in Rule 10-5.011(1)(n)2.b.(I)-(IV) and substituted more favorable numbers into the formula. To support the use of more favorable formula data, UCH asserted that if actual admissions (4.7) and patient length of stay (35-37 days) were used, the formula would produce a need for forty-six new beds in 1991. It contended also that if national incidence and prevalence rates were applied to the District 6 population, the bed need would be in excess of three hundred. Both calculations are inappropriate since they draw upon factors already taken into account in the rule or are based on
erroneous assumptions. As to evidence submitted to support the other factors for determining need, which were not a part of UCH's completed application, UCH likewise made incorrect assumptions or applied incorrect data. Thus, UCH failed to demonstrate any special circumstances that would justify a deviation from the rule methodology.
Availability, Efficiency, Appropriateness, Accessibility, Extent of Utilization and Adequacy of Existing CMR Units (Subsections 381.705(1)(b) and (f), F.S.
In the last three years, there have been waiting lists for admission to the rehabilitation units at TGH and UCH. However, TGH's waiting list has declined in recent times, and it now intends to intensify its marketing efforts to maintain a high occupancy level. While UCH still had a waiting list as of the time of hearing, UCH has followed the practice of placing some of these patients on the list before they were ready for rehabilitation and before being screened medically and financially to determine if they met admissions criteria. Indeed, even though UCH has experienced 1988, occupancy rates ranging from only
68 percent to 78 percent, it continues to maintain waiting lists and fails to give continual assessment to those lists.
UCH's occupancy rate for its eighteen bed unit was 84 percent in 1986 and 86 percent in 1987. If the application is approved, UCH projects an 85 percent occupancy rate for the twenty-bed unit. Prior to August 1985, the unit was generally 85 percent to 90 percent full with a waiting list of three or four patients. However, until a renovation project was completed in 1986, the beds were used as medical rehabilitation beds, and utilization factors before that date are irrelevant. Further, non-licensed CMR beds are not taken into account by HRS in the licensing process. TGH's occupancy was 90.86 percent in 1986 and
88.51 percent in 1987, but the rate has declined in 1988, because of a new CMR facility in an adjoining district (New Port Richey) and a drop in the average length of stay by patients. This decline has occurred even though the demand for rehabilitation services is increasing, and it is not feasible to maintain
100 percent occupancy in a rehabilitation unit because of the way patients are historically admitted on Monday and discharged on Friday.
The HRS rule contains a two hour accessibility standard. The standard is not a limitation on facilities but is designed to insure that there are facilities available to the public. The standard requires that CMR services be accessible to 90 percent of the population within two hours driving time. This means that it is not unreasonable to have patients travel up to two hours to access CMR services. In interpreting this rule, HRS includes the availability of CMR beds in adjacent districts that are reasonably accessible. Thus, Districts 5 and 8, which include communities such as Sarasota, St. Petersburg and New Port Richey, are reasonably and economically accessible in adjoining districts. CMR beds that are available, or will shortly become available, include sixty beds in St. Petersburg, forty beds in Clearwater, twenty beds in New Port Richey, and sixty beds in Sarasota. While there was an accessibility problem in the past, this problem peaked in 1986 and has been subsequently alleviated by the rejuvenation of programs in Districts 5 and 6 and the addition of twenty-four beds at Winter Haven Hospital. 3/
District 6 has experienced rapid growth and is expected to continue growing in the future. However, health planning is not done in this state on a geographically ad hoc basis, particularly for tertiary services that are planned on a regional basis.
Proximity of a facility to the family of rehabilitation patients is important to the patient's recovery. This is because the training and counseling of the family is an important part of rehabilitative care. Approximately 80 percent of UCH's rehabilitation patients are elderly stroke patients. This makes driving time a significant barrier to the rehabilitation process if the families of the patients are likewise elderly and unable to drive more than a short distance. This was confirmed by the testimony of a local physician who always attempted to place patients in facilities closest to their families. However, because CMR services are not emergency health care services, HRS does not require such services to be accessible within a short drive time. Moreover, besides TGH, most of the other district facilities lie within one hour's driving time from Tampa.
As to financial accessibility to CMR services within District 6, TGH provides services to indigents, medicaid and medicare patients and private pay patients. There are also financial incentives to use outpatient services whenever possible.
Should UCH's application be denied, patients within District 6 will not experience any problems in obtaining CMR services.
Quality of Care - Subsection 381.705(1)(c), F.S.
UCH is accredited by the Joint Commission on Accreditation of Health Care Organizations (JCAH). At hearing, HRS expressed no concern over UCH's ability to provide quality of care.
If approved, UCH's twenty-bed unit will meet all criteria in Rule 10- 5.011(1)(n). UCH has agreed to provide all programs and range of services specified by the rule. The unit now meets CARF standards. Finally, UCH has a fully developed referral system.
Availability and Adequacy of Existing Providers - Alternatives - Subsection 381.705(1)(d), F.S.
There are no alternatives to CMR services for patients who need inpatient comprehensive rehabilitation services. This is because only a CMR unit offers the comprehensive specialized services needed by CMR patients. In this proceeding, UCH does not propose an alternative to CMR services. Rather, it proposes an alternative site from that offered by other CMR providers in the district.
Although there is a growing number of comprehensive outpatient rehabilitation facilities (CORF) in the district, these do not provide the same level of care as do CMR units.
Availability of Resources, including Manpower - Subsection 381.705(1)(h), F.S.
There is a general, overall shortage of specialized staff in the Tampa area. However, UCH does not have any problem attracting and keeping qualified staff for its eighteen-bed rehabilitation unit or finding qualified physical therapists to provide rehabilitation services. This was confirmed by HRS's administrator of community health services and facilities.
Financial Feasibility - Subsection 381.705(1)(i), F.S.
The proposed project, if approved, is financially feasible from both an immediate and long-term standpoint.
Impact on Costs of Health Care - Subsection 381.705(1)(i), F.S.
The evidence is conflicting as to whether the project will impact adversely or favorably upon UCH's costs of providing health care. It is found that the project will have a beneficial effect on UCH's cost of providing health care since the unit provides a positive cash flow and offsets in part its uncompensated indigent care costs. It will also prevent UCH from going into an operating deficit.
Provision of Services to Indigents and Medicaid Patients - Subsection 381.705(1)(n)1, F.S.
Historically, UCH has not provided a high percentage of care to Medicaid and indigent patients. In its application, UCH proposes a patient mix that includes 2.5 percent indigent care and 2.5 percent medicaid. Also, UCH proposes to screen patients seeking rehabilitation care and deny admission to the unit if they lack a funding source.
I. Impact on TGH.
TGH's CMR unit is a significant contributor to TGH's overall financial soundness. Admissions, revenues and operating margin from the unit have increased each year. Because of large indigent care costs (which totaled almost
$30 million in 1987), TGH depends on cross-subsidization of profits from private paying patients to offset the cost of indigent care and other laudable purposes such as being the primary teaching hospital for the University of South Florida. Therefore, it is necessary that TGH's CMR unit be fully utilized in order to maximize the return on its investment. TGH currently attracts patients from roughly a 72-mile radius and is impacted by providers in District 6 and adjoining districts. UCH's proposed CMR service area will overlap with TGH's existing service area and thus adversely impact on TGH's admissions. Indeed, TGH's profit margin in its CMR unit could be wiped out with a 10 percent drop in the occupancy rate.
Around sixty percent of UCH's rehabilitation admissions come from in- house. Virtually none of its patients come from Pinellas or Polk Counties but it does get a significant number from Pasco County. TGH also admits patients from Pasco County and would be adversely affected by this competition.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction of the subject matter and the parties thereto pursuant to Subsection 120.57(1), Florida Statutes (1987).
In its proposed order, UCH raises again the question of whether a third party, such as TGH, has standing to contest HRS's decision to declare a service to be exempt from CON review. Similar motions to dismiss filed by UCH and HRS were denied by Hearing Officer Grubbs by order dated May 3, 1988. By its motion, UCH contends that TGH lacks standing under the rationale expressed in Associated Home Agency, Inc. v. DHRS, 453 So2d 104 (Fla. 1st DCA 1984) and several subsequent agency final orders. 4/ In Associated, the court, in
rejecting a third party's effort to initiate a proceeding to contest HRS's determination that a service for a competitor was exempt, held, inter alia, that "the agency's determination, prior to issuance of the subject license, was that Associated met the 'grandfather' provisions of Section 400.504. A Associated had no standing to a 120.57 hearing on that question." In her order of May 3, the hearing officer found Associated to be inapposite and relied instead upon the case of Baptist Hospital, Inc. v. State, DHRS, 500 So2d 620 (Fla. 1st DCA 1986), which upheld the right of a third party to intervene in support of HRS's preliminary decision to deny a request for an exemption from CON review of a 50- bed designated rehabilitation unit. Finding that Baptist was controlling since it was rendered after the Associated case, and that Associated had not been distinguished from Baptist by UCH and HRS, the hearing officer denied the motions to dismiss for lack of standing. UCH contends now that Baptist is distinguishable since that case involved a request for exemption of a substantial change in service and not just an ongoing, existing service as is present here. UCH reasons that a substantial change in service can impact the interests of a third party competitor while an existing service cannot, thus explaining why the court found in Baptist that an intervenor's substantial interest was affected by the agency determination. While it is true that UCH seeks to exempt from CON review an allegedly ongoing existing service, it has interwoven that request with its application for a CON and, after its first motion to dismiss was denied, consented to having the two matters considered jointly and on a consolidated record. Indeed, the exemption request was filed shortly after the application, and the number of beds sought in the application is directly dependent upon HRS's decision on the exemption request. Under these circumstances, the two matters may be considered as one, and the agency decision clearly impacts TGH's substantial interest. As such, TGH has standing to protect its interest and to challenge HRS's decision to grant an exemption. The renewed motion to dismiss is accordingly denied.
Turning to the merits of the request for exemption, it is noted initially that UCH bears the burden of proving that it is entitled to an exemption. As a general rule, the provision for grandfathering is strictly construed against the party invoking it. 73 Am Jur 2d, Statutes s. 313. The purpose of a grandfather provision is, of course, to exempt from statutory regulation, imposed for the first time, those persons already in the field who have followed the trade and may be presumed to possess the necessary qualifications. Midstate Hauling Co. v. Mason, 177 So2d 206, 210 (Fla. 1965). In the context of this proceeding, to "follow the trade" means that the provider must have offered CMR services as defined by HRS rule prior to July 1983. The more credible and persuasive evidence reflects that, prior to July 1983, UCH was providing medical rehabilitation services and not CMR services. This being so, UCH is not entitled to an exemption. Cf. Baptist Hospital, Inc. v. State, DHRS, supra (hospital not a CMR provider even though its rehabilitation services share some of the attributes of CMR services).
UCH argues also that HRS is "estopped" from denying its request for an additional nine beds because of the advice given it in HRS's letter dated July 19, 1983. UCH points out that, in the letter, HRS advised UCH it did not have to apply for a CON and could continue providing rehabilitation services so long as its unit had less than twenty beds. This was based on HRS's interpretation of a rule that an existing unit of less than twenty beds did not require a CON. UCH contends further that, based on this advice, it added nine beds in 1984 and upgraded its facility in 1986 at a cost of $300,000 so as to bring it into compliance with CARF standards. UCH adds that in January 1987, HRS changed its interpretation of the rule and announced that the unit size requirement applied only to new units and not existing units and that a CON was accordingly
required. UCH argues that the new interpretation has been illegally applied in a retroactive manner and impaired UCH's vested rights. To support this contention, UCH cites the cases of Young v. Altenhaus, 472 So2d 1152 (Fla. 1985) and Anderson v. Anderson, 468 So2d 528 (Fla. 3rd DCA 1985). Young stands for the proposition that a statute which interferes with vested rights will not be given retroactive effect. Similarly, Anderson repeats the same principle that if a statute impairs vested rights, it will be deemed to operate prospectively only. Assuming this principle has application here and that HRS has given retroactive effect to a rule interpretation, the test is whether UCH had a vested right to CMR beds based upon HRS's actions. A close examination of HRS's representations to UCH from 1983 through 1986 reflects that HRS did not authorize UCH to establish an eighteen bed CMR unit but authorized it only to provide medical rehabilitation services. This is abundantly clear from communications between the two parties. Indeed, it was only after UCH made extensive changes to its facilities in 1986 that its unit had all of the attributes of CMR services. Thus, UCH had no vested right to operate a CMR unit in 1983, and any subsequent change in HRS policy did not impair that right. The argument is accordingly rejected.
To evaluate the application for new CMR services, reference to Section 381.705, Florida Statutes (1987) is appropriate. That section sets forth fourteen criteria to be used in evaluating a request for a CON. The record reflects that paragraphs (e), (f), (g), (j), (k), (l), and (m) are either inapplicable or are not in issue. Therefore, only the remaining seven criteria will be considered. In addition, reference to Subsection 381.702(18), Florida Statutes (1987) is appropriate. That subsection defines a "tertiary service" to be:
a health service which, due to its high level of intensity, complexity, specialized or limited applicability, and cost, should be limited to, and concentrated in, a limited number of hospitals to ensure the quality, availability and cost-effectiveness of such service. Examples of such service include
... comprehensive rehabilitation ... services ...
This latter statute defines CMR services to be a tertiary service or one that should be concentrated in a limited number of hospitals.
Several well-established principles involving the evaluation of CON applications bear repeating. First, a balanced consideration of all relevant statutory criteria must be made. DHRS v. Johnson and Johnson Home Health Care, Inc., 447 So2d 361, 363 (Fla. 1st DCA 1984). Further, the appropriate weight to be given each individual criterion is not fixed but must vary on a case-by-case basis, depending on the facts of each case. Collier Medical Center, Inc. v. DHRS, 462 So2d 83, 84 (Fla. 1st DCA 1985). With these principles in mind, a review of the record will be made to determine whether the criteria have been satisfied.
To satisfy the first statutory criterion, there must be a "need for the health care facilities and services. ... being proposed in relation to the applicable district plan and state health plan." In this case the district plan is inapplicable since it fails to specifically address rehabilitation beds. However, the state health plan incorporates by reference the bed need methodology found in Rule 10-5.011(1)(n), Florida Administrative Code (1987).
After applying the appropriate data to the formula, the methodology produces a surplus of twelve CMR beds in District 6 in 1991. This being so, the first criterion has not been satisfied. In reaching this conclusion, the undersigned has considered the arguments of UCH that (a) HRS used incorrect occupancy rates,
(b) the rule produced unrealistic results, and (c) other indicia of need should be considered. However, to the extent these indicia are already considered in the rule, efforts to deviate from the application of the methodology are inappropriate. Health Quest Realty XII v. DHRS, 477 So2d 576 (Fla. 1st DCA 1985). Next, the contention that HRS incorrectly interpreted its rule by using a calendar quarter of data instead of the average annual occupancy rate is deemed to be unavailing since HRS adequately explained its basis for interpreting the rule in the manner that it did. Finally, even if UCH's belated efforts to show need other than by the rule methodology did not violate the principle in Gulf Court Nursing Center v. DHRS, 483 So2d 700 (Fla. 1st DCA 1985), these approaches were flawed because of various infirmities in the underlying data.
Subsection 381.705(1)(b) requires consideration of the availability, quality of care, efficiency, appropriateness, accessibility, extent of utilization and adequacy of like and existing health care facilities in the service district. The evidence reveals that the facilities of TGH and other CMR providers are available and accessible to the public. As to utilization of existing facilities, the record shows that during the calendar quarters preceding the scheduled decision date and the actual decision date the occupancy rates of existing providers were below the minimum standard for occupancy (85 percent) used by HRS, even without considering the addition of a new CMR unit in Polk County. Given these considerations, it is concluded that UCH has not satisfied this statutory criterion.
Subsection 381.705(1)(d) requires that HRS consider the availability and adequacy of alternative facilities and services in the district. Since CMR services are unique and specialized, there are no viable alternatives to this type of service. Accordingly, this criterion has been satisfied.
Subsection 381.705(1)(h) addresses the availability of resources and the extent to which the services will be accessible to all residents. The record shows clearly that UCH has the financial resources to operate a CMR unit, can attract the necessary personnel and is willing to serve indigent and Medicaid patients in its facility.
Subsection 381.705(1)(i) requires that a project be financially feasible both in the immediate and long term. The evidence supports a conclusion that this criterion has been met.
Subsection 381.705(1)(1) requires the assessment of the probable impact of the proposed project on competition and health care costs. The evidence reflects that the installation of a new CMR unit will not affect health care costs in the district. However it will have an adverse effect on TGH, its closest geographical competitor. Therefore, this criterion has not been satisfied.
Subsection 381.705(1)(n) is the final relevant criterion and addresses the applicant's past and proposed provision of health care services to Medicaid and indigent patients. Although UCH's record has not been exemplary, it has had a Medicaid contract since January 1987, and proposes to offer services to indigent patients in an amount comparable to that offered by TGH. Thus, it is concluded the last criterion has been met.
A failure to meet one or more criteria does not necessarily sound the death knell for an application. Indeed, UCH cites the case of Balsam v. DHRS,
486 So2d 1341 (Fla. 1st DCA 1986) for the proposition that slavish adherence to one criterion is erroneous. However, the applicant has failed to demonstrate that there is a need for the new facility, that the existing facilities are fully-utilized, inadequate or inaccessible, or that the new facility will not adversely impact existing providers. In addition, Subsection 381.702(18), Florida Statutes (1987), mandates that rehabilitation services be limited to only a few regional locations in order to ensure the "quality, availability and cost-effectiveness of such service." After balancing these considerations, it is concluded the application should be denied.
Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the application for a Certificate of Need and the request
for exemption of nine beds be DENIED.
DONE AND ORDERED this 28th day of December, 1988, in Tallahassee, Leon County, Florida.
DONALD R. ALEXANDER
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 28th day of December, 1988.
ENDNOTES
1/ Under the then-existing law, projects costing less than $600,000 did have to undergo CON review.
2/ The entire unit is now located on the sixth floor and consists of patient rooms, dining room, recreation rooms, two speech pathology rooms, a quiet room, physical therapy gym, occupational therapy room and offices for staff members.
3/ The approval of beds at Winter Haven was predicated on a number of considerations including Winter Haven's willingness to delicense a surplus of acute care beds, a positive need for six CMR beds shown under the formula, and a perceived need by HRS to establish a facility between Tampa and Orlando.
4/ These cases include Wuesthoff Memorial Hospital v. DHRS, 8 FALR 5126 (October 1, 1986); St. Mary's Hospital v. DHRS, 8 FALR 4644 (September 11,
1986); Mount Sinai Medical Center, Inc. v. DHRS, 8 FALR 4237 (August 5, 1986); Villa Maria Nursing and Rehabilitation Center v. DHRS, 8 FALR 3971 (July 21, 1986); St. Lucie Home Health Agency, Inc. v. DHRS, 9 FALR 1019 (March 5, 1987).
5/ Gulf Court prohibits the introduction of new concepts in support of an application that were not initially reviewed by HRS.
UCH:
APPENDIX TO RECOMMENDED ORDER, CASE NOS. 87-4760, 88-1275
1-2. Covered in finding of fact 6.
Covered in finding of fact 9.
Covered in finding of fact 10.
Covered in finding of fact 12.
Covered in finding of fact 13.
Covered in finding of fact 15.
Covered in finding of fact 6.
Covered in finding of fact 27.
Rejected as unnecessary.
Covered in finding of fact 13.
Covered in finding of fact 17.
Covered in findings of fact 1 and 16.
Covered in finding of fact 31.
Covered in finding of fact 11.
16-17. Covered in finding of fact 14.
18. Covered in finding of fact 16.
19-21. Covered in finding of fact' 25.
Covered in findings of fact 9, 15, and 17.
Covered in finding of fact 10.
Rejected as being contrary to the more credible and persuasive
evidence.
Rejected since CARF standards were not fully met until 1986.
Covered in finding of fact 12.
Covered in findings of fact 13 and 25.
Covered in finding of fact 13.
Covered in finding of fact 24.
Covered in findings of fact 32 and 34.
Covered in findings of fact 33 and 54.
Covered in findings of fact 34 and 35. 33-39. Covered in finding of fact 38.
40. Covered in finding of fact 39.
41-45. Covered in finding of fact 40. 46-48. Covered in finding of fact 26.
46. Covered in finding of fact 42.
50. Covered in finding of fact 41.
51-53. Covered in finding of fact 43.
54. Covered in finding of fact 41.
55-56. Covered in findings of fact 46 and 47.
57-70. Covered in findings of fact 48 and 49. 71-73. Rejected as unnecessary.
74-75. Covered in finding of fact 50.
TGH:
Partially covered in finding of fact 1. The remainder is unnecessary.
Covered in finding of fact 11.
Covered in finding of fact 29.
4-6. Covered in finding of fact 14.
Rejected as unnecessary.
Covered in finding of fact 27.
9-10. Covered in finding of fact 12.
11. Covered in finding of fact 10.
12-13. Covered in finding of fact 15. 14-15. Covered in finding of fact 16.
Covered in findings of fact 17 and 18.
Covered in findings of fact 20 and 21. 18-19. Covered in findings of fact 7 and 23.
Covered in finding of fact 26.
Covered in finding of fact 16.
Covered in finding of fact 24.
23-26. Covered in finding of fact 25.
27-31. Covered in findings of fact 25-30. 31-33. Covered in finding of fact 16.
34-35. Rejected as being argument.
36. Covered in finding of fact 29.
37-38. Rejected as being unnecessary.
39-40. Covered in findings of fact 33 and 35. 41-42. Covered in finding of fact 36.
Partially rejected as being argument; the remainder is covered in finding of fact 40.
Covered in finding of fact 39.
Covered in finding of fact 42.
46-49. Covered in finding of fact 41. 50-53. Covered in findings of fact 37. 54-59. Covered in finding of fact 38.
60. Covered in finding of fact 7.
61-73. Covered in findings of fact 54 and 55.
74-75. Partially covered in finding of fact 49. The remainder is rejected as being contrary to the more credible and persuasive evidence or as being unnecessary or partially covered in finding of fact 49.
Covered in finding of fact 54.
Rejected since the district health plan is inapplicable.
Covered in finding of fact 36.
Covered in finding of fact 45.
Rejected as being unnecessary.
Covered in finding of fact 53.
82-83. Rejected as being contrary to the more credible and persuasive evidence.
84. Partially covered in finding of fact 50.
HRS:
1-3. Covered in finding of fact 11. 4-6. Covered in finding of fact 14.
Rejected as unnecessary.
Covered in finding of fact 6.
Covered in finding of fact 9.
Covered in finding of fact 13.
Rejected as being contrary to the more credible band persuasive
evidence.
12-14. Covered in finding of fact 15.
Rejected in part since the evidence reflects UCH was a provider of "rehabilitation services" in 1982, and not CMR services. The remainder is covered in findings of fact 9 and 17.
Covered in finding of fact 13.
Covered in finding of fact 12.
Covered in finding of fact 1.
Covered in findings of fact 17 and 20.
Covered in finding of fact 27.
Covered in finding of fact 23.
Covered in finding of fact 24.
23-25. Covered in finding of fact 25.
Covered in finding of fact 26.
Covered in finding of fact 24.
Covered in finding of fact 15.
29-30. Covered in findings of fact 1 and 53.
Rejected as unnecessary.
Covered in finding of fact 37.
Covered in finding of fact 31.
34-35. Covered in finding of fact 29. 36-37. Covered in finding of fact 33.
Covered in finding of fact 7.
Covered in findings of fact 32 and 34.
Covered in finding of fact 32.
41-61. Covered in findings of fact 33-38. 62-63. Covered in finding of fact 39.
64. Covered in finding of fact 44. 64-68 Covered in finding of fact 41.
69-70. Covered in finding of fact 45.
Covered in finding of fact 46.
Covered in finding of fact 48. 73-74. Rejected as unnecessary.
75. Covered in finding of fact 51. 76-85. Rejected as unnecessary.
Covered in finding of fact 53.
Covered in finding of fact 45.
COPIES FURNISHED:
John A. Radey, Esquire Elizabeth W. McArthur, Esquire Post Office Box 11307 Tallahassee, Florida 32302
R. S. Power, Agency Clerk 1323 Winewood Boulevard Building One, Room 407
Tallahassee, Florida 32399-0700
Cynthia S. Tunnicliff, Esquire Mary E. Haskins, Esquire
Post Office Drawer 190 Tallahassee, Florida 32302
Leslie F. Mendelson, Esquire 2727 Mahan Drive, Suite 308
Tallahassee, Florida 32308
=================================================================
AGENCY FINAL ORDER
=================================================================
STATE OF FLORIDA
DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES
UNIVERSITY COMMUNITY HOSPITAL,
Petitioner,
CASE NO.: 87-4760
vs. CON NO.: 4829
DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES,
Respondent,
and
HILLSBOROUGH COUNTY HOSPITAL AUTHORITY,
Intervenor.
/ HILLSBOROUGH COUNTY HOSPITAL AUTHORITY,
Petitioner,
CASE NO.: 88-1275
vs. CON NO.: 4829
DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES,
Respondent,
and
UNIVERSITY COMMUNITY HOSPITAL,
Intervenor.
/
FINAL ORDER
This cause came on before me for the purpose of issuing a final agency order. The Hearing Officer assigned by the Division of Administrative Hearings (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 UNIVERSITY COMMUNITY HOSPITAL (UCH)
UCH excepts to the factual findings of the Hearing Officer which support the Hearing Officer's conclusion that UCH is not entitled to an exemption because it was not providing Comprehensive medical rehabilitation services (CMR) prior to July 1983. The findings are supported by competent, substantial evidence; therefore, the exceptions are denied.
UCH excepts to the Hearing Officer's conclusion that Tampa General has standing to oppose approval of an exemption for UCH. As pointed out by the Hearing Officer the number of beds sought by UCH is directly dependent on the exemption issue. Under these circumstances, I concur with the Hearing Officer's conclusion that Tampa General has standing. The exception is denied.
UCH excepts to the Hearing Officer's findings supporting his conclusion that UCH failed to prove need. The findings are supported by competent, substantial evidence; therefore, the exceptions are denied.
UCH excepts to the Hearing Officer's findings regarding the impact on Tampa General. The findings are supported by competent, substantial evidence; therefore, the exceptions are denied.
UCH's exceptions to the conclusions of law reached by the Hearing Officer are denied.
FINDINGS OF FACT
The Department hereby adopts and incorporated 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.
Based upon the foregoing, it is
ADJUDGED, that University Community Hospital's application for certificate of need number 4829 and request for exemption are denied.
DONE and ORDERED this 13th day of February, 1989, in Tallahassee, Florida.
Gregory L. Coler Secretary
Department of Health and Rehabilitative Services
by Deputy Secretary for Programs
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
Copies furnished to:
Cynthia S. Tunnicliff, Esquire Mary E. Haskins, Esquire
Post Office Drawer 190 Tallahassee, Florida 32302
John A. Radey, Esquire Elizabeth W. McArthur, Esquire Post Office Drawer 11307 Tallahassee, Florida 32302
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that a copy of the foregoing was sent to the above-named people by U.S. Mail this 17th day of December, 1988.
R. S. Power, Agency Clerk Assistant General Counsel Department of Health and Rehabilitative Services Building One, Room 407 1323 Winewood Boulevard
Tallahassee, Florida 323990700 904/488-2381
================================================================= DISTRICT COURT OPINION
=================================================================
IN THE DISTRICT COURT OF APPEAL FIRST DISTRICT, STATE OF FLORIDA
UNIVERSITY COMMUNITY NOT FINAL UNTIL TIME EXPIRES TO HOSPITAL, FILE MOTION FOR REHEARING AND
DISPOSITION THEREOF IF FILED.
Appellant,
CASE NO.: 89-429
v. DOAH CASE NO. 87-4760
88-1275
DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES, and HILLSBOROUGH COUNTY HOSPITAL AUTHORITY,
Appellees.
/ Opinion filed January 12, 1990.
An Appeal from an order of the Department of Health and Rehabilitative Services.
Cynthia S. Tunnicliff of Carlton, Fields, Ward; Emmanuel, Smith and Cutler, P.A., Tallahassee, for Appellant.
Lesley Mendelson, Assistant General Counsel, Department of Health and Rehabilitative Services, Tallahassee, for Appellee/Department of Health and Rehabilitative Services.
John Radey, Elizabeth McArthur of Aurell, Radey, Hinkle & Thomas, Tallahassee, for Appellee/Hillsborough County Hospital Authority.
SMITH, J.
University Community Hospital appeals a final order of the Department of Health and Rehabilitative Services (HRS) denying an application for a certificate of need (CON) to operate a comprehensive medical rehabilitation unit. Appellant raises several issues, only one of which merits extensive discussion. 1/ We affirm.
As part of its CON application, appellant sought an exemption for nine beds which had been used for rehabilitation purposes prior to the enactment of section 381.706, Florida Statutes (1983), which required CON approval for a change in the number of licensed beds. 2/ Though HRS denied the CON application, it agreed that the nine beds should be exempt from review. Tampa General Hospital (TGH), a regional competitor, sought to intervene in the hearing requested by appellant following denial of its application; appellant filed no objection to TGH's request. Tampa General also requested a hearing on
the grandfather exemption. Over the appellant's objection, Tampa General was allowed to contest the decision to grant the grandfather exemption.
The two cases were consolidated into a single hearing which lasted several days. Before a recommended order was filed, the presiding hearing officer resigned from the Division of Administration Hearings, and pursuant to section 120.57(1)(b)(11), a second hearing officer was assigned. He prepared a recommended order based on a review of the written record and documentary evidence. The hearing officer recommended that the application for a CON be denied. Appellant filed exceptions to the recommended order which were denied by HRS when it adopted the findings of fact and law made in the recommended order.
Appellant argues that the substituted hearing officer should have conducted a new hearing before entering a recommended order. The appellant did not request a hearing de novo, but appellant claims, nevertheless, that section 120.57(1)(b)(11) requires a new hearing when a finding of fact requires an assessment of conflicting evidence. That section provides:
If the hearing officer assigned to a hearing becomes unavailable, the division shall assign another hearing officer who shall use any existing record and receive evidence or argument, if any, which the new hearing officer finds necessary.
Contrary to the appellant's assertion, the statute plainly gives a substitute hearing officer the discretion to determine whether a new hearing is necessary. The substitute hearing officer apparently felt a second hearing was not necessary, and we cannot say that his exercise of discretion in this case requires reversal.
Appellant's reliance on Tomkins Land and Housing Inc. v. White, 431 So.2d
259 (Fla. 2d DCA 1983), is misplaced. In that case, the court held that while a successor judge may complete acts left unfinished by a predecessor, a successor may not weigh and compare testimony heard by another judge unless the parties so stipulate. The court in Tomkins cited as authority Bradford v. Foundation & Marine Construction Co., 182 So.2d 447, 449 (Fla. 2d DCA 1966), in which the court stated that " . . . In the absence of a statute to the contrary, a successor judge cannot generally make findings or render a final decree even though the testimony is transcribed at trial and preserved." (Emphasis added.) The court noted that besides a statute to the contrary, the parties may stipulate to the rendition of a verdict or judgment by a successor judge. Id. In the instant case, there is clear statutory authority giving hearing officers the discretion whether to hold a second hearing.
Nor are we persuaded by the federal case law cited to this court, namely Gamble-Skogmo Inc. v. Federal Trade Commission, 211 F.2d 106 (8th Cir. 1954), which held that a substitute hearing officer is required to conduct a new hearing when an evaluation of a witness' credibility is necessary. This holding was premised on Congressional intent. The instant case involves a different statute which does not evince the same legislative intent. Moreover, the
Gamble-Skogmo court specifically noted that the complaining party had requested a second hearing, distinguishing that case from others cited, in which a second hearing was not required because a hearing de novo had not been requested or the record was unclear whether a request for a second hearing had been made. 3/ As
noted, the appellant did not request the hearing de novo until after the recommended order was filed.
Finding none of the other arguments presented are meritorious, the final order of HRS denying an application for a CON is AFFIRMED.
THOMPSON and MINER, JJ., CONCUR.
ENDNOTES
1/ Among the other issues raised by appellant is the argument that Tampa General Hospital had no standing to contest HRS' initial determination that some of appellant's beds were exempt from review, i.e., were "grandfathered." The hearing officer properly found standing under the authority of Baptist Hospital, Inc. v. HRS, 500 So.2d 620 (Fla. 1st DCA 1986)(any party whose substantial interests will be affected by proposed agency action has standing to participate in a 120.57 proceeding). Compare, Associated Home Health Agency, Inc. v. HRS,
453 So.2d 104 (Fla. 1st DCA 1984)(a third party is not permitted to initiate and prosecute a license revocation proceeding though the licensee may have been wrongfully granted a grandfather exemption). Appellant also contends that when HRS adopted the recommended order, it employed standards different from those initially used. This argument fails to consider the finding by the hearing officer that HRS failed to fully qualify under its rule governing grandfather eligibility when HRS issued its proposed agency action. Finally, appellant claims that the findings are not supported by the competent and substantial evidence. Following a review of the record, we find this last argument to be meritless.
2/ Section 395.003(4), F.S. (1983) required the number of beds used for rehabilitation to be reflected on the face of a hospital's license.
3/ See N.L.R.B. v. Dixie Shirt Co., Inc., 176 F.2d 969 (4th Cir. 1949) N.L.R.B.
v. Mfg. Co., 185 F.2d 451 (3d Cir. 1950), cited in Gamble-Skogmo at 114.
| Issue Date | Proceedings |
|---|---|
| Dec. 28, 1988 | Recommended Order (hearing held , 2013). CASE CLOSED. |
| Issue Date | Document | Summary |
|---|---|---|
| Jan. 12, 1990 | Opinion | |
| Feb. 13, 1989 | Agency Final Order | |
| Dec. 28, 1988 | Recommended Order | Application for Certificate Of Need to establish a Comprehensive Medical Rehabilitation unit and for an exemption of existing rehabilitation beds denied |
