STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

LA AMISTAD FOUNDATION, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 88-3907

)

DEPARTMENT OF HEALTH AND )

REHABILITATIVE SERVICES, )

)

Respondent. )

and )

)

HCA HEALTH SYSTEMS, INC., ) d/b/a HCA WEST LAKE HOSPITAL, )

)

Intervenor, )

) PIA PSYCHIATRIC HOSPITALS, INC.,) d/b/a LAUREL OAKS RESIDENTIAL ) TREATMENT CENTER, )

)

Petitioner, )

)

vs. ) CASE NO. 88-3908

)

DEPARTMENT OF HEALTH AND )

REHABILITATIVE SERVICES, )

)

Respondent, )

and, )

)

HCA HEALTH SYSTEMS, INC., ) d/b/a HCA WEST LAKE HOSPITAL, )

)

Intervenor. )

)

RECOMMENDED ORDER

Pursuant to notice, formal hearing in this cause was conducted on September 27-29, 1988, in Orlando, Florida, and on September 30, 1988, in Tallahassee, Florida, before Mary Clark, Hearing Officer.

The parties were represented as follows:

For Petitioner Thomas W. Stahl, Esquire

La Amistad 817 North Gadsden Street

Foundation, Inc. Tallahassee, Florida 32303 (La Amistad):

For Petitioner PIA Gary Williams, Esquire Psychiatric Hospitals, Michael J. Glazer, Esquire Inc., d/b/a Laurel Ausley, McMullen, McGehee, Oaks Treatment Center Carothers & Proctor (LORTC): 227 South Gadsden Street

Tallahassee, Florida 32301

For Respondent Lesley Mendelson, Esquire Department of Health Assistant General Counsel & Rehabilitative Department of Health and

Services (HRS) Rehabilitative Services 2727 Mahan Drive

Tallahassee, Florida 32308

For Intervenor HCA Mark Herron, Esquire

Health Systems, Christopher R. Haughee, Esquire

Inc., d/ba HCA Moffitt, Hart & Herron, P.A. West Lake Hospital 216 South Monroe St., Suite 300 (West Lake): Tallahassee, Florida 32301

BACKGROUND AND PROCEDURAL MATTERS

On or about March 30, 1988, both Petitioners filed Certificate of Need (CON) applications with HRS for intensive residential treatment program (IRTP) beds in Orange County, Florida, HRS Service District VII.

After its initial review HRS requested and received omissions responses from both applicants. HRS evaluated both completed applications and on July 1, 1988, issued its State Agency Action Report (SAAR), denying both.

This consolidated proceeding resulted from timely requests for formal hearings by the applicants.

Upon beginning the final hearing, West Lake's Motion for Protective Order was heard. West Lake contended that its strategic plan was privileged information and was inadvertently provided to counsel for LORTC during discovery. Oral arguments and briefs were considered. As the proceeding continued, an in camera review of the document was conducted and it was ultimately determined that no privilege attached.

At the hearing, La Amistad presented the testimony of ten (10) witnesses and its Exhibits, LA 1-LA 20, were received into evidence. Testifying for La Amistad were: Raymond A. Burns, Ali Kashfi, M.D., Walter J. Muller, M.D., J. William Johnson, Stanley Jones, M.D., David R. Parker, M.D., Deborah Stallworth, Vaughn Burns, Carol DeBaush, and Morteza Nadjari, M.D.

LORTC presented the testimony of twelve (12) witnesses and its Exhibits, PIA 1-PIA 21, were received into evidence. Testifying for LORTC were: Erik M. Anderson, Barry Hepner, Esquire, Joe Carloni, Shelby Morrison, Ph.D., Daniel Sciento, Ph.D., James P. Berko, Richard Warden, Wayne Kennedy, Alan M. Cohen, M.D., Thomas J. Ebejer, David Rabb, and Cristie U. Travis.

HRS presented the testimony of one (1) witness, Reid Jaffe, by deposition taken in advance of the hearing to preserve his testimony due to his unavailability during the scheduled hearing. Its Exhibit, HRS 1, was received into evidence.

West Lake presented the testimony of two (2) witnesses and its Exhibits, WL 1-WL 6, were received into evidence. Testifying for West Lake were Martin Lazoritz, M.D., and Jay Wolfson, Ph.D.

After hearing, HRS filed a request for official recognition of pages 104-

115 of the 1985-1987 Florida State Health Plan. This request is denied as untimely. Pages 116-120 of the plan were admitted at hearing as Laurel Oaks Exhibit No. 20. The need for any additional portions of the plan should have been raised at the hearing. All parties have submitted proposed recommended orders. Rulings on the proposed findings of fact are found in the attached appendix.

ISSUES

The issue for determination is whether either applicant's request for a CON for IRTP beds should be granted.

LORTC's allegation that La Amistad plagiarized portions of another PIA facility's CON application was deemed at hearing to be irrelevant.

Likewise, it was determined at hearing and in a post- hearing order entered on November 1, 1988, that the sale of La Amistad to UHS of Maitland, Inc. had no material bearing on the La Amistad application under review here.

In the parties' prehearing statement filed on September 26, 1988, the following were agreed:

1. Consideration of the applications at issue is governed by the statutory criteria contained in section 381.705, Florida Statutes and Rule 10- 5.011(1)(b)(1)-(4), Florida Administrative Code.

   
   

2. These criteria are either satisfied or are inapplicable:

Section 381.705(1)(g), (h), (only as to the following clauses: "the effects the project will have on clinical needs of health professional training programs in the service district; the extent to which the services will be accessible to schools for health professions in the service district for training purposes if such services are available in a limited number of facilities"), (j), Florida Statutes (1987)

As to LORTC, the parties stipulated that the criteria in Section 381.705(1)(h) as to availability of funds for capital and operating expenditures is satisfied. This is not a stipulation that the application satisfies the financial feasibility criterion contained in Section 381.705(1)(i).

Rule 10-5.011(1)(b)(4)(b) , Florida Administrative Code.

Each applicant argues that its application, and not that of the other, should be approved. HRS and West Lake both argue that neither application should be approved.

FINDINGS OF FACT

1. La Amistad is a not-for-profit corporation providing a variety of mental health services to children, adolescents and young adults on campuses in Maitland and Winter Park, Florida since 1970. At the time of hearing La Amistad operated 27 licensed IRTP beds at its Maitland campus.

   
   

   At the time of hearing La Amistad had a contract to sell its residential treatment program, including the beds that are the subject of this proceeding, to Universal Health Services, Inc. The contract was entered into after this CON application was filed.

   
   

2. LORTC is a wholly owned subsidiary of PIA, Psychiatric Hospitals, Inc. (PIA), which in turn is wholly owned by NME Hospitals, Inc. PIA owns or operates approximately three residential treatment centers (RTCs) and 58 psychiatric hospitals throughout the country, including Laurel Oaks Hospital in Orange County, Florida, an 80-bed licensed hospital providing short term psychiatric and substance abuse services to children and adolescents.

   
   

3. HRS is the state agency charged with the responsibility of implementing and enforcing the CON program, pursuant to Section 381.701-381.715, Florida Statutes.

   
   

4. The Intervenor, West Lake, is an 80-bed licensed psychiatric hospital in Longwood, Seminole County, Florida. West Lake has allocated 16 beds to its children's program and 24 beds to its adolescent programs. West Lake is licensed for both long and short-term psychiatric beds.

   
   

   THE APPLICATIONS

   
   

5. La Amistad's application requests the conversion of 13 existing beds (currently licensed as child caring beds) to licensed IRTP beds, the demolition of several old buildings and the construction of a new building which will contain a total of 16 IRTP beds. The 13 additional beds would bring La Amistad's IRTP total to 40 beds. The total project cost of La Amistad's proposal is $500,000.00 or $38,462.00 per bed.

   
   

6. La Amistad's Maitland facility is located in a residential area and is itself designed to be residential in nature, rather than institutional. The patients prepare their own food under the supervision of a dietician and other staff. They also do their own housekeeping. La Amistad is not a "locked unit".

   
   

7. A maximum of 16 patients reside in each "house" on the La Amistad campus. The houses are staffed on a 24-hour a day basis. Like other similar facilities, La Amistad utilizes a multi-discipline team approach to treatment. That is, psychiatrists, nurses, social workers and other staff work together. The treatment team meets weekly to discuss the program and treatment of each patient. Family members may visit and stay at the campus on weekends. Families are encouraged to participate in the treatment process.

   
   

8. La Amistad has a full-time school on campus with teachers provided by the Orange County School System.

9. The average length of stay for patients is in excess of Il to 12 months. This is consistent with HRS' understanding that 9-14 months is an average length of stay for an intensive residential treatment program.

   
   

10. LORTC's application is for CON approval of a 40-bed IRTP located on the grounds of its existing freestanding psychiatric hospital, Laurel Oaks. The facility is currently under construction and will be operated as a residential treatment center if its IRTP CON is denied.

    
    

11. LORTC anticipates serving two out of three of the following groups: adolescents who need long-term care, older children (8 years to 13 years) who need long-term care, and chemically dependent adolescents. The projected average length of stay is 120 days, which stay is consistent with that of other PIA residential treatment centers in Florida.

    
    

12. The LORTC facility will be "locked". Meals will be prepared at Laurel Oaks Hospital and will be transported in some, as yet undetermined, manner to the separate building. The geographical area in which LORTC will be located is not residential.

    
    

13. The capital cost of the 40 bed facility is projected at $3,291,000.00. The funds, provided by the parent company, NME, will be expended, regardless of CON approval.

    
    

14. LORTC also uses a multi-discipline team approach to treatment. Each patient's treatment program will consist of psychiatric support services, educational services and family services. Students will attend academic classes four hours a day at the facility.

    
    

    THE APPLICABLE DISTRICT PLAN AND STATE HEALTH PLAN

    
    

15. The District Seven Health Plan does not address needs, policies, or priorities for IRTP facilities for children and adolescents.

    
    

16. The State Health Plan addresses very generally the need for mental health and substance abuse services. Goal 1 seeks to: "Ensure the availability of mental health and substance abuse services to all Florida residents in the least restrictive setting." Goal 2 seeks to: Promote the development of a continuum of high quality, cost effective private sector mental health and substance abuse treatment and preventive services". Goal 3 seeks to: "Develop a complete range of essential public mental health services in each HRS district." (Laurel Oaks Exhibit #20).

    
    

    The applications neither violate nor materially advance these goals. In both instances the beds will exist for the provision of mental health services, with or without the certificate of need. La Amistad's proposal clearly presents a "less restrictive alternative" to the more institutional psychiatric hospital. Laurel Oaks is also an alternative, although more institutional than homelike in character.

    
    

    NEED, INCLUDING THE AVAILABILITY OF LIKE OR ALTERNATIVE SERVICES AND

    INCREASED ACCESSIBILITY

    
    

17. IRTP beds are a statutorily defined class of specialty hospital beds:

    
    

    Intensive residential treatment programs for children and adolescents means a specialty hospital accredited by the Joint Commission on Accreditation of Hospitals which provides 24-hour care and which has the primary functions of diagnosis and treatment of patients under the age of 18 having psychiatric disorders in order to restore such patients to an optimal level of functioning. Section 395.002(8),

    Florida Statutes.

    
    

    Because an IRTP is a hospital, a certificate of need is required. This alone distinguishes an IRTP from a residential treatment program (RTP).

    
    

18. In spite of its name, HRS considers an IRTP as a service that is less intensive than a long or short term psychiatric hospital. Generally, the RTP and IRTP have a longer average length of stay than a psychiatric hospital and provide a more homelike setting.

    
    

19. No HRS rule further defines the IRTP, and as evidenced by the La Amistad and LORTC proposals, the projected average length of stays vary widely (120 days for LORTC, versus 12-14 months for La Amistad).

    
    

20. Long term psychiatric hospitals have an average length of stay of over

    90 days. West Lake has treated adolescents in its psychiatric beds as long as a year, although this has not occurred recently.

    
    

21. HRS has no rule methodology for calculating the need for IRTP's. However, HRS considers there is a need for at least one reasonably-sized IRTP in each HRS service district. In HRS district VII there are currently two IRTPs: Devereaux, a 100-bed facility in Melbourne, Brevard County, Florida, licensed on February 26, 1988; and La Amistad, with 27 IRTP beds in Orange County, licensed in August, 1988.

    
    

22. Although HRS clearly does not limit its approval to only one IRTP per district, it has a policy of waiting to see what the need and demand are before it authorizes an additional program with a CON. Its deviation from this policy regarding approval of the La Amistad beds was adequately explained as a settlement based on the acknowledgment of a prior administrative error. Utilization of the Devereaux beds was not a consideration in that unique case.

    
    

23. HRS also uses as a reasonable non-rule policy the requirement that existing programs be 80 percent occupied before additional programs are authorized. This is modeled after the promulgated rule in effect for long-term psychiatric beds. At the time the applications were considered, La Amistad was not licensed and Devereaux had a less than 50 percent occupancy.

    
    

24. Conflicting evidence was presented with regard to the accessibility of both La Amistad's 27 beds and Devereaux' 100 beds. Devereaux is approximately one to two hours from the three counties identified as LORTC's primary service area: Seminole, Osceola and Orange. LORTC argues that families who need to

    actively participate in the patients' treatment are discouraged by the travel distance.

    
    

    However, Laurel Oak Hospital currently refers patients to its sister facilities in Manatee and Palm Beach counties, which are more distant than Devereaux.

    
    

25. No patient origin studies of Devereaux were done and LORTC's expert in health and planning conceded that it takes a while for people to become aware of a new facility and its services, and a new facility can stimulate patient migration.

    
    

26. The credible weight of evidence is that a travel time of two hours or less would not significantly influence decisions to use the facility.

    
    

27. La Amistad is noted for its treatment of schizophrenics. It sponsors seminars attracting participants from a wide geographical area. It does not, however, limit its beds to patients with that diagnosis. In the past approximately 48 percent of La Amistad's beds (its entire facility, not just the IRTP beds) have been utilized by schizophrenics. This does not alone evidence non-accessibility of its IRTP beds.

    
    

28. The statutory definition of an IRTP, cited in paragraph 17, above, is broad enough to include the type of care provided in long-term psychiatric hospitals, such as West Lake. The programs described in the applications of both LORTC and La Amistad are similar to the programs currently operated at West Lake for children and adolescents. The multi-disciplinary team monitors the patient's progress with a goal toward reintegration into the community. The patients attend school and receive a wide variety of therapies, with varying intensity: individual and group counseling, activity and occupational therapy, family therapy, vocational planning, and the like. When the patient is admitted, an evaluation is done to determine an anticipated length of stay.

    Some require a shorter stay, with more intensive therapy; others are more appropriately treated for a longer period, with less intensity. West Lake's program is not full.

    
    

29. There are myriad alternative programs for the treatment of children and adolescents in the tri-county area. Seagrave House, the Charlie Program and Boystown are residential programs for children and adolescents who may have received treatment in a hospital but who are not ready to return home and could progress further in a residential program.

    
    

    Mainstream, a partial hospitalization program, is also available to this age group. A partial hospitalization program provides structured daytime treatment with the same therapies offered in a hospital or full residential program, but the patients are able to return home at night.

    
    

    Other existing facilities and programs available in the service district include Parkside Lodge, the Care Unit, the Center for Drug-free Living, Glenbeigh Hospital and Rainbow. Laurel Oaks has referred patients to Rainbow, a residential treatment program for youths with substance abuse problems.

    
    

30. La Amistad presented anecdotal testimony from its clinical and other staff regarding the numbers of patients they could refer to La Amistad if the application were approved. In no instance did these witnesses eliminate the other available programs as appropriate alternatives.

31. Several other witnesses testified on behalf of LORTC regarding the need for additional long-term treatment programs for children and adolescents. It is clear, however, that these individuals from the Orange County Public Defender's office, the Orange County Public Schools and the Seminole County Mental Health Center were descrying the need for services for economically disadvantaged youths and those without insurance. Neither La Amistad nor LORTC propose to materially serve that population. Medicaid funds are not available to licensed speciality hospitals and both La Amistad and LORTC will serve patients referred and paid for by HRS, with or without an IRTP CON. The projected percentage of non-pay patient days in both applications is negligible.

    
    

32. Any consideration of alternatives in this case must consider the alternatives of the applicants themselves. In both cases, the beds will be available with or without the CON, and the treatment programs are substantially the same with or without the CON. Denial of these applications will not decrease the potential supply of beds in District VII.

    
    

33. Indeed, LORTC candidly argues that it is asking only that HRS assist in enhancing financing access to its beds, that CON approval and subsequent licensure will provide increased access to patients with insurance which will not reimburse non- hospital based care. LORTC, and to a lesser degree, La Amistad, insist that approval will positively impact access for privately insured patients.

    
    

    The weight of evidence does not support that basic contention in this case.

    
    

34. PIA's non-hospital RTCs in Palm Beach and Manatee County claim to have a 60-70 percent commercial insurance pay or mix. LORTC projects only 67 percent commercially insured patients after its first year of operation. This does not represent an increase.

    
    

    According to its financial experts La Amistad is not projecting any increase in insurance reimbursement because of licensure as an IRTC.

    
    

35. Two trends in insurance reimbursement practices were described at length in this proceeding.

    
    

    First, companies are willing to negotiate an "out-of- contract" reimbursement when a non-covered facility is able to show that its services are more appropriate and in the long term, more cost effective than the covered services for a particular patient.

    
    

    Second, insurance companies are carefully scrutinizing long term treatment reimbursement and are limiting coverage in expensive residential programs.

    
    

    Neither trend weighs in favor of approval of these applications.

    
    

    AVAILABILITY OF RESOURCES

    
    

36. Nursing costs in health care institutions usually comprise more than

    50 percent of the operating costs. It is the largest single budget item in a hospital or health care facility.

    
    

37. Throughout the country and in District VII, there is a shortage of nurses and trained allied health personnel. Although Laurel Oaks Hospital is staffed, maintaining its staff of registered nurses is a day-to-day problem.

38. West Lake also experiences difficulty in maintaining qualified staff. No doubt LORTC, with aggressive recruitment will initially attract the personnel it needs. Financial incentives will have to be provided and West Lake's problems will be exacerbated. The additional costs will be passed on to the consumer, thus perpetuating the upward inflation spiral of health care costs.

    
    

    FINANCIAL FEASIBILITY AND EFFECTS ON COMPETITION

    
    

39. La Amistad states it intends to finance $450,000.00 of its $500,000.00 total project cost through bank loans, fund raising efforts and personal commitments from board members. Its pro forma, as corrected and updated at the hearing is reasonable, based upon the facility's actual experience in staffing and filling beds.

    
    

40. However, the ability of the applicant itself to complete construction for the replacement beds is questionable in light of an admission at hearing by Walter Muller, M.D., the founder and Medical Director of La Amistad. Dr. Muller conceded that one of the reasons for the sale to Universal Health is to obtain adequate funds for the new building. (transcript pages 271-272).

    
    

41. LORTC contends that no capital expenditure is relevant here as the facility is being constructed as a non-hospital RTC. For the transfer to IRTC status no additional expenses will be incurred. Regardless of the validity of that contention, the parties have stipulated that funds are available for capital and operating expenditures.

    
    

42. LORTC's pro forma is reasonable based on the extensive experience of its parent company with similar facilities, the RTCs in Manatee County and Palm Beach County, and Laurel Oaks Hospital. That experience has not been tested in an area, where, as here, there are existing unfilled IRTPs. As provided in the discussion of need, above, LORTC cannot dismiss West Lake, Devereaux, La Amistad and other facilities offering similar programs. LORTC did not establish conclusively that it could maintain its projected utilization in the face of the potential draw of those other facilities.

    
    

    PIA has been highly successful in marketing its services in the past. If its success prevails and LORTC proves financially feasible, there is substantial evidence that it will be at the expense of West Lake, Devereaux, and the others. There is no evidence that LORTC or La Amistad evaluated the impact of their proposals on other service providers in the area.

    
    

    OTHER REVIEW CRITERIA, INCLUDING QUALIFY OF CARE

    
    

43. Both applicants enjoy a reputation for providing good quality mental health services and there is no substantial evidence that this quality will deteriorate if the applications are approved.

    
    

44. No competent evidence was presented regarding the failure of either applicant to meet the remaining relevant criteria.

    
    

    CONCLUSIONS OF LAW

    
    

45. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter in this proceeding pursuant to Sections 120.57,(1) and 381.709(5), Florida Statutes.

46. La Amistad and LORTC, as applicants for a CON, each has the burden of proving entitlement to the certificate it seeks. Florida Department of Transportation v. J. W. C. Company, Inc., 396 So2d 778 (Fla. 1st DCA 1981).

    
    

47. West Lake has standing to challenge the application of La Amistad to add to its established intensive residential treatment program in Orange County, Florida. West Lake, likewise, has standing to challenge the application of LORTC to establish a 40 bed intensive residential treatment program in Orange County, Florida. West Lake conclusively proved that it will suffer adverse economic impact if LORTC's application for a CON is approved, based on a project decline in patient census, loss of patient days and revenues, and ability to attract and retain qualified staff. Economic injury to a competing facility is a proper consideration in a CON proceeding and such injury is sufficient to grant party status. Florida Medical Center v. Department of Health and Rehabilitative Services, 484 So.2d 1291 (Fla. 1st DCA 1986). See also, Psychiatric Institute of America, Inc. v. Department of Health and Rehabilitative Services, 491 So.2d 1199 (Fla. 1st DCA 1986). Numerous cases have held that facilities of one type can be substantially affected by, and therefore have standing to challenge, the CON application of a different type of facility. St. Francis Parkside Lodge of Tampa Bay v. Department of Health and Rehabilitative Services, 486 So.2d 32 (Fla. 1st DCA 1986). See also, Baptist Hospital Inc. v. Department of Health and Rehabilitative Services. 500 So.2d 620 (Fla. 1st DCA 1987). This is especially true for facilities challenging applications for intensive residential treatment programs due to the definitional flexibility provided by statute for such programs and the lack of any rule standards clarifying where such programs fit in the spectrum of health care facilities.

    
    

48. HRS has failed to adopt a rule setting forth a need methodology for determining need for an intensive residential treatment program. Non-rule policy has been recognized as a basis for agency action, however. Such non-rule policy must be clearly explicated by the agency or party seeking to rely on the non-rule policy. McDonald v. Department of Banking and Finance, 346 So.2d 569 (Fla. 1st DCA 1977); Florida Medical Center v. Department of Health and Rehabilitative Services, 463 So.2d 380 (Fla. 1st DCA 1985). This is a heavy burden and the non-rule policy does not have the presumption of validity which is afforded formally promulgated agency rules. Barker v. Board of Medical Examiners, 428 So.2d 720 (Fla. 1st DCA 1983).

    
    

49. In his testimony, Reid Jaffe, Health Services and Facilities Consultant Supervisor for HRS' Office of Regulation and Health Facilities, explicated HRS' policy that when there are existing intensive residential treatment programs in the service district, HRS will wait until such programs have been operating a substantial period of time to see what the need and demand is before it authorizes additional. IRTPs are relatively newly defined health care entities. Residential Treatment Center of the Palm Beaches, Inc. v. HRS and Florida Residential Treatment Centers, Inc., Case No. 87-2037, and Community Hospital of the Palm Beaches, Inc., d/b/a Humana Hospital Palm Beaches v. HRS and Florida Residential Treatment Centers of Palm Beach County, Case No. 87-2050 (Final Order filed July 21, 1988). The lack of extensive experience with these entities and their definitional overlap with a variety of other residential programs providing mental health services to children and adolescents validate that policy.

    
    

50. The policy alone does not end the discourse. In considering an application for CON, a balanced consideration of the criteria provided in

    section 381.705, Florida Statutes and Rule 10-5.011, Florida Administrative Code, is required. Department of Health and Rehabilitative Services v. Johnson and Johnson Home Health Care, 447 So.2d 361 (Fla. 1st DCA 1984); Humana Inc. v. Department of Health and Rehabilitative Services, 469 So.2d 889 (Fla. 1st DCA 1985). The weight to be accorded to each criterion is not fixed, but will vary depending on the facts and circumstances of each case. North Ridge General Hospital, Inc. v. NME Hospitals, 478 So.2d 1138 (Fla. 1st DCA 1985); Collier Medical Center, Inc. v. Department of Health and Rehabilitative Services, 462 So.2d 83 (Fla. 1st DCA 1985).

    
    

51. Contrary to LORTC's assertions, La Amistad's application cannot be summarily dismissed because of the sale. La Amistad filed its application pursuant to section 381.709(3), Florida Statutes; it is the "applicant" in these proceedings, pursuant to Rule 10-5.002(3), Florida Administrative Code, defining "applicant" as " . . . any individual, partnership, corporation, or governmental entity which has filed an application for a certificate of need with the Department."

    
    

    Sections 381.706(1)(n) and 381.712, Florida Statutes plainly contemplate that a CON may be transferred from one entity to another. To substitute an entity after the application was deemed complete, but before final decision, would violate Rule 10-5.010(2)(b), Florida Administrative Code prohibiting amendments to an application.

    
    

52. Although the fact of the sale itself is irrelevant in this proceeding, the reason for the sale is relevant in view of Dr. Muller's admission that La Amistad needed the sale in order to construct the facility. The proposal by La Amistad does not meet the review criteria in sections 381.705(h) and (i), Florida Statutes, relative to the availability of funds for capital expenditures and the financial feasibility of the proposal.

    
    

53. Neither La Amistad nor LORTC met the burden of proving that the proposed IRTP beds would improve accessibility, or that like and existing or alternative services are not available and appropriate. The criteria in section 381.705(b)(d), and (2)(b), Florida Administrative Code are not met and the proposed IRTPs are not needed.

The failure to prove need also negatively impacts financial feasibility, competition and cost effectiveness. See criteria found in section 381.705(i) and (1), Florida Statutes.

Based upon the foregoing, it is hereby RECOMMENDED:

That HRS enter a final order denying the application of Laurel Oaks and La Amistad for certificates of need for intensive residential treatment programs.

DONE and ENTERED this 3rd day of February, 1989, at Tallahassee, Florida.

MARY CLARK

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 February, 1989.

APPENDIX TO FINAL ORDER, CASE NOs. 88-3907 and 88-3908

The following constitute my specific rulings pursuant to Section 120.59(2), Florida Statutes, on the Proposed Findings of Fact submitted by the parties in this case.

Specific Rulings on Proposed Findings of Fact Submitted by Petitioner, La Amistad

1. Adopted in substance in paragraph 1.

2. Adopted in substance in paragraph 27. 3.-4. Adopted in substance in paragraph 6.

1. Adopted in substance in paragraph 7.

2. Rejected as cumulative.

3. Adopted in part, as to length of stay, in paragraph 9, otherwise rejected as unnecessary.

4. Adopted in substance in paragraph 7.

5. Adopted in paragraph 8.

10.-13. Rejected as unnecessary. Quality of case is addressed in summary in paragraph 43.

14. Adopted in paragraph 5. 15.-16. Rejected as unnecessary.

1. Rejected as contrary to the weight of evidence, although the pro forma, as corrected is found reasonable in paragraph 39.

2. Adopted in part in paragraph 39, otherwise rejected as unnecessary.

3. Rejected as contrary to the weight of evidence. La Amistad admitted that it cannot fund the construction

without the sale of its facility. See paragraph 40. 20.-25. Rejected as unnecessary.

1. Rejected as uncorroborated hearsay.

2. Adopted in paragraph 2.

3. Adopted in paragraphs 11 and 13.

29.-31. Adopted in substance in paragraph 12.

32. Adopted in paragraph 11. 33.-37. Rejected as unnecessary.

1. Adopted in paragraphs 17.

2. Adopted in paragraphs 15 and 19.

3. Adopted in substance in paragraph 18.

4. Adopted in paragraph 9.

5. Rejected as unsupported by the weight of evidence. The process is not a "policy".

6. Rejected as contrary to the evidence. The testimony described does not document a need for 13 more beds, but only a possible demand.

44.-45. Rejected as immaterial.

46. Adopted in paragraph 42.

Specific Rulings on Proposed Findings of Fact Submitted by Petitioner, Laurel Oaks (LORTC)

1. Adopted in substance in paragraph 33.

2. Adopted in paragraph 2.

3. Adopted in paragraph 1.

4. Adopted in paragraph 3.

5. Adopted in paragraph 4.

6. Addressed in background.

7. Addressed in issues statement.

8. Rejected as unnecessary argument.

9. Rejected as irrelevant.

10. Addressed in Background.

11. Adopted in paragraphs 2 and 10.

12. Adopted in paragraph 13. 13.-18. Rejected as unnecessary.

1. Adopted in part in paragraph 14.

2. Adopted in paragraph 11.

3. Rejected as cumulative.

4. Adopted in paragraph 14.

22. Rejected as unnecessary.

1. Adopted in summary in paragraphs 34 and 42.

2. Rejected as unnecessary argument.

3. Adopted in paragraphs 1 and 5.

4. Adopted in part in paragraphs 6 and 9, otherwise rejected as inconsistent with the weight of evidence.

64.-70. Quality of care is addressed in summary in paragraph 43.

The proposed findings with regard to LORTC are to that extent, accepted, and with regard to La Amistad are rejected.

71.-73. Rejected as unnecessary. Dr. Wolfson's testimony regarding his findings from the "Yellow Pages" was not credited. The finding that alternatives are available is based on other competent evidence.

74.-78. Rejected as unnecessary.

79.-80. Rejected as contrary to the evidence, except as related to capital expenditures.

1. Adopted in paragraph 40.

2. Rejected as unnecessary.

83.-84. Adopted in summary in paragraph 42.

1. Rejected as cumulative.

2. Rejected in part. The pro forma, as corrected, was reasonable, but financial feasibility was still not demonstrated in light of Dr. Muller's admission. See paragraphs 39 and 40.

87.-89. Rejected as unnecessary.

90.-91. Rejected as contrary to the evidence. 92.-99. Rejected as unnecessary.

100.-104.Rejected as contrary to the weight of evidence.

Specific Rulings on Proposed Findings of Fact Submitted by Respondent, Department of Health and

Rehabilitative Services (HRS)

1. Adopted in paragraphs 10 and 12.

2. Adopted in paragraph 11.

3. Adopted in paragraphs 12 and 16. 15.-16. Adopted in paragraph 12.

17.-18. Rejected as unnecessary.

19. Adopted in paragraph 33. 20.-23. Rejected as unnecessary.

1. Adopted in paragraphs 17 and 18.

2. Adopted in paragraph 17.

3. Rejected as cumulative.

4. Rejected as unnecessary.

5. Adopted in paragraph 15.

6. Adopted in paragraph 19.

7. Adopted in paragraph 17.

8. Adopted in paragraphs 21 and 32.

9. Adopted in paragraph 23.

1. Adopted in paragraph 22.

2. Adopted in paragraph 23. 36.-37. Rejected as unnecessary. 38.-39. Adopted in paragraph 29.

1. Adopted in paragraph 28.

2. Rejected as cumulative.

3. Adopted in part in paragraph 38.

43.-44. Rejected as unnecessary. However, the conclusion that the LORTC is not needed is adopted.

1. Adopted in substance in paragraph 24.

2. Adopted in paragraph 25. 47.-48. Rejected as unnecessary.

1. Adopted in substance in paragraph 32.

2. Rejected as unnecessary.

3. Adopted in paragraph 31.

4. Rejected as cumulative. 53.-59. Rejected as unnecessary.

60.-61. Adopted in substance in paragraph 34.

1. Adopted in substance in paragraph 40.

2. Rejected as unnecessary.

3. Adopted in substance in paragraphs 38 and 42.

Specific Rulings on Proposed Findings of Fact Submitted by Respondent, West Lake Hospital

1.-5. Addressed in Background

1. Adopted in part in paragraph 4.

2. Adopted in paragraphs 17 and 19. 8.-9. Adopted in paragraphs 21.

1. Adopted in paragraphs 22 and 23.

2. Adopted in paragraph 17.

3. See HRS proposed findings, above.

4. Adopted in paragraph 10.

5. Adopted in paragraph 11.

6. Adopted in part in paragraph 18.

7. Rejected as unnecessary. 17.-18. Adopted in paragraph 15. 19.-24. Addressed in paragraph 16. 25.-30. Rejected as unnecessary.

31. Adopted in part in paragraph 23. 32.-34. Adopted in part in paragraph 24.

1. Rejected as unnecessary. The conclusion is adopted in paragraph 26.

2. Adopted in substance in paragraph 27.

3. The conclusion is adopted in conclusions of law No. 9. 38. Adopted in paragraph 43.

39. Rejected as unnecessary.

40.-47. Adopted in substance in paragraph 29. 48.-51. Adopted in substance in paragraph 31.

52. The conclusion is adopted in conclusion of law No. 9. 53.-55. Rejected as unnecessary.

56.-61. Adopted in summary in paragraphs 37 and 38. 62.-85. Rejected as unnecessary.

86. Adopted in summary part in paragraph 42. 87.-92. Rejected as unnecessary.

1. Adopted in summary in paragraph 42.

2. Conclusion adopted in conclusion of law No. 9. 95.-115. Rejected as unnecessary.

COPIES FURNISHED:

Thomas W. Stahl,Esquire 817 North Gadsden Street

Tallahassee, Florida 32303

Gary Williams, Esquire Michael J. Glazer, Esquire

227 South Gadsden Street Tallahassee, Florida 32301

Lesley Mendelson, Esquire Assistant General Counsel Department of Health and Rehabilitative Services 2727 Mahan Drive

Tallahassee, Florida 32308

Mark Herron, Esquire Christopher R. Haughee, Esquire

216 South Monroe Street, Suite 300 Tallahassee, Florida 32301

Sam Power, Clerk Department of Health and Rehabilitative Services 1325 Winewood Boulevard

Tallahassee, Florida 32399-0700

Gregory L. Coler, Secretary Department of Health and Rehabilitative Services 1325 Winewood Boulevard

Tallahassee, Florida 32399-0700

Docket for Case No: 88-003907

Orders for Case No: 88-003907