michael j. cherniga, stephen boone|Department of Health|doah... -- eLawyers

Petitioner: ST. MARY'S HOSPITAL, INC.
Respondent: DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES
Judges: WILLIAM R. DORSEY, JR.
Agency: Department of Health
Locations: Tallahassee, Florida
Filed: Nov. 21, 1989
Status: Closed
DOAH Final Order on Tuesday, June 12, 1990.
Latest Update: Jun. 12, 1990
Summary: Whether proposed Rule 10-5.011(1)(v), Florida Administrative Code, is an invalid exercise of delegated legislative authority?Rule challenge to neonatal intensive care unit designation dismissed in part Rule 10-5.011(1)(v)10a invalidated for containing conflicting definitions.

89-6417.PDF

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

ST. MARY'S HOSPITAL, INC., )

)

Petitioner, )

vs. ) CASE NO. 89-6417RP

) 89-6418RP

DEPARTMENT OF HEALTH AND ) 89-6419RP

REHABILITATIVE SERVICES, ) 89-6420RP

) 89-6422RP

Respondent, ) 89-6423RP

and ) 89-6424RP

) 89-6425RP

BAPTIST HOSPITAL, ADVENTIST ) 89-6426RP HEALTH SYSTEM SUNBELT d/b/a )

FLORIDA HOSPITAL, HOLMES MEDICAL ) CENTER, MEASE HEALTH CARE, INC., ) WINTER PARK MEMORIAL HOSPITAL, ) NORTH BROWARD HOSPITAL DISTRICT, ) MEMORIAL HOSPITAL SARASOTA, ) FLORIDA LEAGUE OF HOSPITALS, ) SOUTH BROWARD HOSPITAL DISTRICT, ) SACRED HEART HOSPITAL OF ) PENSACOLA, COMMUNITY HEALTH ) SYSTEMS, INC. d/b/a WOMEN'S ) MEDICAL CENTER and ALACHUA )

GENERAL HOSPITAL, )

)

Intervenors. )

)

FINAL ORDER

This matter was heard by William R. Dorsey, Jr., the assigned Hearing Officer of the Division of Administrative Hearings, on January 29 - February 6, 1990, in Tallahassee, Florida.

APPEARANCES

For Baptist Hospital: Michael J. Cherniga

Roberts, Baggett, LaFace & Richard

101 East College Avenue Tallahassee, FL 32301

For Adventist Health Stephen Boone

System Sunbelt d/b/a Florida Boone, Boone, Klingbeil, Hospital, and Holmes Medical Boone, et al.

Center: 1001 Avenida del Circo Venice, FL 34284

For Mease Health Care, Inc., Patricia A. Renovitch and Oertel, Hoffman,

Winter Park Memorial Fernandez & Cole, P.A. Hospital: Post Office Box 6507

Tallahassee, FL 32314

For North Broward Hospital Patrick J. Phelan District: Post Office Box 527

Tallahassee, FL 32302

For Memorial Hospital Robert A. Weiss

Sarasota: Parker, Hudson, Rainer & Dobbs

118 North Gadsden Street Tallahassee, FL 32301

For the Florida League of John H. French, Jr. Hospitals: Messer, Vickers,

Caparello, et al.

215 North Monroe Street Suite 701

Tallahassee, FL 32302

For Nu-Med Pembroke Byron B. Mathews, Jr. d/b/a Pembroke Pines McDermott, Will & Emery General Hospital: 700 Brickell Avenue

Miami, FL 33131

For South Broward Hospital Paul H. Amundsen District: Blank, Hauser & Amundsen

204B South Monroe Street Tallahassee, FL 32301

For Sacred Heart Hospital: Karen Emmanuel

Emmanuel, Sheppard & Condon

30 South Spring Street Pensacola, FL 32596

For Department of Health and Richard A. Patterson Rehabilitative Services: Department of Health and

Rehabilitative Services 2727 Mahan Drive

Tallahassee, FL 32308

For Women's Medical Center: John F. Gilroy

306 North Monroe

Post Office Box 10095 Tallahassee, FL 32302

For Alachua General Hospital: Robert Newell

Newell & Stahl, P.A. 817 North Gadsden

Tallahassee, FL 32303

STATEMENT OF THE ISSUE

Whether proposed Rule 10-5.011(1)(v), Florida Administrative Code, is an invalid exercise of delegated legislative authority?

PRELIMINARY STATEMENT

Before hearing, the parties were unable to agree on a prehearing stipulation. The proponents and opponents of the rule each submitted joint prehearing statements. Findings of fact and conclusions of law were submitted before the hearing, but at the request of the parties, leave was granted to substitute proposed findings of fact and conclusions of law, arranged in an agreed outline format, by March 20, 1990. On April 3, 1990, the challenge filed by Nu-Med Pembroke was dismissed based upon its voluntary dismissal. Rulings on proposed findings of fact are made in the Appendix to this Recommended Order.

FINDINGS OF FACT

General Background; Neonatologists in Contemporary Hospital Settings.
1. The rule at issue regulates neonatal intensive care services. Neonates are newborn infants, less than one month old.The care of neonates is provided in hospital nurseries. Before the birth, the mother and fetus are ordinarily under the care of an OB-GYN physician, although in cases of problem pregnancies, a subspecialist known as a maternal-fetal specialist may also participate in the care of the mother and fetus.
2. After birth, normal newborns are cared for by physicians who specialize as pediatricians. They usually have office practices which cannot be interrupted continuously by travel to a hospital nursery to care for a neonate in crisis. Ill neonates, especially those of low birth weight or born before full term, often need non-routine or intensive care, including intravenous administration of medication, alimentation using stomach tube feeding (gavage), assistance with breathing through an oxygen hood or by mechanical ventilation and intensive medical and nursing care. Intensive care of neonates commonly is managed by neonatologists. Neonatologists usually have a hospital-based practice, not an office practice. They are physicians who specialized as pediatricians and received three years pediatrics training after licensure and successfully completed a board examination, and then received three additional years training in a neonatology fellowship and successfully completed a further examination, leading to board eligibility or certification in the sub-specialty of neonatology. The first board examination in neonatology was given in 1975. There are now about 1,900 board-certified neonatologists in the United States; about 105 practice in Florida.
3. As subspecialists, neonatologists command substantial salaries due to their experience and lengthy training. They are the second highest paid subspecialists in pediatrics. They often do not find practice at community hospitals attractive because the low incidence of ill neonates at a community hospital does not allow them to keep their skills current; they tend to work in larger medical centers. Neonatologists can maximize their income by working at proprietary hospitals on a fee-for-service basis if the hospital has a large obstetric volume of healthy mothers (i.e., few low income mothers who lack prenatal care or present complicating problems such as drug addiction which may affect the child). Infants such as premature babies of crack addict mothers can
  be very sick, but as the cost of their care rises, the percentage of reimbursement to the neonatologist and the hospital from any insurers or public sources diminishes.
4. A very few physicians take additional training and board certification examinations as sub-subspecialists in extremely narrow areas of care, such as neonatal cardiovascular surgery, or in areas such as pediatric surgery, pediatric neurology, pediatric neurosurgery, or pediatric cardiac catheterization. They almost always work at regional, tertiary care hospitals.
5. The Guidelines for Perinatal Care (second edition, 1988), (Perinatal Guidelines) of the American Academy of Pediatrics and the American College of Obstetricians and Gynecologists point out that:
  
  [a]lthough outcome is not necessarily influenced by facility or service size, the availability of appropriate equipment and personnel, such as obstetric and pediatric specialists, subspecialists, and experienced nurses, is very important to the effective management of the problems presented by the small proportion of the perinatal population with the highest risks. In the recent past, the outcome for very low birth weight infants (750-1,500 g) has steadily improved. Neonatal intensive care and interhospital transport of high-risk and very ill infants have positively influenced the survival and well-being of small and premature babies.
  The outcome is better for high-risk infants born in regional perinatal centers than for those transferred after birth. Perinatal Guidelines, Chapter 1 at pages 1-2.
6. As might be expected in such matters, OB-GYN physicians and neonatologists in private practice do not always agree with neonatologists on the faculty of teaching hospitals on the best way to design a system to provide for the care of very ill neonates. Practicing OB-GYNs and neonatologists want to have more hospitals designated as intensive care centers. The Perinatal Guidelines themselves recognize that "competition [among hospitals] is eroding regionalized care," and contain the caveat that "local circumstances must dictate the way in which these guidelines are best interpreted to meet the needs of a particular hospital, community, or system." Perinatal Guidelines, Preface, at pages xv-xvi.
7. As the field of neonatology has grown, and new neonatologists entered the employment market, hospitals have competed for obstetric admissions by escalating their level of neonatal care. Traditional levels of care under the Perinatal Guidelines are described in Findings 28 to 30, post.
8. The range of services required for severely ill neonates in large part is directly related to their prematurity, and/or their birth weight. The more premature, and/or the lower the birth weight, the more likely the neonate will present multiple problems, not just cardio-pulmonary ones, requiring substantial interdisciplinary coordination in care, which is best accomplished in regional intensive care centers. Gestational age and birth weight problems are exacerbated by poor prenatal care, birth by very young mothers or by mothers addicted to drugs such as cocaine. These mothers and their babies require extensive, expensive care but often are indigent.
9. The Department intends to develop a rule for regulation of neonatal intensive care services which will achieve these goals:
  1. Ensure an adequate supply of beds to satisfy need.
  2. Develop units of an efficient size, taking into account quality of care and economies of scale.
  3. Minimize disruption to existing patient flow patterns which had been developed in the existing system of neonatal intensive care.
  4. Provide higher quality neonatal care.
    
    The rule designed by the Department divides neonatal intensive care into two categories, Level II, and Level III. Rule 10-5.011(1)(v)2.e. (II) and (III), Florida Administrative Code. Traditional Level I care is the ordinary care, sometimes called "normal newborn" or "well baby care" provided by regular pediatricians in hospital nurseries. Rule 10-5.011(1)(v)2.e.(I), Florida Administrative Code. As a practical matter, all care not swept into the proposed definition of Level II or Level III care becomes Level I care. This expands the care which may be provided in Florida Level I nurseries over that which could be provided under the hierarchy of care embodied in the Perinatal Guidelines. The proposed rule defines the minimum requirements for personnel, equipment, and support services for the two levels of neonatal intensive care services, methodologies to be used to determine the need for additional neonatal intensive care beds for each level of care, and a means to establish a beginning inventory of Level II and Level III neonatal intensive care beds in Florida.
    This implicitly involves an issue of grandfathering. The beginning inventory of the neonatal intensive care units in hospitals in Florida will include some units which were initiated without prior certificate of need approval through accretion of services over time. Existing units which met certain standards contained in the rule, which the Department believes are indicators of quality neonatal intensive care services, as of October 1, 1987, will be placed on the beginning inventory without being required to submit a CON application for those services, along with units which had obtained prior CON approval and units which are now licensed because they predated the CON program.
10. A study by the Robert Wood Johnson Foundation has found that nationally:
  
  In urban areas, Level Is are upgrading to Level II status, and many Level IIs are upgrading to near- tertiary status. (Mease Exhibit 7 at 4)
  and
  Upgraded Level IIs and proliferating Level IIIs in a single area compete for a limited supply of high risk patients. These trends raise worrisome questions regarding system-wide cost efficiencies and comparative patient outcomes by hospital level. (Id. at 5)
  
  These competitive pressures account to a large extent for the blurring of roles among providers in the traditional three level hierarchy of care embodied in the Perinatal Guidelines construct. Neonatologists employed at Level I units tend to provide Level II services, which can be inappropriate. Although the neonatologist may be well trained, the provision of intensive care services is not an issue dominated by considerations of physician training but by issues of the experience and availability of nurses and other staff such as respiratory technicians, and allocation of resources by the hospital administration. The
  level of service a neonatologist has been trained to provide and wants to provide may not be cost-effective or represent wise public policy. Some hospitals have decried the Department's attempt to redefine in the proposed rule Level I, II, and III care in a manner which diverges from the Perinatal Guidelines. The Department is not required to accept the Guidelines developed by private orzanizations, but may craft a rule suited to Florida's needs. Those Guidelines definitions do not reflect current Florida practices; they are standards from the past. They were based on an implicit assumption that the health care system should and would marshal scarce resources to provide higher levels of manpower and technology in regional neonatal intensive care centers to serve as large a proportion of the population as possible. Hospitals today see a competitive advantage in offering higher level services and consequently do so. Competition has eroded the former altruistic sharing or transfer of patients which was designed to provide the greatest medical benefits to high risk neonates. (Mease Ex. 7 at 7).
11. The percentage of neonates who require prolonged assisted ventilation, and thereby also require related nursing and other services which are doubtlessly intensive care services under any definition, are by birth weight:
  
  Birth Weight in Grams Percentage 2,500 and above---------------------1/2 of 1%
  2,499 to 2,000 2%
  1,999 to 1,500 4-5%
  1,499 to 1,000 20%
  999 and below-----------------------at least 75%
12. The State of Florida, through the Department of Health and Rehabilitative Services, already has established a statewide system of Regional Perinatal Intensive Care Centers, known as the RPICC program. Chapter 10J-7, Florida Administrative Code. The hospitals participating in the program are large hospitals which have the facilities, equipment, and specialized medical, nursing, and technical staff to coordinate the transportation of and manage care for preterm and other severely ill neonates who need Level III care. RPICC
  step-down hospitals provide intensive nursing to neonates who do not require prolonged ventilation, or who cannot be placed because all RPICC beds are full. The Legislature has recognized that intensive care of neonates is a tertiary health care service which cannot be accomplished in a large number of hospitals offering obstetric services. See, Finding 16. Smaller community hospitals do not have the patient population to justify the significant expenditures necessary to recruit and retain subspecialists and sub-subspecialists, experienced nurses, and the equipment necessary to provide a high quality intensive care program for these neonates.
13. A few community hospitals now offer neonatal intensive care services by engaging a firm of neonatologists to provide coverage at a hospital when the need for the services of a neonatologist arises, thus avoiding the need to have a neonatologist in the employ of the hospital. This practice can be acceptable if the neonatologist(s) are nearby and able to provide and direct care around the clock. It is also necessary for quality care that the neonatologist(s) regularly practice at the hospital and be on the active staff of the hospital, i.e., have full privileges at the hospital, without a cap on the number of admissions or on the duration of care, which is often the case with "courtesy" hospital staff. The point is that the neonatologist(s) should actually provide care at the hospital on a regular basis, and not merely lend their name(s) and credentials to a hospital through listing an itinerant neonatologist or members of a group of neonatologists on a form as a means for the hospital to meet
  regulatory staffing requirements. The proposed rule's staffing requirement that Level II units be directed by a neonatologist or group of neonatologists on the active staff with unlimited privileges is reasonable and appropriate. Rule 10- 5.011(1)(v)8.a.(I), Florida Administrative Code. See, also, Finding 32, post.
14. Community hospitals have financial incentives to seek to be inventoried as Level II or even Level III neonatal intensive care hospitals. OB-GYNs and some pediatricians feel most comfortable in concentrating their medical practices at hospitals where experienced neonatologists, nurses, and
  specialized equipment are near at hand in emergencies. The risk of malpractice claims causes OB-GYNs to feel this pressure more acutely than many other physicians. They will even relocate their medical practices away from hospitals which cannot provide neonatal intensive care, in part because they view the potential for bad outcomes and malpractice claims as directly related to the consultants and resources available at their hospital. OB-GYN physicians who practice at hospitals which currently provide some neonatal intensive care services want those hospitals to retain the ability to provide those services to avoid disruption of their practices. Such a disruption would result if their sensitivity to malpractice claims impels them to move their practices to a larger hospital, because their current hospital fails to qualify as a Level II or Level III neonatal intensive care provider.
15. Community hospitals in more affluent areas with a base of patients able to pay for their care through insurance or otherwise will sometimes incur the expense of employing one or more staff neonatologists. This encourages OB- GYNs to use the hospital for their obstetric patients, and is reassuring to more highly educated and demanding expectant mothers, who know a neonatologist and a supporting cluster of services are immediately available if needed. Hospitals understand that OB-GYN physicians tend to use the same hospital for both their obstetrics and gynecology practices. If the absence of a staff neonatologist causes OB-GYN physicians to avoid delivering babies at a hospital, that hospital will lose those doctors' gynecological surgery patients as well. Gynecology patients are desirable because hospitals find those services profitable.
Background of the Regulatory Controversy.
1. Before the certificate of need program was enacted, hospitals were free to establish services, including neonatal intensive care services. After enactment of the program, a hospital would be licensed to provide neonatal intensive care services or other services only if it obtained a CON to add new institutional health services. Section 381.494(1)(i), Florida Statutes (1981), Section 395.003(4), Florida Statutes (1983). After October 1, 1987, certificate of need approval has been required specifically for "[t]he establishment of tertiary health care services," Section 381.706(1)(m), Florida Statutes (1989).
  The statute defines a tertiary health service as
  
  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 insure quality, availability, and cost-effectiveness of such service. Examples of such service include, but are not limited to, . . . neonatal intensive care units
  . . . . Section 381.702(20), Florida Statutes (1989).
  The Department has proposed to adopt several versions of Rule 10-5.011(1)(v), regulating neonatal intensive care services. The Department published its first neonatal intensive care services rule on March 10, 1989. 15 F.A.W. 1056. That proposed rule would have (a) regulated the establishment of new Level II and Level III neonatal intensive care units, as defined in the rule, (b)
  established minimum requirements for personnel, equipment, and support services for these levels of neonatal intensive care, (c) established methodologies for determining the need for additional Level II and Level III beds, (d) established criteria which would treat certain current Level II and Level III services as eligible for placement on the beginning inventory if those services already had been licensed or received certificate of need approval, or were being offered in the manner described in the rule on October 1, 1987, and continuously thereafter.
2. The rule initially proposed on March 10, 1989, would have qualified few hospitals for the Level III designation (the most intense level of care) due to the broad range of services required, which included availability of sub- subspecialists such as pediatric cardiac catheterization, neonatal cardiovascular surgery, and pediatric neurosurgery. HRS notified the parties of tentative amendments to the proposed rule on July 25, 1989, which were ultimately published in the Administrative Weekly on October 6, 1989. See, 15
  F.A.W. 4574. These amendments would have enabled more hospitals to qualify as Level III units.
3. The March 10, 1989, edition of the rule sparked a number of rule challenge proceedings, which were consolidated at the Division of Administrative Hearings as cases 89-1883R through 89-1892R. After the Department published its October 6, 1989, amendments to the proposed rule, it completely withdrew that rule on November 3, 1989. See, 15 F.A.W. 5140. The administrative challenges to the March version of the rule (cases 89-1883R through 89-1892R) therefore became moot, and were closed by an Order entered on November 16, 1989. The current version of the proposed rule was published on November 3, 1989, see, 15
  F.A.W. 5052. Timely challenges to that edition of the rule were filed, and consolidated in this proceeding. All parties agree that each has a substantial interest in the outcome of this proceeding. All parties have standing.
Brief Description of the Parties.
1. Baptist Hospital is a 520 bed not-for-profit tertiary care facility located in Pensacola, Florida. It provides comprehensive obstetrical and newborn baby services, but does not serve newborns with birth weights of less than 1,000 grams (Mease Ex. 5). If the proposed rule is adopted, Baptist hopes to obtain grandfather status for a five-bed Level II unit, thereby avoiding the necessity of obtaining a certificate of need to continue to provide what the rule describes as Level II services. The rule in its current form may preclude this, because neonatal services at Baptist were not provided under the direction of a neonatologist on and after October 1, 1987.
2. Florida Hospital is a 1,100 bed tertiary care hospital in the Orlando area which has provided services which would be Level II and Level III neonatal intensive care services under the proposed rule. Its neonatal intensive care unit began in 1983. It holds CON #3062, issued July 24, 1984 for Level II and III beds (Mease Ex. 5). In 1987 it opened a 19 bed unit. More than 40% of its neonatal intensive care services are rendered to indigents and are reimbursed by Medicaid. In the fiscal year from October 1, 1986, to September 30, 1987, (the last year before Section 381.706(1)(m) became effective), most neonates with
  birth weights less than 1,000 grams were transferred elsewhere (Mease Ex. 5). More recently, it has served a significant number of low birth weight infants; some were transferred there from Orlando Regional Medical Center.
3. Holmes Regional Medical Center is a current provider of neonatal intensive care services with 15 Level II and 14 Level III beds. It has not received CON approval for these beds (Mease Ex. 5). Holmes regularly receives transfers of infants from Indian River Memorial Hospital, Lawnwood Medical Center, Cape Canaveral Hospital, Jess Parrish Hospital, and West Volusia Memorial Hospital. Roughly one-half of these transfers are Medicaid patients or indigents. In fiscal year 1986-87, its only neonate of less than 1,000 grams birth weight was transferred to another hospital (Mease Ex. 5). Recently it has served some very low birth weight neonates who were born at or transferred to its Level III unit.
4. Mease Health Care, Inc., operates Mease Hospital, a not-for-profit community hospital in Dunedin, Florida. Under the proposed definition of Level II and Level III, Mease currently operates six Level II and four Level III neonatal intensive care beds. It has not obtained a CON for its beds (Mease Ex. 5). It serves few infants of 1,000 grams birth weight, 2 in fiscal year 1986- 87, 3 in fiscal year 1987-88, but this jumped to 10 in the first half of fiscal year 1989. (Id.) Its services are directed by a neonatologist and Mease has, on its staff, a second full-time neonatologist. Mease has provided neonatal intensive care services since at least 1981. Before Mease hired a staff neonatologist, pediatricians were uncomfortable in caring for high-risk mothers or neonates there, but the hospital also found that patients were upset if they had to be transferred to unfamiliar facilities due to their health care needs. If the intensive care services at Mease are not grandfathered, some OB-GYN physicians will likely relocate their practices to other hospitals where Level II or Level III neonatal intensive care services are available. Local physicians who currently hold admitting privileges at Mease regard this as a reversion to an earlier, unsatisfactory state of affairs.
5. Winter Park Memorial Hospital Association operates Winter Park Hospital in a suburb of Orlando, Florida. It is located not far from Florida Hospital, and is also near Orlando Regional Medical Center. Since 1981 it has provided mechanical ventilation services to neonates who required it. Since 1983 Winter Park has had approximately 1,800 deliveries of newborns annually. It operates five Level II beds, which it has reported to the local health council, but it has not obtained a CON for these beds (Mease Ex. 5). It serves no infants of 1,000 grams birth weight or less. Fifty-three percent of all Level II care (by admissions) at Winter Park is provided to Medicaid patients. Since 1983 Winter Park has provided Level II care through the services of three consulting neonatologists. While these neonatologists are on the active staff of Orlando Regional Medical Center, they have admitting privileges at Winter
Park, and can attend babies at Winter Park when necessary. A neonatal intensive care network in the Orlando area is developing among Winter Park, Orlando Regional Medical Center and Florida Hospital. Through this arrangement, Winter Park has provided Level II neonatal intensive care services without having a full-time neonatologist at the hospital. The past volume of neonatal intensive care services at Winter Park has not been such that a neonatologist would be willing to work exclusively at Winter Park. In fiscal year 1986-87, the hospital served 58 Level II neonates, who cumulatively used 136 patient days.
When recruiting obstetrical staff, Winter Park administrators find that the first matter of concern to an obstetrician is the level of intensity of services
which the hospital's nursery offers. If Winter Park fails to qualify for Level II status, OB-GYN physicians probably would move their practices from Winter Park to hospitals which would offer Level II services.

24 a. North Broward Hospital District is an independent special taxing district located in Broward County, Florida. It owns and operates Broward General Medical Center and Coral Springs Medical Center. Broward General is a 744 bed acute care hospital in Fort Lauderdale which presently operates 36 neonatal intensive care beds providing Level II and 27 beds providing Level III services. It holds a certificate of need for neonatal intensive care services issued on April 7, 1982. It serves a substantial number of neonates, including
67 in fiscal year 1986-87, of less than 1,000 grams birth weight (Mease Ex. 5). Coral Springs Medical Center is a 220 bed acute care hospital located in Coral Springs, in Broward County. It operates a six bed Level II neonatal intensive care facility under a certificate of need issued on August 13, 1984. It does not serve neonates of less than 1,000 grams birth weight (Mease Ex. 5). b. Similarly, the South Broward Hospital District is also an independent special taxing district. It operates Memorial Hospital in Hollywood, Florida, a large public hospital which received certificate of need approval on February 18, 1982, for 8 Level II and 15 Level III beds. In fiscal year 1986-87, it served
40 neonates of less than 1,000 grams birth weight. It is a major indigent care provider.
1. Sacred Heart Hospital is a 398 bed acute care hospital in Pensacola, Florida. It provides high risk obstetrical care, and had about 3,400 deliveries in 1989. Its neonatal intensive care unit has 22 Level II and 18 Level III beds staffed by five board certified neonatologists. Some data from this hospital is skewed by its practice of admitting all neonates who need intensive care to its Level III unit for evaluation. Those with lesser needs are then stepped-down into its Level II beds. Sacred Heart began neonatal intensive care in the early 1970's, before the CON program began, and became a Regional Perinatal Intensive Care Center in 1974. It serves a 10-county area in Northwestern Florida. In 1987, it served 65 neonates of less than 1,000 grams birth weight, which was 11% of total admissions. Medicare reimburses the hospital for half of its neonatal intensive care patients, which indicates that it serves many indigents.
2. Community Health Systems, Inc. d/b/a Women's Medical Center is a licensed acute care hospital which will be substantially affected by the proposed rule, as is Alachua General Hospital.
The Service Level Definitions of the Proposed Rule.
1. Introduction.
  1. The Department conducted two surveys which were sent to hospitals providing obstetrical services, one in 1987 and one in 1989, to assess the types of services that were being offered, the levels of staffing (including such things as the number of nurses per shift and whether the hospital had a full- time neonatologist), the number of neonatal intensive care patient days, whether the unit had obtained CON approval and other information. The purpose of these surveys was to obtain a preliminary inventory of the types of services that were actually being offered in Florida hospitals and give a general overview of the existing service delivery system which had developed in Florida. During the rule promulgation process, the Department also received comments from a number of neonatologists practicing in Florida hospitals and from hospitals. According to the surveys, only 2 of 49 hospitals which claimed to operate Level II units lacked ventilators.
2. Traditional Perinatal Guidelines Levels of Care.
  1. The terms Level I, Level II, and Level III neonatal intensive care originate from the Perinatal Guidelines. Under the traditional Guidelines definition, a Level I nursery provides routine care to normal full term or pre- term neonates who weigh more than 2,000 grams at birth. According to a summary table in the Perinatal Guidelines, the babies in a traditional Level I unit present
    
    uncomplicated, emergency and remedial problems such as the lack of progress in labor, immediate resuscitation of asphyxiated neonates, uterine antony, nursing care of large premature neonates [those weighing greater than 2,000 grams] without risk factors, or physiologic jaundice. Guidelines, Table A-1, at 288.
    
    They are usually cared for in bassinets.
  2. Level II units under the traditional Guidelines definition provide services to sick neonates who do not require what the Guidelines define as intensive care, but who need six to twelve hours of nursing care each day. Hours of nursing care are determined by dividing the number of nurses by the number of babies in the nursery. Thus, a hospital which maintains three nurses on the nursery floor for six babies is said to provide twelve hours of nursing care to each baby. This is not a measure of the time actually devoted to each newborn, but a measure of the intensity of staffing in the nursery. These are related however, because hospitals try to minimize personnel costs. Hospital administrators staff a nursery to provide more than 6 hours of care per newborn only if the condition of the newborns require it. Under the Perinatal Guidelines, Level II units provide Level I services, plus
  selected problems such as preeclampsia, premature labor at 32 weeks and later, mild to moderate respiratory distress syndrome, suspected neonatal sepsis, hypoglycemia, neonates of diabetic mothers, post- asphyxia without life-threatening sequelae.
  Guidelines, Table A-1 at 288.
  
  Level II services described by the Guidelines are sometimes also characterized as "intermediate care". These neonates may be cared for in radiant warmers or incubators, which can accommodate IV lines, pumps and monitors. The radiant warmers are expensive, costing about $25,000 each after installation. Care involving IV lines or monitoring cannot be done in a bassinet.
  1. Newborns who require complex surgical care, or cardio-pulmonary care such as prolonged assisted mechanical ventilation (ventilation for more than resuscitation and stabilization purposes) are ordinarily moved to an intensive care area within the Level II unit, which the Perinatal Guidelines describe as a Level III unit. Infants who need prolonged ventilation require the care of a neonatologist and a minimum of 12 hours nursing care (i.e., a ratio of at least
    1 nurse for 2 neonates). Based on the Department's survey, most Florida Level II units had ventilation services, and met the Perinatal Guidelines definition of a Level III unit.
  2. It is essential to understand that the Perinatal Guidelines are primarily standards of care, and they do not contain operational definitions that are suited to regulatory enforcement. The definitions of Level I, II, and III neonatal intensive care services found in the Perinatal Guidelines do not describe the actual system of health care delivery to neonates in Florida. For example, the Guidelines recommend 3-4 Level II and one bed per 1,000 births for Level III services. Florida had approximately 185,000 births in 1988, which under the guidelines would show a need for only 185 Level III neonatal beds. In reality, the Department's preliminary survey data indicated that Florida had 391 Level III beds. In part because the Perinatal Guidelines definitions would indicate a significantly lower number of Level III beds than are in use, the Department determined that the Guidelines need methodology should not be adopted without modification.
Division Among Levels of Care in the Proposed Rule.
1. The new definitions the Department has proposed to adopt for Level II and Level III use functional distinctions that are significant indicators of the level or intensity of services provided in a nursery. These distinctions reflect the reality that there is a need for a hierarchical clustering of services, in terms of the availability of medical specialists, subspecialists and sub-subspecialists, the intensity of nursing care, and the availability of respiratory therapy technicians and equipment, as hospitals deal with smaller and smaller neonates, who require prolonged ventilation and other interdisciplinary care.
  1. Level I versus Level II Neonatal Intensive Care Services.
2. The definition of Level I services in the proposed rule encompasses intravenous medication and tube feedings (gavage) to neonates, and administration of oxygen by hood, which would be traditional Level II intermediate care services under the Perinatal Guidelines. The major distinction between the services authorized under the proposed rule for Level I versus Level II nurseries are that a Level I unit cannot offer prolonged assisted ventilation; it can provide mechanical ventilation to a newborn for resuscitation and stabilization only. A Level II unit may provide prolonged ventilation, and it must provide those services under the direction of a neonatologist or group of neonatologists. Rule 10-5.011(1)(v)2.e.(I)(II) and 8.a.(I), Florida Administrative Code. Under contemporary standards of care, prolonged mechanical ventilation is a complex procedure which requires extensive training due to its significant mortality rate.
3. Providing artificial ventilation to an infant is not the only distinction in the proposed rule between Level I and Level II services, however. A unit routinely providing less than six hours of nursing care to its newborns is providing care which is appropriately rendered by a pediatrician. The proposed definition of Level II neonatal intensive care services also includes provision of no less than six hours of nursing care per day. Management of conditions which require six or more hours nursing care per day likely transcend the skills and training of an ordinary pediatrician and require care directed by a neonatologist. This is not a bright line standard, but relates to the clustering of services typically required by seriously ill neonates. If a unit commonly serves neonates who are so ill that the hospital routinely must staff the unit so that the neonates receive more than six hours of nursing care a day, the unit is likely operating an intensive care nursery. This is so even though the proposed rule's definition of Level I care includes some services
  traditionally regarded as intermediate care. Cost pressures will dissuade genuine Level I units from staffing to provide more than six hours of nursing care per day. There is, however, no restriction on Level I units forbidding them from providing six hours or more of nursing care to its newborns.
  1. Transport Between Units.
4. The need to transport a neonate from a Level I to Level II or a Level II to a Level III unit can be minimized by appropriate pre-natal care. Women in pre-term labor with gestation which correlates with low birth weight can be directed to a Level II unit, or if gestation is compatible with very low birth weight (i.e. less than 1,000 grams), to a Level III unit which will have the services of a maternal-fetal specialist who can attempt to arrest the premature labor. See, Rule 10-5.011(1)(v) 8.a. (II), Florida Administrative Code. This transfer of the mother and fetus as a unit is preferable to transfer of a neonate. When that is not possible, however it is appropriate to arrange transfer from a Level I to Level II or Level II to Level III unit. It is true that there are some risks in transferring a neonate of less than 1,000 grams from a Level II to a Level III center. It can be difficult to maintain the infant's temperature, and it is possible that the ventilation equipment being used during transport can be dislodged from the infant's windpipe, and that there can be some risk of brain hemorrhaging. Fewer than 1% of neonates who are transported die during transport, however, and the increased likelihood of a good outcome by treating the infant in an enriched setting with respect to the experience of the medical, nursing and technical staff and the availability of equipment outweighs this risk. Similarly, the increased cost of transportation to the parents is counter-balanced by the higher level of care available in a Level III center for low birth weight neonates. For example, approximately 3/4 of infants between 500 and 1,000 grams require prolonged assisted ventilation, that is, assisted ventilation for several hours or even many days. They commonly require the care of a single nurse on a 24-hour basis because they are on a ventilator, have an IV, and multiple pumps and monitors. The practical effect of birth weight transfer rule should not be the transfer of most low birth weight infants, but the direction of mothers who are likely to have low birth weight babies to Level III centers in the first instance. On an institution-specific basis, there may be a change in transfer patterns at a small number of hospitals with low service volumes.
  1. Level II versus Level III Neonatal Intensive Care
  Services.
5. The proposed rule also requires that Level II units restrict themselves to care to neonates of 1,000 grams birth weight and over, with the exception that a Level II facility may serve a neonate of less than 1,000 grams birth weight only while waiting to transport the baby to a Level III facility. Rule 10-5.011(1)(v)2.e., (II), (III), Florida Administrative Code. The 1,000 gram birth weight limit on Level II units is a reasonable one. Few neonates weigh less than 1,000 grams at birth; the population is small, and the technologic requirement to care for them are great. (Tr. 1179). Data demonstrate that morbidity and mortality for infants of less than 1,000 grams is not as good when there is a small number of infants cared for as compared to care in regional Level III centers which handle a moderate volume of such infants. (Tr. 1259-63; Sacred Heart Ex. 1; see, also Finding 5, above). Small neonates often need interdisciplinary medical care, including care by a cardiologist as well as by a neonatologist. Anecdotal data from community hospitals such as Mease hospital, which recently began caring for a number of very low birth weight neonates and experienced good results with that small
sample of children does not alter this fact. Consequently, the rule provision which would restrict Level II centers from handling infants with less than 1,000 grams birth weight has a reasonable medical basis. It is also an operational standard suitable for regulatory enforcement. This provision impacts, to some extent, on the judgment of neonatologists about whether to care for a neonatal of less than 1,000 grams birth weight in a Level II center; the issue involved is not only the physician's assessment of his or her own skill and ability to care for the infant in a Level II center, however. It also raises questions about the training of nurses, their skills, and the resources available in a Level II hospital, such as access to subspeciality care. A survey of Florida neonatologists indicates that they disagree among themselves on the appropriate birth weight cut-off for transfer to a Level III unit. Opinions range from requiring transfer at 1,250 grams, 1,000 grams, or 800 grams to deletion of the transfer requirement. As congressional hearings found in another context (dealing with the efficacy of drugs), "impressions or beliefs of physicians, no matter how fervently held, are treacherous." Hearings on S. 1552 before the Subcommittee on Antitrust and Monopoly of the Senate Committee on the Judiciary 87th Cong., 1st Sess., pt. 1 at 195, 282, 411-12.1 Data should be preferable to physician plebiscite in establishing standards of care. Dr. Curran's testimony concerning studies in Florida and Texas and Dr. Alpin's testimony on Florida data on outcomes of treatment of low birth weight infants form an adequate basis for choosing the 1,000 gram cut off. (Tr. 1411, Sacred Heart Ex 1.) The argument that the cut point is the result of impermissible compromise is rejected. The choice was not an unprincipled one, such as a compromise jury verdict or the compromise invalidated in the Adam Smith case, discussed post at
1. Dr. Curran merely acknowledged that colleagues could come to different conclusions on the weight standard, and he might choose a higher one were the matter left up to him. The actual practice of hospitals such as Baptist, Florida Hospital, Holmes Regional, Winter Park and Coral Springs in fiscal year 1986-87 of transferring almost all neonates of less than 1,000 grams show that the threshold is reasonable and consistent with contemporary medical practice. See, Findings 19, 20, 21 and 23, above.
  1. Level III units not only care for very low birth weight neonates, but for all neonates who need sub-subspecialist care, such as complex pediatric surgery, neonatal cardiovascular surgery, the interdisciplinary efforts of pediatric neurology and neurosurgery (usually neonates suffering from hydrocephalus) or pediatric cardiac catheterization. These are services appropriately limited to regional medical centers, because very few physicians provide such care. In recognition of this, the rule definition of Level III care permits Level III centers to make care available for major congenital anomalies that require the care of a pediatric surgeon, pediatric cardiovascular surgery and cardiac catheterization by means of a written agreement with another Level III unit in the same or adjacent service district. Rule 10- 5.011(1)(v)2.e. (III), Florida Administrative Code. Each Level III provider need not have these sub-subspecialists on active staff.
  2. The rule contains a conflict, however. Rule 10-5.011(1)(v)10.a., requires in the "Level III Neonatal Intensive Care Unit Standards" that Level III units "shall have a pediatric surgeon on active staff who is either board certified or board eligible in pediatric surgery." The definition of a Level III unit and this substantive provision are mutually exclusive. Because pediatric surgeons are so few, the testimony that the definition should prevail, and the substantive provision be dropped, is persuasive. (Tr. 1299-1301).
    These services can appropriately be provided through written agreement with a pediatric surgeon nearby.
Grandfather Provisions.
1. General.
2. Review of CON Applications for Neonatal Intensive Care Services Before October 1, 1987.
  1. Historial Background.
3. Other Challenges to Level II Grandfathering Provisions.
4. Tripartite Test for Grandfathering Level III Providers Who Have no CON or License Designation.
Need Methodology.
1. Introduction.
2. The Occupancy Standards.
3. Minimum Unit Sizes and Birth Volumes.
Economic Impact Statement.

The Department engaged in a reasonable analysis of the possible economic impact of the proposed rule. Assessing the impact is, necessarily, a difficult process. The economic impact statement accompanying the proposed rule addresses the cost to the agency of implementing the proposed rule; an estimate of the cost to persons directly affected by the proposed rule; an estimate of the impact of the proposed action on competition; a statement of the data and method used in making those estimates; and an analysis of the impact on small business as defined in the Florida Small and Minority Business Assistance Act of 1985. (Nu-Med Ex. 7).
The rule will allow Level I units to keep some babies that would have been transferred to Level II units under the traditional Perinatal Guidelines categorization of units. It will also allow Level II units to conduct prolonged ventilation, which was a Level III service under the traditional Perinatal Guidelines, thus reducing the need for transfers from Level I to Level II units and from Level II to Level III units. In terms of overall impact, there is no reason to believe that there will be a significant change in the total transportation patterns of neonates throughout the state. There may be some impact on neonatologists, if they have been employed by hospitals which did not have authority to conduct a Level II or Level III neonatal intensive care service. There is little likelihood that the rule will have an adverse economic impact on the overall employability of neonatologists in the general market place, but they maybe required to relocate their practices from small community hospitals to larger medical centers. The economic impact statement does not take into consideration the losses which might follow if a hospital is prohibited from advertising its nursery as a Level II or Level III unit, because it fails to qualify under the rule, and consequently OB-GYN physicians decide to move their practices elsewhere. That would be an extremely difficult calculation to make, and the failure of the economic impact statement to attempt to quantify that possible shift in OB-GYN practices does not impair the fairness of the rulemaking proceeding.

CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction to declare a rule invalid under Section 120.54(4)(a), Florida Statutes (1989), if it is "an invalid exercise of delegated legislative authority."
The term "invalid exercise of delegated legislative authority" is defined in Section 120.52(8), Florida Statutes (1989), to include whether
1. the rule enlarges, modifies, or contravenes the specific provisions of law implemented, citation to which is required by s. 120.54(7);
2. the rule is vague, fails to establish adequate standards for agency decisions, or vests unbridled discretion in the agency; or
3. the rule is arbitrary or capricious.
The Department relied upon Sections 381.702(20) and 381.706(1)(a), (e), (h), and (m), Florida Statutes (1989), in promulgating the rule. Section 381.702(20)
defines neonatal intensive care as a tertiary service. The substantive sections authorize the Department to regulate the establishment of tertiary services [Section 381.706(1)(m)], and requires a certificate of need for the addition of beds [Section 381.706(1)(a)], changes in licensed bed capacity [Section 381.706(1)(e)], establishment of inpatient institutional health services, or a substantial change in such services involving a capital expenditure or an operating cost of $500,000 or more per year. Section 381.706(1)(h), Florida Statutes (1989).
Section 395.003(4), Florida Statutes (1989), requires the Department to specify on the face of the hospital's license the number of rehabilitation or psychiatric beds it may operate. The statute goes on to say that "all beds which are not covered by any specialty-bed-need methodology shall be specified as general beds [on the license]." Id. (emphasis added). Some of the parties have argued that because there is no statement in the licensing law [Section 395.003(4)] requiring that the number of neonatal intensive care beds be endorsed on the face of the license, the Department's attempt to establish a specialty-bed-need methodology for neonatal intensive care beds is invalid.
This argument is unpersuasive. The text of that statute does not limit the Department to establishing specialty bed-need methodologies for rehabilitation or psychiatric beds only. When the Legislature enacted Section 381.702(20), and defined tertiary health services to include neonatal intensive care units, the Legislature meant to limit their proliferation. Section 381.706(1)(m), enacted as Chapter 87-92, Section 23, Laws of Florida, became effective on October 1, 1987, and provided the Department the authority to regulate, through certificate of need review, neonatal intensive care services. The proposed rule will require such review for any hospital which may have attempted to establish a neonatal intensive care unit since October 1, 1987. It allows hospitals which actually had quality neonatal intensive care units before that date to obtain grandfather status by listing them on the beginning inventory of neonatal intensive care units. The Legislature did not specifically require the endorsement of neonatal intensive care beds on the face of a hospital's license, but the import of the legislative program is to permit the establishment of a specialty bed need methodology for neonatal intensive care. The rule designed by the Department establishing a bed need formula and method to determine a beginning inventory of beds in units is reasonably designed to effectuate that legislative purpose. Florida Waterworks Association v. Florida Public Service Commission, 473 So.2d 237, 240 (Fla. 1st DCA 1985), rev. den., 486 So.2d 596 (Fla. 1986; Agrico Chemical Company v. State, Department of Environmental Regulation, 365 So.2d 759 (Fla. 1st DCA 1978), cert. denied, 376 So.2d 74 (Fla. 1979). The Department is not required to list on its beginning inventory every neonatal intensive care bed that hospitals assert were operated as of September 30, 1987. The standards established for grandfathering are based on appropriate quality of care considerations.
The First District Court of Appeal in Adam Smith Enterprises v. Department of Environmental Regulation, 553 So.2d 1260 (Fla. 1st DCA 1989), discussed the scope of judicial review of agency rulemaking. When reviewing the quasi-legislative record arising from a public hearing conducted by the agency under Section 120.54(3), Florida Statutes, the question is whether the rules are "arbitrary or capricious." Adam Smith, at 1271. The court canvassed federal decisions which have developed indicia of arbitrariness. The court went on to rule, however, that
[h]earings under Section 120.54(4) and 120.56 are conducted in the same manner as adjudicatory hearings under Section 120.57. Section 120.54(4)(d) and 120.56(5), Florida Statutes. . .
* * *
[I]n determining the validity of an agency's rule, the Hearing Officer's standard of review is whether the rule constitutes an invalid exercise of delegated legislative authority, as that phrase is defined in Section 120.52(8), Florida Statutes. . .
One of the criteria that a Hearing Officer may consider in determining the validity of an agency's proposed rule is whether the rule is arbitrary or capricious.
Section 120.52(8), Florida Statutes. . . [W]hether a rule is arbitrary or capricious is not dependent on whether the rule is supported by competent substantial evidence. As previously established, the arbitrary and capricious and competent substantial evidence standards of review are two distinct standards, and their applicability in a given case is dependent on the nature of the proceeding under review. 553 So.2d 1273, 1274 & n. 23 (footnotes omitted) (emphasis by the court).
Although the holding of the Court of Appeal is not entirely clear on the point, it appears that one challenging the validity of a proposed rule in a Section 120.54(4) proceeding must demonstrate, with a preponderance of the evidence that the rule is arbitrary and capricious. The arbitrary and capricious standard to be applied by the Division of Administrative Hearings under Section 120.52(8)(e), Florida Statutes, remains that developed in Agrico Chemical Company, supra, and focuses on whether the rule contains choices made irrationally, without thought or reason, which are not supported by facts or logic, or are despotic. The test was stated somewhat differently in Florida Waterworks Association, supra, 473 So.2d at 240: "The standard of review for determining the validity of adopted rules, as well as orders entered in Section 120.54(4) proceedings, is identical: the reviewing court should sustain both if they can be considered reasonably related to the purposes of the enabling legislation and are not arbitrary or capricious."
These tests are quite similar to the appellate standard announced by the Court of Appeal in Adam Smith, which is whether the agency promulgating the rule has considered all relevant factors, has given actual, good faith consideration to those factors, and has used reason rather than whim to progress from consideration of these factors to its final decision. 553 So.2d at 1273.
Utilizing any of these formulations for determining whether the proposed rule is arbitrary or capricious, the opponents of the rule have not met their burden under Section 120.52(8)(e), Florida Statutes.
1. Service Level Definitions.
The definitions of Level I, II, and III neonatal services in the proposed rule are sufficiently clear to enable the regulated hospitals to comply with them. The definitions implement the term "neonatal intensive care," and this operationalization of the definitions is entitled to great weight. Island Harbor Beach Club Ltd. v. Department of Natural Resources, 495 So.2d 209, 214 (Fla. 1st DCA 1986), rev. den., 503 So.2d 327 (Fla. 1987). While the use of the
term "well-baby care services" in the definition of Level I services in Rule 10- 5.011(1)(v)2.e.(I) could be somewhat misleading if viewed in isolation, when taken in context, the definitions are not misleading. The definitions provide adequate lines of demarcation between the three levels of services which are medically justifiable and based on competent substantial evidence. The definitions provide objective criteria which should allow for reliable, predictable and fair enforcement of the rules. They do not vest unbridled discretion in the agency and are supported by fact and logic. Section 120.52(8)(d), Florida Statutes.
1. The Department Has the Authority to Regulate Tertiary Health Care Services.
While intermediate neonatal care as used in the Perinatal Guidelines might not be a tertiary health service, the Department's definition for neonatal intensive care Levels II and III found in Rule 10-5.011(1)(v)2.e. (II) and (III), Florida Administrative Code, do describe intensive care services in a manner consistent with the statutory definition. Those tertiary health services should be provided under the direction of a neonatologist, not an ordinary pediatrician. They require substantial nursing and respiratory technician support. They should be limited to and concentrated in a limited number of hospitals in order to ensure quality, availability, and cost effectiveness. The minimum unit sizes, the minimum number of live births to qualify as a Level II or III unit, and the preference for existing facilities, especially those with large indigent case loads, is consistent with the statutory directive. These agency decisions on quality of care issues are entitled to deference. Island Harbor, supra at 223. (Agencies are entitled to deference in their selection of techniques and methodologies to carry out statutory responsibilities.)
1. The Grandfather or Inventory Provisions.
Without grandfather provisions, the Department would be required to go through enforcement actions to close neonatal intensive care units which had been established without approval since the inception of the certificate of need process. This rule makes a clean break with the murky past and permits the Department to analyze the staff and services offered at a hospital nursery to determine whether it had indicia of high quality Level II or III services as of October 1, 1987. This is a rational alternative to a plethora of enforcement proceedings, and is also consistent with the Department's internal goal to implement a rule which will not unduly disrupt current referral patterns or contract the availability of neonatal intensive care services. The policy choice is reasonable, rational, and not arbitrary.
The criteria contained in subsubsection 14. of the rule, for grandfathering or inventorying units as Level II or III units if they were in operation before October 1, 1987, and operated continuously thereafter are based on medical quality of care considerations. They are not the result of blind prejudice, inattention to critical facts, or the result of whim rather than reason.
Hospitals which operated Level II or Level III neonatal intensive care services because they either obtained a certificate of need for them, or had been providing them before the certificate of need program began, and thus have carried those beds forward in their applications for hospital licensure (although they are not endorsed on the face of the license) ought to be able to continue to provide those services. Hospitals which provided prolonged assisted ventilation and care requiring more than six hours of nursing without a
certificate of need, after the certificate of need program began, will be carried forward on the beginning inventory of Level II units if the unit was directed by a neonatologist or group of neonatologists on the active staff of the hospital with unlimited privileges, who were either board certified or board eligible in neonatal medicine who provided 24-hour coverage. This is a reasonable test to differentiate between those hospitals which operated high quality neonatal intensive care services from those which occasionally provided those services with itinerant neonatologists or operated units staffed by pediatricians who were testing the limits of their skills.
The further requirements in the "tripartite tests" for Level III neonatal intensive care units which had not received a certificate of need and did not pre-date the certificate of need program, that the average length of stay for its neonatal intensive care patients be at least ten days, that 5% of the neonates weigh 1,000 grams or less at birth, or that 50% of the neonates admitted to its Level II and III units have been classified in DRG's 385, 386, 387, or 388 are reasonable. That some hospitals will qualify or fail to qualify because fiscal year 1986-87 was chosen for computation of averages or percentages rather than a more recent year does not render the rule irrational, arbitrary, or invalid. The task of classifying persons for some benefit inevitably requires that some persons with roughly equal claims to favored treatment be placed on different sides of the line. That the line could be drawn differently is a matter of agency discretion. U.S. Railroad Retirement Board v. Fritz, 449 U.S. 166, 179 (1980). The Department justified each of the three prongs of its tripartite test, and demonstrated with convincing evidence why it did not alter those prongs as suggested by some of the parties. Island Harbor, supra at 223.
Implementation of the proposed rule methodology and the preliminary inventory criteria will not create a pool of need for beds for which all applicants should compete. Cf., Methodist Regional Hospital System, Inc. v. Department of Health and Rehabilitative Services, 497 So.2d 272 (Fla. 1st DCA 1986) (alteration of an existing rule methodology which recognizes need for new beds requires that all potential applicants be permitted to compete for those beds without regard to prior batching cycles). The proposed rule will establish an initial inventory of the beds in the service delivery system as it existed on October 1, 1987. It is not assessing the need for those beds in the inventory process. After verification and, perhaps, litigation with respect to that inventory, beds needed in addition to those in the beginning inventory must be allocated on a competitive basis.
1. Need Methodology.
The Department is required by Section 381.704(3), Florida Statutes, to establish uniform need methodologies for health services and health facilities. The Department must consider in those methodologies demographic characteristics of the population, the health status of the population, service use patterns, standards and trends, and market economics. Id.
The individual components of the rule, and the rule as a whole, are reasonably related to the statutory requirement that the Department regulate tertiary care services through the certificate of need program, and that it establish a uniform methodology to determine need. The general 80% occupancy standard and the decision not to include a Poisson adjustment have been adequately explained by the Department. While some of the parties argue that the "90%" occupancy standard for existing providers violates the statutory requirement that the Department have a uniform methodology, because it allows
existing providers to add beds without a showing of district-wide numerical need, this argument overlooks the statutory definition of tertiary health services, and does not take into account service use patterns which the Department must consider. Cf., Humana, Inc. v. Department of Health and Rehabillitative Services, 469 So.2d 889 (Fla. 1st DCA 1985) (Rule may implement a competitive advantage in expansion of a CON-regulated service which arises from the statute). The rule complies with the statutory mandate because the 90% rule assures adequate access to beds by the indigent, a group whose demographic profile shows that it needs the service disproportionately, and avoids the proliferation of tertiary health care services. The 2-tiered methodology for neonatal intensive care beds does not conflict with Section 381.704(3), and is uniform throughout the state.
1. Economic Impact Statement.
The parties have also challenged the validity of the economic impact statement. To prevail in such a challenge, Petitioners must prove that the fairness of the rulemaking proceeding or the correctness of the agency's action was impaired by some defect in the economic impact statement. Florida Waterworks Association v. Florida Public Service Commission, 473 So.2d 237 (Fla. 1st DCA 1985) rev. den., 486 So.2d 596 (Fla. 1986); Polk v. School Board of Polk County, 373 So.2d 960 (Fla. 2d DCA 1979). No party has demonstrated that the fairness of the rulemaking proceeding has been impaired or that the agency's action is incorrect as the result of some deficiency in the economic impact statement. The Department has considered each of the issues which the statute requires the Department to address in an economic impact statement. See, Humana, Inc., supra at 890; Section 120.54(2)(b), Florida Statutes. The conclusions the Department has reached are not the product of rigorous economic analysis and may be subject to debate, but the Department cannot be faulted for failing to make better predictions of unknown future events. Department of Natural Resources v. Sailfish Club of Florida, 473 So.2d 261 (Fla. 1st DCA 1985), rev. den., 484 So.2d 9 (Fla. 1986). The fact that some neonatologists may be required to seek employment at larger medical centers rather than at community hospitals is not significant because there is no persuasive evidence that the number of neonatologist likely to be employed to serve the population of neonates requiring intensive care will decline. Similarly, the fact that some neonatologists are women does not require a separate economic analysis under the Small and Minority Business Assistance Act of 1985. See, Section 120.54(2)(a), Florida Statutes (1989).
1. Regulation of Obstetric Care.
Petitioners have argued that the regulation of neonatal intensive care actually regulates obstetric care. Establishment or expansion of obstetric care was de-regulated in 1988. See, Section 381.706(3)(f), Florida Statutes (1989). The Level II and III services regulated by the rule are not obstetric services, but pediatric services. The effect of failure to qualify as a Level II or III neonatal intensive care unit may be to reduce the volume of births at a hospital's obstetric unit, but that result is implicit in the legislative decision to concentrate neonatal intensive care in a limited number of hospitals. That effect does not invalidate the rule.
1. Summary.
In adopting a rule that impinges on the financial interests of Florida physicians and health care facilities, there will be differences of opinion which cannot be harmonized. The current desire of most OB-GYN physicians to
practice in hospitals where neonatal intensive care is available is inconsistent with the legislative determination that neonatal intensive care services are tertiary care services which should be concentrated in a few hospitals, rather than generally available in community hospitals throughout the state. It would be impossible to draft a rule which will satisfy those physicians, and all hospitals which wish to become or remain providers of Level II and III neonatal intensive care. The Department has gathered information from appropriate sources, made a good faith evaluation of that information, and attempted to reconcile different points of view where possible. The rule it has promulgated is not arbitrary or capricious.
Executive agencies enjoy wide discretion in the exercise of their rulemaking authority. Florida Waterworks v. Florida Public Service Commission,

473 So.2d 237, 239-40 (Fla. 1st DCA 1985). Parties who attack the validity of a rule on the grounds of arbitrariness or capriciousness carry the burden of demonstrating by a preponderance of evidence that the rule was adopted without thought or reason or that the agency did not adequately consider all relevant factors. Adam Smith, supra. After examination of the record in this proceeding, the Petitioners have failed to demonstrate that the proposed rule is irrational or without basis in fact, or that it is arbitrary or capricious. The economic impact statement is no model of financial forecasting, but the Department considered the economic effects of the rule upon existing providers, potential providers, consumers, patients and the health care system as a whole. Any deficiencies in the economic impact statement have not impaired the fairness of the rulemaking proceeding. The sole fault in the rule is the conflict between the definition of Level III neonatal intensive care services (which permits the unit to provide the services of a pediatric surgeon through a written agreement with another facility in the same or nearby service area rather than maintaining that surgeon on the active staff) and the portion of the rule setting Level III neonatal intensive care standards, Rule 10- 5.011(1)(v)10.a., which requires that a Level III unit shall "have a pediatric surgeon on active staff who is either board certified or board eligible in pediatric surgery." Such a direct conflict is irrational. The evidence supports the conclusion that the substantive portion of the rule should fall, and that the definition should prevail. With this single exception, the challenges to the proposed rule regulating neonatal intensive care services should be dismissed.

It is ORDERED that Rule 10-5.011(1)(v)10.a., be invalidated, but that the challenge to the remainder of Rule 10-5.011(1)(v), be dismissed.

DONE and ORDERED this 12th day of June, 1990, at Tallahassee, Florida.

WILLIAM R. DORSEY, JR.

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 12th day of June, 1990.

APPENDIX TO FINAL ORDER

Rulings on the joint proposals by South Broward Hospital District, Sacred Heart Hospital, and Department of Health and Rehabilitative Services: (They are not numbered consecutively, but by number and letter.)

A1-3. Adopted in Finding 16.

See, Conclusions of Law.
Adopted in Finding 27. B1. a. Adopted in Finding 2.

Adopted in Finding 9 and 29.
Adopted in Finding 30.
Adopted in Finding 31.
Adopted in Finding 35.

2. a.-g.

Adopted

Findings 9,

28,

and 32.

Adopted Adopted Adopted

Adopted

in in in

Findings 32

Finding 32.

Finding 11.

Findings 27

and

33.

43.

f and g. h.

Adopted Adopted Adopted Adopted

Adopted

in in in in

Finding 29.

Finding 28.

Finding 32.

Finding 35.

Finding 34.

k. and l.

Rejected as unnecessary. Adopted in Finding 34.

Adopted in Findings 29 and

35.

4. a.-n.

C1,2., 3.

a, b. c.
a.

b. and c.

6. a.

b. and c. d.

7. D.i.1.a.

See, Finding 34.

See, Conclusions of Law. Adopted in Finding 11.

Rejected as unnecessary. Adopted in Finding 35.

Rejected as subordinate. Adopted in Finding 45.

Rejected as unnecessary. Adopted in Finding 34.

See, Conclusions of Law. Adopted in Finding 38.

Adopted in Finding 39.

Adopted in Findings 9 and

40.

Adopted in Finding 40.

3. a, b.

c. and d.

e. and f. 4. a.-e.

5. a.-c.

ii.1.

2. a, b. 3. a.-f.

4. a.-h. E.

1. a.

Adopted in Finding 40. Adopted in Finding 41. Adopted in Finding 42. Adopted in Finding 43. Adopted in Finding 44. Adopted in Finding 45. Rejected as unnecessary. Adopted in Finding 46.

Adopted in Finding 47. Adopted in Finding 49. (Introduction) adopted in

Rejected as unnecessary.

Finding 50.

b. and c. Rejected because the testimony of Mr. Rond was not persuasive and because any problem with element "AB2" can be alleviated, if necessary, by spacing the batching cycles.

d.-k. Rejected as unnecessary.

2. a, b. Adopted in Finding 53. 3,4.a.-d. Adopted in Finding 54.

a.-d. Adopted in Finding 55.
a.-e. Adopted in Finding 56.
Rejected as unnecessary.
a, b. Adopted in Finding 56.
a.-j. Adopted in Findings 57 and 58.
a, b. Rejected as unnecessary.

F1.-13. Adopted in Findings 59 and 60.

Ruling on the proposals of North Broward Hospital District: 1.-5. Addressed in Findings 16-18.

6.-8. Adopted in Finding 24 a.

Adopted in Finding 41.
Adopted in Finding 41.
Rejected as argument.

12.-15. Adopted in Finding 41, to the extent necessary.

Rejected as unnecessary.
Adopted in Finding 42.
Rejected as subordinate to Finding 41.
Adopted in Finding 42. 20, 21. Adopted in Finding 38.

Implicit in Finding 40.
Essentially adopted in Finding 40.
Adopted in Finding 59.
Rejected as argument.

26.-29. Rejected for the reasons stated in Findings 59 and 60 and in the Conclusions of Law.

Rulings on the proposals by Florida Hospital and Holmes Regional Medical Center:

Adopted in Finding 20.
Adopted in Finding 21.
Rejected for the reasons stated in Findings 6, 10, and 30.
Reject as irrelevant. Florida is not required to follow record keeping systems generated by others.
Rejected for the reasons stated in Finding 35.
Rejected for the reasons stated in Finding 35.
Rejected, although weeks of gestation might have been used as a standard of demarcation, the weight standard is appropriate, and not arbitrary.
Rejected because artificial surfactants are not yet approved, and it is not certain that they will be. The question is whether the standard is arbitrary today, and it is not.
Rejected. It is not clear that more transfer will be done although the transfer pattern may change. See, Finding 34.
Rejected, see, Finding 34.
Rejected. "Good faith effort" to transfer may become an issue in license disciplinary proceedings, but the standard is sufficient so that is does not grant the agency unbridled discretion.
Rejected because the rule does not ignore professional discretion but analyzes not only physician training, but the staff and equipment available at a hospital. The regulation is reasonable.
It is reasonable for the rule to grandfather RPICC centers since they are currently major providers of indigent care, as are step-down units. See, also, Finding 44.
The term "licensed" means facilities whose services pre-dated the CON program, and therefore may obtain hospital "licensure" for the beds without first presenting a certificate of need for those beds. The terminology may be inexact, but it is understandable and reasonable. Use of the most recent license application focuses on the current service delivery pattern, although use of the October, 1987, application would also have been reasonable.
The requirement for Level II units to have been directed by a neonatologist is reasonable under contemporary standards of care.
The three prongs of the tripartite test are reasonably designed to identify genuine Level III providers.
See, Finding 49.
The use of the October 1, 1986, through September 30, 1987, period is one reasonable approach to grandfather analysis. It immediately preceded the effective date of Section 381.706(1)(m). The Department could have chosen another period but that does not render the period chosen invalid.
Rejected as unnecessary.
The 5% requirement is reasonable, even if it offers no additional discrimination among hospitals.
The 10-day-ALOS is not arbitrary. That the clause is subject to differing interpretations does not make it invalid.
Rejected for the reasons stated in Finding 49. DRG
389 was properly excluded.
Rejected because it is likely that the results will differ from year-to-year. This is implicit in line- drawing. See, Conclusion of Law.
Rejected. The grandfathering criteria are appropriate without regard to the result they produce for Holmes.
Rejected as unnecessary.
Rejected as unnecessary.
Rejected. The testimony of Mr. Rond was not persuasive. There is no requirement that liberal rather than conservative approaches be taken in projecting need, which is inherently inexact.
Rejected. The formula is reasonable. It projects a need for additional Level II beds in four districts at the 1992 planning horizon, and an overall need for 53 Level III beds in 1992.
Rejected. There is no requirement for sub-area allocations. This may be a "not normal" situation which the Department can consider, however.
Rejected. The minimum unit size is consistent with the National Health Planning Guidelines and the classification of the service as a tertiary one.
Rejected. This is essentially an argument against the statutory classification of the service as tertiary.
Rejected for the reasons given for rejecting Finding 57.
"Monopolization" of beds by existing providers is consistent with the classification of the service as a tertiary service and the fact that the existing providers tend to be large providers of indigent care, which is the population most likely to require the service.
Rejected as argument.
Rejected for the reasons stated in Finding 34.
Rejected for the reasons stated in Finding 34.
Rejected. Any insufficiency has not been shown to affect the fairness of the rulemaking proceeding.
Rejected. It is not clear that there will be a significant increase in neonatal transport, as opposed to maternal-fetal transport. Nevertheless, the "hardship" placed on families of infancy must be transported is extremely difficult to quantify.
Rejected. It is not necessary for the Department to identify each physician who might be affected and then determine whether or not they are a member of minority.
Rejected as unnecessary.

Rulings on the proposals by Alachua General:

Rejected because it is unlikely that many babies of low birth weight will not require "Level III type ancillary services," such as the consultation of other subspecialists or care by a staff with experience in small neonates.
Rejected. By its nature the certificate of need program has impact on independent medical judgments.
Rejected. Given the evidence of outcomes for low birth weight infants at Level III units, the transfer rule is reasonable. See, also, Findings 6 and 10.
Although the rule contains no definition of "neonate" the terms has a widely accepted definition. See, Finding 1.
Rejected. If necessary, batching cycles may be rescheduled to make factor AB2 available.
Rejected for the reasons stated in Findings 35 and 54.
Adopted in Finding 9.

Rulings on the proposals by Women's Medical Center: 1.-3. Rejected as unnecessary.

Rejected. See, Finding 9.
Adopted in Finding 9.

6.-8. The Department's duty to consider demographic characteristics of the population, the health status of the population, and service use patterns under Section 381.704(3) justifies the Department's preference for existing neonatal providers who carry a heavy indigent caseload. Such a preference is not required to be based on medical or quality of care considerations.

Rejected as recitation of the rule.
Adopted in Finding 40.
Adopted in Finding 40.
Adopted in Finding 42.
Adopted in Findings 9 and 39.
Rejected. See, Finding 42.
Implicit in Finding 40.
Rejected. Grandfathering based on licensure arises from
have a unit which pre-dated the certificate of need program.
Rejected. This issue will arise in litigation over whether a hospital should be inventoried, but does not go to the validity of the proposed rule.
Rejected as a Conclusion of Law.
Adopted as a Conclusion of Law.
Adopted in the Conclusions of Law.
Adopted in Finding 51.
Rejected. Those similarly situated are treated equally. New entrants are not situated similarly to existing RPICC centers, however. See, Finding 55.
Rejected. See, Finding 55.
Rejected. The methodology is uniform across service districts, although it has two tiers.
Rejected. See, Finding 55.
Accepted. See, Finding 55.
While it is true that the 90% provision is not limited to large hospitals, they are clearly the ones who would benefit from it.
Rejected as unnecessary, although true.
Rejected, although probably true. The important consideration is economic access, not economy of scale.
Rejected, not supported by a fair reading of the citation given.
Rejected as unnecessary.
Implicit in Finding 55.
Rejected. The testimony of Mr. Rond was not persuasive. Any potentially "irrational results" can be remediated under the "not normal" provisions of the rule.
Rejected as unnecessary. The Department could limit applications to 10 bed units, but the "not normal" language contained in the rule makes applications for fewer beds possible.
Rejected as unnecessary, but implicit in grandfathering.
Rejected. See, the National Health Planning Guidelines.
Rejected. It is reasonable to grandfather existing small providers who meet quality standards, and to prohibit the proliferation of small units in the future. This does not require the closing of existing small units, however.
Rejected as unnecessary. The statutory classification of the service as tertiary is an effort to prevent the proliferation of services.
Rejected. There is no reason to assume, a priori, that additional providers should be approved in Broward County.
Rejected. See, the National Health Planning Guidelines.
Rejected as unnecessary.

Rulings on the supplemental proposed recommended order submitted by Mease and Winter Park Memorial:

Adopted in Finding 18.
Adopted in Findings 16 and 27.
Adopted in Finding 17.
Adopted in Finding 18.
Adopted in Finding 18.
Adopted as modified in Finding 50.
Generally adopted in Findings 5 and 10. The final two sentences are rejected as unnecessary. See, also, Finding 35.
Adopted in Finding 40.
Rejected. The inventory process determines the present supply, but does not assess the need. Hospitals have no choice but to convert medical/surgery beds to NICU beds because they cannot expand their number of beds without applying for a CON.
Adopted in Finding 23.
Adopted in Finding 23.
Adopted in Finding 23.
First sentence rejected as unsupported, the remainder is adopted in Finding 23.
Adopted in Finding 23.
Adopted in Finding 23.
Generally adopted in Finding 23. The revenue projection losses are rejected as too speculative, although some revenue will be lost.
Adopted in Finding 22.
Adopted in Finding 22.
Rejected as unnecessary, and because the application may have been submitted in response to the proposed rule.
It is doubtful that Mease failed to receive the 1981 memorandum although the hospital may have no record of it. While intermediate care may not have required a certificate of need, there is insufficient evidence that the hospital ever told the Department it offered Level III care under the Perinatal Guidelines, and was told that it did not need a certificate of need for those services.
Rejected. The issue here is not whether Mease meets the grandfather criteria for Level III status.
Adopted in Finding 22.
Adopted in Finding 22.
Rejected as unnecessary.
Rejected. See, Conclusions of Law.
Rejected. See, Conclusions of Law.
Rejected. See, Conclusions of Law.
Rejected. See, Finding 35.
Rejected. See, Finding 35.
Rejected. See, Findings 35 and 36. Pediatric neurology may be provided a Level II facility. The limit is that interdisciplinary efforts of pediatric neurology and neurosurgery must be limited to a Level III.
Rejected as inconsistent with the persuasive evidence.
Rejected as inconsistent with the persuasive evidence.
Adopted in Finding 34.
Rejected. See, Finding 35.
Rejected as unnecessary. See, Finding 35.
Rejected as unnecessary. Such results are inherent in line-drawing. They are not irrational. There is not evidence that the situation described is common.
Rejected. The provision is reasonable.
Rejected. See, Finding 35.
Rejected. See, Findings 11 and 35. Most low birth weight infants will require interdisciplinary care. That a very few may not does not render the rule arbitrary.
Rejected. Bonding is irrelevant in infants of this size, who are likely cared for in an incubator.
Generally adopted in Finding 11. No fewer than 85% of neonates below 1,000 grams will need intensive services. This is the vast majority of this very small population. Requiring transfer to Level III centers, with access to interdisciplinary care, is reasonable.
Rejected. Ventilation is not the only issue. Small neonates often need interdisciplinary care and very intensive nursing. (Tr. 1343-45).
Rejected as inconsistent with the more persuasive evidence. A transferred neonate has already been delivered.
Accepted in Finding 37.
Rejected as unnecessary, but bi-directional placement is a likely result of the Department's rule. (Tr. 1251).
Discussed in Finding 35.
Rejected for the reasons stated in Finding 35.
Rejected. See, Conclusions of Law.
Rejected. See, Conclusions of Law.
Rejected as irrelevant.
Adopted in Finding 16.
See, Conclusions of Law.
This characterization of legislative intent is not persuasive.
Rejected as a conclusion of law.
Rejected. The Department lacks authority to revoke certificates of need for Level II and III beds. See, Finding 43. It is not true that the Department lacks statutory authority to prohibit unlicensed services which hospitals began to provide in general medical surgical beds before October 1, 1987.
Rejected. The rule is an appropriate balancing of criteria.
Rejected as unnecessary. The rule does not require a hospital to accept an indigent. The Department may, however, look more favorably on indigent care providers when conducting a comparative review.
Rejected. Institution of new health services is reviewable without regard to monetary thresholds or beds.
Rejected. The rule makes not such assumption. See, Finding 40.
Rejected. No final inventory has yet been done.
Rejected as irrelevant. All those who "call themselves Level II" are not necessarily Level II providers.
Rejected as unnecessary. If the rule resulted in a wholesale loss of beds, the methodology might be suspect, but the operation of the tentative inventory appears to be reasonable.
Rejected as unnecessary. Given the unregulated accretion of services, it is not surprising that some hospitals will be authorized for fewer beds than they now claim.
Rejected for the reasons stated for rejecting Finding 63.
Rejected for the reasons stated for rejecting Finding 60.
Rejected for the reasons stated in Finding 47.
Rejected for the reasons stated in Finding 47.
Rejected. See, Finding 37. What is prohibited at a Level II unit is interdisciplinary treatment by pediatric neurologists and neurosurgeons, which should be done in a Level III unit. (Tr. 1247).
Rejected. See, Finding 47.
Rejected. Coverage by consulting neonatologists is acceptable if they were on the active staff of the hospital. This is an appropriate limitation.
Rejected as unnecessary, but see, Finding 25.
Rejected as unnecessary.
Rejected. Level III is clearly a tertiary care service; there is no requirement to introduce "flexibility" in order to accommodate facilities which seek to enter the Level III market for competitive advantage. This is contrary to the legislative intention to limit the number of tertiary care institutions.
Rejected for the reasons stated in Finding 49.
Rejected for the reasons stated in Finding 49.
Rejected. Hospitals engage in DRG classification daily. The uncertainty in classification underscores the appropriateness of dropping DRG 389.
Rejected. The infant must have been served at the institution in order for it to have been transferred out. At most, the inclusion of DRG 385 expands the number of neonates to be counted, to the hospital's benefit.
Rejected for the reasons stated in Finding 49.
Rejected for the reasons stated in Finding 49.
Rejected. The statewide average is skewed due to the accretion of Level III services at small units, which lowers that average length of stay. The 20-day average length of stay of RPICC providers is a better measure of true Level III status.
Rejected. See, Finding 49.
Rejected as an erroneous legal conclusion.
Rejected as unpersuasive.
Rejected. See, Finding 53.
Rejected. The occupancy requirements are reasonable.
Rejected as unnecessary.
Rejected, the test is not whether small and ICU units meet the rate, but whether the standard is reasonable, and it is.
The services of pediatric surgeons may be provided through a written agreement.
It is reasonable to expect a Level III facility to have pediatric cardiology available and pediatric surgery, at least through a written agreement with a nearby facility.
Rejected as irrelevant.
Rejected as unnecessary.
Rejected as unnecessary.
Rejected. See, Finding 57.
Rejected as irrelevant.
Rejected. The data relied upon is data from a period which immediately precedes the date regulation of tertiary services came into place; this is reasonable for a grandfather provision. Moreover, use of more recent date could permit hospitals to have manipulated their figures in anticipation of the effective date of the rule.
Rejected as unnecessary.
Rejected as unnecessary. The tentative methodology is only tentative.
Rejected as unnecessary.
Rejected as unnecessary. If the beds are not used, they may be distributed through the CON process.

100.-119. Discussed, to the extent necessary, in Findings 59 and 60.

Rulings on the proposals by Baptist Hospital:

Adopted in Finding 16.
Adopted in Finding 16.
Adopted in Finding 18.
Adopted in Finding 19.
Adopted in Finding 19.
Adopted in Finding 19.
Implicit in Finding 18.
Implicit in Finding 18.
Rejected as argument.
Rejected as unnecessary.
Implicit in Finding 9.
Rejected as unnecessary.
Rejected for the reasons stated in Finding 10.
Implicit in Findings 10 and 28-30.
Adopted in Finding 28.
Adopted in Finding 29.
Adopted in Finding 29.
Adopted in Finding 33.
Adopted in Finding 32.
Adopted in Finding 9.
Rejected as unnecessary.
Rejected as unnecessary.
Rejected for the reasons stated in Finding 33.
Rejected as unnecessary.
Rejected as unnecessary.
Rejected for the reasons stated in Finding 33.
Rejected as unnecessary.
Rejected as unnecessary.
Rejected for the reasons stated in Finding 33.

34.-54. Rejected because the distinction between Level I and II is not as difficult to understand as Baptist would make it out. These findings are unnecessary.

55. Rejected for the reasons stated in Finding 33. 56.-60. Rejected as unnecessary.

Adopted in Finding 38.
Rejected as argument.
Rejected. See, Findings 41 and 43.
Rejected for the reasons stated in Finding 43.
Rejected. See, Finding 43.
Rejected because the units not only had ventilators but also neonatologists, which make it likely that prolonged assistance was provided.
Rejected as unnecessary.
Adopted in Finding 41.
Rejected as unnecessary. 70, 71. Rejected as unnecessary. 72.-76. Rejected. See, Finding 44.

Rejected as unnecessary.
Rejected. See, Finding 43.
Rejected as unnecessary.

80.-87. Rejected as unnecessary. See, also, Finding 43.

88. Rejected as argument.

89.-98. Rejected. See, Finding 47.

99.-105. Rejected. See, Findings 47 and 48.

106, 107. Rejected as unnecessary.

Rulings on the proposals by the Florida League of Hospitals:

1. and 2. Rejected. See, Findings 56 and 57.

Rejected. See, Finding 56.
Rejected. The preference for indigent care providers is justified.
Rejected. The provision for continuity of care is reasonable.
Rejected. See, Finding 41.
Discussed in Finding 42.
Generally adopted in Finding 42.
Rejected as unnecessary.

Copies furnished:

Michael J. Cherniga Roberts, Baggett, LaFace

& Richard

101 East College Avenue Tallahassee, FL 32301

Stephen Boone

Boone, Boone, Klingbeil, Boone, et al.

1001 Avenida del Circo Venice, FL 34284

Patricia A. Renovitch Oertel, Hoffman,

Fernandez & Cole, P.A. Post Office Box 6507 Tallahassee, FL 32314

Patrick J. Phelan Post Office Box 527 Tallahassee, FL 32302

Robert A. Weiss Parker, Hudson, Rainer

& Dobbs

118 North Gadsden Street Tallahassee, FL 32301

John H. French, Jr.

Messer, Vickers,

Caparello, et al.

215 North Monroe Street Suite 701

Tallahassee, FL 32302

Byron B. Mathews, Jr. McDermott, Will & Emery 700 Brickell Avenue

Miami, FL 33131

Paul H. Amundsen

Blank, Hauser & Amundsen 204B South Monroe Street Tallahassee, FL 32301

Karen Emmanuel Emmanuel, Sheppard

& Condon

30 South Spring Street Pensacola, FL 32596

Copies furnished (cont.) (See Next Page)

Richard A. Patterson Department of Health and

Rehabilitative Services 2727 Mahan Drive

Tallahassee, FL 32308

John F. Gilroy

306 North Monroe

Post Office Box 10095 Tallahassee, FL 32302

Robert Newell

Newell & Stahl, P.A.

817 North Gadsden

Tallahassee, FL 32303

Liz Cloud, Chief

Bureau of Administrative Code The Capitol, Room 1802 Tallahassee, Florida 32399-0250

Carroll Webb, Executive Director Administrative Procedures Committee Holland Building, Room 120 Tallahassee, Florida 32399-1300

Sam Power, Agency Clerk Department of Health and

Rehabilitative Services 1323 Winewood Boulevard

Tallahassee, Florida 32399-0700

John Miller, General Counsel Department of Health and

Rehabilitative Services 1323 Winewood Boulevard

Tallahassee, Florida 32399-0700

================================================================= DISTRICT COURT OPINION AND MANDATES

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

IN THE DISTRICT COURT OF APPEAL FIRST DISTRICT, STATE OF FLORIDA

BAPTIST HOSPITAL, et al., NOT FINAL UNTIL TIME EXPIRES TO

FILE MOTION FOR REHEARING AND

Appellants, DISPOSITION THEREOF IF FILED.

vs. CASE NOS. 90-1999, 90-2022,

90-0234, 90-2054,

DEPARTMENT OF HEALTH AND 90-2056 & 90-2077 REHABILITATIVE SERVICES, DOAH CASE NO. 89-6417RP

Appellee.

/ Opinion filed March 28, 1991.

Appeals from a final order of DOAH Hearing Officer William R. Dorsey, Jr.

Stephen A. Ecenia of Katsz, Kutter, Haigler, Alderman, Davis, Marks & Rutledge, Tallahassee, for Appellant/Baptist Hospital.

Patricia A. Renovitch of Oertel, Hoffman, Fernandez and Cole, P.A., Tallahassee, for Appellants/Winter Park Memorial Hospital Association, Inc. and Mease Health Care, Inc.

John H. French, Jr. of Messer, Vickers, Caparello, Frnch, Madsden & Lewis, Tallahassee, for Appellant/Florida League of Hospitals, Inc.

Stephen K. Boone of Boone, Boone, Klingbeil, Boone & Roberts, P.A., Venice, for Appellant/Adventist Health System/Sunbelt, Inc., d/b/a Florida Hospital.

John F. Gilroy, III of Haben & Culpepper, P.A., Tallahassee, for Appellant/Community Health Systems, Inc., d/b/a Women's Medical Center.

Heidi Berkowitz of Panza, Maurer, Maynard, Platow & Neel, P.A., Fort Lauderdale, for Appellant/North Broward Hospital District, d/b/a Coral Springs Medical Center.

Richard A. Patterson, Assistant General Counsel, Department of Health and Rehabilative Services, Tallahassee, for Appellee/HRS.

Karen O. Emmanuel of Emmanuel, Sheppard & Condon, Pensacola, for Appellee/Intervenor - Sacred Heart Hospital of Pensacola.

PER CURIAM.

AFFIRMED.

SMITH, WIGGINTON, JJ., and WENTWORTH, S.J., CONCUR.

MANDATE

From

DISTRICT COURT OF APPEAL OF FLORIDA FIRST DISTRICT

To the Honorable William Dorsey, Jr., Hearing Officer WHEREAS, in that certain cause filed in this Court styled:

ST. MARY'S HOSPITAL, INC.,

v. Case No. 90-2077

DEPARTMENT OF HEALTH AND

REHABILITATIVE SERVICES Your Case Nos. 89-6417RP,

89-6418RP, 89-6419RP, 89-6420RP,

and 89-6422RP, 89-6423RP, 89-6424RP, 89-6425RP, & 89-6426RP

BAPTIST HOSPITAL, ADVENTIST HEALTH SYSTEM SUNBELT d/b/a FLORIDA HOSPITAL, HOLMES MEDICAL

CENTER, et al.

The attached opinion was rendered on March 28, 1991.

YOU ARE HEREBY COMMANDED that further proceedings be had in accordance with said opinion, the rules of this Court and the laws of the State of Florida.

WITNESS the Honorable Douglass B. Shivers

Chief Judge of the District Court of Appeal of Florida, First District and the Seal of said court at Tallahassee, the Capitol, on this 30th day of April, 1991.

Clerk, District Court of Appeal of Florida, First District

MANDATE

From

DISTRICT COURT OF APPEAL OF FLORIDA FIRST DISTRICT

To the Honorable William Dorsey, Jr., Hearing Officer WHEREAS, in that certain cause filed in this Court styled:

ST. MARY'S HOSPITAL, INC.,

v. Case No. 90-2056

DEPARTMENT OF HEALTH AND

REHABILITATIVE SERVICES Your Case Nos. 89-6417RP,

89-6418RP, 89-6419RP, 89-6420RP,

and 89-6422RP, 89-6423RP, 89-6424RP, 89-6425RP, & 89-6426RP

BAPTIST HOSPITAL, ADVENTIST HEALTH SYSTEM SUNBELT d/b/a FLORIDA HOSPITAL, HOLMES MEDICAL

CENTER, et al.

The attached opinion was rendered on March 28, 1991.

YOU ARE HEREBY COMMANDED that further proceedings be had in accordance with said opinion, the rules of this Court and the laws of the State of Florida.

WITNESS the Honorable Douglass B. Shivers

Chief Judge of the District Court of Appeal of Florida, First District and the Seal of said court at Tallahassee, the Capitol, on this 30th day of April, 1991.

Clerk, District Court of Appeal of Florida, First District

MANDATE

From

DISTRICT COURT OF APPEAL OF FLORIDA FIRST DISTRICT

To the Honorable William Dorsey, Jr., Hearing Officer WHEREAS, in that certain cause filed in this Court styled:

ST. MARY'S HOSPITAL, INC.,

v. Case No. 90-2054

DEPARTMENT OF HEALTH AND

REHABILITATIVE SERVICES Your Case Nos. 89-6417RP,

89-6418RP, 89-6419RP, 89-6420RP,

and 89-6422RP, 89-6423RP, 89-6424RP, 89-6425RP, & 89-6426RP

BAPTIST HOSPITAL, ADVENTIST HEALTH SYSTEM SUNBELT d/b/a FLORIDA HOSPITAL, HOLMES MEDICAL

CENTER, et al.

The attached opinion was rendered on March 28, 1991.

YOU ARE HEREBY COMMANDED that further proceedings be had in accordance with said opinion, the rules of this Court and the laws of the State of Florida.

WITNESS the Honorable Douglass B. Shivers

Chief Judge of the District Court of Appeal of Florida, First District and the Seal of said court at Tallahassee, the Capitol, on this 30th day of April, 1991.

Clerk, District Court of Appeal of Florida, First District

MANDATE

From

DISTRICT COURT OF APPEAL OF FLORIDA FIRST DISTRICT

To the Honorable William Dorsey, Jr., Hearing Officer WHEREAS, in that certain cause filed in this Court styled:

ST. MARY'S HOSPITAL, INC.,

v. Case No. 90-2034

DEPARTMENT OF HEALTH AND

REHABILITATIVE SERVICES Your Case Nos. 89-6417RP,

89-6418RP, 89-6419RP, 89-6420RP,

and 89-6422RP, 89-6423RP, 89-6424RP, 89-6425RP, & 89-6426RP

BAPTIST HOSPITAL, ADVENTIST HEALTH SYSTEM SUNBELT d/b/a FLORIDA HOSPITAL, HOLMES MEDICAL

CENTER, et al.

The attached opinion was rendered on March 28, 1991.

YOU ARE HEREBY COMMANDED that further proceedings be had in accordance with said opinion, the rules of this Court and the laws of the State of Florida.

WITNESS the Honorable Douglass B. Shivers

Chief Judge of the District Court of Appeal of Florida, First District and the Seal of said court at Tallahassee, the Capitol, on this 30th day of April, 1991.

Clerk, District Court of Appeal of Florida, First District

MANDATE

From

DISTRICT COURT OF APPEAL OF FLORIDA FIRST DISTRICT

To the Honorable William Dorsey, Jr., Hearing Officer WHEREAS, in that certain cause filed in this Court styled:

ST. MARY'S HOSPITAL, INC.,

v. Case No. 90-2002

DEPARTMENT OF HEALTH AND

REHABILITATIVE SERVICES Your Case Nos. 89-6417RP,

89-6418RP, 89-6419RP, 89-6420RP,

and 89-6422RP, 89-6423RP, 89-6424RP, 89-6425RP, & 89-6426RP

BAPTIST HOSPITAL, ADVENTIST HEALTH SYSTEM SUNBELT d/b/a FLORIDA HOSPITAL, HOLMES MEDICAL

CENTER, et al.

The attached opinion was rendered on March 28, 1991.

YOU ARE HEREBY COMMANDED that further proceedings be had in accordance with said opinion, the rules of this Court and the laws of the State of Florida.

WITNESS the Honorable Douglass B. Shivers

Chief Judge of the District Court of Appeal of Florida, First District and the Seal of said court at Tallahassee, the Capitol, on this 30th day of April, 1991.

Clerk, District Court of Appeal of Florida, First District

MANDATE

From

DISTRICT COURT OF APPEAL OF FLORIDA FIRST DISTRICT

To the Honorable William Dorsey, Jr., Hearing Officer WHEREAS, in that certain cause filed in this Court styled:

ST. MARY'S HOSPITAL, INC.,

v. Case No. 90-1999

DEPARTMENT OF HEALTH AND

REHABILITATIVE SERVICES Your Case Nos. 89-6417RP,

89-6418RP, 89-6419RP, 89-6420RP,

and 89-6422RP, 89-6423RP, 89-6424RP, 89-6425RP, & 89-6426RP

BAPTIST HOSPITAL, ADVENTIST HEALTH SYSTEM SUNBELT d/b/a FLORIDA HOSPITAL, HOLMES MEDICAL

CENTER, et al.

The attached opinion was rendered on March 28, 1991.

YOU ARE HEREBY COMMANDED that further proceedings be had in accordance with said opinion, the rules of this Court and the laws of the State of Florida.

WITNESS the Honorable Douglass B. Shivers

Chief Judge of the District Court of Appeal of Florida, First District and the Seal of said court at Tallahassee, the Capitol, on this 30th day of April, 1991.

Clerk, District Court of Appeal of Florida, First District

Docket for Case No: 89-006417RP

Issue Date	Proceedings
Jun. 12, 1990	Final Order (hearing held , 2013). CASE CLOSED.

Orders for Case No: 89-006417RP

Issue Date	Document	Summary
Jun. 12, 1990	DOAH Final Order	Rule challenge to neonatal intensive care unit designation dismissed in part Rule 10-5.011(1)(v)10a invalidated for containing conflicting definitions.

Source: Florida - Division of Administrative Hearings

ST. MARY'S HOSPITAL, INC. vs DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES, 89-006417RP (1989)

Docket for Case No: 89-006417RP

Orders for Case No: 89-006417RP

Jeff Goodman

Stephen K Boone

Byron B Mathews

Paul H. Nessler, Jr.

Karen O Emmanuel

Robert Daniel Newell Jr.

Robert Daniel Newell Jr.

Patricia Alan Renovitch

John H French, Jr.

Richard B Patterson Jr.

Richard B Patterson Jr.

John Francis Gilroy III

John Francis Gilroy III

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ST. MARY'S HOSPITAL, INC. vs DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES, 89-006417RP (1989)

Docket for Case No: 89-006417RP

Orders for Case No: 89-006417RP

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