STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

HCA OF FLORIDA, INC., d/b/a ) HCA DOCTORS HOSPITAL OF SARASOTA, )

)

Petitioner, )

)

vs. ) CASE NO. 90-5634

)

DEPARTMENT OF HEALTH AND )

REHABILITATIVE SERVICES and ) SARASOTA PUBLIC HOSPITAL BOARD, ) d/b/a MEMORIAL HOSPITAL, SARASOTA )

)

Respondent. )

)

RECOMMENDED ORDER

A hearing was held in this case in Tallahassee, Florida on October 4, 1990 before Arnold H. Pollock, a Hearing Officer with the Division of Administrative Hearings.

APPEARANCES

For Petitioner: John Radey, Esquire

Aurell, Radey, Hinkle & Thomas Suite 1000, Monroe Park Tower

101 N. Monroe Street

P.O. Drawer 11307 Tallahassee, Florida 32302

For Respondent: Edward G. Labrador, Esquire Department DHRS

Ft. Knox Executive Center 2727 Mahan Drive, Suite 103

Tallahassee, Florida 32308

For Respondent: Robert A. Weiss, Esquire Sarasota Memorial Parker, Hudson, Rainer & Dobbs

The Perkins House

118 N. Gadsden Street Tallahassee, Florida 32301

STATEMENT OF THE ISSUES

The issue for consideration is whether Respondent, Sarasota County Public Hospital Board's, (Board), Motion To Dismiss HCA of Florida, Inc.'s (Doctors), Petition For Formal Administrative Proceedings should be granted.

PRELIMINARY STATEMENT

On September 11, 1990, the Board filed its Motion to Dismiss Doctors' Petition filed in opposition to the Department's intent to award CON 6347 to the Board to construct a comprehensive outpatient center and medical office complex on the campus of Sarasota Memorial Hospital. After a response to the motion was filed by Doctors and other pleadings were filed by the various parties in support of and in opposition to the motion, the matter was set for hearing in Tallahassee on October 4, 1990 at which time it was held as scheduled.

None of the parties presented evidence in support of their position at the hearing choosing, instead, to make oral argument consistent with, and in supplement to, their prior filed pleadings. No transcript of the Hearing was made.

FINDINGS OF FACT

1. On June 26, 1990, the Board filed CON application No. 6347, seeking approval to construct a comprehensive outpatient center and medical office complex on the campus of Sarasota Memorial Hospital. The new facility, anticipated to have a cost of slightly in excess of $18,000,000.00, was to house several outpatient functions including:

   
   

   1. outpatient registration

   2. outpatient diagnostic radiology

   3. outpatient laboratory services

   4. outpatient rehabilitative services

   5. outpatient cardiology diagnostic center

   6. outpatient dialysis

   7. Health resources center, and

   8. an office building located adjacent to the existing ambulatory surgical center.

      
      

2. On or about July 13, 1990, the Department of Health and Rehabilitative Services, (Department), issued its State Agency Action Report, (SAAR), in which it indicated a preliminary decision to approve the subject application in its entirety, designating the project reviewable under Section 381.706(2)(d), Florida Statutes. Notice of this decision was published in the Florida Administrative Weekly on August 3, 1990.

   
   

3. On August 14, 1990, Doctors filed a Petition For Formal Administrative Hearing challenging the preliminary approval, claiming that components of the project are reviewable under several subsections of Section 381.706(1), Florida Statutes. Specifically, Doctors claims that the operation of a home health agency from the complex renders it reviewable under subsection (f); that as the project constitutes a substantial change in the provision of inpatient services, or establishes new inpatient services, it is reviewable under subsection (h); and that it is an additional health care facility which is reviewable pursuant to subsection (b).

   
   

4. Doctors also claims the new facility will hurt its ability to compete for patient referrals from physicians who will be housed in the new facility and will result in a reduction of Doctors' market share. Doctors is an existing hospital that provides a full range of acute care services to residents of Sarasota County.

5. The Board's application contends that the development of this complex will free up capacity in key ancillary areas to better accommodate patients, and it is so found. The ambulatory diagnostic and treatment space proposed for the new facility represents what would have otherwise been less efficient additions to the existing departments.

   
   

6. There will also be a bridge connecting the main hospital to the new center which will provide convenient access to any outpatient who may need to visit the hospital. It will also provide,

   
   

   "... direct linkage between the acute inpatient facility with the physicians' offices thereby enhancing pertinent access to a range of diagnostic and treatment services."

   
   

7. Doctors contends in its Petition that it is the Board's clear intention and expectation to increase its service area and market share of Sarasota County patients as a result of this project. It asserts that if the Board's project is implemented, it will be serving different patients, and a different patient mix from a different geographical area than currently served. For the purpose of resolving the limited issues at this motion hearing, these assertions are accepted as fact.

   
   

8. Accepting the assertions in paragraph 5 through 7, above, as fact, however, does not necessarily require the conclusions be reached that the accomplishment of the Board's project would result in any significant change to the level of its patient service since what is planned deals only with outpatient services. While Doctors disputes this, its claims that inpatient services would be effected is not supported.

   
   

   CONCLUSIONS OF LAW

   
   

9. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter in this case. Section 120.57(1), Florida Statutes.

   
   

10. Section 381.706(2)(d), Florida Statutes, the provision under which the instant Certificate is to be granted reads:

    
    

    (2) PROJECTS SUBJECT TO EXPEDITED REVIEW. Unless exempt pursuant to subsection (3), projects subject to an expedited review shall include, but not be limited to:

    * * *

    (d) Acquisition of land which is to be used for the construction of a health care facility, or office facilities for health care providers.

    
    

11. Certificate of Need review is required, under Section 381.706(1)(b), Florida Statutes, for "[t]he new construction or establishment of additional health care facilities." "Health care facilities" are defined in Section 381.702(7), Florida Statutes, as "a hospital, skilled nursing facility or intermediate care facility." The project envisioned here, providing space for purely outpatient services and medical office space, does not fall within that definition.

12. The leasing of office space to an independent home health agency does not constitute the "establishment" or "operation" of a home health agency so as to require review under Section 381.706(1)(f), Florida Statutes.

    
    

13. There is nothing in the pleadings or documentation filed therewith that in any way reasonably supports the conclusion that the Board's proposal either constitutes a substantial change in health services or creates new inpatient services so as to require review under Section 381.706(1)(h), Florida Statutes. Reorganization or addition of space and the implementation of non- reviewable activities to make more efficient and more cost effective currently existing, approved activities, does not constitute a reviewable, new activity. To hold otherwise would be a clear misinterpretation and misapplication of the statutes and rules governing CON approval.

    
    

14. Taken together, the matters submitted clearly do not show that Doctors either has an established program that will be substantially affected by the issuance of the challenged CON to the Board or has standing to protest it. See Agrico Chemical Co. v. Department of Environmental Regulation, 406 So.2d 478 (Fla. 2nd DCA 1981), St. Joseph Hospital of Port Charlotte, Florida, Inc., v. Department of Health and Rehabilitative Services, 559 So.2d 595 (Fla. 1st DCA 1989).

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore

RECOMMENDED that the Secretary, Department of Health and Rehabilitative Services, enter a Final Order dismissing HCA of Florida, Inc.'s Petition in opposition to the grant of CON No. 6347 to the Sarasota County Public Hospital Board.

RECOMMENDED this 15th day of October, 1990, in Tallahassee, Florida.

ARNOLD H. POLLOCK, Hearing Officer Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, FL 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 15th day of October, 1990.

COPIES FURNISHED:

Robert A. Weiss, Esq.

Parker, Hudson, Rainer & Dobbs The Perkins House

118 N. Gadsden Street Tallahassee, Florida 32301

John Radey, Esq. Elizabeth McArthur, Esq.

Aurell, Radey, Hinkle & Thomas Suite 1000, 101 North Monroe Street Post Office Drawer 11307 Tallahassee, Florida 32302

Edward G. Labrador, Esq. Department of Health and Rehabilitative Services

2727 Mahan Drive, Suite 103

Tallahassee, Florida 32308

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions to this Recommended Order. All agencies allow each party at least 10 days in which to submit written exceptions. Some agencies allow a larger period within which to submit written exceptions. You should consult with the agency that will issue the final order in this case concerning their rules on the deadline for filing exceptions to this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the final order in this case.

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AGENCY FINAL ORDER

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

STATE OF FLORIDA

DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES

HCA OF FLORIDA, INC. d/b/a

HCA DOCTORS HOSPITAL OF SARASOTA,

Petitioner,

CASE NO.: 90-5634

vs. CON NO.: 6347

DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES AND SARASOTA PUBLIC HOSPITAL BOARD d/b/a MEMORIAL HOSPITAL, SARASOTA,

Respondent.

/

FINAL ORDER

This cause came on before me for the purpose of issuing a final agency order. The Hearing Officer assigned bye the Division of Administrative Hearings (DOAH) in the above-styled case submitted a Recommended Order to the Department

of Health and Rehabilitative Services (HRS). A copy of that Recommended Order is attached hereto.

RULING ON EXCEPTIONS FILED BY HCA OF

FLORIDA, INC. d/b/a DOCTORS HOSPITAL OF SARASOTA (DOCTORS)

Doctors excepts to the Hearing Officer's findings of fact which go beyond the allegations of Doctors petition.

The Hearing Officer is obligated to accept as true the factual allegations in Doctors' petition for purposes of ruling on the Motion to Dismiss. St.

Francis Parkside Lodge of Tampa Bay vs. Department of Health and Rehabilitative Services, 486 So2d 32 (Fla. 1st DCA 1986). Accordingly, the department rejects the following findings of fact made by the Hearing Officer in his Recommended Order:

1. At paragraph one (1), the department rejects the list of "outpatient functions" to be housed in the Board's project. The list is identified as subparagraphs (a) through

   
   

2. At paragraph eight (8), the department rejects that portion of the finding of fact that states "what is planned deals only with outpatient services. While Doctors disputes this, its claim that inpatient services would be effected is not supported."

   
   

3. At page five (5) of the Recommended Order, in the Conclusions of Law, the language "providing space for purely outpatient services and medical office space" is rejected.

   
   

4. At page six (6) of the Recommended Order, in the Conclusion of Law, the language "or documentation filed therewith" is rejected.

The remainder of Doctors' exceptions are without merit. By rejecting the findings of fact referenced above, the department may now resolve the Board's Motion to Dismiss upon the facts alleged in Doctors' Petition for Formal Administrative Proceedings. Accepting those facts as true, Doctors has failed to demonstrate its standing to bring this action pursuant to Section 381.709(5), Florida Statutes (1989). St. Joseph Hospital of Port Charlotte, Florida, Inc. vs. Department of Health and Rehabilitative Services, 559 So2d 595 (Fla. 1st DCA 1989).

In St. Joseph, the Court construed the term "established program," as used in Section 381.709(5)(b). In that case, the appellant, St. Joseph Hospital, had petitioned to intervene in an administrative hearing relating to an application for certificate of need ("CON") filed by Fawcett Memorial Hospital. Fawcett sought CON approval to establish an inpatient cardiac catheterization laboratory. St. Joseph alleged in its petition to intervene that it had standing because the Fawcett project would affect its established cardiology program. It did not allege that it had an established cardiac catheterization program.

The Hearing Officer recommended dismissal of St. Joseph's petition. HRS adopted that recommendation in its Final Order. The department held that the term "program," as used in Section 381.709(5)(b), does not refer to general services rendered to a range of patients. The department held that thee term refers to a specific licensed program or a program requiring a CON. The District Court of appeal affirmed the department's Final Order.

Doctors' petition failed to allege that it has a specific licensed program or a program requiring a CON which would be substantially affected by the issuance of CON number 6347. Rather, it alleged that its general acute care services would be substantially affected by the issuance of CON number 6347.

Specifically, Doctors' alleged that it would lose market share of acute care patients generally. It failed to allege that a specific established program at Doctors would be substantially affected by the approval of the Boards project.

Doctors' allegation that its general acute care services would be substantially affected would be, enough to confer standing on Doctors only if Doctors had alleged sufficient facts to support a conclusion of law that the Board's project was reviewable under Section 381.706(1)(b), Florida Statutes, as the construction of an additional health care facility.

Doctors' petition fails to make such an allegation of fact. Paragraph eight (8) of its petition states in pertinent part:

If one were to accept the theory that expanding a hospital's market share and its patient base through a new construction project constitutes the establishment or construction of an additional health care facility, even though the number of licensed beds stays the same, then the Board's project would qualify and the project would also be subject to CON review pursuant to Section 381.706(1)(b), Florida Statutes.

Ignoring the rhetorical nature of Doctors' allegation, Doctors has not alleged facts sufficient to support a conclusion of law that the Board's project constitutes the construction of an additional health care facility.

Section 381.702(7), Florida Statutes (1989), defines health care facility to mean a "hospital, skilled nursing facility, or intermediate care facility." Doctors has not alleged that the Board's project will result in the new construction or establishment of an additional hospital, skilled nursing facility, or intermediate care facility. It has described the Board's project as a "new construction project" which will allegedly expand the hospital's market share and patient base Accordingly, Doctors has not alleged facts sufficient to demonstrate its standing.

FINDINGS OF FACT

The department hereby adopts and incorporates by reference the findings of fact set forth in the Recommended Order except where inconsistent with the ruling on exceptions.

CONCLUSIONS OF LAW

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

Based upon the foregoing, it is

ADJUDGED, that the petition of HCA of Florida, Inc. for a formal administrative hearing be DENIED.

DONE and ORDERED this 5th day of December 1990, in Tallahassee, Florida.

Gregory L. Coler Secretary

Department of Health and Rehabilitative Services

by Deputy Secretary for Programs

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

Copies furnished to:

John Radey, Esquire Edward Labrador, Esquire AURELL, RADEY, HINKLE, & Assistant General Counsel THOMAS Department of Health and Ste 1000, 101 N. Monroe Street Rehabilitative Services Post Office Drawer 11307 2727 Mahan Drive

Tallahassee, FL 32302 Fort Knox Executive Center Tallahassee, FL 32308

Robert A. Weiss, Esquire Arnold H. Pollock PARKER, HUDSON, RAINER & DOBBS Hearing Officer

The Perkins House, Suite 200 DOAH, The DeSoto Building

118 North Gadsden Street 1230 Apalachee Parkway Tallahassee, FL 32301 Tallahassee, FL 32399-1550

FALR Wayne McDaniel (PDDR)

Post Office Box 385 Susan Lincicome (PDRH)

Gainesville, FL 32602 Legal (PDDR)

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a copy of the foregoing was sent to the above-named people by U.S. Mail this 11 day of Dec, 1990.

R. S. Power, Agency Clerk Assistant General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Building One, Room 407

Tallahassee, Florida 32399-0700 904/488-2381

Docket for Case No: 90-005634

Orders for Case No: 90-005634