STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
HOSPITAL CORPORATION OF ) LAKE WORTH, )
)
Petitioner, )
)
vs. ) CASE NO. 91-2128
) DEPARTMENT OF HEALTH AND ) REHABILITATIVE SERVICES, )
)
Respondent. )
)
RECOMMENDED ORDER
Pursuant to notice, a formal hearing was conducted before Daniel Manry, a duly designated Hearing Officer of the Division of Administrative Hearings, on August 21, 1991, in Tallahassee, Florida.
APPEARANCES
For Petitioner: Donna H. Stinson, Esquire
Attorney at Law Moyle, Flanigan, Katz,
Fitzgerald & Sheehan
The Perkins House, Ste. 100 Tallahassee, Florida 32301
For Respondent: Edward G. Labrador, Esquire
Assistant General Counsel Department of Health and
Rehabilitative Services 2727 Mahan Drive, Ste. 103
Tallahassee, Florida 32308 STATEMENT OF THE ISSUES
The issue for determination in this proceeding is whether Petitioner's letter of intent for a certificate of need to establish a hospital-based skilled nursing unit must be filed in the batching cycle for nursing homes or that for hospitals and others.
PRELIMINARY STATEMENT
Petitioner filed a letter of intent to establish a skilled care nursing unit in its hospital on February 21, 1991. The letter of intent stated that Petitioner would request review of its proposal in the first batching cycle in 1991 for hospital projects.
Respondent rejected Petitioner's letter of intent on March 7, 1991. The sole reason for rejection was that the letter of intent concerned a project reviewable in the nursing review cycle rather than the hospital review cycle.
Petitioner filed a Petition For Formal Administrative Proceedings on March 22, 1991. The matter was referred to the Division of Administrative Hearings for assignment of a hearing officer on April 3, 1991, and assigned to the undersigned on April 8, 1991.
A formal hearing was scheduled for May 14, 1991, pursuant to a Notice of Hearing issued on April 22, 1991. Respondent filed a motion for continuance, which was unopposed, and the formal hearing was rescheduled for August 21, 1991.
At the formal hearing, Petitioner presented the testimony of three witnesses 1/ and submitted four exhibits for admission in evidence. 2/ Petitioner's exhibits were admitted in evidence without objection.
Respondent presented the testimony of two witnesses 3/ and submitted five exhibits 4/ for admission in evidence. Respondent's Exhibits 1 and 3-5 were admitted in evidence without objection. Respondent's Exhibit 2 was admitted in evidence over objection.
A transcript of the formal hearing was requested and filed with the undersigned on September 11, 1991. Proposed findings of fact and conclusions of law were originally due from the parties on September 23, 1991.
Petitioner filed a Motion To Reopen Record, on September 3, 1991. On September 20, 1991, Petitioner requested a one week extension of the time originally established for filing proposed findings of fact and conclusions of law if the motion to reopen the record was denied. Petitioner's motion to reopen the record was granted by Order Opening Record entered on September 24, 1991. A formal hearing was scheduled for October 3, 1991, pursuant to the agreement of the parties.
At the formal hearing, Petitioner called no further witnesses but submitted three additional exhibits for admission in evidence. 5/ Petitioner's Exhibits
were admitted in evidence without objection. Respondent presented the testimony of Ms. Amy Jones and offered one exhibit for admission in evidence. 6/ Respondent's Exhibit 7 was admitted in evidence without objection.
Proposed findings of fact and conclusions of law were timely filed by both parties on October 28, 1991. The parties' proposed findings of fact are addressed in the Appendix to this Order.
FINDINGS OF FACT
Petitioner is the licensee for Palm Beach Regional Hospital. Respondent is the state agency charged with responsibility for issuing certificates of need ("CONs") for both hospital and nursing home beds pursuant to Chapter 381, Florida Statutes. A letter of intent is a statutory prerequisite for filing CON applications under Chapter 381.
Petitioner filed a letter of intent dated February 21, 1991, with Respondent. The letter of intent notified Respondent of Petitioner's intent to file an application for a certificate of need ("CON") to convert 12 acute care beds in Palm Beach Regional Hospital to skilled nursing beds. Petitioner
requested that its application for CON be reviewed in the first 1991 batching cycle for hospital projects.
Respondent rejected Petitioner's letter of intent by letter dated March 7, 1991. Petitioner's letter of intent was rejected for the reason that it was ". . . for a project which is reviewable in the nursing home cycle, rather than the hospital review cycle." Petitioner timely filed a petition for formal hearing to contest Respondent's proposed agency action.
Respondent has a long standing policy of requiring applications for hospital-based skilled nursing units ("SNU") to be filed in the nursing home batching cycle, on nursing home application forms, and in competition with applications by other nursing homes. Respondent reviews such applications to determine need under the nursing home bed methodology.
Respondent unsuccessfully attempted to promulgate its policy of requiring SNUs to be considered in nursing home batching cycles through formal rulemaking procedures in Proposed Rules 10-5.002(13) 7/ and 10-5.008(2)(d). 8/ Both proposed rules were determined in Venice Hospital, Inc. v. Department of Health and Rehabilitative Services, 12 F.A.L.R. 3320 (HRS 1990) to be invalid exercises of delegated legislative authority. Hearing Officer Diane K. Kiesling found that the proposed rules were not reasonable or rational and would lead to an illogical result.
The policy Respondent attempted to codify in Proposed Rules 10- 5.002(13) and 10-5.008(2)(d) is no less unreasonable and irrational when applied on a case-by-case basis in this proceeding. 9/ Hospital-based skilled nursing units and free-standing community based nursing home beds are not comparable. Comparing the two types of beds in the same batching cycle creates an unfair comparison and fails to address an existing and expanding gap in the need for medical care needs for health planning purposes.
Changes in health care reimbursement since 1985 and 1986 have created a gap in the need for medical care provided by acute care hospitals and that provided by most nursing homes. The level of medical care in the gap is referred to as subacute care. Patients who no longer need the acute care provided by hospitals but who need a higher level of medical services than that available in most nursing homes can be properly treated in a distinct part of a hospital known as a hospital-based skilled nursing unit or SNU. 10/
Hospital-based skilled nursing units provide a higher level of service than that provided by free-standing community nursing homes. An SNU provides 24-hour nursing by an RN nurse, skilled nursing multi-disciplinary treatments, and therapy services and equipment. Patients who do not meet acute care standards but who have more complex diagnoses or who require specialized
equipment are difficult to place in free standing community nursing homes due to the level of services and types of equipment required for proper treatment.
Some free-standing community nursing homes do provide some of the services available in a hospital-based SNU. However, the complex medical services required for subacute care is not available in most nursing homes. It is therefore difficult to place patients with subacute medical care needs in nursing homes. Petitioner, for example, has been unable to place patients in free standing community based nursing homes if a patient requires: therapy three or four times a day; ventilator assistance; dressings three or four times a day for decubitus ulcers; heart monitors; or respirators. The unavailability of staff, high cost of care, and lower Medicare rates paid to nursing homes 11/
preclude most free-standing community nursing homes from delivering the level of services required for subacute care in hospital-based skilled nursing units.
The types of patients served by a hospital-based skilled nursing unit are different from those served by a free- standing community nursing home. The average length of stay in a hospital-based skilled nursing unit is approximately
15 to 20 days. While the average length of stay in a free-standing community nursing home is less than 90 days, many patients in such facilities have lengths of stay in excess of one year. 12/ Hospital-based skilled nursing units are predominantly Medicare patients whereas patients in free-standing community nursing homes are predominantly Medicaid patients. Medicaid does not reimburse for subacute care provided in hospital-based skilled nursing units. Finally, patients in hospital-based skilled nursing units have more complex and difficult diagnoses and require more specialized equipment.
Hospital-based skilled nursing units cannot compete equally with free- standing community nursing homes. The cost of subacute care provided by SNUs is two or three times more than the cost of medical care provided by free-standing community nursing homes. The higher cost for SNUs is a result of the higher level of medical services provided in SNUs.
Federally funded Medicare reimbursement is a principal payor source for both hospital-based skilled nursing units and free-standing community nursing homes. 13/ The conditions of participation in Medicare are the same for both types of facilities, but a higher rate of Medicare reimbursement is allowed for hospital-based skilled nursing units.
Hospital-based skilled nursing units are certified under federal guidelines to care for patients who no longer meet "acute" care criteria. Acute care is determined under federal guidelines on the basis of standards that include "intensity of service" and "severity of illness." Hospitals and physicians may face sanctions under federal guidelines if patients who do not meet the acute care criteria are kept in acute care beds.
Hospitals are the primary source of patients admitted to nursing homes. Petitioner is put in a difficult position when it cannot place subacute patients in community nursing homes, due to the level of medical care required for such patients, but cannot keep such patients in acute care beds in the hospital without facing sanctions under federal guidelines.
Respondent's policy of requiring SNUs to be reviewed in the nursing home batching cycle is based in part upon Respondent's concern over the potential for increased costs in the delivery of medical care. Although hospital-based skilled nursing units are reimbursed by Medicare at a higher rate than that received by nursing homes, SNUs are not prohibited under federal guidelines from treating patients who require medical care that is below the standards for either acute care or subacute care. There are no restrictions under federal guidelines on the patients each type of facility can admit. Patients in both types of facilities must meet the same admission standards for treatment, and both types of facilities can treat patients who are neither acute care patients nor subacute care patients. 14/ As a practical matter, however, the unavailability of staff, high cost of care, and low Medicare reimbursement rates preclude most free-standing community nursing homes from delivering the level of services required for subacute care in hospital-based skilled nursing units.
Respondent has the ability to place conditions on certificates of need and regularly does so. If Respondent imposes conditions of certification that preclude a provider from treating patients who meet Medicare guidelines, however, the state may be decertified for federal Medicare funds. Similarly, if a provider voluntarily refuses to treat such patients, the provider may be decertified for Medicare reimbursement.
It is uncontroverted that it would be inappropriate for a hospital- based skilled nursing unit to treat patients who require levels of medical care that are available in a free- standing community nursing home and receive a higher rate of reimbursement from Medicare. Such treatment would be inappropriate for purposes of both health care planning and the cost effective delivery of medical services.
The potential for inappropriate treatment does not establish that Petitioner does or would provide such treatment if its application for CON is reviewed in the hospital batching cycle. The evidence failed to establish that reviewing Petitioner's application in the hospital batching cycle would preclude Respondent from adequately addressing Respondent's concerns, including the actual need for hospital-based subacute care.
CON applications for hospital-based skilled nursing units must be reviewed in either the nursing home batching cycle or the hospital batching cycle. There is no specialty bed need methodology for reviewing CON applications for SNUs.
Hospital beds and nursing home beds are licensed respectively under Chapters 395 and 400, Florida Statutes. Beds in hospital-based skilled nursing units are in fact "hospital" beds under Chapter 395 and not nursing home beds under Chapter 400. SNUs are licensed by Respondent as general hospital beds pursuant to Chapter 395. 15/ The two types of beds are in different planning cycles, and the application form used for nursing home beds is not suitable for SNUs. Respondent's policy, however, requires SNU beds to be carried as part of the inventory of nursing home beds for purposes of projecting need under pool projections utilized by Respondent for the purpose of evaluating the need for new beds.
The standards for licensing nursing home beds under Chapter 400 are different from the standards applied to hospital beds in Chapter 395. It is difficult to prove need for an SNU under the standards applied for purposes of licensing nursing home beds. As Hearing Officer Kiesling found in Venice Hospital:
A hospital desiring to establish . . . [an SNU] . . . will likely find itself having either to challenge the fixed need pool for nursing home beds or litigate the almost inevitable denial of its application for lack of need. Either course of action would in- volve time and expense over and above those usually encountered in the CON process, par- ticularly because such an application would likely draw the opposition of existing nursing homes, even though their services
are not really comparable.
. . . The proposed rule amendments do not comport with the basic health planning policy
of reducing over-bedding by encouraging conver- sion to other services. It is unlikely a hospital could get a skilled nursing unit by showing a numeric need under the nursing home need methodology, and any attempt to show excep- tional circumstances would be hampered by the lack of utilization data. Such beneficial conversions will probably also be chilled by the difficulty in converting a skilled nursing unit back to general acute care use, should
it not be successful. Given the extreme acute care over-bedding which exists throughout the state, it is not anticipated that there will be any need for additional acute care beds for the foreseeable future. Since a skilled nursing unit would not be counted in the acute care bed inventory, the reconversion to acute care use would have to undergo CON review and would almost certainly be denied.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties and the subject matter in this proceeding pursuant to Section 120.57(1), Florida Statutes. The parties were duly noticed for the formal hearing.
The burden of proof in this proceeding is on Petitioner. Petitioner must show by a preponderance of the evidence that Respondent's policy of reviewing CON applications for hospital-based skilled nursing units ("SNUs") in its nursing home batching cycle is unreasonable. Young v. State, Department of Community Affairs, 567 So.2d 2 (Fla. 3d DCA 1990); Florida Department of Transportation v. J.W.C. Co., Inc., 396 So.2d 778 (Fla. 1st DCA 1981); Balino v. Department of Health and Rehabilitative Services, 348 So.2d 349 (Fla. 1st DCA 1977).
Petitioner showed by clear and convincing evidence that Respondent's policy of reviewing CON applications in the nursing home batching cycle is unreasonable. Respondent failed to ". . . articulate a reasonable and justifiable basis . . ." for its long standing policy of requiring letters of intent and applications for hospital-based skilled nursing units to be reviewed in the nursing home batching cycle.
Respondent's policy of reviewing Petitioner's CON application in the nursing home batching cycle precludes Petitioner from competing fairly with nursing homes that are reimbursed by Medicare at a lower rate. The unavailability of staff, high cost of care, and lower rate of Medicare reimbursement paid to nursing homes, however, precludes most free-standing community nursing homes from delivering levels of medical care required by patients who need the subacute care available in hospital-based skilled nursing units. Respondent's policy, therefore, has the practical effect of precluding SNUs from delivering subacute care without an effective means of measuring the "need" of patients whose medical needs fall in the gap between acute care and long term residential care.
Respondent's policy is intended to eliminate the potential for SNUs to receive reimbursement payments at a rate higher than that paid to nursing homes while providing no higher level of medical services than that provided in
nursing homes. Such a policy has been determined on substantive grounds to be unreasonable when Respondent attempted to promulgate that policy through formal rulemaking procedures. Without an evidentiary showing that Petitioner actually engages in such a practice or that no need for subacute care exists, Respondent fails to articulate reasonable and justifiable reasons, on a case-by-case basis, for the application of its long standing policy in this proceeding. 16/
Petitioner's Motion For Attorneys' Fees is denied. Petitioner claims that Respondent's proposed agency action is based upon a policy of general applicability which satisfies the definition of a rule in Section 120.54, Florida Statutes, but which has not been properly promulgated through formal rulemaking procedures. Petitioner claims that Respondent's proposed agency action in this proceeding is an attempt to apply an invalid, unwritten rule. Petitioner cites State Paving Corp. v. Florida Department of Transportation, DOAH Case No. 89-6871BID in support of its position. The undersigned has no authority to determine the invalidity of unwritten or written rules in a proceeding conducted pursuant to Section 120.57(1), Florida Statutes, in the absence of a separate challenge under either Sections 120.54 or 120.56, or both.
Based upon the foregoing Findings of Facts and Conclusions of Law, it is recommended that Respondent should enter a final order accepting Petitioner's letter of intent to file a CON application for a hospital-based skilled nursing unit to be reviewed in the appropriate hospital batching cycle.
RECOMMENDED this 21st day of November, 1991, in Tallahassee, Leon County, Florida.
DANIEL MANRY
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 21st day of November, 1991.
ENDNOTES
1/ The three witnesses were: Lee A. Fischer, M.D., accepted as an expert in family medicine; Joan LoFaso, Director of Quality Management, Palm Beach Regional Hospital; and Mr. John Whitman, Consultant, accepted as an expert in geriatric health care.
2/ Petitioner's Exhibit 1 is the deposition testimony of Ms. Amy Jones, Assistant Director, Office of Regulation and Health Facilities for Respondent. Petitioner's Exhibit 2 is a composite exhibit of the letter of intent and rejection at issue in this proceeding. Petitioner's Exhibit 3 is the resume of Mr. John Whitman. Petitioner's Exhibit 4 is a copy of a document entitled
Skilled Nursing Facility And Intermediate Care Beds In Acute Care Facilities, Regulatory And Reimbursement Issues, May 1989 (the "Report").
3/ Petitioner's witnesses were: Ms. Elfie Stamm, Health Services and Facilities Consultant Supervisor for Respondent; and Ms. Amy Jones.
4/ Respondent's Exhibit 1 is the resume of Ms. Stamm. Respondent's Exhibit 2 is a summary of information entitled Skilled Nursing Facility (SNF) Beds In Hospitals. Respondent's Exhibit 3 is a study of the responses of facilities offering subacute care in Florida which was conducted in March, 1988, by the State of Florida Hospital Cost Containment Board in cooperation with Respondent. It is entitled "A Study Of Subacute Care In Florida." Respondent's Exhibit 4 is the resume of Ms. Jones. Respondent's Exhibit 5 is a copy of The Federal Register, Part II, Department of Health and Human Services. Respondent's Exhibit 6 is a copy of an excerpt from the State Operations Manual, Provider Certification. Respondent's Exhibit 6 was identified but not submitted for admission in evidence.
5/ Petitioner's Exhibit 5 is a copy of the letter transmitting CON Action Number 6732 to Prescribed Pediatric Extended Care, Inc., to establish 18 pediatric skilled nursing home beds in Respondent's District Six. Petitioner's Exhibit 6 is a copy of a letter from Respondent to Petitioner dated .
Petitioner's Exhibit 7 is a copy of page 8 from the CON issued to Prescribed Pediatric Extended Care, Inc.
6/ Respondent's Exhibit 7 is a cover sheet and project summary for the CON application submitted by Prescribed Pediatric Extended Care, Inc.
7/ Proposed Rule 10-5.002(13) defined community nursing home beds to include:
. . . acute care beds licensed pursuant to Chapter 395, Part I, F.S., but designated as skilled nursing beds, which are reviewable pursuant to Rule 10-5.001(1)(k) [the nursing home bed need methodology].
8/ Proposed Rule 10-5.008(2)(d) provided in relevant part:
(d) Skilled Nursing Units in Hospitals. Beds in skilled nursing units which are a distinct part of a hospital will be counted in the nursing home bed inventory, even though they retain their licensure as acute care beds.
9/ But see, Venice Hospital, Inc. v. Department of Health and Rehabilitative Services, 12 F.A.L.R. 4641 (HRS 1990)(in which Hearing Officer Arnold H. Pollock found that Respondent ". . . articulated a reasonable and justifiable basis . .
." for its long standing policy of requiring letters of intent and applications for hospital-based skilled nursing units to be reviewed in the nursing home batching cycle).
10/ A hospital-based skilled nursing unit is certified under federal guidelines to care for patients who no longer meet "acute care" criteria.
11/ See discussion at Findings of Fact 12 infra.
12/ Medicare limits the patient benefit period to 100 days regardless of whether the patient setting is a hospital-based skilled nursing unit or a free- standing community based nursing home.
13/ Approximately 95 percent of the free-standing community based nursing homes in Florida participate in Medicare. Medicare is a principal payor for approximately 47 percent of all admissions to nursing homes in Florida.
Nationally, the rate of participation in Medicare ranges from 33 to 50 percent. The higher rate of participation in Florida is attributable to a high elderly population in the state, a low number of nursing home beds per 1,000 population, and the fact that existing skilled nursing facilities are serving patients in need of more intensive nursing facilities.
14/ Respondent relies on Fla. Admin. Code Rule 10-5.0036 (formerly Rule 10- 5.011(1)(k)) which provides in relevant part:
For the purpose of this rule community nursing home beds are defined as nursing home beds located in a facility which serves the popu- lation at large, and for which the facility has not received a certificate of need desig-
nating the beds as sheltered beds in accordance with Chapter 651, Florida Statues.
Because SNU beds are not specifically excluded from the rule, Respondent reasons that such beds must be included in the nursing home batching cycle.
15/ Hospital-based skilled nursing units are certified by the Health Care Finance Administration ("HCFA") as a distinct part of a hospital. The HCFA also categorizes beds in SNUs as "hospital beds."
16/ Respondent cites Miami Heart Institute, Inc. v. Department of Health and Rehabilitative Services, 13 F.A.L.R. 1916, 1928 (HRS 1991) for the proposition that Fla. Admin. Code Rule 10-5.036 (formerly 10-5.011(1)(k)) ". . . is applicable when reviewing the need for nursing home beds . . . ." Respondent implies that Rule 10-5.036 has been interpreted to require that CON applications for SNUs must be reviewed in the nursing home batching cycle. If so, Respondent would be precluded by Sec. 120.68(12)(b), Fla. Stat., from taking action that is inconsistent with the requirements of Rule 10-5.036. The ruling in Miami Heart, however, was that the criteria in former rules 10-5.011(1)(b)1-4 and 10- 5.011(1)(k)2.k. apply to all applications for nursing home beds ". . . whether the application seeks to fill an existing fixed pool need or seeks approval on a 'not normal' or 'special circumstances basis.'" The issue in Miami Heart was whether ". . . the Petitioner's application for a certificate of need to establish a 20-bed skilled nursing home facility by converting 20 acute care hospital beds should be granted or denied." The issue of whether the application should be reviewed in the nursing home or hospital batching cycles was never raised.
APPENDIX TO RECOMMENDED ORDER, CASE NO. 91-2128
Petitioner submitted proposed findings of fact. It has been noted below which proposed findings of fact have been generally accepted and the paragraph number(s) in the Recommended Order where they have been accepted, if any. Those proposed findings of fact which have been rejected and the reason for their rejection have also been noted.
The Petitioner's Proposed Findings of Fact
Proposed Finding Paragraph Number in Recommended Order of Fact Number of Acceptance or Reason for Rejection
1 | Accepted | in | Findings | 1-3 |
2 | Accepted | in | Findings | 1, 3 |
3 | Accepted | in | Findings | 7, 13 |
4 | Accepted | in | Finding | 19-20 |
5 | Accepted | in | Findings | 4, 20 |
6-7 | Accepted | in | Finding | 5 |
8 | Accepted | in | Finding | 7 |
9 | Accepted | in | Finding | 10 |
10 | Accepted | in | Finding | 9 |
11-12 | Accepted | in | Finding | 8 |
13 | Accepted | in | Finding | 12 |
14 | Accepted | in | Findings | 9, 15 |
15 | Accepted | in | Findings | 6, 11, |
19-21 | ||||
16 | Rejected | as | irrelevant |
and immaterial
Accepted in part in
Finding 21
Accepted in Finding 15
19-22 Rejected as irrelevant and immaterial
Respondent submitted proposed findings of fact. It has been noted below which proposed findings of fact have been generally accepted and the paragraph number(s) in the Recommended Order where they have been accepted, if any. Those proposed findings of fact which have been rejected and the reason for their rejection have also been noted.
The Respondent's Proposed Findings of Fact
Proposed Finding Paragraph Number in Recommended Order of Fact Number of Acceptance or Reason for Rejection
1 | Accepted in Findings | 1, 2 | |
2 | Accepted in Finding | 3 | |
3 | Rejected as irrelevant | ||
and immaterial | |||
4 | Accepted in Finding | 20 | |
5 | Accepted in Finding | 12 | |
6 | Accepted in Finding | 10 | |
7 | Accepted in Finding | 12 | |
8 | Accepted in Finding | 14 | |
9 | Accepted in Finding | 9 | |
10, | 16 | Rejected for the reasons | |
stated in Findings | 15-21 | ||
11 | Accepted in Finding | 11 |
12 | Rejected as recited | |
testimony | ||
13 | Rejected as irrelevant | |
and immaterial | ||
14-15 | Accepted in Finding | 15 |
17 | Accepted in Finding | 16 |
18 COPIES FURNISHED: | Accepted in Finding | 16 |
R. S. Power, Agency Clerk Department of Health and
Rehabilitative Services 1323 Winewood Boulevard Building One, Room 407
Tallahassee, Florida 32399-0700
Edward G. Labrador Assistant General Counsel Department of Health and
Rehabilitative Services 2727 Mahan Drive, Suite 103
Tallahassee, Florida 32308
Donna H. Stinson, Esquire Moyle, Flanigan, Katz,
Fitzgerald & Sheehan, P.A.
118 North Gadsden Street Suite 100
Tallahassee, Florida 32301
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 contact the agency that will issue the final order in this case concerning agency 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.
=================================================================
AGENCY FINAL ORDER
=================================================================
STATE OF FLORIDA
DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES
HOSPITAL CORPORATION OF )
LAKE WORTH, )
)
Petitioner, )
)
vs. ) CASE NO.: 91-2128
DEPARTMENT OF HEALTH AND )
REHABILITATIVE SERVICES, )
)
Respondent. )
)
FINAL ORDER
This cause came on before me for the purpose of issuing a final agency order. The Hearing Officer assigned by the Division of Administrative Hearings (DOAH) in the above-styled case submitted a Recommended Order to the Department of Health and Rehabilitative Services (HRS). A copy of the Recommended Order is attached hereto.
FINDINGS OF FACT
The department hereby adopts and incorporates by reference the findings of fact set forth in the Recommended Order except for the conclusion in paragraph 6 that the department's policy of reviewing applications for hospital-based nursing units in the same batching cycle in which applications for nursing home beds are reviewed is unreasonable and irrational. Also rejected is the conclusion that hospital based nursing beds are not comparable to nursing beds in a nursing home. Whether hospital based nursing units and nursing home beds are comparable and reviewable in the same batching cycle is a matter of policy and as such must be determined by the department. 1/
The Hearing Officer's characterization of the department's policy as unreasonable and irrational is in striking contrast to the conclusion by another Hearing Officer that the department's policy is reasonable. Venice Hospital vs. Department of Health and Rehabilitative Services, 12 FALR 4641 (HRS 1990). The characterization of the department's policy as unreasonable and irrational is hyperbole reflecting a disagreement with the department's policy, not a lapse of reason or rationality on the part of the department.
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 following:
As demonstrated by the Hearing Officer's findings of fact, nursing beds in a hospital unit may differ from nursing beds in a nursing home due to the proximity of hospital services. But it does not follow from this lack of exactitude that proposals for such beds should be reviewed in the hospital batching cycle.
It is responsibility of the department to review CON applications from the broad perspective of community need in order to restrain the increasing costs of health care. 2/ 3/ The Hearing Officer correctly found that a hospital nursing unit may care for the same patients as a nursing home and that the hospital based care is much more expensive. See findings of fact 11 and 15. Most hospital nursing care is paid for by Medicare and the department has no authority to prevent a hospital from treating nursing patients who meet Medicare
guidelines. See findings of fact 12 and 16. The Hearing Officer recognized the potential for expensive hospital care that should be provided in a nursing home. See findings of fact 17 and 18 and conclusion of law 5. 4/ Thus, while hospital nursing beds are not identical to nursing beds in a nursing home, they are comparable and proposals for hospital nursing units are appropriately reviewed in the nursing home batching cycle and under the rules for determining need for nursing home beds. 5/ The need formula recognizes that where there are access problems a proposal may be approved despite a lack of numeric need under Section 10-5.036, Florida Administrative code.
The courts have held that when an agency relies on non-rule policy in a Section 120.57 proceeding, the policy must be proved on a case-by-case basis. In the present case, the Hearing Officer ruled that the department failed to prove its policy; thus, the policy cannot be used as the basis for the decision in this proceeding.
Based upon the foregoing, it is
ADJUDGED, that petitioner's letter of intent for a hospital-based skilled nursing unit be ACCEPTED and reviewed in the hospital batching cycle.
DONE and ORDERED this 27th day of January, 1992, in Tallahassee, Florida.
Robert B. Williams Secretary
Department of Health and Rehabilitative Services
by Deputy Secretary for Human Services
ENDNOTES
1/ In Baptist Hospital vs. Department of Health and Rehabilitative Services,
500 So2d 620 at 623 (Fla. 1st DCA 1986) the Court pointed out that "The label affixed to a particular finding... is not determinative...matters that are susceptible of ordinary methods of proof such as determining the credibility of witnesses or the weight to accord evidence are factual matters to be determined by the Hearing Officer. On the other hand, matters infused with overriding policy considerations are left to agency discretion."
2/ In Miami Heart Institute vs. Department of Health and Rehabilitative Services, 13 FALR 1916 (HRS 1991) a proposal to convert acute care beds to a hospital nursing unit was found to be in the financial interest of Miami Heart but inconsistent with community need.
3/ From the perspective of the individual hospital with excess capacity, conversion of acute care beds to a nursing unit is a sound economic decision.
4/ Where the cost is borne by a third party payor such as Medicare, the decision of the patient and physician as to where the care is to be provided is often based on considerations other than cost. Miami Heart Institute vs.
Department of Health and Rehabilitative Services, 13 FALR 1916 at 1920, finding 15 (HRS 1991).
5/ If a proposal to convert acute care beds to a nursing unit is reviewed in the hospital batching cycle, the proposal escapes scrutiny under the numeric need rules for nursing beds and acute care beds.
COPIES FURNISHED:
Donna H. Stinson, Esquire Moyle, Flanigan, Katz
Fitzgerald & Sheehan, P.A.
118 North Gadsden Street Suite 100
Tallahassee, FL 32301
Edward Labrador, Esquire Department of Health and
Rehabilitative Services 2727 Mahan Drive, Suite 103 Fort Knox Executive Center Tallahassee, FL 32308
Daniel Manry, Hearing Officer DOAH, The DeSoto Buidling 1230 Apalachee Parkway
Tallahassee, FL 32399-1550
Wayne McDaniel (PDRFM) Wendy Thomas (PDRF)
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that a copy of the foregoing was sent to the above named people by U.S. Mail this 27th day of January, 1992.
R. S. Power, Agency Clerk Assistant General Counsel Department of Health and
Rehabilitative Services 1323 Winewood Boulevard Building One, Room 407 Tallahassee, FLO 32399-0700
(904)488-2381
A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO A JUDICIAL REVIEW WHICH SHALL BE INSTITUTED BY FILING ONE COPY OF A NOTICE OF APPEAL WITH THE AGENCY CLERK OF HRS, AN D ASECOND COPY ALONG WITH THE 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 APPEALLATE RULES. THE NOTICE OF APPEAL MUST BE FILED WITHIN 30 DAYS OF RENDITION OF THE ORDER TO BE REVIEWED.
| Issue Date | Proceedings |
|---|---|
| Jan. 28, 1992 | Final Order filed. |
| Nov. 21, 1991 | Recommended Order sent out. CASE CLOSED. Hearing held 8/21/91. |
| Oct. 28, 1991 | HRS' Proposed Recommended Order filed. |
| Oct. 28, 1991 | (Petitioner) Motion For Attorney`s Fees; Proposed Recommended Order of Hospital Corporation of Lake Worth; Proposed Final Order of Hospital Corporation of Lake Worth filed. |
| Oct. 18, 1991 | Transcript filed. |
| Sep. 24, 1991 | Order Opening Record; (Hearing Set for October 3, 1991: 9:30 am: Tallahassee) sent out. |
| Sep. 20, 1991 | Letter to DSM from Donna Stinson (re: PRO) filed. |
| Sep. 11, 1991 | HRS' Response to Petitioner's Motion to Reopen Record filed. (From Edward G. Labrador) |
| Sep. 11, 1991 | Transcript (Vols 1&2) filed. |
| Sep. 03, 1991 | (Petitioner) Motion to Reopen Record filed. |
| Aug. 21, 1991 | CASE STATUS: Hearing Held. |
| Aug. 09, 1991 | Notice of Taking Telephone Deposition Duces Tecum filed. (From Edward G. Labrador) |
| Aug. 08, 1991 | Amended Notice of Hearing sent out. (hearing set for Aug. 21, 1991; 11:00am; Tallahassee). |
| Aug. 06, 1991 | Letter to DSM from Donna Stinson (re: difficulties in scheduled hearing) filed. |
| Aug. 01, 1991 | (Petitioner) Notice of Deposition filed. (From Donna Stinson) |
| May 10, 1991 | Order Continuing and Rescheduling Formal Hearing sent out. (hearing rescheduled for Aug. 21, 1991; 9:30am; Tallahassee). |
| May 07, 1991 | Department of Health and Rehabilitative Service Motion for Continuance filed. (Edward G. Labrador) |
| Apr. 22, 1991 | Notice of Hearing sent out. (hearing set for May 14, 1991; 9:30am; Tallahassee). |
| Apr. 19, 1991 | (Respondent) Response to Initial Order filed. (from Edward G. Labrador) |
| Apr. 19, 1991 | (Petitioner) Response to Initial Order filed. (from Donna Stinson) |
| Apr. 08, 1991 | Initial Order issued. |
| Apr. 03, 1991 | Notice; Petition for Formal Administrative Proceedings (Exhibit A) filed. |
| Issue Date | Document | Summary |
|---|---|---|
| Jan. 27, 1992 | Agency Final Order | |
| Nov. 21, 1991 | Recommended Order | Applications for Certificate Of Need for hospital based skilled nursing units should be re- viewed in hospital batching cycle not nursing home batching cycle Letter Of Intent accepted. |
