STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

ST. MARY'S HOSPITAL, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 91-2147

)

DEPARTMENT OF HEALTH AND )

REHABILITATIVE SERVICES, )

)

Respondent, )

)

and )

)

MARTIN MEMORIAL HOSPITAL )

ASSOCIATION, INC., and ) GOOD SAMARITAN HOSPITAL, INC., )

)

Intervenors. )

) ST. MARY'S HOSPITAL, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 91-5718

)

DEPARTMENT OF HEALTH AND ) REHABILITATIVE SERVICES and ) GOOD SAMARITAN HOSPITAL, INC., )

)

Respondents, )

)

and )

)

MARTIN MEMORIAL HOSPITAL )

ASSOCIATION, INC., )

)

Intervenor. )

)

RECOMMENDED ORDER

These consolidated cases were heard by Eleanor M. Hunter, the Hearing Officer designated by the Director of the Division of Administrative Hearings, from October 22 - 28, 1991, in Tallahassee, Florida.

APPEARANCES

For Petitioner, W. David Watkins, Esquire St. Mary's Hospital, Kenneth F. Hoffman, Esquire Inc.: OERTEL, HOFFMAN, FERNANDEZ

& COLE, P.A.

2700 Blair Stone Road, Suite C Tallahassee, Florida 32301

For Respondent, Good William B. Wiley, Esquire Samaritan Hospital, Darrell White, Esquire

Inc.: Charles A. Stampelos, Esquire McFARLAIN, STERNSTEIN, WILEY

& CASSEDY

First Florida Bank Building

215 South Monroe Street Suite 600

Tallahassee, Florida 32301

For Respondent, Lesley Mendelson Department of Health Senior Attorney

and Rehabilitative 2727 Mahan Drive, Suite 103 Services: Tallahassee, Florida 32308

For Intervenor, Byron B. Mathews, Jr., Esquire Martin Memorial McDERMOTT WILL & EMERY Hospital Miami Center, 22nd Floor Association, Inc.: 201 South Biscayne Boulevard

Miami, Florida 33131-4336 STATEMENT OF THE ISSUES

1. Whether there is a need for one or two additional inpatient adult cardiac catheterization programs in Department of Health and Rehabilitative Services District IX.

   
   

2. Whether the application for certificate of need number 6626 filed by Good Samaritan Hospital, Inc. for an inpatient adult cardiac catheterization program in District IX should be approved.

PRELIMINARY STATEMENT

In Case No. 91-2147, St. Mary's Hospital, Inc. ("St. Mary's"), challenged the fixed need pool published by the Department of Health and Rehabilitative Services ("HRS"), showing a need for two inpatient adult cardiac catheterization programs in HRS District 9. That case was held in abeyance pending the outcome of an HRS decision on the applications.

HRS published its intent to grant certificates of need ("CON") numbers 6624 and 6626 for inpatient adult cardiac catheterization to Lawnwood Regional Medical Center ("Lawnwood") and Good Samaritan Hospital, Inc. ("Good Samaritan"), respectively. Bethesda Memorial Hospital, Inc., a co-batched applicant contested the denial of its application (6625) and the intent to grant CONs 6624 and 6626. St. Mary's filed two petitions, one challenging the intent to grant CON 6624 to Lawnwood, and a separate one challenging the intent to grant CON 6626 to Good Samaritan. The cases, including St. Mary's challenge to the fixed need pool, were consolidated by Order dated September 24, 1991.

On October 3, 1991, Martin Memorial Hospital ("Martin Memorial") filed a Petition to Intervene in the consolidated cases. On October 9, 1991, St. Mary's dismissed its Petition challenging HRS' intent to grant a CON to Lawnwood.

Bethesda had previously withdrawn its application and dismissed its Petition, by Notice of Withdrawal dated September 4, 1991.

Martin Memorial, HRS, and Lawnwood all filed memoranda on the effect of St.

Mary's dismissal of Case No. 91-5717. HRS and Martin both argued that a comparative hearing with both Lawnwood and Good Samaritan participating must still occur, especially considering the fixed need pool challenge, and the possibility of an ultimate determination that one or no adult cardiac catheterization services were needed. Lawnwood argued that since HRS' intent to grant it a CON was no longer challenged, there was no case against Lawnwood in which Memorial could intervene, and Lawnwood was entitled to a final order issuing its CON.

After a hearing scheduled by Martin Memorial on the issue of its Petition to Intervene and the effect of St. Mary's dismissal, an order of October 17, 1991, was entered closing the St. Mary's case against Lawnwood, Case No. 91- 5717, and returning it to HRS for final disposition. Martin Memorial's petition to intervene in the remaining cases was granted, although Martin Memorial failed to appear or participate at final hearing.

Counsel for Good Samaritan, although given notice of the hearing scheduled by Martin Memorial, failed to participate in the hearing. On October 15, 1991, Good Samaritan and St. Mary's filed a Joint Prehearing Stipulation. Based on Good Samaritan's failure to participate in the hearing and the failure to raise the issue in the Joint Prehearing Stipulation, HRS asserted that Good Samaritan waived its right to a comparative hearing. At the outset of the final hearing, HRS requested and was granted permission to amend its stipulation to include the issue of whether Good Samaritan had waived its right to comparative review with Lawnwood.

In Case No. 91-2147, St. Mary's presented the testimony of Michael Jernigan, expert in health care planning. St. Mary's exhibits 1-7 were received in evidence. HRS presented the testimony of Wendy Thomas and Elfie Stamm. HRS Exhibit 1 was received in evidence. Good Samaritan Exhibit 1 was received in evidence.

In Case No. 91-5718, Good Samaritan presented the testimony of William Byron, expert in hospital administration and operations; Julianne Buono, expert in health care planning; Richard Drinkwine, expert in medical equipment planning and costs estimating; Robert Devries, expert in architecture and construction cost estimating; Cynthia Vanek, expert in nursing and staffing; and Christopher Kane, expert in health care finance and feasibility analysis. Good Samaritan Exhibits 2-14 were received in evidence. The offer of Good Samaritan 15, the HRS file on St. Mary's 1984 CON application, was rejected. St. Mary's presented the testimony of Michael Jernigan, Louise DeVivo, Edward V. Pershing, expert in health care finance and financial feasibility analysis; Robert W. Herrmann, expert in architecture; and Julia Bower, expert in health care planning; and Exhibits 1-16, which were received into evidence. HRS presented the testimony of Elizabeth Dudek, expert in health planning and Exhibits 2-4, which were received into evidence. HRS Exhibit 5, the Lawnwood CON application number 6624, was rejected.

The transcript of the final hearing was received by the Division of Administrative Hearings on November 25, 1991. Proposed recommended orders were filed on January 3, 1992.

FINDINGS OF FACT

1. Good Samaritan Hospital, Inc., ("Good Samaritan") is a 341 bed not-for- profit acute care community-based hospital in West Palm Beach, Florida. The hospital has operated in West Palm Beach, Florida, for more than 70 years. It is the third largest hospital in Palm Beach County, which is the largest county in the Department of Health and Rehabilitative Services ("HRS") District IX. Good Samaritan has an open medical staff and provides a high level of quality care to its patients.

   
   

2. There are approximately three hundred eighty physicians on the active medical staff at Good Samaritan, including twelve cardiologists and eighty-four internal medicine physician, many of whom have expressed support for the application for an inpatient cardiac catheterization laboratory at Good Samaritan. The hospital provides a full scope of diagnostic capability up to invasive cardiac catheterization, operates a comprehensive cardiac rehabilitation program, and an active community education program.

   
   

3. Good Samaritan is presently in the process of constructing a new six- bed coronary care unit to complement existing medical and surgical intensive care units. Good Samaritan operates a thirty bed telemetry unit, as well as a progressive care unit. Good Samaritan expected to begin offering Thallium Stress Tests in December, 1991.

   
   

4. Good Samaritan is seeking by its CON application a diagnostic cardiac catheterization laboratory for inpatients with a project cost of approximately

   $1,636,200. Normal operating hours for the laboratory will be 8:30 a.m. to 5:00

   p.m. Emergency procedures will be available in approximately thirty minutes, twenty-four hours a day, as required by Florida Administrative Code Rule 10- 5.032(4)(b).

   
   

5. St. Mary's Hospital, Inc., ("St. Mary's") located approximately 10 minutes from Good Samaritan, is the largest hospital in Palm Beach County, with

   430 beds. St. Mary's ranks in the top ten state hospitals in the provision of Medicaid services and is a disproportionate share provider. St. Mary's adult cardiac catheterization laboratory opened in February 1988. St. Mary's challenged the published need for two adult inpatient cardiac catheterization laboratories in District IX, and initially HRS' intent to approve CONs for Good Samaritan and Lawnwood Memorial Hospital, although the challenge to Lawnwood was voluntarily dismissed prior to final hearing.

   
   

6. In February, 1991, HRS published a need for two additional adult inpatient cardiac catheterization laboratories in District IX for the July 1993 planning horizon.

   
   

7. On March 22, 1991, Good Samaritan filed a letter of intent to file an application for an adult inpatient cardiac catheterization program, followed by the timely filing of an application and responses to HRS' omissions request.

   
   

8. On or about July 8, 1991, HRS issued its intent to approve the application filed by Good Samaritan.

   Numeric Need

   
   

9. HRS published a need for two adult cardiac catheterization laboratories on February 8, 1991, in Volume 17, Number 6, Florida Administrative Weekly.

   
   

10. On March 11, 1991, St. Mary's challenged the published pool, asserting that HRS used an incorrect number of actual adult cardiac catheterization program volume ("ACCPV") in computing net need. The formula is established in Florida Administrative Code Rule 10-5.032(8).

    
    

11. St. Mary's asserted that the correct ACCPV is 5668, while HRS used 5427 as the ACCPV in its computation of need. The higher ACCPV, when used in the formula, results in a net need for 458 admissions or one additional adult inpatient cardiac catheterization laboratory. The lower ACCPV results in a net need for 699 admissions, or two additional adult inpatient cardiac catheterization laboratories. The need for a minimum of three hundred (300) admissions is the equivalent of the need for one catheterization laboratory.

    
    

12. St. Mary's ACCPV used corrected information on utilization reported to HRS by Delray Community Hospital ("Delray"), for April through June, the second quarter of 1990. The data shows a higher number of procedures at Delray, resulting in a lower net need. The corrected data, according to St. Mary's expert, was received by HRS sometime between the August 1990 and the February 1991 cycles, although St. Mary's failed to demonstrate when HRS became aware of the error.

    
    

13. HRS had previously used 5427 as the ACCPV in computing its fixed need pool of August 1990, which resulted in a net need ("NN") for 67 admissions, below the three hundred minimum, and, therefore, in zero need for new adult inpatient cardiac catheterization laboratories. The August 1990 publication was used as a measure of numeric need for the first batching cycle under the rule.

14. Rule 10-5.032(8)(d), Florida Administrative Code, provides as follows: Need Determination for Subsequent Batching

    Cycles. If NN is less than 300 in the first batching cycle after the rule becomes effec- tive, the ACCPV value which is subtracted from the PCCPV will be the same value as ACCPV in the first batching cycle until the projected net need in a future batching cycle reaches

    a program volume of 300 or more.

    
    

15. St. Mary's expert agreed with HRS that subsection (d) of the rule requires that you go back to the previous cycle and use the same ACCPV, but asserted that the data should be corrected, although "the rule doesn't actually specify that." The expert relied on subsection (c) of the rule, for calculating ACCPV for the first cycle, which provides in relevant part:

    
    

    ACCPV equals the adult cardiac catheterization program volume for the most recent 12-month period for which data are available to the department 3 weeks prior to the publication of the fixed need pool.

    Rule 10-5.032(8)(c), Florida Administrative Code.

    
    

16. Based on Rule 10-5.032(8)(d), HRS correctly published numeric need in February 1991, using the same ACCPV that had been used in August 1990, which was, in August 1990, the most recent data available to the department 3 weeks prior to that publication.

    
    

17. A numeric need exists for two additional adult inpatient cardiac catheterization laboratories in HRS District IX, as published on February 8, 1991. See, Vol. 17, No. 6, Florida Administrative Weekly.

    
    

    Compliance With State and District Health Plans

    
    

18. Subsection 381.705(1)(a), Florida Statutes, requires consideration of the need for the proposed cardiac catheterization laboratory in relation to the applicable district plan and state health plan. The 1989 Florida State Health Plan contains four preference statements relating to inpatient cardiac catheterization services. The first preference in the state plan and the second recommendation in the District IX plan both apply if an applicant is proposing to establish both cardiac catheterization services and open heart surgery services, provided that a need for open heart surgery and/or both is indicated. Since there is no indicated need for open heart surgery in the July, 1993 batch cycle, this preference is not applicable to the Good Samaritan application.

    
    

19. Secondly, the state health plan requires preference to be given an applicant proposing to establish a new cardiac catheterization program in a county without a cardiac catheterization program if the applicant can demonstrate that patients are currently seeking cardiac catheterization services outside the respective county or HRS district. Currently, there are five operational inpatient cardiac catheterization laboratories located in Palm Beach County, at St. Mary's, Palm Beach Gardens Medical Center, John F. Kennedy Medical Center, Boca Raton Community Hospital, and Delray Community Hospital. In addition, another Palm Beach County hospital, Bethesda Hospital, has received final approval for an inpatient adult cardiac catheterization laboratory. Outside Palm Beach County, but also in District IX, there is a cardiac catheterization laboratory at Martin Memorial Hospital in Martin County. In addition, laboratories have been approved for Indian River Memorial Hospital in Indian River County, and Lawnwood Medical Center, in St. Lucie County, the latter as a result of St. Mary's voluntary dismissal of its petition in a case previously consolidated with these cases.

    
    

20. The Good Samaritan application is not entitled to the second state health plan preference, since Palm Beach County currently has six existing or approved providers, and there is no showing of a significant volume of people leaving the Palm Beach County area to obtain cardiac catheterization services, who would not leave if the Good Samaritan application is approved. See, Findings of Fact 35, 36 and 37, infra.

    
    

21. The third preference in the state health plan is for hospitals with a disproportionate share of charity care and Medicaid patient days in the respective acute care subdistrict. Qualifying hospitals shall meet Medicaid disproportionate share criteria. Good Samaritan stipulated that it is not currently a disproportionate share provider of Medicaid services nor has it ever qualified as such.

    
    

22. Finally, the state health plan includes a preference for an applicant who agrees to provide services to all regardless of ability to pay. Good

    Samaritan proposes to provide inpatient cardiac catheterization to patients regardless of their ability to pay. St. Mary's asserts that Good Samaritan's history indicates the lack of commitment to Medicaid and charity care. Good Samaritan's stated commitment to serve cardiac catheterization patients without regard to their ability to pay is accepted. HRS enforcement mechanisms are available and appropriate for use if health care providers violate the conditions of a CON.

    
    

23. The first recommendation of the District IX Health Plan for 1990 is that priority be given to area facilities proposing specialized services which can show a commitment to, or an historical record of, service to the Medicaid/indigent, handicapped and under served population groups. Good Samaritan did not accept Medicare patients until 1984, and did not begin participating in the Medicaid program until 1988. In 1989 and 1990, the number of Medicaid and indigent care increased to six percent of Good Samaritan's revenue base. Good Samaritan, according to St. Mary's, only participated in Medicaid to recoup a portion of its 1 1/2% assessment from the Patient's Medical Assistance Trust Fund. Assuming, arguendo, that Good Samaritan's participation in Medicaid is only a reaction to financial incentives, Good Samaritan now ranks fifth in the district and second in the subdistrict in the provision of Medicaid services. Good Samaritan, in its proposal, shows a commitment to serve Medicaid patients, in compliance with the local health plan.

    
    

24. Good Samaritan does not, however, comply with Subsection 381.705(1)(n), Florida Statutes, which favors applicants with both a proposal to serve and an historical commitment to serving Medicaid and indigent patients, because its services to these groups only began in 1988. By contrast, St. Mary's reported 8,000 Medicaid patient days as early as 1983 and 1984.

    
    

    Like and Existing Services

    
    

25. St. Mary's cardiac catheterization laboratory opened in February, 1988. Currently, St. Mary's is performing approximately 375 catheterizations a year, having increased approximately 10% each year, beginning with 235 catheterizations in 1988. For the first six months of 1991, St. Mary's performed 267 inpatient cardiac catheterizations.

    
    

26. St. Mary's inpatient cardiac catheterization services are adequate, accessible and available. St. Mary's provides a high quality of care, exceeding HRS requirements, in compliance with industry standards. See, Subsection 381.705(1)(b), Florida Statutes.

    
    

    Projected Utilization at Good Samaritan

    
    

27. Good Samaritan projected that it would have, in its inpatient cardiac catheterization laboratory, 275 procedures in year one and 378 procedures in year two. St. Mary's asserts that the projections are unreasonable and overstate the likely utilization of the Good Samaritan catheterization laboratory, based on St. Mary's experience.

    
    

28. St. Mary's asserts that its experience is a valid measure of Good Samaritan's projected utilization based on Good Samaritan's own zip code definition of its primary service area which completely overlaps that of St. Mary's. Ninety percent (90%) of St. Mary's cardiac catheterization cases come from the same zip codes that are projected to provide Good Samaritan's inpatient cardiac catheterization procedures. St. Mary's and Good Samaritan's medical staffs also overlap and are essentially the same physicians. Good Samaritan's

    laboratory could be expected to compete with St. Mary's for skilled staff and patients.

    
    

29. Good Samaritan projects that its experience would be more comparable to that of Boca Raton Community Hospital, which experienced a higher start-up volume than did St. Mary's. At Boca Raton Community Hospital, there were 621 procedures in 1988, 658 in 1989, and 635 in 1990. Boca Raton Community Hospital, however, is in a different subdistrict of the county from that in which St. Mary's and Good Samaritan are located.

    
    

30. Good Samaritan's projected experience is more reasonably comparable to that of St. Mary's due to location, range of other available cardiac-related services, which are fewer at Good Samaritan than at St. Mary's, and due to the overlapping physician staff.

    
    

31. St. Mary's experiences the transfer of approximately 50 patients a year for cardiac services. Physicians will not typically admit a patient to the St. Mary's catheterization laboratory if they believe the patient's condition will require additional services, to avoid the need for a subsequent transfer to a hospital at which angioplasties and open heart surgery are performed, particularly if the same physicians are on the staff of both hospitals. This competitive disadvantage at St. Mary's is reasonably expected to limit procedures at Good Samaritan.

    
    

32. Seventy-nine (79) to eighty-two (82) patients were transferred from Good Samaritan to other facilities for cardiac catheterization procedures in 1990. Good Samaritan correctly points out that transfers are costly and disruptive for the patients. As of October 15, 1991, Good Samaritan had 53 cardiac transfers, or annualized approximately 70 patients were expected to be transferred in 1991 to other hospitals for cardiac catheterization procedures. Good Samaritan, based on the experience of St. Mary's, will not be able to retain all of these patients for inpatient cardiac catheterization services. The assumptions that Good Samaritan would have 115, not 70 transfers in 1991, and that with a cardiac catheterization laboratory, all the transfers would remain at Good Samaritan are the bases for Good Samaritan's projected utilization, and are rejected.

    
    

33. St. Mary's expert projected utilization at Good Samaritan's cardiac catheterization laboratory at 143 admissions in year one, and 157 in year two. That projection was flawed and skewed downward by the omission of outpatient cases at Bethesda. When corrected, however, the projected utilization at Good Samaritan does not reach 300 admissions by year two. None of the parties questioned the need for the requisite minimum of admissions to assure patient safety, by keeping the staff proficient and the equipment operational. The safe operation of the laboratory outweighs the cost and inconvenience to patients which results from the need to transfer to other facilities for inpatient cardiac catheterization services.

    
    

34. Good Samaritan also based projected utilization on capturing current out-migration, and on having strong physician support, and a high emergency room cardiac volume.

    
    

35. Approximately 18.54 percent of total district patients, or 365 people, left the district for cardiac catheterizations in the 12 months ending June 30, 1990. HRS expert's testimony that some transfers are to major national heart institutes, or specialty hospitals, and that Good Samaritan has failed to demonstrate that it will capture any of this group of patients is accepted.

36. Good Samaritan has not demonstrated that it will generate enough cardiac catheterization cases to reach an annual program volume of 300 admissions within two years after the program becomes operational, as required by Rule 10-5.032(8)(b), Florida Administrative Code.

    
    

37. Good Samaritan is capable of providing immediate endocardiac catheter pacemaking in cases of cardiac arrest, and pressure recording for monitoring and to evaluate valvular disease, or heart failure, in compliance with Florida Administrative Code Rule 10-5.032(3)(a).

    
    

38. Hemotology, coagulation, electrocardiography, chest x-ray, blood gas, clinical pathology and blood chemistry analysis studies can be performed at Good Samaritan, as required by Florida Administrative Code Rule 10-5.032(3)(b).

    
    

39. Good Samaritan's program will include a special procedure x-ray room, a film storage and darkroom for proper processing of films, x-ray equipment with the capability in cineangiocardiography, or equipment with similar capabilities; an image intensifier, an automatic injector, a diagnostic x-ray examination table for special procedures, an electrocardiograph, a blood gas analyzer, a multichannel polygraph and emergency equipment including a temporary pacemaker unit with catheters, ventilatory assistance devices and a DC defibrillator.

    See, Florida Administrative Code Rule 10-5.032(3)(c).

    
    

40. Good Samaritan is accredited by the Joint Commission of Accreditation of Health Care Organizations for special care units, as required by Florida Administrative Code Rule 10-5.032(5)(a).

    
    

41. St. Mary's asserts that Good Samaritan's proposed staffing of its laboratory with the full time equivalent of two registered nurses is inadequate. St. Mary's demonstrated that the industry standard is a minimum of three to four employees present during any cardiac catheterization.

    
    

42. Good Samaritan's proposed staffing of its cardiac catheterization laboratory is adequate, and meets the minimum standards required by HRS in Florida Administrative Code Rule 10-5.032(5)(b). In addition, Good Samaritan demonstrated that it has the ability to attract a qualified invasive cardiologist.

    
    

43. Good Samaritan has entered into an agreement to transfer patients requiring open heart surgery to either JFK Memorial Hospital or Palm Beach Gardens Medical Center, both of which are within 30 minutes travel time by emergency vehicles, as required by Florida Administrative Code Rule 10- 5.032(6)(a).

    
    

    Compliance With Other Statutory Criteria

    
    

44. Good Samaritan established that it has an excellent record of providing high quality of care and is among the lower cost providers within the district. Its ability to provide the same quality of care for inpatient cardiac catheterization services at a lower cost is compromised solely by patient safety concerns based on the projected under-utilization of the staff and equipment. See, Subsection 381.705(1)(c), Florida Statutes.

    
    

45. There are no outpatient or other less costly alternatives to the need for inpatient cardiac catheterization services, which are adequate or available, as described in Subsection 381.705(1)(d), and (2)(a), Florida Statutes.

46. Good Samaritan is not proposing to provide special equipment or services not reasonably and economically available in adjoining areas, as specified in Subsection 381.705(1)(f), Florida Statutes; nor is there any serious consequences to patients in the absence of the establishment of the proposed services, as specified in Subsection 381.705(1)(d), Florida Statutes. In fact, the most serious risks exist if, as a result of Good Samaritan's proposal, both Good Samaritan and St. Mary's are underutilized.

    
    

    Financial Feasibility

    
    

47. Good Samaritan has the cash on hand to fund the project.

    
    

48. Approximately seventy percent of the hospital's cardiac catheterization referrals are to John F. Kennedy Medical Center and fifteen percent to Palm Beach Gardens Medical Center, both of which have open heart surgery services, and the remainder to a variety of different hospitals. Good Samaritan will not be able to achieve the utilization projected on Table 10 of its application which is the basis for its revenue projections. Good Samaritan failed to show that it will be able to retain all of those cardiac catheterization patients who are currently transferred, if the service were available at Good Samaritan.

    
    

49. Good Samaritan's program, with projected utilization in year one at some number in excess of 143, but less than 275, and in year 2 at more than 157, but less than 300, will not be financially feasible in the short term.

    
    

50. Due to projected rising district wide utilization rates and the fact that the proposed service generally is a positive contribution to hospital revenues, it is impossible to conclude that Good Samaritan's proposal is not financially feasible in the long-term. However, Good Samaritan did not demonstrate when, in the future, it could capture a sufficient percentage of the district wide growth to become financially feasible.

    
    

    Schematic Design

    
    

51. St. Mary's presented expert testimony critical of the proposed design of the Good Samaritan laboratory. The criticisms of the procedure room were that it was (1) undersized with a total of 454 square feet, (2) too narrow at 16 feet, and (3) not designed to have walls lined with lead, as required. The criticisms of the layout of the laboratory included (1) the location of the scrub sink within the control room, (2) the location of the film viewing and developing areas adjacent to the control room, (3) the inadequate size of the film viewing and storage areas, and (4) the absence of the required stretcher alcove area.

    
    

52. The HRS expert architect, who reviewed the schematic design, described the procedure room as smaller than the minimum size recommended by the Intersociety Commission for Heart Diseases. Nevertheless, he noted that HRS has approved smaller, operational catheterization laboratories around the state, and size is not regulated by any HRS rules. In addition, the HRS expert reviewed the design with an understanding that Good Samaritan can and will satisfy the requirements for providing additional support spaces in areas adjacent to, but not shown on the schematic design.

    
    

53. Good Samaritan's expert in architecture, also confirmed that recovering cardiac catheterization patients and other additional space needs can

    be accommodated in an adjacent surgical suite. He testified that he had designed two similarly sized laboratories in renovated spaces, which were functioning well in Maine and New York. The size of the procedure room in Maine is 486 square feet, as compared to 454 square feet proposed at Good Samaritan.

    He was unable to provide information on the size and arrangement of the equipment used in the procedure room in Maine.

    
    

54. Good Samaritan's total laboratory size is adequate, given the proposed use of adjacent areas for support services. The availability of that space allows corrections in the placement of the scrub sink, film viewing, developing and storage areas and other adjustments in the schematic design. The schematic design can be corrected in subsequent, more detailed plans to show lead lined walls.

    
    

55. Good Samaritan has also demonstrated that the total size of 454 square feet in its procedure room is also adequate. St. Mary's expert testified that 600 to 800 square feet is optional, that the Intersociety Commission for Heart Diseases minimum size is 454 square feet, and that 400 square feet is the minimum size under New York state regulations.

    
    

56. Good Samaritan has not demonstrated that the width of the procedure room is adequate to accommodate the staff and equipment necessary to respond to emergencies during cardiac catheterization procedures. No information was presented from which any conclusions can be drawn about the placement and size of equipment in other similarly sized procedure rooms, and whether the same size equipment will be used and may be arranged similarly at Good Samaritan.

    
    

57. Good Samaritan's projected cost of $1.3 million for equipment is reasonable, and sufficient to allow the purchase of an additional Sensitometer and Densitometer, intraaortic balloon pump, radiographic sensing equipment, and a pulse oximeter.

    
    

58. The estimated cost for renovation and construction at $266,200, which includes a 10% contingency, is also reasonable, as are construction forecasts.

    
    

    CONCLUSIONS OF LAW

    
    

59. The Division of Administrative Hearings has jurisdiction over the parties and subject matter in this cause. Subsections 120.57(1) and 381.709(5), Florida Statutes.

    
    

60. As the applicant, Good Samaritan has the burden of proving that its CON application satisfies, on balance, the relevant statutory and rule criteria for the issuance of a CON. Boca Raton Artificial Kidney Center v. Department of Health and Rehabilitative Services, 475 So.2d 260 (Fla. 1st DCA 1985). No single criterion is necessarily determinative. The purpose behind Section 381.705, Florida Statutes, is to provide for a "balanced consideration of all relevant criteria." North Ridge General Hospital, Inc. v. NME Hospital, Inc.,

    478 So.2d 1138 (Fla. 1st DCA 1985). "The appropriate weight to be given to each individual criterion contained in the statute regarding CON applications is not fixed, but rather must vary on a case-by-case basis, depending on the facts in each case. Id. at 1139.

    
    

61. Good Samaritan and St. Mary's have stipulated that the following statutory criteria are either met or not at issue in this proceeding. Subsections 381.705(1)(g), (j), (k), and (2)(e), Florida Statutes.

62. St. Mary's claim that the ACCPV subtracted from the PCCPV should have been updated with information available to HRS at the time of determining need for the February, 1991 batch is rejected. The cardiac catheterization rule prohibits updating the ACCPV in a subsequent batching cycle when net need was less than 300 in the previous batching cycle. HRS correctly held the ACCPV constant for the February, 1991 batching cycle. The ACCPV used to project PCCPV was correctly updated with the most recent information, as the rule requires. The fixed need pool projection for two (2) cardiac cath programs for the July, 1993 planning horizon is accurate.

    
    

63. Good Samaritan has not demonstrated that it meets the applicable state health plan preferences for disproportionate share providers, or providers proposing a service in a county in which the service is not available. Good Samaritan does meet the preference for providers proposing to serve all patients without regard to their ability to pay.

    
    

64. Good Samaritan does not meet local plan recommendations for high levels of quality of care solely because of the inability to demonstrate that utilization will be sufficient to assure staff and equipment proficiency. Good Samaritan did not demonstrate an historical record of service to Medicaid/indigent patients.

    
    

65. Good Samaritan has demonstrated that the costs of construction and equipment and proposed staffing are reasonable, that its proposal includes the provision of the range of non-invasive cardiac and circulatory diagnostic services required, that it has a commitment to provide services regardless of patients ability to pay, that it has the required emergency transfer agreements, and that it will have the required capability of rapid mobilization of a team within 30 minutes for emergency procedures 24 hours a day, 7 days a week.

    
    

66. Good Samaritan has not demonstrated that it can capture enough catheterization admissions to safely operate its program from its current cardiac inpatient service area, from its transfers of patients to other facilities and from the out-migration of county residents. The failure to show sufficient utilization undermines the pro forma by not providing support for the basic underlying assumptions. Therefore, Good Samaritan has failed to demonstrate the financial feasibility of its proposal.

    
    

67. Good Samaritan has also failed to show that its procedure room is wide enough to be equipped in a manner that will permit access by emergency teams and equipment, if necessary. Based on the foregoing, on balance, the Good Samaritan application for adult inpatient cardiac catheterization services should be denied.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that a Final Order be entered determining that the fixed need pool for adult inpatient cardiac catheterization for District IX, published on February 8, 1991, in Volume 17, Number 6, Florida Administrative Weekly, is valid; and denying the application of Good Samaritan Hospital, Inc., for Certificate of Need Number 6626.

RECOMMENDED this 18th day of March, 1992, at Tallahassee, Florida.

ELEANOR M. HUNTER

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 18th day of March, 1992.

APPENDIX TO RECOMMENDED ORDER, CASE NOS. 91-2147 and 91-5718

Rulings on findings proposed by Good Samaritan Hospital, Inc.:

1. Accepted in Findings of Fact 1, 7 and 8.

2. Accepted, in relevant part, in Finding of Fact 1.

3. Subordinate to Finding of Fact 2.

4. Subordinate to Finding of Fact 1.

5. Accepted, in relevant part, in Finding of Fact 2.

6. Accepted in Finding of Fact 2.

7 and 8. Accepted in Finding of Fact 3.

1. Accepted in Findings of Fact 2 and 40.

2. Accepted in Finding of Fact 3.

11 and 12. Accepted in Finding of Fact 4.

1. Accepted in Findings 4 and 42.

2. Subordinate to Findings of Fact 9 and 17.

3. Subordinate to Finding of Fact 17.

4. Subordinate to Finding of Fact 17.

5. Rejected, first sentence, in Finding of Fact 33.

6. Rejected, except second sentence, in Finding of Fact 36.

7. Accepted, except second sentence, in Findings of Fact 1 and 2.

8. Subordinate, first sentence, to Finding of Fact 2. Rejected, second sentence, as irrelevant.

9. Rejected, first sentence, in Findings of Fact 20 and 26. Accepted, second sentence, in Finding of Fact 45.

10. Rejected, first sentence, in Finding of Fact 36.

11. Rejected in Finding of Fact 46.

12. Rejected in Finding of Fact 33.

13. Accepted, in relevant part, in Finding of Fact 43.

14. Accepted in Findings of Fact 32 and 44.

15. Accepted, first two sentences, in Findings of Fact 2 and 34. Rejected, last sentence, in Finding of Fact 46.

16. Subordinate, except sixth and seventh sentences, to Finding of Fact 2.

29 and 30. Subordinate to Findings of Fact 2 and 28.

1. Accepted, except last sentence, in Finding of Fact 35.

2. Accepted in Finding of Fact 32.

3. Subordinate to Finding of Fact 17.

4. Subordinate to Findings of Fact 28 and 30.

5. Rejected in Findings of Fact 33 and 36.

6. Rejected, in relevant part, in Finding of Fact 36.

7. Accepted in Finding of Fact 42.

8. Accepted in Finding of Fact 1.

9. Accepted in Finding of Fact 22.

10. Accepted in Findings of Fact 21 and 22.

11. Subordinate to Finding of Fact 22.

12. Accepted in Findings of Fact 6, 9 and 13.

13. Accepted in Findings of Fact 5, 10 and 13.

14. Accepted in Findings of Fact 11 and 12.

45 and 46. Accepted in Finding of Fact 10.

1. Accepted in Finding of Fact 14.

2. Accepted in Findings of Fact 13 and 14.

3. Accepted in Findings of Fact 11 and 13.

4. Accepted in Findings of Fact 12 and 16.

51 and 52. Accepted in Findings of Fact 15 and 16.

53. Accepted in Finding of Fact 15.

54 - 56. Subordinate to Findings of Fact 12 and 13.

1. Accepted in Finding of Fact 12.

2. Accepted in Finding of Fact 13.

3. Accepted in Findings of Fact 16 and 17.

4. Rejected conclusion in Finding of Fact 28.

5. Rejected, in part, in Finding of Fact 19. Accepted, in part, in Finding of Fact 45.

6. Accepted in Findings of Fact 25 and 32.

7. Subordinate to Finding of Fact 32.

8. Accepted in Findings of Fact 25 and 32.

9. Accepted in Findings of Fact 57 and 58.

10. Accepted in Finding of Fact 57.

11. Subordinate to Finding of Fact 58.

68 and 69. Accepted in Finding of Fact 58.

1. Accepted in Finding of Fact 54.

2. Accepted in Finding of Fact 58.

3. Accepted conclusion in Finding of Fact 42.

4. Accepted in Finding of Fact 42.

74 - 76. Subordinate to Finding of Fact 42.

77. Subordinate to Finding of Fact 47.

78 and 79. Rejected in Findings of Fact 49 and 50.

80 and 81. Accepted in Finding of Fact 44. Rulings on findings proposed by St. Mary's:

1 - 4. Accepted in Finding of Fact 5.

1. Subordinate to Finding of Fact 28.

2. Accepted in Finding of Fact 28.

3. Rejected as not relevant.

4. Accepted in Finding of Fact 4.

5. Accepted in Finding of Fact 10.

10 and 11. Accepted in Finding of Fact 6.

1. Accepted in Finding of Fact 16.

2. Rejected in Finding of Fact 16.

14 - 16. Accepted in Finding of Fact 12.

1. Accepted in Finding of Fact 11.

2. Accepted in Finding of Fact 4.

19 and 20. Rejected in Finding of Fact 17.

1. Accepted in Finding of Fact 18.

2. Accepted in Finding of Fact 19.

3. Accepted in Finding of Fact 20.

24 - 26. Accepted in Finding of Fact 21.

1. Accepted in Finding of Fact 22.

2. Rejected, in relevant part, in Finding of Fact 44.

3. Accepted, in substance, in Finding of Fact 4.

4. Accepted, first sentence, in substance in Finding of Fact 33.

5. Accepted in Finding of Fact 33.

32 - 36. Accepted in Finding of Fact 24.

37. Rejected, in relevant part, in Finding of Fact 23.

38 and 39. Accepted in Finding of Fact 23.

1. Accepted in Conclusions of Law.

2. Accepted in Finding of Fact 26.

42 and 43. Subordinate to Findings of Fact 28, 41 and 57.

44 and 45. Subordinate to Finding of Fact 41.

1. Accepted in Finding of Fact 25.

2. Subordinate to Finding of Fact 26.

3. Subordinate to Findings of Fact 26 and 28.

49 - 52. Rejected as not relevant.

53 - 56. Subordinate to Finding of Fact 26.

1. Accepted in Finding of Fact 30.

2. Accepted in Finding of Fact 27.

3. Subordinate to Finding of Fact 33.

4. Subordinate to Finding of Fact 27.

5. Subordinate to Findings of Fact 28 and 29.

6. Subordinate to Finding of Fact 30.

63 and 64. Accepted in Finding of Fact 28.

1. Subordinate to Finding of Fact 46.

2. Accepted in Finding of Fact 25.

67 and 68. Accepted in Finding of Fact 31.

1. Subordinate to Finding of Fact 36.

2. Accepted in Finding of Fact 35.

71 - 73. Subordinate to Finding of Fact 33.

1. Accepted in Finding of Fact 29.

2. Accepted in Finding of Fact 33.

3. Accepted in Findings of Fact 31 and 32.

4. Accepted in Finding of Fact 33.

78 and 79. Accepted in Finding of Fact 32.

1. Accepted in Findings of Fact 34 - 36.

2. Accepted in Finding of Fact 33.

3. Accepted in Finding of Fact 46.

4. First sentence, rejected as hearsay. Second sentence, subordinate to Finding of Fact 32.

5. Accepted in Finding of Fact 33.

6. Rejected, in substance, in Finding of Fact 55.

7. Subordinate to Finding of Fact 56.

8. Accepted as not demonstrated by applicant in Finding of Fact 56.

9. Accepted in Finding of Fact 55.

10. Accepted in Finding of Fact 56.

11. Rejected in Findings of Fact 54 and 55.

91 - 95. Accepted in Finding of Fact 54.

1. Rejected in Finding of Fact 58.

2. Rejected in Finding of Fact 42.

3. Accepted in Finding of Fact 26.

4. Subordinate to Finding of Fact 30.

5. Subordinate to Findings of Fact 52 and 53.

101 and 102. Subordinate to Finding of Fact 26.

1. Subordinate to Finding of Fact 28.

2. Accepted in Finding of Fact 57.

3. Accepted in Finding of Fact 49.

4. Subordinate to Finding of Fact 50.

5. Subordinate to Finding of Fact 48.

6. Subordinate to Finding of Fact 50.

7. Accepted in Findings of Fact 49 and 50.

110 - 112. Subordinate to Finding of Fact 50.

1. Subordinate to Findings of Fact 49 and 50.

2. Subordinate to Finding of Fact 50.

115 - 117. Subordinate to Finding of Fact 49.

1. Subordinate to Finding of Fact 50.

2. Rejected as not relevant.

120 - 129. Subordinate to Findings of Fact 28, 30 and 46.

130 - 139. Subordinate to Findings of Fact 33 and 46.

1. Subordinate to Findings of Fact 33 and 46.

2. Accepted in Finding of Fact 46.

3. Accepted in Finding of Fact 33.

4. Accepted, except "less costly", in Finding of Fact 33.

5. Subordinate to Finding of Fact 20.

6. Accepted in Finding of Fact 46.

7. Accepted in Findings of Fact 32, 33 and 46.

8. Accepted in Finding of Fact 20.

9. Accepted in Finding of Fact 33.

149 - 151. Subordinate to Findings of Fact 26.

152 and 153. Rejected, as not applicable, in Finding of Fact 17.

154. Rejected.

155 - 157. Subordinate to Finding of Fact 6.

158. Rejected, as to "cost", but accepted as to "quality" in Finding of Fact 44.

Rulings on findings proposed by HRS:

1. Accepted in Preliminary Statement and Finding of Fact 10.

2. Accepted in Preliminary Statement and Finding of Fact 5.

3. Accepted in Preliminary Statement.

4. Accepted in Preliminary Statement and Finding of Fact 5.

5 - 10. Accepted in Preliminary Statement.

11. Subordinate to Preliminary Statement and Finding of Fact 5.

12 - 16. Rejected as not relevant subsequent to Order Closing File in Case No. 91-5717 dated October 17, 1991.

1. Accepted in Finding of Fact 18.

2. Accepted in Findings of Fact 19, 21 and 22.

3. Accepted in Finding of Fact 22.

4. Accepted in Findings of Fact 18 and 23.

5. Accepted in Finding of Fact 23.

6. Accepted in Finding of Fact 6.

7. Accepted in Findings of Fact 5 and 10.

8. Accepted in Finding of Fact 10.

9. Accepted in Findings of Fact 10 and 11.

10. Accepted in Findings of Fact 10, 11, 13 and 14.

11. Accepted in Finding of Fact 14.

37 - 41. Subordinate to Finding of Fact 11.

1. Subordinate to Finding of Fact 12.

2. Accepted in Finding of Fact 16.

COPIES FURNISHED:

Lesley Mendelson, Senior Attorney Department of Health and

Rehabilitative Services 2727 Mahan Drive

Tallahassee, Florida 32308

W. David Watkins, Esquire Kenneth F. Hoffman, Esquire Oertel, Hoffman, Fernandez

& Cole, P.A.

Post Office Box 6507 Tallahassee, Florida 32314-6507

William B. Wiley, Esquire Darrell White, Esquire McFarlain Sternstein Wiley

& Cassedy

Post Office Box 2174 Tallahassee, Florida 32316-2174

Byron B. Mathews, Jr., Esquire McDERMOTT WILL & EMERY

Miami Center, 22nd Floor

201 South Biscayne Boulevard Miami, Florida 33131-4336

Sam Power, Agency Clerk Department of Health and

Rehabilitative Services 1323 Winewood Boulevard

Tallahassee, Florida 32399-0700

John Slye, General Counsel Department of Health and

Rehabilitative Services 1323 Winewood Boulevard

Tallahassee, Florida 32399-0700

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

ST. MARY'S HOSPITAL, INC.,

Petitioner, CASE NO.: 91-2147 RENDITION NO.: HRS-92-120-FOF-CON

vs.

DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES,

Respondent,

and

MARTIN MEMORIAL HOSPITAL ASSOCIATION, INC. and

GOOD SAMARITAN HOSPITAL, INC.,

Intervenors.

/ ST. MARY'S HOSPITAL, INC.,

Petitioner,

vs. CASE NO.: 91-5718

DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES and GOOD SAMARITAN HOSPITAL, INC.,

Respondents,

and

MARTIN MEMORIAL HOSPITAL ASSOCIATION, INC.

Intervenor.

/

FINAL ORDER

This cause came on before me for the purpose of issuing a final agency order. The Hearing Officer assigned by the Division of Administrative Hearings (DOAH) in the above-styled case submitted a Recommended Order to the Department of Health and Rehabilitative Services (HRS). A copy of the Recommended Order is attached hereto.

RULING ON EXCEPTIONS

FILED BY ST. MARY'S HOSPITAL

St. Mary's excepts in whole or in part to findings of fact 9 through 17, 22, 23, 33, 42, 44, 54, and 55. The challenged findings are supported by competent, substantial evidence; therefore, the exceptions are denied.

RULING ON EXCEPTIONS FILED BY GOOD SAMARITAN HOSPITAL INC.,

Good Samaritan excepts in whole or in part to findings of fact 24, 25, 27, 28, 29, 30, 31, 32, 33, 35, 36, 44, 48, 49, 50, and 56. The challenged

findings are supported by competent, substantial evidence; therefore, the exceptions are denied. Good Samaritan suggests that the Hearing Officer's finding of an approximate 10% annual increase (finding of fact 25) in the number of catheterizations at St. Mary's is flawed. Good Samaritan maintains that the number of catheterizations performed in the first six months of the year can simply be doubled to obtain an accurate annual number. Given the wide seasonal fluctuation in the number of residents and visitors in the coastal counties of Southern Florida, an accurate annual number cannot be assumed from the suggested calculation.

RULING ON EXCEPTIONS FILED BY THE DEPARTMENT

Counsel excepts to the Hearing Officer's conclusion that the preliminary award of CON 6624 to Lawnwood Regional Medical Center was irrelevant in this proceeding.

"Comparative hearing" is defined at Section 10- 5.002(14), Florida Administrative Code, as a "a single hearing, conducted pursuant to Section 120.57, Florida Statutes, held to review all applications in the same batching cycle and comparatively reviewed by the department." Lawnwood, Bethesda 1/ and Good Samaritan all filed application in the batching cycle at issue in this proceeding. Thus, HRS proffered exhibit number 5, the application of Lawnwood for CON 6624 Is relevant and admitted into evidence.

There is competent, substantial evidence to support the award of CON 6624 to Lawnwood Medical Center, Inc., both in the testimony of the department (T. 479 - 480), the State Agency Action Report issued by the department (HRS Exh. 4), and Lawnwood CON application 6624 (HRS Exh. 5). Additionally, the initial decision to approve CON 6624 was not opposed at the final hearing.

FINDINGS OF FACT

The department hereby adopts and incorporates by reference the findings of fact set forth in the Recommended Order.

CONCLUSIONS OF LAW

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

Based upon the foregoing, it is

ADJUDGED, that the application of Good Samaritan Hospital, Inc. to establish an inpatient cardiac catheterization program, CON 6626, be DENIED. It is further adjudged that the application of Lawnwood Medical Center, Inc. to establish an inpatient cardiac catheterization program, CON 6624, be APPROVED. The fixed need pool for adult inpatient cardiac catheterization for District IX, published on February 8, 1991, in the Florida Administrative Weekly is correct.

DONE and ORDERED this 5th day of May, 1992, in Tallahassee, Florida.

Robert B. Williams, Secretary Department of Health and Rehabilitative Services

by Deputy Secretary for Human Services

ENDNOTE

1/ In a pleading filed September 4, 1991, Bethesda Memorial Hospital, Inc. withdrew its application for CON 6625.

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, 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:

Eleanor M. Hunter, Hearing Officer DOAH, The DeSoto Building

1230 Apalachee Parkway

Tallahassee, FL 32399-1550

Lesley Mendelson, Esquire Department of Health and Rehabilitative Services 2727 Mahan Drive, Suite 103 Fort Knox Executive Center Tallahassee, FL 32308

W. David Watkins, Esquire Kenneth F. Hoffman, Esquire OERTEL, HOFFMAN, FERNANDEZ & COLE, P. A.

Post Office Box 6507 Tallahassee, FL 32314-6507

William B. Wiley, Esquire Darrell White, Esquire McFARLAIN, STERNSTEIN, WILEY

& CASSEDY, P. A.

Post Office Box 2174 Tallahassee, FL 32316

Byron B. Mathews, Jr., Esquire McDERMOTT, WILL & EMERY

201 South Biscayne Boulevard 22nd Floor, Miami Center Miami, FL 33131

CON Legal

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a copy of the foregoing was sent to the above named people by U. S. Mail this 7th day of May , 1992.

R. S. Power, Agency Clerk Department of Health and

Rehabilitative Services 1323 Winewood Boulevard Building One, Room 407 Tallahassee, FL 32399-0700

(904)488-2381

Docket for Case No: 91-002147

Orders for Case No: 91-002147