STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

ST. LUKE'S HOSPITAL ASSOCIATION ) d/b/a ST. LUKE'S HOSPITAL, )

)

Petitioner, )

)

vs. ) CASE NO. 92-5111

)

AGENCY FOR HEALTH CARE )

ADMINISTRATION, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to written notice, a formal hearing was held in this case from February 1-4 and 15, 1993, in Tallahassee, Florida, before Eleanor M. Hunter, the designated Hearing Officer of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Michael J. Cherniga, Attorney

Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel, P.A.

101 East College Avenue Post Office Drawer 1838 Tallahassee, Florida 32301

For Respondent: Edward G. Labrador, Attorney

P. Tim Howard, Attorney

Agency for Health Care Administration 2727 Mahan Drive

Tallahassee, Florida 32308 STATEMENT OF THE ISSUES

Whether the certificate of need application of St. Luke's Hospital, Jacksonville, to establish an adult liver transplantation program meets statutory and rule criteria for approval.

PRELIMINARY STATEMENT

In March 1992, St. Luke's Hospital Association d/b/a St. Luke's Hospital ("St. Luke's") in Jacksonville, Florida, filed a certificate of need ("CON") application to establish an adult liver transplantation program. The application was filed with the Department of Health and Rehabilitative Services ("HRS"), the agency responsible for the administration of CON laws prior to the Agency for Health Care Administration ("AHCA"). AHCA published its notice of intent to deny St. Luke's application in the Florida Administrative Weekly, dated July 17, 1992. By timely filed petition, St. Luke's challenged AHCA'S preliminary action. When the file was transferred from AHCA to the Division of

Administrative Hearings, the file included a Petition to Intervene filed on behalf of Shands Teaching Hospital and Clinics, Inc. The Petition to Intervene was denied by Order dated September 9, 1992. Shands was granted leave to file an amended petition, which was denied by Order of October 9, 1992, as was Shands' Motion for Entry of Order on Intervention as a Recommended Order.

St. Luke's presented the testimony of St. Luke's administrator, J. Larry Read; Charlie R. Fleming, M.D.; Mark Richardson, an expert in health planning; Ruud Krom, M.D.; Rick Knapp, expert in hospital accounting, budgeting, and financial analysis; and, by published deposition excerpts, William Phaff, M.D., Mathew Brunson, M.D., Gary Davis, M.D., and Jim White. St. Luke's exhibits 1-8 and 11-13, were received into evidence.

AHCA presented the testimony of Mark Swink, expert in health care planning; Richard J. Howard, M.D., Ph.D., expert in transplant surgery and programs; Gary

1. Davis, M.D., expert in transplant hepatology and liver transplant programs; William W. Phaff, M.D., expert in organ transplantation; Elizabeth Dudek, expert in health care planning; Joshua Miller, M.D., expert in organ transplantation programs; Thomas A. Prevost, expert in hospital accounting, budgeting and financial analysis. AHCA's exhibits 1 - 20 were received in evidence.

   
   

   The formal hearing was held on February 1 - 4 and 15, 1993. The transcript of the hearing was received at the Division of Administrative Hearings on March 8, 1993. Proposed Recommended Orders were filed on April 14, 1993. AHCA also filed a letter correcting errors in its proposed recommended order on April 19, 1993.

   
   

   FINDINGS OF FACT

   
   

   1. St. Luke's Hospital Association d/b/a St. Luke's Hospital ("St. Luke's"), in Jacksonville, Florida, is the applicant for certificate of need ("CON") number 6924 to establish an adult liver transplantation program. St. Luke's is a 289-bed general acute care hospital, providing open heart surgery and bone marrow transplant services. Since the fall of 1987, St. Luke's has been affiliated with the Mayo Clinic- Jacksonville, outpatient research facility, which is a subsidiary of the Mayo Foundation. Other Mayo clinics and affiliated inpatient hospitals are located in Rochester, Minnesota and Scottsdale, Arizona. St. Luke's is located in AHCA District 4 for Baker, Nassau, Duval, Clay, St. John's, Flagler, and Volusia Counties. The District 4 local health council supports St. Luke's proposal. St. Luke's is located in service planning area one, which includes all of north Florida from the Georgia and Alabama lines to a line between Gainesville and Orlando. By rule, the state is divided into four organ transplant service planning areas. Rule 59C-1.044, Florida Administrative Code.

      
      

   2. The Agency for Health Care Administration ("AHCA") is the state agency responsible for the administration of CON laws. AHCA has the power to issue, deny or revoke CONs, pursuant to Subsection 408.034(1), Florida Statutes (1992 supp.).

      
      

   3. Shands Teaching Hospital and Clinics, Inc. ("Shands") is an existing provider of adult and child liver transplant services, located in Gainesville, which is also in service planning area one. Shands is a 560-bed teaching hospital for the University of Florida Medical School, with over forty clinical programs, kidney, liver and heart transplant services, and approval to initiate a lung transplant program. Shands is a disproportionate share provider of Medicaid services.

   4. There are two other existing providers of adult and child liver transplant services in Florida, Tampa General Hospital and Jackson Memorial Hospital in Miami, both of which are also disproportionate share Medicaid providers. Tampa General is in service planning area two and is affiliated with the University of South Florida Medical School. Jackson Memorial is a tertiary care referral center in service planning area four, affiliated with the University of Miami Medical School. There are no liver transplant programs in service planning area three for East Central Florida.

      
      

   5. Shands liver transplant program began in 1985. Between 1985 and 1987, two adult liver transplant surgeries were performed. No liver transplant surgeries were performed at Shands in 1987, 1988 and 1989. In 1990, there were ten, in 1991, sixteen, and in 1992, thirty-one liver transplant surgeries at Shands.

      
      

   6. Tampa General's liver transplant program began in 1986 and 1987, when two surgeries were performed. In 1992, there were four liver transplant surgeries at Tampa General, and ten to twelve were anticipated for 1993.

      
      

   7. Jackson Memorial's program began in the late 1980's. There, thirty-two liver transplant surgeries were performed in 1991, thirty-seven in 1992. Jackson Memorial was approved recently as a program for teaching fellows of the American Society of Transplant Surgeons.

      
      

   8. The Mayo Clinic-Jacksonville is a not-for-profit corporation which operates as an outpatient facility, and is approximately 9 miles from St. Luke's, its affiliate hospital. The clinic has approximately 130 physicians covering a wide range of specialties and sub-specialties for adult patients.

      
      

   9. About fifty percent of the patients admitted to St. Luke's are referred by physicians within the Jacksonville community. The remaining fifty percent are referred by physicians at the Mayo Clinic-Jacksonville. St. Luke's Hospital handles all inpatient services for Mayo Clinic-Jacksonville physicians.

      
      

   10. St. Luke's seeks to establish a new adult liver transplantation program at its facility in Jacksonville, Florida, for projected capital costs of

       $3,188,000. The new program would be located in service planning area one, which is a regional service planning area that includes AHCA Districts 1, 2, and

       3 except for Lake County, and District 4 except for Volusia County. See, Finding of Fact 1, supra.

       
       

   11. St. Luke's would establish its liver transplant program under the Mayo Clinic-Rochester protocols and training programs, as it did its bone marrow transplant program. Residents from Mayo Medical School and the University of Florida have access to educational programs at St. Luke's. Services will be provided to patients who cannot pay or have medicaid coverage in total minimum amounts of $300,000 in the first year, $400,000 in the second year, and $500,000 in subsequent years, with average charges per case expected to be approximately

       $200,000. In addition, St. Luke's will seek medicare certification when eligible, although St. Luke's is not a disproportionate share Medicaid provider.

       
       

   12. St. Luke's and other Mayo facilities use satellite telecommunications and five digit telephone communications among their physicians. Coordination with Mayo Clinic-Rochester liver transplant research services is expected.

   13. By prehearing stipulation, the parties agreed that St. Luke's provides good quality care, has the personnel, resources, and funds to accomplish the project, and qualifies as a research hospital. The parties disagree whether St. Luke's proposal is needed, and can reach projected volumes.

       
       

   14. AHCA does not publish a fixed need pool for liver transplant services. Need is determined in accordance with general statutory criteria for review of CON applications and the organ transplantation rule, Rule 59C-1.044, Florida Administrative Code.

       
       

   15. Rule 59C-1.044(7)(d) requires an applicant to demonstrate the ability to perform a minimum of five (5) liver transplants within two (2) years of CON approval. AHCA agrees that St. Luke's provided sufficient documentation in its application to demonstrate compliance with the standard.

       
       

   16. The rule also requires an applicant to demonstrate that the new liver transplant program will improve patient access.

       
       

   17. St. Luke's projects that it will perform 15 liver transplants during its first year of operation and 30 during the second year. St. Luke's expects that 45 percent of its liver transplant patients will be residents of service planning area one, 35 percent will be statewide patients and 20 percent will be out-of-state patients. For some residents of service planning area one, St. Luke's will provide an alternative to going out-of-state or to Gainesville, thereby, improve their access by eliminating the time and expense involved in patient and family travel.

       
       

   18. St. Luke's also plans to apply to cooperate with the organ procurement organizations established in Florida and the Southeastern United States, and would expect to recruit leaders of a transplant team, a transplant hepatologist and transplant surgeons, within three to six months.

       
       

   19. St. Luke's argues that its proposed liver transplant service is needed because (1) a significant number of livers procured in Florida are used for out- of-state transplants, (2) Florida has a large number of patients in need of liver transplants, (3) patients needing liver transplants are having to leave Florida for the service, and (4) existing Florida liver transplant services are inadequate.

       
       

   20. In 1990, there were 175 adult and pediatric livers obtained in Florida, but only 15 of those were transplanted in Florida. In 1992, there were

       223 adult and pediatric livers obtained in Florida and 56 transplanted in Florida. Based solely on population growth with the procurement efficiency remaining the same, only an additional 18 to 22 livers will become available in Florida by 1996, or up to 245, according to St. Luke's expert. In 1996, St. Luke's proposed program would become operational, however, the three existing programs will be transplanting up to 225 of those in the state by that time. Expert testimony established that substantially more donors than patients are needed to select those that match.

       
       

   21. Florida also has a large pool of potential transplant patients with end stage liver disease. Approximately 515 of those under the age of 65 died in 1990, of which only 9 were children. Testing that number against National Cooperative Transplantation study estimates of 59.1 per million, or 600 in Florida, demonstrates the reasonableness of the estimate of the number of patients with end stage liver disease. Although some may be eliminated due to other complicating conditions, this group is the total pool from which qualified

       transplant candidates could be selected. For service planning area one, the potential pool of patients is 172, which is also prior to screening to determine actual candidacy for transplants. Until late 1992, Shands would also routinely refer hepatitis B patients to Pittsburgh due to special protocols required for their treatment, but that referral pattern no longer exists because of Shands' ability to treat those patients.

       
       

   22. In 1990, there were 90 transplants for Florida residents, or 6.9 per million, in contrast to the national use rate of 10.7 per million population. Of the 90 Florida residents receiving liver transplants, 21 surgeries were performed in Florida, the rest were performed out-of-state. Only 17-20 percent of potential Florida transplant patients are on Florida waiting lists, the rest are on waiting lists elsewhere, particularly Pennsylvania and Nebraska. The percentage of patients leaving Florida decreased from 75 percent in 1990 to 50 percent in 1992.

       
       

   23. Rule 59C-1.044(7)(d), the organ transplant rule applicable to liver transplants, does not include minimum volumes for existing providers, unlike the heart and kidney transplant subsections of the rule.

       
       

   24. In general, St. Luke's believes the establishment of its Mayo- affiliated program will enhance procurement of livers in Florida, increase access principally by stemming out-migration, enhance medical education and research, and introduce a more efficient, more cost effective provider to the system. There is no evidence that the existence of St. Luke's program will have a positive impact on the state's procurement of organs, which already exceeds all except two or three other states in the country.

       
       

   25. St. Luke's also asserted that its program would have greater success than existing Florida programs. Survival rates at Mayo-Rochester have increased from 85 to 87 percent, despite the acceptance of more complex cases after the first 20 surgeries. Expected survival rates, taking into account the serverity of cases, are approximately the same for Tampa General and Jackson Memorial as for Mayo-Rochester. In terms of actual outcome, however, Jackson Memorial's survival rate is 58.8 percent and Tampa General's is 25 percent. At Shands, the survival rate is 73 percent. After successful outcomes in seven of the first ten transplant patients, Jackson Memorial became less selective and less successful. More selective screening of liver transplant patients was reinstituted at Jackson Memorial in 1991, the same year that the University of Miami was approved for a liver transplant surgery fellowship. Jackson Memorial now ranks in the top five in terms of transplant survival rates.

       
       

   26. St. Luke's is a 289 licensed bed hospital, which operated 208 beds in 1992, in marked contrast to the average size of 636 beds for hospitals reporting to the United Network of Organ Sharing ("UNOS"), which coordinates the distribution of organs among its members. UNOS hospitals also averaged 4.6 solid organ transplant programs, such as liver, heart, kidney and lung, which share tissue typing laboratories and immunology services. No other solid organ transplant programs exists at St. Luke's. Nevertheless, St. Luke's must be given favorable consideration under state health preferences, for having an existing organ transplantation program which is defined by AHCA's rules to include bone marrow. See Finding of Fact 37.

       
       

   27. St. Luke's proposal was also criticized due to its occupancy levels and patient payer category mix. St. Luke's operated at approximately 55 percent occupancy in 1992, in contrast to 80 percent occupancy at Shands and other hospitals with solid organ transplant programs. While 50 to 55 percent

       occupancy is typical for general acute care hospitals in Florida and does not, in and of itself, indicate that a hospital is operating inefficiently, occupancy rates at teaching hospitals tend to exceed that of general acute care hospitals.

       
       

   28. St. Luke's patient mix includes in excess of 60 percent medicare, or over age 65. The vast majority of liver transplant patients are under age 65. Few persons over 65 have been qualified as viable liver transplant candidates. By contrast, Shands' payer mix overall and for liver transplants in 1991, was

       23.7 percent medicare, 33.5 percent medicaid, 30.8 percent commercial, and 11.9 percent other; however, Shands Medicaid percentage includes services not available at St. Luke's, such as obstetrics services which alone account for 22 percent of the Medicaid category.

       
       

   29. Although organ procurement in Florida is extremely efficient, the gap is narrowing between those transplanted in Florida as compared to elsewhere. In addition, every organ procured in Florida is checked first against Florida, next regional, and finally, national waiting lists to match donors to recipients by size, weight, blood type and severity of illness. Priority is given for a match on the Florida waiting list.

       
       

   30. Expert witnesses for AHCA outlined the potential negative impact on Shands and Jackson Memorial from the establishment of St. Luke's liver transplant program. Of the 31 adult patients receiving liver transplants at Shands before December 1992, 18 came from a service area which overlaps that of St. Luke's. If St. Luke's reaches the estimated 15 cases for year one, with 12 of those from Florida, 4 of those would otherwise likely be transplanted at Jackson Memorial, and most of the remaining at Shands. Shands and Jackson Memorial reasonably anticipate losing predominantly commercial, managed care, and CHAMPUS transplant patients to St. Luke's. If a program at St. Luke's could reverse out-of-state referral patterns, that would not alleviate the Medicaid case loads because only two Florida residents in the Medicaid payer group received transplants in other jurisdictions. Taking only Shands Medicaid patients from District 4 would also not alleviate its disproportionate share burden, because only one patient in that group has been transplanted at Shands. The loss of well-funded adult patients leaves Shands and Jackson Memorial with the state's under-funded adults and children, who are under-funded at a higher percentage than adults. In addition, the greatest shortage of donor livers is experienced in pediatric programs. The loss of adult livers to an adult-only program can adversely impact pediatrics, since small adult or cut-down livers can be used for children.

       
       

   31. Historically, kidney transplants increased in the 1970s and then leveled off in the mid-80s. Like livers, most kidneys are obtained from cadaveric donors which will not keep pace with demand. Cadaveric donors must be brain dead, but must still have hearts beating to provide an undamaged liver. Currently, a total of 19,000 patients are on waiting lists for cadaveric organs, in contrast to 10-12,000 cadaveric transplants performed. The surplus of liver donors over potential recipients on waiting lists is 1,100. As liver transplantation increases rapidly, donor availability has already become the most significant limitation on further expansion, as happened with kidney transplants. At the University of Miami organ donors decreased form 115 in 1987 to 86 in 1992.

       
       

   32. Since kidney transplant services began at Methodist Hospital in Jacksonville in 1989, the number of kidney transplants performed at Shands has been reduced by 20 to 25 each year.

   33. Shands has reached sufficient volumes to secure managed case contracts to perform kidney transplants which were previously referred out-of-state. Transplant surgeons at Shands who perform liver transplants also perform kidney transplants. Shands plans to add one transplant surgeon. With that addition Shands can double the number of liver transplants. Reasonable projections are that 50 liver transplant surgeries a year will be performed at Shands for the next few years, and 75 to 100 a year after 1995, 40 to 50 at Tampa General after the next three to five years, and up to 100 a year within the next few years at Jackson Memorial. As the liver transplant programs mature, referral patterns are shifting to favor the provider nearest the patient.

       
       

   34. The Organ Procurement Organization for north, northeast and central Florida retrieved 36 adult and pediatric livers in that area in 1992, 32 of which were transplanted at Shands. St. Luke's failed to demonstrate that its program can reverse the effect of Florida procured livers being transplanted elsewhere in residents of other states. If, as St. Luke's projects, it will bring 20 percent of its patients from out-of-state to put on the Florida waiting list.

       
       

   35. In its review of St. Luke's proposal, AHCA used allocation factors in its District 4 report for 1990-1991. St. Luke's is in compliance with those factors related to (1) location in a major metropolitan area, (2) proposing to serve a wide geographic area, (3) financial accessibility, (4) written relationships with other health care providers, (5) agreeing to abide by CON conditions, and (6) agreeing to serve hard-to-place patients. St. Luke's is not in compliance with factors related to (1) cost efficiency and (2) improving geographic access problems.

       
       

   36. AHCA found partial compliance for St. Luke's current treatment of HIV patients, and because of not proposing liver transplants for HIV patients. St. Luke's should have been given full credit for HIV service if it is currently serving those patients. HIV patients are not candidates for liver transplants.

       
       

   37. State health plan preferences for organ transplant programs are applicable to the review of St. Luke's proposal. The preferences met by St. Luke's application are (1) proposed service to patients regardless of ability to pay, (2) already having a bone marrow transplant program, and (3) implementation of provisions of the Uniform Anatomical Gift Act. St. Luke's application does not qualify for preferences for (1) disproportionate share providers, (2) teaching hospitals, (3) UNOS members, or (4) NIH approval or Medicare designation.

       
       

   38. In general, AHCA asserted and established that the developing three university-based liver transplant programs are an existing alternative to St. Luke's proposal, are underutilized, and that St. Luke's has failed to demonstrate any problems with access to the existing facilities.

       
       

   39. St. Luke's is not proposing a joint or cooperative service, as that has been interpreted by AHCA, since it is the CON single applicant.

       
       

   40. The services proposed by St. Luke's are economically, geographically and programmatically accessible in an adjoining area, District 3, which includes Shands in Gainesville.

       
       

   41. St. Luke's included a research and training component of its proposal, but showed no need for any unique research or training programs that are not or cannot be conducted at either Jackson Memorial, Shands or Tampa General.

   42. St. Luke's failed to demonstrate that its proposal would provide competition that would foster quality of care or cost-effectiveness. Although Mayo Clinic-Rochester has better outcomes at lower charges than the Florida facilities, substantial doubt was raised based on the history of liver transplant services, whether success can be duplicated without the transfer of all major participants in a transplant team. Proposed average adult case charges, trended forward with declining average lengths of stay, are approximately equal at Shands to those proposed at St. Luke's.

       
       

   43. St. Luke's historically has provided less than one percent of its patient days to Medicaid patients. The commitment has been constant, but not significant in comparison to similar hospitals that are grouped by the Health Care Cost Containment Board. Medicaid services at Shands, in 1990, were approximately 29 percent. In liver transplant services, Shands' Medicaid shares are approximately 41 percent for adults and over 68 percent for children.

       
       

   44. In 1990, St. Luke's performed charity care for two percent of its total patient days. Shands charity care was 6 1/2 percent.

       
       

   45. There is no showing that residents of organ transplant service planning area one will lack access to liver transplantation if the St. Luke's proposal is not granted, with the anticipated increase in volume at Shands.

       
       

   46. The state consultant who reviewed St. Luke's proposal erroneously concluded that it was not needed, in part, based on standards of the National Cooperative Transplant Study, which recommends volumes between 20 to 50 surgeries. On that basis, he concluded that Shands was underutilized. There was no determination by AHCA whether the standard applied to adult programs, or combined adult and child transplant programs. There is also confusion about the purpose of the standards. Similarly, Medicare certification guidelines of liver transplant programs requires 12 cases, CHAMPUS requires 10, and the National Task Force in Organ Transplantation guideline suggests 15, but these levels are generally for insurance purposes, rather than being over operational minimum or optimal level. The SAAR also fails to discuss prospective donor limitations.

       
       

   47. The state also failed to include Tampa General in its analysis of existing programs, due to its failure to report any utilization from between 1989 through 1991. The omission of Tampa General from its analysis could have only been more positive for St. Luke's since organ availability is the ultimate constraint on transplant programs.

       
       

   48. St. Luke's raised questions about the legal status of the liver transplant program at Tampa General, and whether it met the requirements for grandfathered providers, especially for their pediatric programs. Whether or not Tampa General's program should be recognized does not affect the negative impact to Shands of competition for donors and certain patients in service planning area one.

       
       

   49. St. Luke's expert established that Shands' liver transplant program is currently profitable, considering a positive margin for adult cases which more than covers a negative margin for pediatric cases. Based on the method used for calculating the margin, estimates range from $676,000 in 1992 to in excess of $1 million when Shands reaches 50 cases. Currently, Shands is capable of undertaking a substantial capital expansion financed from its reserves, anticipated patient revenues and the issuance of tax-exempt bonds.

       CONCLUSIONS OF LAW

       
       

   50. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter of this case, pursuant to Subsections 120.57(1) and 408.039(5)(b), Florida Statutes.

       
       

   51. The applicant, St. Luke's, has the burden of demonstrating entitlement to the issuance of a CON by compliance with applicable statutory and rule criteria. Boca Raton Artificial Kidney Center v. HRS, 475 So.2d 260 (Fla. 1st DCA 1985).

       
       

   52. Liver transplantation is regulated as a tertiary service pursuant to Rule 59C-1.002(65), Florida Administrative Code.

       
       

   53. Rule 59C-1.044, Florida Administrative Code, is the rule which specifically governs organ transplantation services. St. Luke's proposal meets the requirement of the rule that a applicant demonstrate the ability to perform a minimum of five transplants within two years of CON approval. St. Luke's proposal will also improve access to liver transplant services for persons in the Jacksonville metropolitan area who would otherwise seek transplants at Shands or out-of-state. St. Luke's argument that the minimum volume standard established in the rule is determinative of need is rejected. That interpretation of the impact of the rule ignores the fact that the rule defines five surgeries as a "minimum." That interpretation also ignores the fact that, assuming the minimum volume is equivalent to a determination of numeric need, that would not be the only criterion for evaluation of a CON application. Balsam v. HRS, 486 So.2d 1341 (Fla. 1st DCA 1986).

       
       

   54. St. Luke's has demonstrated that it is a research hospital, with proposed staffing, training, protocols and agreements which will fully comply with the additional requirements of the rule.

       
       

   55. The rule also creates service planning areas for regionalized planning of organ transplant programs. For purposes of analyzing need and available alternatives, the service planning area is useful in providing geographic parameters. Within St. Luke's service planning area, Shands is the only other existing liver transplantation program.

       
       

   56. Using District 4 allocation factors and by comparison to Shands, St. Luke's proposal meets all of the factors except proposing a more cost efficient program and improving access for residents of the planning area. While some Jacksonville metropolitan area residents would not have to go to Gainesville if the service were available in Jacksonville, there was no showing of hardship or geographic inaccessibility for those who currently go to Shands. On balance, St. Luke's proposal is favored by the District 4 allocation factors.

       
       

   57. On balance, St. Luke's proposal does not meet state health plan preferences for approval, by not complying with those favoring disproportionate share providers, teaching hospitals, UNOS members, and NIH or Medicare approval. In evaluating the existing alternative within the area, the record contains evidence that Shands meets these preferences, except that there is no direct evidence whether Shands is or is not implementing the Uniform Anatomical Gift Act, or is NIH or Medicare designated. The former is, however, assumed, since the University of Florida is an organ procurement organization.

   58. Thus, on balance, St. Luke's has failed to demonstrate the need for its proposal in relation to the state and local health plans, as provided in Subsection 408.035(1)(a), Florida Statutes.

       
       

   59. Absent a showing of need, issuance of St. Luke's CON depends on a showing of an emergency public health concern, which has not been alleged, or the lack of an available, accessible alternative, pursuant to Subsections 408.035(1)(b),(c), (d) and (f), Florida Statutes. St. Luke's takes the position that some meaning must be given to the omission of minimum volume standards for existing providers in the subsections of Rule 59C-1.044 applying to liver programs, as contracted to the subsections applicable to kidney and heart transplant programs. While the omission may allow more flexibility in the agency's determination of need for a new program, the rule cannot be used to avoid the statutory requirements for consideration of available alternatives, and the case law requiring balancing and weighing of all relevant criteria. Humhosco, Inc. v. HRS, 476 So.2d 258 (Fla. 1st DCA 1985).

       
       

   60. In adjoining service District 3, at Shands's, volume is anticipated to increase to 100 surgeries after 1995 with 245 livers available. Accordingly, Shands will transplant approximately forty percent of the livers expected to be donated in Florida. Together, Jackson Memorial and Shands have the capacity to utilize more than 80 percent of the donor livers in the state. There is no adequate showing that these alternatives are not available and accessible.

       
       

   61. St. Luke's has challenged consideration of Tampa General's existing grandfathered program. In fact, due to the lack of any reported utilization, Tampa General was not considered by the AHCA in reviewing St. Luke's application. No action has resulted in the termination of Tampa General's CON, therefore, evidence of Tampa General's actual and projected volume of liver transplant surgeries is considered. Its current and projected utilization are of a magnitude that makes consideration of Tampa General as an existing provider of little consequence, however, in the analysis of the impact of St. Luke's proposal.

       
       

   62. Because Shands is in the same service planning area as St. Luke's, and is an available, accessible, underutilized alternative which better meets, on balance, criteria related to the type of facility which is appropriate for organ transplantation programs, St. Luke's has failed to show the need for its proposed adult transplantation program.

       
       

   63. AHCA has demonstrated that approval of the St. Luke's proposal would have a negative impact on the liver transplant program at Shands, since up to two-thirds of St. Luke's patients would be taken from the higher reimbursement categories of Shands payer mix.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency For Health Care Administration enter a final

order denying the application of St. Luke's Hospital Association for a certificate of need (number 6924) to establish an adult liver transplantation program.

DONE AND ENTERED this 22nd day of February, 1994, in Tallahassee, Leon County, 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 22nd day of February, 1994.

AHCA

APPENDIX TO RECOMMENDED ORDER, CASE NO. 92-5111

The following rulings are made on the parties' proposed findings of fact:

1,2. Accepted in Finding of Fact 1.

1. Accepted in Finding of Fact 8.

2. Accepted in Finding of Fact 9.

3. Accepted in Finding of Fact 2.

4. Accepted in Findings of Fact 1 and 10.

5. Accepted in Finding of Fact 17.

6. Accepted in Finding of Fact 10.

7. Accepted in Findings of Fact 1 and 10. 10,11. Subordinate to Finding of Fact 31.

1. Subordinate to Findings of Fact 31 and 43.

2. Accepted in Finding of Fact 29.

14,15,16. Subordinate to Findings of Fact 20 and 29.

17. Accepted in Findings of Fact 26 and 29. 18,19. Accepted in Finding of Fact 43.

1. Accepted in Conclusions of Law.

2. Accepted in Finding of Fact 14.

3. Accepted in Finding of Fact 15.

4. Accepted in Findings of Fact 16 and 46.

5. Accepted in Finding of Fact 19.

6. Accepted in Finding of Fact 31.

7. Accepted in Findings of Fact 19 and 22.

8. Accepted in Finding of Fact 34.

9. Accepted in Finding of Fact 31. 29,30. Subordinate to Finding of Fact 31.

1. Subordinate to Finding of Fact 29.

2. Subordinate to Findings of Fact 29 and 30.

3. Accepted in Finding of Fact 30. 34,35. Subordinate to Finding of Fact 30.

1. Accepted in Findings of Fact 21 and 30.

2. Accepted in Finding of Fact 21.

3. Subordinate to Finding of Fact 30.

4. Accepted in Finding of Fact 25.

5. Accepted in Findings of Fact 35 and 37. 41,42,43. Accepted in Finding of Fact 35. 44,45. Accepted in Finding of Fact 37.

46. Accepted in Findings of Fact 3, 4, and 39. 47,48. Accepted in Finding of Fact 3.

1. Accepted in Finding of Fact 5.

2. Accepted in Finding of Fact 7.

3. Accepted in Finding of Fact 6.

4. Accepted in Finding of Fact 25. 53,54. Accepted in Finding of Fact 7.

1. Subordinate to Finding of Fact 7.

2. Accepted in Finding of Fact 25.

3. Accepted in Finding of Fact 23.

4. Accepted in Finding of Fact 29.

5. Accepted in Finding of Fact 39.

6. Accepted in Finding of Fact 33. 61,62. Accepted in Finding of Fact 33. 63,64. Accepted in Finding of Fact 4.

1. Accepted in Finding of Fact 40.

2. Accepted in Findings of Fact 11 and 40.

3. Accepted in Finding of Fact 41.

4. Accepted in Finding of Fact 11 and 42.

69,70,71,72,73,74. Subordinate to Findings of Fact 11 and 42.

75. Accepted in Findings of Fact 17 and 34. 76,77. Issue not reached.

1. Accepted in Finding of Fact 41.

2. Accepted in Findings of Fact 39 and 43.

3. Accepted in Findings of Fact 1, 3, 17 and 30. 81,82,83. Subordinate to Finding of Fact 30.

1. Accepted in Finding of Fact 44.

2. Accepted in Findings of Fact 30 and 44. 86,87. Subordinate to Findings of Fact 30 and 44.

1. Rejected in Findings of Fact 35 and 43.

2. Accepted in Findings of Fact 35 and 43.

3. Subordinate to Findings of Fact 35 and 43. 91,92,93. Accepted in Finding of Fact 30.

1. Accepted in Findings of Fact 35 and 43.

2. Accepted in Finding of Fact 11.

3. Subordinate to Finding of Fact 11.

97,98. Subordinate to Findings of Fact 11, 28, 44 and 45.

1. Accepted in Finding of Fact 11.

2. Accepted in Finding of Fact 44.

3. Accepted in Findings of Fact 11 and 44.

4. Subordinate to Finding of Fact 44.

5. Accepted in Finding of Fact 30. 104,105. Accepted in Finding of Fact 39.

106. Accepted in Findings of Fact 41 and 46.

St. Luke's Hospital Association

1. Accepted in Finding of Fact 1.

2,3. Accepted in Preliminary Statement. 4,5. Accepted in Finding of Fact 13.

6,7,8,9,11,12. Accepted in Finding of Fact 1.

10. Subordinate to Finding of Fact 1.

1. Accepted in Findings of Fact 1, 11 and 25.

2. Subordinate to Finding of Fact 20.

3. Subordinate to Finding of Fact 1.

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

5. Accepted in Finding of Fact 14.

6. Accepted in Finding of Fact 11.

7. Subordinate to Finding of Fact 50.

8. Subordinate to Finding of Fact 50.

9. Accepted in Finding of Fact 3. 22,23,25,26,27. Accepted in Finding of Fact 5. 24,28,29,30. Subordinate to Finding of Fact 5.

31. Accepted in Finding of Fact 33. 32,33. Subordinate to Finding of Fact 33.

1. Rejected as not supported by the record, as cited.

2. Subordinate to Finding of Fact 33.

3. Rejected as not supported by the record, as cited.

4. Subordinate to Finding of Fact 7. 38,39. Accepted in Finding of Fact 7.

40,41,42,43,44,45,46. Accepted in or Subordinate to Finding of Fact 6.

1. Accepted in Finding of Fact 33.

2. Subordinate to Finding of Fact 50.

3. Rejected as characterized and as inconsistent with St. Luke's proposed Finding of Fact 50.

4. Subordinate to Finding of Fact 30. 51,52. Subordinate to Finding of Fact 6.

1. Accepted in Findings of Fact 19 and 21.

2. Subordinate to Finding of Fact 21. 55,56,57,58. Accepted in Finding of Fact 21.

1. Subordinate to Finding of Fact 30.

2. Accepted in Finding of Fact 30. 61,62. Accepted in Finding of Fact 22.

1. Subordinate to Finding of Fact 22.

2. Accepted in Finding of Fact 26. 65,66. Subordinate to Finding of Fact 18.

67. Subordinate to Finding of Fact 18 and Accepted in Finding of Fact 20. 68,69,70,71. Accepted in Finding of Fact 20.

1. Accepted in Findings of Fact 20 and 29.

2. Accepted in Findings of Fact 20 and 29. 74,75. Subordinate to Findings of Fact 20 and 29.

76. Accepted in Finding of Fact 29.

77,78,79,80. Accepted in Findings of Fact 20 and 29.

1. Accepted in Finding of Fact 29.

2. Accepted in Finding of Fact 19.

3. Accepted in Finding of Fact 22.

4. Accepted in Findings of Fact 5, 6, and 7.

5. Accepted in Findings of Fact 20 and 29.

6. Subordinate to Finding of Fact 29.

87,88,89. Accepted in Findings of Fact 20 and 29.

90. Accepted in Finding of Fact 17.

91,92,93,94,95,96,97. Subordinate to Findings of Fact 5, 6, 7, 20 and 29.

1. Accepted in Finding of Fact 33.

2. Subordinate to Finding of Fact 33.

3. Rejected in Finding of Fact 33.

101,102. Accepted in Findings of Fact 49 and 50.

103,104,105 Subordinate to Findings of Fact 49 and 50.

1. Accepted in Finding of Fact 20.

2. Issue not reached.

108,109. Accepted in Finding of Fact 17.

1. Issue not reached.

2. Accepted in Finding of Fact 11.

3. Rejected in Findings of Fact 28,30 and 44. 113,114. Accepted in Finding of Fact 11.

1. Accepted in Finding of Fact 44.

2. Subordinate to Finding of Fact 44.

3. Accepted in Finding of Fact 30.

118,119. Subordinate to Findings of Fact 28, 30 and 44.

1. Accepted in Findings of Fact 44 and 45.

2. Accepted in part in Finding of Fact 28.

3. Accepted in Finding of Fact 28.

4. Subordinate to Finding of Fact 27.

5. Accepted in Finding of Fact 11.

6. Accepted in Finding of Fact 30.

7. Rejected as not supported by the record cited.

8. Rejected in Findings of Fact 30, 33, and 50.

9. Accepted in Finding of Fact 17. 129,130. Issue not reached.

131,132. Rejected in Finding of Fact 20. 133,134,135,136,137,138,139 Accepted as insurance standards only in

Finding of Fact 47.

1. Accepted in Finding of Fact 7.

2. Rejected in Finding of Fact 20. 142,143,144,145,146. Issue not reached.

147,148,149, 150,151,152,153,154,155. Accepted in or Subordinate to Finding of Fact 51.

1. Accepted in Finding of Fact 30.

2. Subordinate to Findings of Fact 49 and 50. 158,159. Subordinate to Finding of Fact 30. 160,161,162. Subordinate to Finding of Fact 44.

163. Subordinate to Findings of Fact 30 and 44. 164,165,166,167,168,169,170. Accepted in or Subordinate to Finding of Fact

51.

171,172,173,174,175,176,177,178,179,180. Accepted in or Subordinate to

Finding of Fact 35.

181,182,183,184,185,186. Accepted in or Subordinate to Findings of Fact 11,12,24,37, and 42.

1. Accepted in Finding of Fact 47.

2. Conclusion in first sentence rejected, otherwise Accepted in Finding of Fact 20.

189,190,191,192,193,194,195,196,197. Accepted in or Subordinate to Finding of Fact 47.

1. Accepted in Findings of Fact 20 and 47.

2. Rejected conclusion in Findings of Fact 49 and 50.

3. Accepted first sentence in Finding of Fact 49.

4. Rejected as not relevant in Findings of Fact 50.

5. Rejected in Finding of Fact 35.

6. Rejected in relevant part in Finding of Fact 35.

7. Rejected in relevant part in Finding of Fact 37.

8. Subordinate to Finding of Fact 37.

COPIES FURNISHED:

Michael J. Cherniga, Attorney Greenberg, Traurig, Hoffman, Lipoff,

Rosen & Quentel, P.A.

101 East College Avenue Post Office Drawer 1838 Tallahassee, Florida 32301

Edward Labrador, Attorney

P. Tim Howard, Attorney

Agency for Health Care Administration 2727 Mahan Drive

Tallahassee, Florida 32308

Sam Power, Agency Clerk

Agency for Health Care Administration The Atrium, Suite 301

325 John Knox Road Tallahassee, Florida 32303

Harold D. Lewis, General Counsel Agency for Health Care Administration The Atrium, Suite 301

325 John Knox Road Tallahassee, Florida 32303

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 ten 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.

Docket for Case No: 92-005111CON

Orders for Case No: 92-005111CON