STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

ORLANDO REGIONAL HEALTHCARE ) SYSTEM, INC., )

)

Petitioner, )

vs. ) CASE NO. 95-3059

)

AGENCY FOR HEALTH CARE )

ADMINISTRATION, )

)

Respondent. )

)

RECOMMENDED ORDER

This case was heard by Eleanor M. Hunter, the Hearing Officer for the Division of Administrative Hearings, on July 13, 1995, in Tallahassee, Florida.

APPEARANCES

For Petitioner, James M. Barclay, Attorney

Cobb, Cole & Bell

131 North Gadsden Street Tallahassee, Florida 32301

For Respondent, John Gilroy, Senior Attorney

Agency For Agency For Health Care Administration Health Care 2727 Mahan Drive

Administration: Fort Knox Building 3, Suite 3431

Tallahassee, Florida 32308-5403 STATEMENT OF THE ISSUES

Whether the certificate of need application filed by Orlando Regional Healthcare System, Inc. should be dismissed as incomplete because the capital costs were not included in the notice of the proposed project published in the newspaper.

PRELIMINARY STATEMENT

Orlando Regional Healthcare System, Inc. ("ORHS") filed an application for a certificate of need ("CON") to establish an adult bone marrow transplantation program in Orange County, Agency For Health Care Administration ("AHCA") District 7, service planning area 3. AHCA rejected the application due to the failure of ORHS to include proposed capital expenditure costs in the Notice of Filing, published in the newspaper. In this action, ORHS challenges AHCA's rejection of its application for CON Number 8039.

At the formal hearing, ORHS presented the testimony of Gene Nelson, expert in health planning, and exhibits 1-4, which were received in evidence. AHCA presented no witnesses or exhibits.

When the final hearing commenced, AHCA moved to have jurisdiction relinquished due to the absence of disputed material facts. Ruling was reserved without prejudice to the right to renew the motion after the presentation of Petitioner's case-in-chief, when the motion was denied.

The transcript of the final hearing was received on July 20, 1995.

Proposed recommended orders were filed on July 31, 1995.

FINDINGS OF FACT

1. Orlando Regional Healthcare System, Inc. ("ORHS") filed a letter of intent to apply for certificate of need ("CON") 8039 for the approval of a bone marrow transplantation program.

   
   

2. ORHS also submitted a Notice of Filing the letter of intent for publication in The Orlando Sentinel newspaper. The notice, which is as follows, did not include the capital expenditure cost of the project.

   
   

   PUBLIC NOTIFICATION NOTICE OF FILING

   
   

   The applicant, Orlando Regional Healthcare System, Inc., which is authorized to operate Orlando Regional Medical Center, announces its intent to file a certificate of need application on March 22, 1995 with the Agency for Health Care Administration to establish Bone Marrow Transplantation Services at Orlando Regional Medical Center, located

   in Orlando, FL, the Agency's District 7, Orange County Subdistrict, which is designated as Organ Transplant Planning Area 3 by the Agency's Certificate of Need Program Office.

   The project, if granted is expected to become operational in 1996.

   Signed:

   /s/ Garry J. Singleton Garry J. Singleton

   Vice President of Acute Care Operations

   Orlando Regional Healthcare System, Inc. 1414 Kuhl Avenue

   Orlando, Fl. 32806

   
   

3. The Agency For Health Care Administration ("AHCA") is the state agency that administers the CON program. AHCA published notice of receiving ORHS' letter of intent in Vol. 21, Number 10 of Florida Administrative Weekly on March 10, 1995. AHCA's notices do not contain cost estimates. AHCA deemed ORHS' application incomplete and withdrew it from consideration due to omission of capital costs from the published notice in the newspaper. AHCA relied on the requirements on Rule 59C-1.008(1)(i) and (j), Florida Administrative Code. See, Conclusion of Law 11, infra.

   
   

4. There is no evidence that The Orlando Sentinel made an error in the publication of the Notice of Filing.

5. Capital expenditure costs, when estimated in letters of intent and in notices of filing letters of intent, are often inflated. That is done because CON applications, filed subsequently with higher capital expenditure costs than those stated in the letter of intent, are rejected. Rule 59C-1.008(1)(k)3, Florida Administrative Code.

   
   

6. Because the capital costs are often inflated in letters of intent, ORHS' expert concluded that notices of capital expenditure costs are meaningless, and that the omission of such costs from the newspaper notice is insignificant. Therefore, he asserts that the ORHS' notice of filing its letter of intent substantially complied with the requirements of the rule.

   
   

7. ORHS' expert also notes that the publication rule requires the notice to include eleven different items, and that ORHS' notice omitted only one of the eleven.

   
   

8. AHCA does not always require letters of intent or newspaper notices. They are not required for expedited applications, and errors in notices are excused if made by the newspaper and not the applicant. However, there are no batching cycles or comparative review of expedited CON applications.

   
   

   CONCLUSIONS OF LAW

   
   

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

   
   

10. The applicant has the burden of proving its entitlement to a CON, including its compliance with the requirements to submit specific documents containing specific information with the application. See, e.g., South Broward Hospital District, et al. v. DHRS, et al., DOAH Case No. 87-4727 (R.O. 9/30/88).

    
    

11. Rule 59C-1.008(1)(i) and (j), Florida Administrative Code, provide, in relevant part, that:

    
    

    . . . The newspaper publication content shall be as follows:

    
    

    PUBLIC NOTIFICATION NOTICE OF FILING

    
    

    The applicant (legal name of the applicant) announces its intent to file a certificate

    of need application on (date) with the Agency for Health Care Administration for (type of health service to be offered, number an type of beds to be constructed, transferred, or converted) to be located in (name of county

    and subdistrict), Florida. The proposed capital expenditure costs of the project will not exceed (dollar amount). The project, if granted, is expected to become operational in (year).

    Signed:

    (Corporate Official or other representatives of applicant, Address)

    (j) Failure to comply with the provisions of Rule 59C-1.008(i), F.A.C., shall result in the application for the Certificate of Need being deemed incomplete and withdraw from consideration by the agency, except where the failure is due solely to documented error by the newspaper. (Emphasis added.)

    
    

12. In Martin Memorial Hospital Association, Inc. v. Department of Health and Rehabilitative Services, DOAH Case No. 91-2230, 584 So.2d 39 (Fla. 4th DCA 1991), the court held that a letter of intent stating that a program would operate "within the cost guidelines" substantially complied with statutory requirement that it operate "at or below the costs" contained in the application. The court determined that the words mean the same, and that reasonable or substantial compliance was required by Rule 10-5.008(1)(b), which requires a letter of intent "consistent" with the statute.

    
    

13. Rule 59C-1.008(1)(k)3 authorizes AHCA to reject an application for a project with capital cost in excess of those stated in the letter of intent. ORHS' argument that the costs, if included, would be meaningless is rejected. ORHS failed to show that estimates of capital costs, even if generally high, are meaningless. In fact, notice of the maximum possible capital expenditure costs is exactly what the public notification rule requires by the statement that "The proposed capital expenditure costs of the project will not exceed (dollar amount)." The requirement is bolstered by the provisions of Rule 59C- 1.008(1)(k)3 and 4 authorizing the rejection of applications in which capital expenditures exceed those in the letter of intent, while explicitly permitting applications proposing lower capital expenditures.

    
    

14. ORHS' notice also is not reasonably or substantially in compliance with the Rule 59C-1.008(1)(i) and (j). As distinguished from Martin Memorial there is, in this case, no information given regarding capital costs, thus no compliance with the requirement to list capital expenditure costs.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that AHCA enter a final order withdrawing from consideration

CON application 8039 filed by ORHS.

DONE AND ENTERED this 11th day of August, 1995, 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 11th day of August, 1995.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 95-3059

To comply with the requirements of Section 120.59(2), Florida Statutes (1993), the following rulings are made on the parties' proposed findings of fact:

ORHS' Proposed Findings of Fact.

1. Accepted in Findings of Fact 1.

2. Accepted in Findings of Fact 3.

3. Subordinate to Findings of Fact 3.

4. Accepted in Findings of Fact 3.

5. Accepted in or subordinate to Findings of Fact 5 (as $5,000,000 each in proposed project costs in Exhibit 3 and approximately $5,000 total actual costs in Exhibit 4).

6. Accepted in or subordinate to Findings of Fact 7.

7. Accepted in Findings of Fact 5.

8. Accepted in or subordinate to Findings of Fact 2 and conclusions of law

   11.

9. Accepted in Findings of Fact 5.

10. Rejected in conclusions of law 13. 11-13. Accepted in Findings of Fact 5.

1. Accepted in or subordinate to Findings of Fact 5 (as $5,000,000 each

   in proposed project costs in Exhibit 3 and approximately $5,000 total actual costs in Exhibit 4).

2. Accepted in Findings of Fact 5 and Conclusions of Law 13. 16-17. Accepted in Findings of Fact 8.

1. Accepted.

2. Conclusion rejected in conclusions of law 11.

3. See, 5 supra.

AHCA's Proposed Findings of Fact.

1. Accepted in Findings of Fact 2.

2. Accepted in Findings of Fact 3 and 4. 3-5. Accepted in Findings of Fact 5-8.

COPIES FURNISHED:

John Gilroy, Esquire Senior Attorney

Agency for Health Care Administration 2727 Mahan Drive

Fort Knox Building 3, Suite 3431

Tallahassee, Florida 32308-5403

James M. Barclay, Esquire Cobb, Cole & Bell

131 North Gadsden Street Tallahassee, Florida 32301

R. S. Power, Agency Clerk

Agency for Health Care Administration 2727 Mahan Drive

Fort Knox Building 3, Suite 3431

Tallahassee, Florida 32308-5403

Tom Wallace Assistant Director

Agency For Health Care Administration 2727 Mahan Drive

Fort Knox Building 3, Suite 3431

Tallahassee, Florida 32308-5403

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: 95-003059CON

Orders for Case No: 95-003059CON