STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

MIAMI HEART INSTITUTE, )

)

Petitioner, )

)

vs. ) CASE NO. 77-1215

) STATE OF FLORIDA, DEPARTMENT ) OF HEALTH AND REHABILITATIVE ) SERVICES, )

)

Respondent. )

)

ORDER

Pursuant to notice, an administrative hearing was held before Chris H. Bentley, Hearing Officer of the Division of Administrative Hearings, on October 25, 1977, and December 7, 1977. The parties stipulated to the waiving of all time requirements for the entry of a final order.

APPEARANCES

For Petitioner: Byron B. Mathews, Jr., Esquire

Mershon, Sawyer, Johnston, Dunwoody, and Cole

1600 Southeast First National Bank Building

Miami, Florida 33131

For Respondent: George L. Waas, Esquire

Office of the General Counsel Florida Department of Health

and Rehabilitative Services 1323 Winewood Boulevard

Tallahassee, Florida 32301 FINDINGS OF FACT

Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found.

1. Petitioner, Miami Heart Institute (MHI) is a 258-bed hospital and research center located at 4701 North Meridian Avenue, Miami Beach, Florida. MHI is primarily dedicated to the research, care, and cure of heart disease. Approximately thirty-nine percent of the patients in 1974 were classified as heart disease patients. MHI patients are, for the most part, elderly with a relatively high number of critically ill. MHI has an unusually high occupancy

   rate for a hospital, averaging approximately ninety-two percent occupancy of its available beds.

2. MHI presently offers complete diagnostic facilities, including cardio- pulmonary laboratories, clinical vascular laboratory, a full compliment of diagnostic imaging services, clinical pathology laboratory, and a physician- responsive information system to assist in the delivery of quality patient care. MHI has a radiology department containing four radiologists, all of whom are trained and competent in interpreting CAT scans. MHI does not have an emergency room serving the community, nor an obstetrics, gynecology section as such.

   
   

3. By letter dated October 11, 1976, MHI filed with the Health Systems Agency of South Florida and the Department of Health and Rehabilitative Services of the State of Florida, a request for a Certificate of Need and for a recommendation of approval by Respondent to the Secretary of the United States Department of Health, Education and Welfare of a capital expenditure to purchase a computerized axial tomographic (CAT) scanner. Petitioner proposes to purchase an Ohio Nuclear whole body scanner costing in excess of $675,000. The Respondent deemed the MHI application finally submitted on March 4, 1977. Respondent determined that MHI's application was not subject to the requirements of Sections 381.493 - 381.497, Florida Statutes. Respondent therefore reviewed the application solely with regard to its responsibilities to make a recommendation to the Secretary of the U.S. Department of Health, Education and Welfare pursuant to Section 1122, Public Law 92-603.

   
   

4. By letter dated June 1, 1977, Respondent informed Petitioner that its application for a proposed capital expenditure was "... not favorably considered" by Respondent.

   
   

5. MHI presently refers a maximum of 250 patients annually to CAT scanners in other hospitals for diagnostic procedures. Not all of these patients are inpatients of the hospital. When inpatients are referred to another hospital for CAT scanning procedures they are transported to and from by ambulance service. The referring of patients to CAT scanners outside the hospital can create health risks incident to the transporting of patients to and from the scanner.

   
   

6. Although a significant percentage of the patients at MHI are cardiac, these patients, especially the elderly, frequently have multi-system diseases and disorders in addition to their heart problems.

   
   

7. The Miami Heart Institute, when referring patients for CAT scans, generally uses the whole body scanner located at Mount Sinai Hospital, approximately three quarters of a mile from MHI. The evidence at the hearing established that Mount Sinai is capable of handling, without undue delay, the patient referrals it might receive from MHI.

   
   

8. A CAT scanner has proven to be a highly useful diagnostic instrument that combines the technologies of x-ray machines and computers. By the use of CAT scans, radiologists are able to obtain a three-dimensional image which separates the organs of the human anatomy. This more distinct imagery improves detection of the presence and extent of disease in the anatomy. CAT scans can be used as a replacement for many diagnostic procedures which are invasive in character, requiring penetration into the body or the skin of a patient, and which are oft-times potentially dangerous to the patient. Therefore because of its non-invasive character, CAT scanning is a safer diagnostic tool.

   
   

9. MHI proposes to operate its scanner from 8:00 a.m. to 4:00 p.m., Monday through Friday, with the machine available twenty-four hours a day on an

   emergency basis. Petitioner further proposes to properly staff the operation of the scanner with personnel competent and properly trained.

   
   

10. Petitioner was the first institution in the south-eastern United States to perform open heart surgery and kidney transplants and enjoys the reputation as one of the best cardiac facilities in the United States. Petitioner has a research division which is separately staffed and funded, and is dedicated to cardiovascular research and related areas. The research division of Petitioner is not subsidized by other MHI operations, but is funded by government grants and private donations. MHI, in conjunction with its research division, offers a unique opportunity to investigate the application of CAT scanning imagery to the diagnosis and treatment of cardiovascular disease. The staff of the research division is well qualified to conduct such research. Applications of CAT scanning imagery to the diagnosis and treatment of cardiovascular disease is presently in its infancy. The research division of MHI proposes to use the CAT scanner for approximately ten hours a week in its research with the cost of that use being borne by the research division funds and not by the patients of MHI.

    
    

11. The use of CAT scanning as part of the diagnostic workup can reduce the length of the patient's hospitalization which, in turn, results in a cost savings to the patient. A further cost savings to the patient would result from the deletion of transportation costs to and from a CAT scanner presently incurred when a patient is referred for a scan.

    
    

12. The projections of Petitioner are that its first year volume of scans will exceed 1800, and may be as high 2800. It projects at least 2400 scans per year thereafter.

    
    

13. The evidence presented indicates that the operation by the Petitioner of a whole body scanner would not have a detrimental effect or otherwise result in under-utilization of the scanner located at Mount Sinai Hospital.

    
    

14. Respondent stated in its letter of denial that

    
    

    "[t]his unfavorable consideration is based upon the high number of scanners to popu- lation ratio in Dade County, [sic] the availability and accessibility of scanning services at Mt. Sinai Medical Center.

    Therefore, the need for an additional scanner within close, [sic] one-half mile of the scanner at Mt. Sinai has not been demon- strated."

    
    

    The evidence presented indicates that by the time the Petitioner's scanner went into operation there would be at least eighteen other scanners in the Dade County area. The evidence does not establish that eighteen scanners are too many to serve The Dade County area in a cost effective manner.

    
    

    CONCLUSIONS OF LAW

    
    

15. The Certificate of Need application procedure is a dual, federal and state process. The federal statute, 42 U.S.C., 1320a-1 (Section 1122 of P.L. 92-603) requires the state's designated planning agency (Respondent herein) to

    submit to the Secretary of the United States Department of Health, Education and Welfare findings and recommendations, together with supporting material as

    necessary, with respect to proposed capital expenditures. The Secretary of HEW has adopted regulations providing the criteria for determining need in 42CFR, Part 100. Florida Statutes 381.493 et seq., also governs a certificate of need application. The Respondent bears the responsibility of determining whether the foregoing Florida Statutes apply to a particular application for certificate of need. In this case the Respondent has determined that those Florida Statutes do not apply and that Petitioner does not need a certificate of need from the state in order to purchase a whole body CAT scanner. Therefore the thrust of this order is directed solely at the federal side of the certificate of need process.

    
    

16. It is concluded, as a matter of law, that Respondent's letter dated June 1, 1977 denying Petitioner's application, meets the basic requirements set forth in Respondent's rules for such negative action. Therefore Petitioner is not entitled to a favorable consideration because of the failure on the part of Respondent to adhere to certain procedural requirements.

    
    

17. Respondent contends, at least in part, that there is no community need for Petitioner's CAT scanner sufficient to warrant such a capital expenditure. The evidence does establish that there is some community need. However, that need alone is not great enough in this case to warrant justification of such a capital expenditure. The community need can be adequately if not ideally, met by existing CAT scanners. However, there are other criteria to consider in determining the appropriateness of a capital expenditure such as that proposed here. The Petitioner here is a unique facility specializing in cardiac problems and performing at the highest possible level in dealing with its specialty. A great percentage of its patients are elderly and critically ill, frequently having multi-system diseases and disorders in addition to cardiac problems. The availability of a whole body scanner will aid in the diagnosis of these multi- system diseases and reduce the risk to the patient by eliminating some invasive diagnostic techniques and the exposure to risk through transportation outside the hospital to another CAT scanner. Furthermore, Petitioner is unique in the area in being able to couple its use of the whole body CAT scanner to research and the applicability of scanners to heart disease.

ORDER

Based upon the foregoing Findings of Fact and Conclusions of Law, it is, ORDERED:

That Respondent's unfavorable consideration of Petitioner's application should be reversed, and the recommendation made to the Secretary of the U.S. Department of Health, Education, and welfare that the proposed capital expenditure be approved in its entirety.

Respectfully submitted and entered this 11th day of October, 1978, in Tallahassee, Florida.

CHRIS H. BENTLEY

Hearing Officer

Division of Administrative Hearings

101 Collins Building

Mail: 530 Carlton Building Tallahassee, Florida 32304

(904) 488-9675

COPIES FURNISHED:

Byron B. Mathews, Jr., Esquire MERSHON, SAWYER, JOHNSTON, DUNWOODY, AND COLE

1600 S. E. First National Bank Bldg. Miami, Florida 33130

George L. Waas, Esquire Office of the General Counsel Department of Health and Rehabilitative Services

1323 Winewood Blvd.

Tallahassee, Florida 32301

Docket for Case No: 77-001215

Orders for Case No: 77-001215