STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

SOUTH BROWARD HOSPITAL DISTRICT, )

)

Petitioner, )

)

vs. ) CASE NO. 77-2290

)

DEPARTMENT OF HEALTH AND ) REHABILITATIVE SERVICES, OFFICE ) OF COMMUNITY MEDICAL FACILITIES, )

)

Respondent. )

)

RECOMMENDED ORDER

A hearing was held in the above captioned matter, after due notice, on January 20 and April 24, 1978, at Tallahassee, Florida and on March 31, 1978 at Hollywood, Florida before the undersigned Hearing Officer.

APPEARANCES

For Petitioner: R. J. Fegers, Esquire

6011 Rodman Street

Hollywood, Florida 33023

For Respondent: Chester Senf, Esquire

Assistant General Counsel Department of Health and

Rehabilitative Services 1323 Winewood Boulevard

Tallahassee, Florida 32301 ISSUE PRESENTED

Whether Petitioner's application for a Certificate of Need and approval of a capital expenditure proposal pursuant to Chapter 381, Florida Statutes, and Section 1122 of the Social Security Act (42 USC 1320a-1), to install and operate an 18 million electron volt linear accelerator in Memorial Hospital, Hollywood, Florida, should be granted.

FINDINGS OF FACT

1. Petitioner South Broward Hospital District operates Memorial Hospital located in Hollywood, Florida. On March 14, 1977, Petitioner's hospital administrator, S. A. Mudano, informed the local Health Systems Agency (HSA), which is the Health Planning and Development Council for Broward County, Inc., of Petitioner's intent to acquire an 18 million electron volt linear accelerator capable of providing radiation therapy by means of both X-ray and high energy electrons for its radiation therapy department. The cost of this acquisition was to be $455,000.00 for the machine and accessories, plus approximately

   $150,000.00 for construction of an addition to the existing radiation therapy

   department to house the unit and support facilities. This notice of intent was followed by submission of an application to the HSA and Respondent on June 20, 1977. The application was reviewed by the staff of the HSA and, although it was determined that the project did not conform to certain criteria contained in the "Goals and Standards for Diagnostic Radiology, Therapeutic Radiology, and Nuclear Medicine Services" which had been adopted by the HSA after public hearings on August 18, 1977, the HSA recommended the project for approval on October 20, 1977, and so informed Respondent on October 28, 1977. By letter of November 23, 1977, Respondent informed Petitioner that its proposal was not favorably considered because it was inconsistent with the aforesaid local goals and standards for Broward County in that maximum utilization of existing and available like equipment items had not been achieved nor projected, and that such radiation therapy units were accessible within Broward County in less that sixty minutes automobile travel time. In this letter, Respondent pointed out that existing radiation therapy units in Broward County had been utilized at only some 61 percent of their capacity in 1976 and were projected as having only the utilization rate of 87 percent by 1990, and that such rates clearly indicated a lack of demonstrated need for an additional unit. The letter further stated that although the HSA had recommended approval, it had not provided justification for its deviation from its own goals and standards.

   Petitioner thereafter appealed Respondent's denial of its application on December 20, 1977. (Exhibits 1 - 5)

   
   

2. Petitioner South Broward Hospital District is a special tax district created and incorporated by a legislative act of 1947. Memorial Hospital is its only facility and provides medical care on a non-profit basis to persons in the district requiring such treatment. However, individuals living outside of the tax district who require services of Memorial Hospital may utilize the same based upon medical need and criteria established by the district's Board of Commissioners. The radiation therapy department of Memorial Hospital was constructed several years ago and presently has in use a 4 MEV linear accelerator to serve the needs of South Broward cancer patients, mostly on an outpatient basis. In 1977, this machine was operated at 116 percent capacity computed on a forty-hour week and rendered 9,655 patient treatments during that period. The first quarter of 1978, 3,056 treatments were performed, which was a utilization rate of 147 percent on a forty-hour week and 98 percent on a 60-hour week. At the time the radiation therapy department was planned, it was anticipated that additional equipment would be required in the future and therefore "shell" space was reserved in the original construction plans for ease of future installation of new equipment. Construction for the proposed linear accelerator primarily will consist of construction of a concrete vault within the existing shell, plus facilities for operation of the radiation equipment.

   It will take approximately 18 months "lead-time" from issuance of a Certificate of Need to acquire the equipment, and complete construction. (Testimony of Mudano, Margulies, Exhibits 1, 16, 19)

   
   

3. Radiation therapy in cancer cases is accomplished by both external therapy machines and sealed sources of radioactive material The machines include both conventional X-ray machines and the super voltage or megavoltage units which include linear accelerators, cobalt, and betatron units. The conventional machines are used primarily for superficial treatment, such as skin cancer. The megavoltage units deliver much heavier radiation to deep tumors with greater intensity so that a localized volume of tissue can be treated without the danger of damaging surrounding organs and normal tissue. They also produce less side effects such as nausea, weakness and anemia. However, the cobalt and betatron methods have certain limitations which make them less satisfactory for many patients than the linear accelerators. The linear accelerators most commonly

   used today are those of 4, 6, and 18 million electron volts (MEV). The 18 MEV accelerator provides deep therapy by utilizing an electron beam that is highly controllable to most effectively treat tumor tissue. Additionally, high-energy X-ray radiation can be delivered from an 18 MEV unit for deeper penetration.

   The 18 MEV is thus particularly effective for obese cancer patients and for those requiring treatment in the neck and head areas. Although machines of lesser voltage, such as the 4 MEV, are capable of treating all types of cancer patients, they do not protect adjoining organs and non-cancerous tissues to the degree afforded by the 18 MEV, nor can they be utilized for the variety of radiation patterns of the larger machine which has the additional flexibility of using pure electron radiation. (Testimony of Green, Margulies, Munson, Exhibits 1 - 2)

   
   

4. At the time the HSA staff evaluated Petitioner's application, it predicated much of its data upon the utilization of existing radiation machines in Broward County at various hospitals and one private clinic. The staff report showed that there were four cobalt units, one betatron unit, and four 4 MEV units in Broward County. In addition, the report took into consideration one 18 MEV unit for which a Certificate of Need had been issued for the North Broward Hospital on March 12, 1977, and which is expected to be operational in January, 1979. At the hearing, however, it was discovered that both the HSA and the Respondent had overlooked the fact that a Certificate of Need for three MEV units had been issued to the Florida Medical Center in Broward County on June 27, 1975. It is expected that one 18 MEV unit and two 6 MEV units will be operational in that facility in July, 1978. In view of this information, the Hearing Officer determined that prior data was incomplete and required the parties to make new projections of need for presentation at a subsequent hearing session. The revised data is shown in composite Exhibit 16 and forms the basis for consideration of the need for Petitioner's requested additional 18 MEV unit. (Testimony of Chamlis, Composite Exhibits 16, 19, 21)

   
   

5. Although the Respondent has a state medical facilities plan in existence, it does not address the question of radiation equipment. Consequently, the only general criteria issued by an agency in the state on this subject bearing on Petitioner's application is the document issued by the HSA entitled "Goals and Standards for Diagnostic Radiology, Therapeutic Radiology, and Nuclear Medicine Services." The pertinent provisions of that document which were used by the Respondent as a basis for denial of Petitioner's application read pertinently as follow:

   
   

   1. Cost -. High quality radiology and nuclear medicine services should be provided in the most efficient and effective manner, minimizing duplication of services and facilities, as well as expenses incurred.

      
      

      1. The utilization of each piece of equipment, and all services, should be maximized; services should be an effective and economical use of resources.

         1. If there are excess providers and excess capacity exists, growth or an increase in capacity should be discouraged.

         2. If an adequate number of providers exists, yet there is excess capacity, there should not be an increase in services until demand catches up. This does not exclude an

            allowance for new developments or techniques.

         3. If there is an adequate number of providers and sufficient capacity, providers should be encouraged to expand services only in response to an increase in demand. This does not refer to new modalities and services previously unavailable.

         4. If there are too few providers and inadequate capacity, existing providers should be encouraged to expand and/or additional qualified providers should be encouraged to offer services.

      
      

   2. Accessibility -. Quality radiology and nuclear medicine services should be reasonably accessible to all individuals in need, taking into consideration: transportation, sociological and cultural factors and relationships to all components of the health care system.

      
      

      B. Radiation therapy services and equipment should be accessible to the population within sixty (60) minutes travel time by automobile.

      
      

      D. Regardless of economic status, race and geographic location, all individuals should have access to radiology and nuclear medicine services at the most appropriate setting with the most efficient and effective use of resources.

      
      

      The HSA "goals and standards" are a part of its comprehensive health systems plan promulgated to comply with federal and state law and regulations, and are designed to achieve the optimum or ideal health care situation in the community. Although the governing body of the HSA determined that Petitioner's project would not meet the goals contained in paragraphs III C and IV 18, it recommended approval of the application because of "extenuating circumstances." (Testimony of Margulies, Anderson, Tupler, Marrinson, Composite Exhibit 7)

      
      

6. Broward County has six hospitals and one private clinic where radiation therapy units are located. However, the two 18 MEV units which have been approved by Respondent will be located in the North Broward Hospital and Florida Medical Center, both of which are in the northern part of the country. Although from a mileage standpoint, each of these facilities is accessible to the county population within an hour's driving time, the large population in the area and congested highways would make it impossible for residents of the extreme southern part of the county to reach these facilities by bus or automobile in sixty minutes during normal hours. If elderly cancer patients living in South Broward County are required to expend the time necessary to journey to the facilities located in the northern part of the county for outpatient services, it would be deleterious to their mental and physical condition, and would be disruptive to the "team" concept employed at Memorial Hospital for the diagnosis, care, and cure of cancer patients. (Testimony of Margulies, Cohen, Tupler, Rodensky, Hartley, Atkin, Marrinson, Zenkel, Boyd, Nelson, Miller, Bennett, Spiegel, McPherson, Exhibits 10, 13 - 15, 17)

7. The data compiled by the HSA and Respondent to assess the need for an additional 18 MEV linear accelerator was obtained from patient statistics in Broward County for prior years and projections of necessary equipment in the future predicated on on a variety of factors. These include population figures, incidence rate for cancer nationally and in Broward County, numbers of patients previously treated in local hospitals and numbers of treatments, estimated capabilities of existing and approved units based on a forty-hour, forty-eight hour and sixty-hour week basis, projected need in the future for radiation therapy treatments, and the percentage of past and projected therapy equipment utilization in Broward County. In its revised statistical charts, Respondent also applied similar projections solely with respect to the population and equipment located in South Broward County. Additionally, it included projections relative to the need and utilization of high-energy equipment, including the betatron machine at Broward General Hospital and the two 18 MEV's which will become operational in the future. Petitioner presented data based primarily on projected utilization of equipment in the South Broward area, and therein employed certain standards and criteria recently announced by the Department of Health, Education and Welfare as national guidelines which will govern health system plans developed after December 31, 1978, unless modified as authorized therein in certain instances. (42 CFR 121.209) The Hearing Officer took official recognition of these guidelines which provide that each megavoltage radiation therapy unit such as Cobalt 60 and linear accelerators, should serve a population of at least 150,000 persons and treat at least 300 cancer cases annually within three years after initiation, and that no additional units should be opened unless each existing unit in the health service area is performing at least 6,000 treatments per year. However, adjustments downward may be justified when travel time to an alternate unit is a serious hardship due to geographic remoteness based on analysis by the HSA. The guidelines indicate that about half of new cancer patients require megavoltage radiation therapy and that the 6,000 treatment standard reflects an average of about 25 patients or treatments per day as a reasonable standard. However, it is also stated that extra high energy machines which have "limited but important applications" may not reach such numbers of treatments and should be evaluated individually by HSA's in the development of the health systems plans. Also, it is noted that when each existing unit cannot reasonably be expected to reach the target level and a new unit is appropriate, the HSA may call for an adjustment in the standard based on pertinent local conditions. Such local conditions may include the age of the local population, seasonal population fluctuation, and access to needed care. (Exhibits 16, 19 - 20)

   
   

8. In consideration of the foregoing facts and supporting exhibits, and in the absence of specific published state criteria, the following findings as to the actual projected need are made:

   
   

   1. Projected need should be based on the year 1980 because Petitioner will require a "lead time" of approximately 18 months from the time any Certificate of Need is issued in which to obtain equipment, construct a vault and ancillary facilities, and place the unit in operating condition.

      
      

   2. Although there are two separate hospital taxing districts in North and South Broward County that generally service the population in their respective geographic areas, projected need should be based on Broward County as an entirety because it is the designated "health service area."

      
      

   3. An 18 MEV linear accelerator can provide better treatment in a variety of types of cancer than other radiation therapy equipment presently in use in Broward County. Therefore, projected need should be based on Broward

      County requirements for such machines or its closest equivalent, the betatron. In 1980, there will one betatron and two 18 MEV linear accelerators in Broward County.

      
      

   4. The estimated population of Broward County in 1980 is 1,090,400. The incidence rate of cancer patients in Broward County is estimated at 490 per 100,000, which results in 4,910 projected cancer patients. Sixty percent of cancer patients are deemed to require radiation therapy and 40 percent of this number will benefit significantly from treatment by an 18 MEV linear accelerator or equivalent. Thus, 3,205 patients will require radiation therapy in Broward County and 1,282 will benefit from the specialized treatment of the higher voltage machines. At least 20 treatments will be required for the 1,282 patients. Based upon a predicted utilization rate of 3.5 patients per hour for the betatron and four patients per hour for the two projected 18 MEV's, the machines would be utilized in excess of 100 percent in 1980 for a forty-hour week. This does not make allowance for "down time" of the 18 MEV machines for maintenance or seasonal patient fluctuation.

      
      

   5. It is found from the foregoing that the extra high-voltage units that will be in operation in Broward County in 1980 will not be adequate to serve the needs of the county population and that therefore an additional 18 MEV linear accelerator to become operational during that year would not unnecessarily duplicate the existing resources. Consequently, a need will exist for an additional unit to be operational at that time.

   
   

   CONCLUSIONS OF LAW

   
   

9. An applicant for a Certificate of Need/capital expenditure proposal has the burden of establishing conformance to federal and state plans, standards, and criteria developed pursuant to Section 1122 of the Social Security Act (42 USC 1320a-1), 42 CFR Section 100.101 et seq, Sections 381.493- 497, Florida Statutes, and Chapter 10-5, Florida Administrative Code.

   
   

10. Title 42 of the federal regulations sets forth the following general criteria for inclusion in state agreements with the federal government as to evaluation of capital expenditure proposals:

    
    

    100.107 Agreement; criteria for agency review.

    1. Whether the proposed project is needed or projected as necessary to meet the needs in

       the community in terms of health services required. . .

    2. Whether the proposed project can be adequately staffed and operated when completed;

    3. Whether the proposed capital expenditure is economically feasible and can be accommodated in the patient charge structure of the health care facility or health maintenance organization without unreasonable increases; and

    4. Whether the project will foster cost containment or improved quality of care through improved efficiency and productivity, including promotion of cost-effective factors such as ambulatory care, preventive health care services, home health care, and design and construction economies, or through

    increased competition between different health services delivery systems. (Emphasis added)

    
    

11. In view of the fact that Respondent denied Petitioner's application basically on the question of need, it is considered that only that aspect of the federal regulations need be considered.

    
    

12. Subsection 381.494(5)(c)1, Florida Statutes, provides that health systems agencies in certificate of need determinations, must consider "The need for health-care facilities and services being proposed in relation to the applicable health systems plan, annual implementation plan, and state medical facilities plan adopted pursuant to Titles XV and XVI of the Public Health Service Act." Subsection 381.494(5)(c)2 requires that health systems agencies address "The availability, accessibility, extent of utilization, and adequacy of like and existing health-care services in the applicant's health service area. Here, the HSA recommended approval of Petitioner's application although finding that this would be contrary to its health systems plan in that similar equipment in the area was underutilized. However, the large number of older patients in the area who have difficulty in traveling, and the fact that Memorial is a tax- assisted hospital designed to serve all residents, were extenuating factors warranting approval. It should be noted in this regard that the HSA based its finding of under utilization on the availability of "similar services" in the health service area. In fact, the only existing equipment similar or equal to that proposed by the applicant is the betatron machine at Broward General Medical Center which cannot provide the specialized services of extra high energy equipment to all eligible patients in Broward County. Although the HSA's "Goals and Standards" provide that an allowance should not be excluded in cases of "new developments or techniques" and "new modalities and services previously unavailable," the-HSA apparently did not consider the fact that an 18-MEV linear accelerator clearly falls in such categories and cannot reasonably be classified with less effective equipment. Therefore, its "lumping" of the 18 MEV with lesser energy machines to arrive at statistics finding that no need existed for Petitioner's requested unit was erroneous. Further, it is clear that the HSA misconstrued the intended meaning of its "Goal" that radiation therapy services and equipment be accessible to the population within sixty minutes travel time by automobile. The vast weight of the evidence showed that this provision was not intended to be used as a bar to proposed additional equipment, but merely as an outer limit of accessibility. Indeed, the testimony of many witnesses attested to the unusually crowded traffic conditions in Broward County, the excessive time required to drive from extreme South Broward to available facilities in North Broward, and the need of older patients for nearby facilities.

    
    

13. No state medical facilities plan has been established for radiation therapy equipment. The Respondent predicated its rejection of the proposal solely on the basis of its alleged nonconformance to the HSA's "Goals and Standards" even though the HSA recommended approval. As pointed out above, it is determined that the application was not contrary to the HSA plan in terms of under-utilization of equipment or accessibility of services.

    
    

14. Section 381.494(6)(c), F.S., provides that Respondent shall review the application, the recommendation of the health systems agency, and the relationship between the application and the state medical facilities plan, and thereafter issue or deny a certificate of need for proposed capital expenditures in their entirety or for identifiable portions of the total project. Respondent has established further criteria for consideration of an application/proposal in Rule 10-5.11, Florida Administrative Code. Rule 10-5.11(3) refers to "The need

    that the population served or to be served has for such proposed health services." (Emphasis added)

    
    

15. It thus can be seen that the question of need for the proposed facilities or services is not restricted to a present need. The federal rule quoted above speaks of whether the project is "projected as necessary to meet the needs of the community," and the state rule specifies the need of the population "to be served," but no definite time period for such projected needs for the health services or population growth is specified. Such a time period should be determined in the light of the status of the application at the present time, the "lead time" necessary for the facility to become operational, and a consideration of the importance of the particular facility to the health of the community. In view of the fact that the health systems agency is in the best position to know the status of the needs of the community, and taking into consideration its crucial role in the evaluation process, its recommendation of approval for the proposed facility is entitled to great weight. The HSA originally applied inadequate or incorrect data or standards to arrive at the number of extra high energy radiation therapy machines required in the community. However, as heretofore found, present figures show a need for an additional unit by 1980. Since Petitioner's facility cannot become fully operational until that time, it is considered that the need be established for that year. Accordingly, Petitioner's request is found to be warranted.

    
    

16. It should further be noted that in the recent case of North Miami General Hospital, Inc. v Office of Community Medical Facilities, Department of Health and Rehabilitative Services of the State of Florida, 355 So.2d 1272 (Fla. 1st DCA 1978), the First District Court of Appeal in considering a proposal for purchase of a "CAT Scanner," determined that the state department had failed to show the applicant's proposal did not meet federal or state criteria, and that, in fact, the state had not promulgated any standards as to the specified equipment including methods of determining proper utilization. The Court held that in the absence of such published criteria, the only remaining possible basis for denial was to find that the application did not conform to federal standards. The decision applies to the case at hand since specific state standards prescribing "formulas" or other precise methods of determining need for the equipment in question have not been established.

    
    

17. It is concluded that the application/proposal is in conformance with applicable federal and state standards, criteria, and plans, and that the Certificate of Need and any necessary approvals of Petitioner's capital expenditure proposal should be issued.

RECOMMENDATION

It is recommended that the Petitioner's application for Certificate of Need/Capital Expenditure Proposal be approved.

DONE and ENTERED this 7th day of July, 1978, in Tallahassee, Florida.

THOMAS C. OLDHAM

Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304

(904) 488-9675

COPIES FURNISHED:

Mr. Art Forehand, Administrator

Office of Community Medical Facilities 1323 Winewood Boulevard

Tallahassee, Florida 32301

Chester Senf, Esquire Assistant General Counsel Department of HRS

1323 Winewood Boulevard

Tallahassee, Florida 32301

R. J. Fegers, Esquire 6011 Rodman Street Hollywood, Florida 33023

Clifford F. Anderson, Jr. Executive Director

Health Planning and Development Council for Broward County

416 South West 1st Avenue

Ft. Lauderdale, Florida 33301

Docket for Case No: 77-002290

Orders for Case No: 77-002290