STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

WINTER PARK MEMORIAL HOSPITAL, )

)

Petitioner, )

)

vs. ) CASE NO. 78-263

)

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

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, an administrative hearing was held before Diane D. Tremor, Hearing Officer with the Division of Administrative Hearings, on May 24, 1978, at 9:00 A.M. in Room 103 of the Collins Building, Tallahassee, Florida.

All parties stipulated that the Hearing Officer was to enter her recommended order within thirty (30) days of receipt by her of the parties' memoranda of law and the transcript, which occurred on July 24, 1978.

APPEARANCES

For Petitioner: John H. French, Jr.

630 Lewis State Bank Building Tallahassee, Florida 32301

and Jon C. Moyle

Moyle, Gentry, Jones, Flanigan, and Groner, P.A.

707 North Flagler Drive Post Office Box 388

West Palm Beach, Florida 33402

For Respondent: Eric J. Haugdahl

Assistant General Counsel Department of Health and

Rehabilitative Services 1323 Winewood Boulevard

Tallahassee, Florida 32304 INTRODUCTION

The petitioner Winter Park Memorial Hospital applied for a certificate of need for the purchase, installation and operation of a computerized tomographic whole body scanner, hereinafter referred to as a CAT scanner. The respondent denied the proposal for the reason that it was not consistent with the respondent's criteria set forth in Chapter 10-5.11 of the Florida Administrative Code in that it was not documented that the number of scans per existing scanners in the service area exceeded 2,400 during the preceding twelve months.

A prehearing conference was held to discuss the scope of the issues to be determined at the hearing. By an Order dated May 10, 1978, the undersigned Hearing Officer ruled that the hearing to be conducted was a de novo fact- finding hearing to determine whether the petitioner is currently entitled to a certificate of need and approval for its capital expenditure proposal. It was further ordered that all relevant evidence of circumstances as they existed at the time of the hearing would be heard and considered and that evidence bearing upon all criteria for review would be heard and considered.

Thereafter, on May 23, 1978, the parties entered into a stipulation agreement confining the issues to be determined at the hearing to whether or not the petitioner met six of the criteria and/or standards set forth in respondent's rules. These will be discussed in detail in the Conclusions of Law portion of this order, but generally they relate to the concepts of need, accessibility, cost benefits, sharing of services, existing area scanner performance, and extenuating circumstances. The parties stipulated that all other applicable criteria and standards had been met by the petitioner and that both parties had complied with the procedural requirements of state and federal law in a timely manner. The stipulation was accepted by the Hearing Officer.

FINDINGS OF FACT

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

1. Petitioner Winter Park Memorial Hospital is a community-oriented, non- profit general hospital located on the eastern side of the City of Winter Park, Florida. The primary service area for this hospital is the City of Winter Park and those areas to the north and east of the City, namely Maitland and Oveido. Approximately seventy percent (70 percent) of petitioner's patients reside in these areas. Its present capacity is 261 beds, but a construction program is underway which will add an additional 40 beds. Petitioner has an active medical staff of 160 to 175 physicians representing all specialties, with the exception of psychiatry. With this exception, petitioner is a full service hospital with an active emergency room serving over 2,000 patients per month. Approximately thirty percent (30 percent) of its patients are Medicare recipients.

   
   

2. The petitioner, although contemplating the purchase of a scanner as early as 1972, submitted its formal certificate of need application and request for approval of a $700,000.00 capital expenditure proposal in September, 1977. At that time, as well as at the time of the hearing, there were three existing scanning services in the area. These are located in the metropolitan-Orlando area to the south of petitioner's facility. Florida Hospital, located approximately five miles from petitioner, has two units -- an EMI head scanner and a General Electric whole-body scanner. The third scanner, a whole-body unit, is located some fifteen miles south of petitioner's facility at the Orlando Regional Medical Center, Orange Memorial Division.

   
   

3. The Health Systems Agency of East Central Florida, Inc. reviewed petitioner's application and recommended denial to the respondent Office of Community Medical Facilities. This recommendation was based upon the Board's and staff's conclusion that there was no need for an additional scanner at this time inasmuch as existing scanners in the area were not operating at near full capacity. The Board further found that patients would not experience serious problems in obtaining inpatient care in the absence of the proposed new service. It should be noted that the Health Systems Agency staff report took exception to the State's criteria of indicating a need for additional scanners. The State

   criteria is that additional CAT scanners will be approved only when existing scanners perform 2,400 scans during the preceding twelve months. The staff report indicates that the HSA's regional board of directors felt that no additional scanners should become operational until existing scanners have reached a utilization of 4,500 scans per year. Although statements were made in the staff report that the staff did not have figures of the number of scans performed by each of the three existing scanners during the preceding twelve month period, the HSA found and concluded that the existing scanners were not operating or performing at full capacity.

   
   

4. The respondent's medical facilities specialist, Jimmie R. Carter, prepared a staff analysis on petitioner's application. Using the HSA's figures and projecting the actual data forward for the scanners which had not been operational for the whole preceding twelve-month period, he found that two of the three existing scanners were operating below the 2,400 state minimum figure. He further took into consideration the recent operation of Transcan, a privately owned mobile CAT scanner.

   
   

5. Respondent's Administrator, Mr. Art Forehand, notified petitioner in early January, 1978, that its $700,000.00 capital expenditure proposal was not favorably considered because it was not consistent with the State criteria. Specifically, Mr. Forehand found that the proposal did not meet the requirement which states

   
   

   "The addition of new CAT Scanners will be approved only when it is documented that the number of scans per existing scanner in the documented service area exceeded 2,400 during the preceding 12 months."

   
   

6. Exhibits were admitted into evidence by stipulation which illustrate the number of scans performed by the existing units for the twelve months preceding the May 24, 1978, hearing in this cause. These figures were obviously not available to the respondent and the HSA when they reviewed petitioner's application. The exhibits indicate that for the twelve month period of May, 1977, through April, 1978, the whole-body scanner at Orange Memorial performed 4,724 scans. (Exhibit 9). The whole-body scanner at Florida Hospital performed a total of 3,115 procedures over this same period of time. (Exhibit 11). The head scanner at Florida Hospital performed 2,345 procedures from May of 1977 through April of 1978. (Exhibit 10) When computing these figures out to averages per month for the past twelve months, the past six months and the past three months, it can be seen that a significant increase in the utilization of this equipment is occurring. (Exhibit 12). Testimony from Clarence Heinlein, technical director of Florida Hospital who supervises the CAT scanning units there, indicates that the head unit has been in operation for about two years, and the body unit has been operational since April of 1977. In March, April and May of 1977, the head scanner at Florida Hospital was not functioning well, and the number of procedures performed was very low. Mr. Heinlein updated the figures appearing on Exhibit 10 to include 131 procedures performed on the head scanner from May 1, 1978 to May 19, 1978. Thus, if one were to compute the number of procedures performed from June 1, 1977 to May 19, 1978, a little less than a twelve-month period, it would total at 2,441 procedures.

   
   

7. The head unit at Florida Hospital is a first generation unit, taking approximately thirty minutes to warm up and sixty seconds per slice scan time. This unit is operated eight hours per day. The whole body unit only takes 4.8 seconds per slice and warms up in two to three minutes. For these reasons, the

   first generation head scanner is less suitable for children, elderly patients, psychiatric patients and emergency patients than the newer, whole-body unit which can also perform head scans. The two units at Florida Hospital are thus used cooperatively to compensate for down time and uncooperative patients.

   
   

8. Petitioner presently has an agreement with Florida Hospital for the sharing of their scanners. Approximately eighty-one percent (81 percent) of petitioner's physicians have staff privileges at Florida Hospital and petitioner is presently referring about fifteen of its inpatients every month to Florida Hospital for CAT scans. Travel time between the two institutions ranges from fifteen to thirty minutes, depending upon the traffic. Although exact figures were not demonstrated, the testimony indicates that a transfer of an inpatient from petitioner's facility to Florida Hospital for a scan does result in added expenses to the patient, and the possibility of endangering the transferred patient's life. The added expense is derived from the ambulance charges, spending extra time in the hospital awaiting scheduling and the results of the scan, and the accompaniment of personnel from the petitioner's hospital to the scanning facility. Without speedy and safe diagnostic procedures readily available, the patient's life may be endangered. Also, many patients, because of their physical condition, are incapable of being transported. Without scanning equipment, petitioner's physicians must then employ the more dangerous, invasive and sometimes painful diagnostic techniques. These procedures, such as carotid arteriograms and pneumoencephalograms, often carry significant risks to the patient and require extra time in the hospital.

   
   

9. It was Mr. Heinlein's testimony that the two scanning units at Florida Hospital were operating at capacity. He felt that the head scanner had a limited effectiveness and testified that the body scanner had been operating at an average rate of over ten hours per day on a six and a half-day work week.

   Mr. Heinlein felt that an additional scanner at petitioner's facility would have no adverse impact on Florida Hospital. The loss of revenue from petitioner's patients would be offset by a general increase in the use of the equipment and by not having to operate the equipment on an overtime basis.

   
   

10. The nearest facilities with scanning equipment to the north and east of petitioner's facility are located some fifty miles away. Petitioner's witnesses indicated that their scanner, if acquired, would be available to other hospitals in the service area.

    
    

11. Petitioner did make an attempt to utilize the services of a commercial mobile scanner which was to be brought to its parking lot in a truck on certain days of each week. Feeling that the service was not satisfactory, petitioner terminated its contract with the mobile unit. The service was late in starting its operation, it was not dependable and it was more expensive than sending a patient to Florida Hospital for a scan. If the weather happened to be inclement on the day the scanner came, the patient's health could suffer. Also, petitioner's physicians were concerned that the mobile unit's equipment might not be as reliable due to the highly sensitive nature of scanning equipment.

    
    

    CONCLUSIONS OF LAW

    
    

12. As indicated in the introductory portion of this order, the parties stipulated that there was timely compliance with applicable state and federal procedural rules. The parties further stipulated that petitioner had complied with all standards and criteria for review, with six exceptions. These six relate to the concepts of need, accessibility, cost benefit factors, sharing of services, the number of scans presently being performed and the existence of

    extenuating circumstances. These standards and criteria are set forth in respondent's Rule 10-5.11, Florida Administrative Code, as subsections (3); (13)(a)1, 2, and 7; and (13)(b)6 and 10.

    
    

13. The undersigned has carefully considered the evidence, both oral and documentary, as well as the arguments of counsel. It is concluded that the petitioner has sufficiently demonstrated compliance with the standards, criteria and factors in dispute herein.

    
    

14. The evidence illustrates that the three existing scanners in the area are performing in excess of 2,400 scans per year. Whether this is a threshold or minimum requirement as contemplated by the respondent is immaterial. Respondent's Rule 10-5.11(13)(b)6 lists the 2,400 figure as an indicator of need and respondent must live with its own promulgated rules. See North Miami General Hospital v. Office of Community Medical Facilities, 355 So.2d 1272 (Fla. App. 1st, 1978). Petitioner has demonstrated compliance with this factor.

    
    

15. Petitioner has demonstrated that patient and physician access would be enhanced were scanning facilities available at Winter Park Memorial Hospital. Approximately 70 percent of petitioner's patients originate from Winter Park and the surrounding areas to the north and east. Although Florida Hospital is only located five miles from petitioner, the driving time is between fifteen to thirty minutes. There are delays in scheduling patients for a scan and delays in receiving the scan results. Such delays for inpatients often result in extra hospital days and possible life threatening situations. Petitioner's emergency patients, intensive care patients and other nontransportable patients are denied access to scanning facilities and physicians are denied the speedy use of safe, diagnostic resources for those patients.

    
    

16. Petitioner has adequately demonstrated that cost benefits for consumers, communities and third-party payors will be enhanced by the operation of scanning equipment at petitioner's facilities. Transporting a patient by ambulance and extra days in the hospital results in higher costs to the patient. The witness responsible for scanning equipment at Florida Hospital, where petitioner currently refers its patients for scans, testified that the operation of a scanner at petitioner's facility would have little, if any impact on Florida Hospital. Indeed, there was testimony that a scanner at petitioner's facility could actually reduce Florida Hospital's costs in terms of overtime pay for personnel.

    
    

17. Petitioner presented unrebutted evidence that it would be willing and would desire to share its services with other hospitals in the service area. This, along with Mr. Heinlein's testimony concerning the impact upon Florida Hospital, satisfies the criteria relating to the development of multi- institutional systems and arrangements for shared services.

    
    

18. The need for a whole-body scanner at petitioner's facility has been amptly demonstrated by petitioner in this proceeding,. It should be emphasized that neither the respondent nor the Health Systems Agency had, at the time of their review, the updated statistics concerning actual procedures performed by the existing scanners over a twelve-month period. It is also clear from the testimony that the staff of the HSA were not aware of the delays encountered by petitioner's patients in utilizing the scanners at Florida Hospital.

    
    

19. The above conclusions having been reached, it is not necessary to determine whether petitioner has shown extenuating circumstances to justify a modification of the standards and criteria utilized by respondent.

RECOMMENDATION

Based upon the findings of fact and conclusions of law recited above, it is recommended that the petitioner be granted a certificate of need and approval for its capital expenditure proposal in the amount of $700,000.00 to install and operate a CAT scanner at its facility in Winter Park, Florida.

Respectfully submitted and entered this 18th day of August, 1978, in Tallahassee, Florida.

DIANE D. TREMOR

Hearing Officer

Division of Administrative Hearings

530 Carlton Building Tallahassee, Florida 32304 (904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 18th day of August, 1978.

COPIES FURNISHED:

John H. French, Jr.

630 Lewis State Bank Building Tallahassee, Florida 32301

Jon C. Moyle

Moyle, Gentry, Jones, Flanigan, and Groner, P.A.

707 North Flagler Drive Post Office Box 388

West Palm Beach, Florida 33402

Eric J. Haugdahl Assistant General Counsel Department of Health and

Rehabilitative Services 1323 Winewood Boulevard

Tallahassee, Florida 32304

Mr. Art Forehand Administrator

Office of Community Medical Facilities

1323 Winewood Boulevard

Tallahassee, Florida 32304

Docket for Case No: 78-000263

Orders for Case No: 78-000263