Judges: DIANE D. TREMOR
Agency: Agency for Health Care Administration
Latest Update: Sep. 14, 1978
Summary: Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found: Petitioner currently owns two free standing dialysis facilities in Dade County containing sixteen dialysis stations. It submitted its application for a certificate of need and capital expenditure approval to establish a new ten station dialysis facility in the Kendall area of southwest Dade County. The proposed facility is somewhat unique in that it will provide for self-care d
Summary: Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found: Petitioner currently owns two free standing dialysis facilities in Dade County containing sixteen dialysis stations. It submitted its application for a certificate of need and capital expenditure approval to establish a new ten station dialysis facility in the Kendall area of southwest Dade County. The proposed facility is somewhat unique in that it will provide for self-care dialysis on five stations, with routine limited care for chronic end-stage renal disease patients on the remaining five stations. Also, petitioner proposes to charge only $138.00 per treatment, as opposed to the prevailing rate of $150.00 per treatment. Petitioner feels this can be done because of its centralized, computerized accounting system and its better purchasing power. The parent company of petitioner is Dialysis Corporation of America. At the hearing, petitioner could not guarantee this charge of $138.00, and admitted that its existing two facilities charge $150.00 per treatment. When submitting its application for approval, petitioner did not present statistics which would indicate a need for further dialysis stations. Rather, according to petitioner's Administrator, petitioner relied upon a prior statement of need made by the Health Systems Agency of South Florida, Inc., that additional stations were needed, particularly in the area of South Dade County. This prior statement of need was not introduced into evidence. At the hearing before the undersigned Hearing Officer, the petitioner did not present figures of its own relating to the need for additional dialysis stations in Dade County. The Health System Agency of South Florida (HSA) considered petitioner's application in early January, 1978, along with three other proposals for renal dialysis services. One of the three proposals was for the relocation of an existing seven-station South Florida Artificial Kidney Center facility to southwest Dade County. The staff of the HSA recommended approval of the relocation application and disapproval of the other three proposals to expand or construct new facilities, determining that there was no need for additional dialysis stations at that time. Petitioner's application, along with the other three proposals, was then considered by the Project Review Committee of the HSA. That Committee recommended disapproval of any expansion from any applicant and approved the relocation application. This decision was based upon the fact that the service area presently had 76 free standing dialysis stations and 80 hospital based stations (ten of which are located in the Veterans Administration Hospital). While the free standing units were operating at an 87 percent utilization rate, it was felt that the ten additional new stations soon to be operational would alleviate this utilization rate and would drop it to below 80 percent. The hospital based stations were only operating at an approximate 52 percent utilization rate. Thus, the Committee felt there was sufficient capacity in the community to meet all needs and to deal with any exigency which might appear. The Committee felt that the petitioner's reduced charge per treatment was not terribly significant because of the lack of need for additional facilities. The Committee voted 8-0 to recommend disapproval of petitioner's proposal. The HSA Board of Directors considered petitioner's application on January 17, 1978. By a vote of 22 to 0, The Board accepted the Project Review Committee's recommendation of denial. The Board concluded that there was no need for ten additional chronic dialysis stations at this time, that capital and operating costs would have no negative impact on patient charges because Medicare reimbursements are fixed at a maximum allowable charge and that patients would not experience serious problems in availability or accessibility if this expansion is denied. By letter dated March 10, 1978, respondent's Administrator, Mr. Art Forehand, notified petitioner that its proposal was not favorably considered "because it has been determined that the proposed project is not needed." Mr. Forehand indicated that the Florida Kidney Disease Committee concurred in this result. Kidney Network 19 collects data, provides statistics and advises the federal government as to the need for new or expanded end-state renal disease services. Subsequent to the respondent's decision on petitioner's proposal, Network 19 made projection as to the need for additional facilities in Dade and Monroe Counties. It was concluded that there was a need for six stations in the service area. In May, 1978, Network 19, reviewed petitioner's application and the application for expansion by South Florida Artificial Kidney Center. The Network recommended approval of the Artificial Kidney Center's proposal since it was a training facility, and recommended denial for petitioner's proposal. At the time of the hearing, the Department of Health, Education and Welfare had not yet acted upon the Network's recommendation in favor of the Artificial Kidney Center application. Utilizing the statistics recently prepared by network 19 regarding patient census, respondent's medical facilities consultant, Mr. David Sjoberg, concluded that there was no need for additional dialysis stations in Dade County. In fact, it was concluded that even in April of 1980, the area would have 15 more dialysis stations than it needs if a 90 percent utilization rate, or 3.6 patients per machine, is used. Even if an 80 percent utilization rate were used, or 3.2 patients per machine, only three stations would be needed in April of 1980. (Exhibit B) These figures do not take into account the possible expansion of the Artificial Kidney Center facility, which will not require state approval.Application for Certificate of Need (CON) for new dialysis stations should be denied because there was no need and it was not cost effective.
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78-0779.PDFSTATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
DIALYSIS ASSOCIATES, INC., )
)
Petitioner, )
)
vs. ) CASE NO. 78-779
)
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, at 10:00
on June 15, 1978, in Room 103 of the Collins Building, Tallahassee, Florida. All parties stipulated that the hearing would officially close upon receipt of the transcript, which occurred on July 12, 1978.
APPEARANCES
For Petitioner: Bart Pelstring, Administrator
Dialysis Associates, Inc. 2125 Biscayne Boulevard
Miami, Florida 33137
For Respondent: Eric J. Haugdahl
Assistant General Counsel Suite 406
1323 Winewood Boulevard
Tallahassee, Florida 32301 STATEMENT OF THE ISSUE
Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found:
Petitioner currently owns two free standing dialysis facilities in Dade County containing sixteen dialysis stations. It submitted its application for a certificate of need and capital expenditure approval to establish a new ten station dialysis facility in the Kendall area of southwest Dade County. The proposed facility is somewhat unique in that it will provide for self-care dialysis on five stations, with routine limited care for chronic end-stage renal disease patients on the remaining five stations. Also, petitioner proposes to charge only $138.00 per treatment, as opposed to the prevailing rate of $150.00 per treatment. Petitioner feels this can be done because of its centralized, computerized accounting system and its better purchasing power. The parent company of petitioner is Dialysis Corporation of America. At the hearing,
petitioner could not guarantee this charge of $138.00, and admitted that its existing two facilities charge $150.00 per treatment.
When submitting its application for approval, petitioner did not present statistics which would indicate a need for further dialysis stations. Rather, according to petitioner's Administrator, petitioner relied upon a prior statement of need made by the Health Systems Agency of South Florida, Inc., that additional stations were needed, particularly in the area of South Dade County. This prior statement of need was not introduced into evidence. At the hearing before the undersigned Hearing Officer, the petitioner did not present figures of its own relating to the need for additional dialysis stations in Dade County.
The Health System Agency of South Florida (HSA) considered petitioner's application in early January, 1978, along with three other proposals for renal dialysis services. One of the three proposals was for the relocation of an existing seven-station South Florida Artificial Kidney Center facility to southwest Dade County. The staff of the HSA recommended approval of the relocation application and disapproval of the other three proposals to expand or construct new facilities, determining that there was no need for additional dialysis stations at that time.
Petitioner's application, along with the other three proposals, was then considered by the Project Review Committee of the HSA. That Committee recommended disapproval of any expansion from any applicant and approved the relocation application. This decision was based upon the fact that the service area presently had 76 free standing dialysis stations and 80 hospital based stations (ten of which are located in the Veterans Administration Hospital). While the free standing units were operating at an 87 percent utilization rate, it was felt that the ten additional new stations soon to be operational would alleviate this utilization rate and would drop it to below 80 percent. The hospital based stations were only operating at an approximate 52 percent utilization rate. Thus, the Committee felt there was sufficient capacity in the community to meet all needs and to deal with any exigency which might appear. The Committee felt that the petitioner's reduced charge per treatment was not terribly significant because of the lack of need for additional facilities. The Committee voted 8-0 to recommend disapproval of petitioner's proposal.
The HSA Board of Directors considered petitioner's application on January 17, 1978. By a vote of 22 to 0, The Board accepted the Project Review Committee's recommendation of denial. The Board concluded that there was no need for ten additional chronic dialysis stations at this time, that capital and operating costs would have no negative impact on patient charges because Medicare reimbursements are fixed at a maximum allowable charge and that patients would not experience serious problems in availability or accessibility if this expansion is denied.
By letter dated March 10, 1978, respondent's Administrator, Mr. Art Forehand, notified petitioner that its proposal was not favorably considered "because it has been determined that the proposed project is not needed." Mr. Forehand indicated that the Florida Kidney Disease Committee concurred in this result.
Kidney Network 19 collects data, provides statistics and advises the federal government as to the need for new or expanded end-state renal disease services. Subsequent to the respondent's decision on petitioner's proposal, Network 19 made projection as to the need for additional facilities in Dade and Monroe Counties. It was concluded that there was a need for six stations in the
service area. In May, 1978, Network 19, reviewed petitioner's application and the application for expansion by South Florida Artificial Kidney Center. The Network recommended approval of the Artificial Kidney Center's proposal since it was a training facility, and recommended denial for petitioner's proposal. At the time of the hearing, the Department of Health, Education and Welfare had not yet acted upon the Network's recommendation in favor of the Artificial Kidney Center application.
Utilizing the statistics recently prepared by network 19 regarding patient census, respondent's medical facilities consultant, Mr. David Sjoberg, concluded that there was no need for additional dialysis stations in Dade County. In fact, it was concluded that even in April of 1980, the area would have 15 more dialysis stations than it needs if a 90 percent utilization rate, or 3.6 patients per machine, is used. Even if an 80 percent utilization rate were used, or 3.2 patients per machine, only three stations would be needed in April of 1980. (Exhibit B) These figures do not take into account the possible expansion of the Artificial Kidney Center facility, which will not require state approval.
CONCLUSIONS OF LAW
An applicant for a certificate of need and capital expenditure approval has the burden of clearly illustrating compliance with all standards and criteria for review. One of the prime considerations for review is, of course, the need for the proposed facility in the service area. Petitioner has wholly failed to illustrate a need for additional dialysis stations in the service area.
All of the agencies which have reviewed petitioner's proposal have agreed that the application should be denied. These include the HSA Staff, the HSA Project Review Committee, the HSA Board of Directors, the Kidney Disease Committee, the HRS Office of Community Medical Facilities and Network 19. While the Network 19 projections of need for the area differ from the respondent's testimony, respondent is no way bound by these projections from Network 19. Also, the testimony illustrates that the method of projecting need employed by the Network differs from that employed by respondent in reviewing end-stage renal disease facility proposals.
Petitioner not only failed to sustain his burden of showing a need for additional dialysis stations in the service area, it also failed to demonstrate that the figures used by respondent or the HSA were in any manner erroneous. While petitioner questioned some of the figures and information utilized, petitioner did not submit any figures or projections of its own. Absent such a demonstration of error, the undersigned must conclude that there is presently no need for additional facilities in Dade County. While petitioner's proposal to offer self-care stations and a reduced cost per treatment is innovative and laudable, these matters cannot be considered absent a showing of need for additional dialysis stations.
RECOMMENDATION
Based upon the findings of fact and conclusions of law recited above, it is recommended that the decision of the respondent to deny petitioner's proposal to establish a new ten station dialysis facility in Dade County be AFFIRMED.
DONE AND ORDERED in Tallahassee, Leon County, Florida, this 21st day of August, 1978.
DIANE D. TREMOR
Hearing Officer
Division of Administrative Hearings
530 Carlton Building Tallahassee, Florida 32304 (904) 488-9675
COPIES FURNISHED:
Bart Pelstring, Administrator Dialysis Associates, Inc.
2125 Biscayne Boulevard
Miami, Florida 33137
Eric J. Haugdahl Assistant General Counsel Department of HRS
1323 Winewood Boulevard
Suite 406
Tallahassee, Florida 32301
Mr. Art Forehand, Administrator
Office of Community Medical Facilities 1323 Winewood Boulevard
Tallahassee, Florida 32301
================================================================= AGENCY FINAL ORDER
=================================================================
STATE OF FLORIDA DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES
DIALYSIS ASSOCIATES, INC.,
Petitioner,
vs. CASE NO. 78-779
DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES, OFFICE OF COMMUNITY MEDICAL FACILITIES,
Respondent.
/
FINAL ORDER
The Florida Department of Health and Rehabilitative Services, finding the Recommended Order to be correct, hereby adopts the findings of fact and conclusions of law of the attached Recommended Order entered in this cause by Hearing Officer Diane Tremor, dated August 21, 1978, and said Order is hereby declared to be and by this Order becomes the Final Order of the Department.
ORDERED that the Petitioner's application to establish a new ten station dialysis facility in Dade County is DENIED.
DONE AND ORDERED in Tallahassee, Leon County, Florida, this 8th day of September, 1978.
WILLIAM J. PAGE, JR., Secretary
Florida Department of Health and Rehabilitative Services
COPIES FURNISHED:
Bart Pelstring, Administrator Dialysis Associates, Inc.
2125 Biscayne Boulevard
Miami, Florida 33137
Diane D. Tremor, Hearing Officer Division of Administrative Hearings
530 Carlton Building Tallahassee, Florida 32304
Mr. Art Forehand, Administrator Office of Community medical
Facilities
1323 Winewood Boulevard
Tallahassee, Florida 32301
Docket for Case No: 78-000779
Orders for Case No: 78-000779
| Issue Date |
Document |
Summary |
|
Sep. 08, 1978 |
Agency Final Order
|
|
|
Aug. 21, 1978 |
Recommended Order
|
Application for Certificate of Need (CON) for new dialysis stations should be denied because there was no need and it was not cost effective.
|
