STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DIALYSIS CENTER OF BROWARD )

COUNTY, )

)

Petitioner, )

)

vs. ) CASE NO. 80-320

)

DEPARTMENT OF HEALTH AND )

REHABILITATIVE SERVICES, )

)

Respondent, )

) PLANTATION ARTIFICIAL KIDNEY ) CENTER, INC., )

)

Intervenor. )

)

RECOMMENDED ORDER

This matter came on for hearing in Tallahassee, Florida, before the Division of Administrative Hearings by its duly designated Hearing Officer, Robert T. Benton, II, on April 28, 1981. The Division of Administrative Hearings received the transcript of proceedings on June 9, 1981. The parties were represented by counsel:

APPEARANCES

For Petitioner: Guyte P. McCord, III, Esquire

Cynthia S. Tunnicliff, Esquire Suite 550, Barnett Bank Building Post Office Box 82

Tallahassee, Florida 32302

For Respondent: Eric J. Haugdahl, Esquire

1317 Winewood Boulevard

Tallahassee, Florida 32301

For Intervenor: Richard Baron, Esquire

444 Brickell Avenue. Suite 500 Miami, Florida 33131

By letter dated January 29, 1980, respondent gave notice of its intent to deny petitioner's application for a certificate of need "because a similar proposal under concurrent review ha[d] been found to be a superior and more appropriate method of providing E[nd] S[tage] R[enal] D[isease] services in the proposed service area. At one point in these proceedings a successful applicant, Leslie S. Schreiber d/b/a Nephrology Associates (Nephrology Associates), appeared as a correspondent. Thereafter Nephrology Associates filed a motion to dismiss and petitioner filed a notice of dismissal of party, purporting to dismiss Nephrology Associates as a party; and, on September 25,

1980, an order dismissing Nephrology Associates as a party was entered because "all parties agree[d] to the dismissal.

ISSUE

Whether respondent should grant petitioner's application for a certificate of need for a ten-station chronic hemodialysis center in Broward County?

FINDINGS OF FACT

1. At the time petitioner's application was originally submitted, an unmet need for hemodialysis facilities appeared to exist in Broward County. The project review committee and the board of directors of the Health planning and Development Council for Broward County, Inc., recommended denial of petitioner's application and of all applications for new facilities, however. Competing applicants seeking to expand and establish a satellite were awarded certificates of need because their personnel had proven track records. Petitioner's application was tentatively denied, not because it was deficient, but because competing applications were deemed stronger. With the approval and addition of hemodialysis units since that time, Broward County has become saturated with dialysis centers, and now has significant excess capacity.

   
   

2. As of January 1, 1981, there were eight dialysis centers in Broward County, which is coterminous with the jurisdiction of the Health Systems Agency for respondent's District VIII, the Health Planning and Development Council for Broward County, Inc. These eight dialysis facilities had, in the aggregate, 125 approved stations, as of January 1, 1981. Five free-standing stations have since been approved for Plantation Artificial Kidney Center. Respondent's Exhibit No. 3. Countywide, the 125 hemodialysis stations then existing had a utilization rate of 67 percent in January and February of 1981, winter months in which Broward County experiences an influx of seasonal residents. On January 31, 1981, there were 29 seasonal hemodialysis patients in Broward County and, on February 28, 1981, there were 38. Respondent's Exhibit No. 1. Broward County has a population of approximately one million persons.

   
   

3. Using the formula prescribed in respondent's rules, Florida End Stage Renal Disease Network 19 projected that 353 patients would require in-center dialysis in 1980, while in fact only 339 patients required dialysis outside their homes. This need could have been met with 106 stations, on the basis of

   3.2 patients per station, instead of the 125 stations that existed in Broward County in fact in 1980. For December of 1981, the projection is that 349 patients will require 109 stations; for December of 1982, it is projected that

   359 patients will require 112 stations; and for December of 1983, it is projected that 371 patients will require 116 stations, on the basis of 3.2 patients per station. Respondent's Exhibit No. 3.

   
   

4. Customarily, dialysis centers are open for business six days a week, with each machine available for two shifts daily. Dialysis usually entails three sessions weekly for the patient so that, if fully utilized, one machine could service four patients. Approximately ten hemodialysis stations in Broward County are set aside for patients with hepatitis positive antigens. These isolation stations are not ordinarily fully utilized. On this account and because of seasonal changes in the numbers of hemodialysis patients in Broward County, the health systems plan looks to an 80 percent utilization rate (on the basis of two shifts a day, even though the machines could he used for three shifts daily in an emergency). This utilization rate translates into 3.2 patients per machine. Another objective of the health system plan is that 95

   percent of patients be within 30 minutes of a hemodialysis center. The annual implementation plan calls for 132 stations by December of 1982, without adding any new centers.

   
   

5. Dialysis patients in south Florida are older than dialysis patients in north Florida, on the average. Most dialysis patients in Broward County are more than 50 years old. In 1978, Broward County's increase in patients with end stage renal disease was the highest among [Florida's] HSA areas. Petitioner's Exhibit No. 4. Historically, Broward County has had the highest acquisition rate in Florida, although the rate has fallen recently. In 1978, the acquisition rate in Broward County was approximately 138 per million population. By 1980, it had dropped to 119 per million persons. The state average for 1980 was between 105 and 110 per million. In September of 1979, 122 of the 305 persons receiving chronic hemodialysis treatments in Broward County came from Dade County and ten postal zones in the south end of Broward County. Petitioner's Exhibit No. 5. Residential growth in Broward County is occurring principally in the western part of the county.

   
   

6. Petitioner proposes to build a ten-station hemodialysis facility at 4175 Southwest 84th Street, in Davie, Broward County, Florida. Dr. Herold, a nephrologist, would refer patients to petitioner's facility, if it is built, and if the South Broward Artificial Kidney Center fills up. Although not an expert in making such projections, Dr. Herold "would say ten [of his] patients, as a guesstimate, Deposition, p. 6, would be referred to petitioner's proposed facility annually. Dr. Zeig, another nephrologist, said three of his patients were in imminent need of dialysis, as were six patients of a former associate of his, a Dr. Levinson. Dr. Zeig testified that he would refer his patients, "upwards of eight to ten . . . in the coming year," Deposition, p. 10, to petitioner's facility, if built. In his deposition, Dr. Rose testified on April 20, 1981, that he could refer "in the range of five to maybe seven" patients to the proposed facility within "the next year." These projected patients are among the 122 persons forecast to develop end stage renal disease in Broward County in 1981 or the 125 expected to be afflicted in 1982. Respondent's Exhibit No. 3. Petitioner projects that the proposed facility could break even with eight patients. Medicare pays for about 95 percent of renal dialysis treatments, nationally.

   
   

7. Three or four dialysis centers are within 20 minutes driving time of the site petitioner proposes. The proposed facility would be approximately six miles from Plantation Artificial Kidney Center (15 approved stations 80 percent utilized as of February 28, 1981), and only three or four miles from the Nephrology Associates' satellite facility in Pembroke Pines (four approved stations 44 percent utilized as of February 28, 1981). Located in Broward County south and east of petitioner's proposed facility are South Broward Artificial Kidney Center in Hollywood (30 approved stations 80 percent utilized as of February 28, 1981) and Nephrology Associates' main facility, which is also in Hollywood (10 approved stations 65 percent utilized as of February 28, 1981). Petitioner's Exhibit No. 5; Respondent's Exhibit No. 1. Petitioner's facility would be next north of the southernmost of what would be five hemodialysis centers in the western part of Broward County.

   
   

8. Petitioner proposes to offer patients "free" transportation to and from the proposed facility. At present, only one hemodialysis facility in Broward County, Plantation Artificial Kidney Center, provides transportation for patients. There was testimony, however, that Broward County would provide transportation "through coordination with each of the dialysis facilities, if needed." Block Deposition, p. 19.

9. Some patients requiring dialysis perform dialysis themselves at home. This practice is likely to increase significantly as a result of recent advances in continuous ambulatory peritoneal dialysis techniques. Projections that 35 persons in Broward County would elect this method of dialysis in 1981, 30 in 1982, and 40 in 1983 were not shown to be unrealistic, even though Broward County's home dialysis rates have historically been extremely low. On February 28, 1981, 13 of the 350 hemodialysis patients in Broward County underwent dialysis at home. In 1978, there was only one such patient in Broward County. Eighty-seven hemodialysis patients or approximately 19 percent of the total in Broward County died in 1980. Half of the four attempts to transplant kidneys in Broward County failed in 1980.

   
   

10. As a practical matter: patients are likely to follow their physicians' advice about which dialysis center to go to. Dr. Herold testified that he choose[s] not to use, Deposition, p. 9, Nephrology Associates' satellite facility for some unspecified medical reason. Dr. Zeig expressed similar sentiments, but also testified that "all our patients were dialysized there, Deposition, p. 8, during the time that he himself had been associated with Nephrology Associates. Dr. Zeig also testified that he had a letter from Nephrology Associates' board of directors advising him he was unwelcome there. Dr. Rose testified that he would not refer patients to Nephrology Associates' satellite facility because of "strong feelings based on medical conditions that exist that I, too, choose not to discuss." Deposition, p. 5. There was hearsay testimony to the effect that Nephrology Associates reused chemical dialyzers, but absolutely no evidence tending to show that this was not good medical practice or that any formal complaint about Nephrology Associates had been filed anywhere on any ground. Nephrology Associates is fully certified for Medicare purposes.

    
    

11. In preparing the foregoing findings of fact, the hearing officer had the benefit of respondent's memorandum, petitioner's memorandum of law, and petitioner's proposed recommended order. To the extent petitioner's proposed findings of fact have not been adopted in substance, they have been rejected as unsupported by or contrary to the evidence; or have been deemed irrelevant.

    
    

    CONCLUSIONS OF LAW

    
    

12. At issue in these proceedings is whether a need exists for a ten- station hemodialysis center in the location proposed. Health systems agencies explicitly and respondent implicitly, see Section 381.494(7)(c), Florida Statutes (1980 Supp.), are to consider, on the question of need, all of the following:

    
    

    1. The need for the health care facil- ities and services and hospices being pro- posed in relation to the applicable health systems plan, annual implementation plan, and state health plan adopted pursuant to Title XV of the Public Health Service Act, except in emergency circumstances which

       pose a threat to the public health.

    2. The availability, quality of care, efficiency, appropriateness, accessibility, extent of utilization, and adequacy of like and existing health care services and hos- pices in the applicant's health service area.

    3. The availability and adequacy of other health care facilities and services and hospices in the applicant's health ser- vice area, such as outpatient care and ambu- latory of home care services, which may serve as alternatives for the health care facilities and services to be provided by the applicant. Section 381.494(6)(c) Florida Statutes (1980 Supp.).

       
       

13. With respect to hemodialysis facilities, the following applies:

    
    

    1. The base period for determining the need for a proposed chronic renal dial-

       ysis facility is one year from the date that the application is deemed complete by the Department. Factors which must be incorpo- rated in the procedure for determining the need for a chronic renal dialysis facility include:

       1. The most recent available monthly census of the number of patients receiving chronic dialysis services in the service area.

       2. Data on the annual patient acquisi- tion rate (new ESRD patients per million population) for the service area for at

          least the preceding calendar year or more than one year if available.

       3. Data on the number of successful and unsuccessful transplant operations per- formed for the service area for at least the preceding calendar year or more than one year if available.

       4. Data on the ESRD patient mortality rate (ESRD patient deaths/ESRD patient popu- lation) for the service area for at least the preceding calendar year or more than

          one year if available.

    2. The following procedure will be utilized for determining the need for a proposed chronic renal dialysis facility;

       1. Current ESRD patients by census for service area

          • ESRD patients on hemodialysis

            + New ESRD patients per one million population for one year (based on experi- ence and on population projections obtained from the Bureau of Economy and Business Research, University of Florida, for the service area)

          • Projected number of ESRD patients to receive home dialysis training

          • Number of ESRD patients receiving transplant operations for one year (based on experience for the service area)

          • Number of unsuccessful transplants

            for one year (based on experience for the service area)

          • ESRD patient mortality for one year (mortality rate based on experience for ser- vice area applied to the sub-total of pre- vious calculations)

          + 10 percent of current and projected ESRD patients on home dialysis (predicated on periodic facility utilization)

          = number of patients requiring chronic dialysis services for one year in the ser- vice area

       2. The application of a station util- ization factor to the determined number of patients requiring chronic dialysis services in the service area yields the number of chronic dialysis stations needed. Compar- ison of the number of stations needed with the number of existing stations for the ser- vice area yields the net number of stations needed which is compared to the number of stations proposed in an application for a new chronic dialysis facility. A utiliza-

    tion factor of 80 percent is applicable to all stations providing chronic maintenance services in freestanding or hospital based setting,

    when 100 percent utilization is 4.0 patients per station for a 2 shift, 8 days per week opera- tion. The operation of 3 shifts by an exist- ing chronic dialysis facility in a service

    area shall not be considered in determining the need for additional dialysis stations.

    
    

    Petitioner has the burden to demonstrate need in accordance with the foregoing criteria.

    
    

14. Petitioner sought to meet this burden by urging that the southwest sector of Broward County be considered in isolation from the rest of the county, and by arguing that the idle hemodialysis machines in that part of the county were, in some unspecified way, medically inadequate. No competent evidence established, however, where any of the patients reside whom Drs. Herold, Zeig, Levinson, or Rose might refer to petitioner's proposed facility. Nor did petitioner succeed in establishing that there was anything amiss with the care Nephrology Associates makes available to end stage renal disease patients. For both these reasons, among others, petitioner did not carry its burden to establish a need for the proposed facility.

RECOMMENDATION

It is, accordingly, RECOMMENDED:

That respondent deny petitioner's application for certificate of need.

DONE AND ENTERED this 7th day of July, 1981, in Tallahassee, Florida.

ROBERT T. BENTON, II

Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 7th day of July, 1981.

COPIES FURNISHED:

Guyte P. McCord, III, Esquire and

Cynthia S. Tunnicliff, Esquire Post Office Box 82 Tallahassee, Florida 32302

Eric J. Haugdahl, Esquire 1317 Winewood Boulevard

Tallahassee, Florida 32301

Richard Baron, Esquire Suite 500

444 Brickell Avenue Miami, Florida 33131

=================================================================

AGENCY FINAL ORDER

=================================================================

STATE OF FLORIDA

DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES

DIALYSIS CENTER OF BROWARD COUNTY,

Petitioner,

vs. CASE NO. 80-320

DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES,

Respondent,

PLANTATION ARTIFICIAL KIDNEY CENTER, INC.,

Intervenor.

/

FINAL ORDER

The Department of Health and Rehabilitative Services hereby adopts the findings of fact and conclusions of law of the Recommended Order entered by Hearing Officer Robert T. Benton, II, dated July 7, 1981, and having reviewed the complete record and being otherwise well advised in the premises makes the following determinations concerning the Exceptions filed by Petitioner:

Exception 1. A review of the record reveals ample evidence to support the Hearing Officer's finding that Broward County has become saturated with dialysis centers. This evidence is summarized in paragraph one of page three of the Recommended order. While South Broward Artificial Kidney Center has in excess of 80 percent utilization, the Petitioner's Component Exhibit No. 9, which consists of the quarterly reports of Network Nineteen from January 1, 1980 through December 31, 1980, shows that this is not true for the other seven facilities which are underutilized. Dr. Zeig testified that patients can go to any clinic (page 10, deposition), so the unavailability of one facility does not establish a need where other underused facilities exist. There was no evidence that any other area facility was medically inadequate. The depositions of Drs. Herold, Zeig and Rose merely suggest such a possibility but offer no proof.

Indeed, the Doctors refuse to discuss the matter. The criteria to be met in establishing a need as set out in s381.494(7)(c) Florida Statutes (1980 Supp.), do not limit scrutiny to one facility within a health service area. Thus, a doctor's preference and the likelihood of his patients following that preference is irrelevant to the issue of establishing need in a service area. In this case, the service area encompasses all of Broward County.

Exception 2. In addition to the evidence of past low utilization of home dialysis, there was abundant testimony by Spero Moutsatsas supporting his projection of a significant increase in home dialysis. (Page 118-119, transcript.) The central support for this finding is the development of the continuous ambulatory peritoneal dialysis (CAPD).

Exception 3. As noted above, need is established pursuant to 381.494(7)(c), Florida Statutes, based on an entire service area not one segment of such an area. Additionally, there are two other facilities in the south county area, Nephrology Associates and its satellite, which unlike South Broward Artificial Kidney Center are not at capacity, thus negating a need for more facilities in the south Broward area even assuming this would be a statutorily appropriate criterion.

Exception 4. The only competent record testimony establishes that Nephrology Associates is fully certified for "Medicare purposes which assures the quality of care given. (Page 78, transcript.) The innuendos set forth in the depositions of Drs. Rose, Herold and Zeig do not rise to the level of competent evidence.

Exception 5. The hearing officer based his conclusion that petitioner had not carried its burden to establish a need for the proposed facility on several reasons; the only two specified were 1) a failure to show any medical inadequacy

of the underutilized facilities in the southern part of Broward and 2) a failure to show the residences of the patients of Drs. Herold, Zeig, Levinson and Rose. The hearing officer was viewing the legal criteria in a light most favorable to the petitioner and using the legal arguments set forth by petitioner. There is no error in using this approach. Because of this form of analysis the hearing officer noted the absence of any evidence of patients' residence location.

Petitioner's argument which restricts the area under study to south Broward would lead to the necessity of showing that patients of Drs. Rose, Zeig and Herold reside in that sub-service area. If patient residence was outside the sub-area, another facility would be more convenient for the patient in light of the need to be dialyzed three times a week. It is the number of patients who require dialysis in a given area not the doctor's personal preference for a facility which determines need. See 331.494(7)(c) Florida Statutes.

THEREFORE, IT IS ORDERED AND ADJUDICATED that the Department's denial of a Certificate of Need for a ten station chronic dialysis center is approved.

DONE AND ORDERED this 10th day of August, 1981.

Alvin J. Taylor Secretary

Department of Health and Rehabilitative Services

1321 Winewood Boulevard

Tallahassee, Florida 32301

(904) 488-7721

COPIES FURNISHED:

Guyte P. McCord, III, Esquire and

Cynthia S. Tunnicliff, Esquire Post Office Box 92 Tallahassee, Florida 32303

Eric J. Haugdahl, Esquire 1317 Winewood Boulevard

Tallahassee, Florida 32301

Richard Baron, Esquire Suite 500

444 Brickell Avenue Miami, Florida 33131

Robert T. Benton, II Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

Gary J. Clarke

Deputy Assistant Secretary

for Health Planning & Development

Department of Health & Rehabilitative Services

1321 Winewood Boulevard

Tallahassee, Florida 32301

Docket for Case No: 80-000320

Orders for Case No: 80-000320