STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

LEE MEMORIAL HOSPITAL, )

)

Petitioner, )

)

vs. ) CASE NO. 82-1659

)

DEPARTMENT OF HEALTH AND )

REHABILITATIVE SERVICES, )

)

Respondent. )

and )

) FORT MYERS COMMUNITY HOSPITAL, )

)

Intervenors. )

) FORT MYERS COMMUNITY HOSPITAL, )

)

Petitioner, )

)

vs. ) CASE NO. 83-1518

)

DEPARTMENT OF HEALTH AND ) REHABILITATIVE SERVICES, and ) LEE MEMORIAL HOSPITAL, )

)

Respondent. )

)

RECOMMENDED ORDER

This matter came on for hearing in Fort Myers, Florida, before the Division of Administrative Hearings by its duly designated Hearing Officer, Robert T. Benton, II, on September 20, 1983, and finished the following day. The Division of Administrative Hearings received the transcript of proceedings on November 7, 1983, and the parties filed proposed orders on January 3 and 6, 1984. The parties waived the time for entry of the recommended order. The parties are represented by counsel.

APPEARANCES

For Lee Memorial Ivan Wood, Esquire Hospital: Wood, Lucksinger & Epstein

One Houston Center, Suite 1600 Houston, Texas 77010

For Respondent James M. Barclay, Esquire Department of Building 2, Room 256 Health and 1317 Winewood Boulevard

Rehabilitative Tallahassee, Florida 32301 Services:

For Fort Myers David W. Mernitz, Esquire

Community Stark, Doninger, Mernitz, West & Smith Hospital: 1030 Merchants Tower, East Tower

Indianapolis, Indiana 46204

Susan S. Stockham, Esquire Law Offices of E. G. Boone Post Office Box 1596 Venice, Florida 34284

After the Department of Health and Rehabilitative Services (HRS) proposed to deny the application that Lee Memorial Hospital (Memorial) had filed, seeking a certificate of need for a cardiac catheterization laboratory, Memorial instituted formal administrative proceedings by petition for administrative hearing filed May 28, 1982. HRS granted the hearing request and forwarded the matter to the Division of Administrative Hearings for hearing, in keeping with Section 120.57, Florida Statutes.

Fort Myers Community Hospital (Community), an existing provider, filed a motion to intervene "as a full party" in opposition to Memorial's application. This motion to intervene was granted, over objection, by order entered July 27, 1982.

While the matter was pending at the Division of Administrative Hearings, HRS staff decided a certificate of need should issue to Memorial after all, and drew one up, Certificate of Need No. 2059. Community filed a petition for formal administrative hearing objecting to the grant to Memorial of a certificate of need for cardiac catheterization on May 11, 1983; and HRS forwarded the petition to the Division of Administrative Hearings, which docketed the matter as a separate case. Case No. 83-1518. A motion to consolidate Case Nos. 82-1659 and 83-1518 was granted by order entered August 8, 1983.

On April 22, 1983, after HRS staff changed position, Memorial filed a notice of voluntary dismissal in Case No. 82-1659, but this was held not to defeat Community's right to a formal hearing, by order entered May 23, 1983. Notwithstanding the pendency of these proceedings, Memorial has gone forward to open a cardiac catheterization service. By motion for supplemental relief, Community sought an order from the Hearing Officer enjoining operation of Memorial's cardiac catheterization service pending the outcome of administrative proceedings; but the motion was denied on jurisdictional grounds by order entered August 10, 1983.

STATEMENT OF THE ISSUE

At issue here is whether Memorial should be authorized to operate the cardiac catheterization service it has already initiated. The parties have stipulated that criteria specified in Section 381.494(6)(c)(5), (7), (9), (10) and (13), Florida Statutes (1983), are not in contention and that Section 381.494(6)(d)(5), Florida Statutes (1983), does not apply. Still in dispute is whether Memorial's application conforms to the criteria set out in Section 384.494(6)(c)(1), (2), (3), (4), (6), (8), (11), (12) and (6)(d)(1), (2), (3)

and (4), Florida Statutes (1983), and Rule 10-5.11(15), Florida Administrative Code.

Among the parties' posthearing submissions are proposed findings of fact.

By order entered February 3, 1984, Fort Myers Community Hospital's motion to strike DHRS' proposed findings of fact, conclusions of law and final order was denied. Proposed fact findings have been considered in preparation of the following findings of fact, and have been adopted, in substance, except where not supported by the weight of the evidence, immaterial, cumulative or subordinate.

FINDINGS OF FACT

1. Community and Memorial are in Fort Myers, Florida, about three miles apart. Since 1974, Community has offered cardiac catheterization services. Memorial instituted these proceedings in hopes of obtaining authority to establish a second cardiac catheterization service in Fort Myers.

   
   

2. Memorial already had an arteriographic radiology room and had only to spend approximately $232,835 in order to acquire a polydiagnostic-parallelogram, a cine pulse M-400 single plane system, a 35 millimeter camera, a "CMB-A Combilabor 2 Cine" film processor and a film projector. With this new equipment, Memorial has gained cardiac catheterization capability, but it is still unequipped for open heart surgery. Memorial instituted cardiac catheterization service in July of 1983.

   
   

3. Under an agreement between the hospitals, Memorial's Exhibit No. 5, cardiac patients at Memorial needing open heart surgery can be transferred to Community, once the need is apparent.

   
   

   DISTRICTS

   
   

4. In 1981, and as late as the time of the hearing, Lee, Collier, Hendry, Glades, Charlotte, Sarasota, DeSoto, Highlands, Hardee and Polk Counties comprised District 8. As of October 1, 1983, however, the district shrank to seven counties, with the shift of Highlands, Hardee and Polk Counties to District No. 6. In 1981, there were three cardiac catheterization laboratories in what was then District 8: one each at Community, Lakeland Regional Medical Center and Sarasota's Memorial Hospital. Lakeland Regional in Polk County is now in District 6.

5. Population projections for the ten counties originally in District 8 are as follows, for the years 1981, 1982, 1983, 1984 and 1985:

   
   

   1981	Total Population	Percent 0-64	Total Percent 0-64 65+		Total 65+	Percent 0-14
   CHARLOTTE	62088.0	66.146	41086.6	33.854	21019.4	12.258
   COLLIER	91456.8	80.428	73557.1	19.572	17899.7	18.464
   DESOTO	19531.2	83.715	16350.5	16.285	3180.7	21.719
   GLADES	6153.6	84.737	5214.4	15.263	939.2	22.697
   HARDEE	19663.2	88.488	17399.6	11.512	2263.6	27.396
   HENDRY	19339.2	91.255	17647.9	8.745	1691.3	28.362
   HIGHLANDS	49460.8	73.075	36143.6	26.925	13317.2	17.605
   LEE	215752.8	77.297	166770.2	22.703	48982.6	17.485
   POLK	329801.6	85.519	282043.7	14.481	47757.9	21.750
   SARASOTA	209440.8	69.897	146392.8	30.103	63048.0	13.664
   SUM OF COUNTIES DISTRICT8	1022688.0	78.470	802588.5 802508.3	21.530	220099.5 220179.7	18.389

   PROJECTION

   
   

   1982	Total Population	Percent 0-64	Total Percent 0-64 65+		Total 65+	Percent 0-14
   CHARLOTTE	65716.0	66.255	43540.2	33.745	22175.8	12.258
   COLLIER	96942.6	79.921	77477.6	20.079	19465.0	18.464
   DESOTO	20023.4	83.655	16750.5	16.345	3272.9	21.719
   GLADES	6315.2	84.177	5316.0	15.823	999.2	22.697
   HARDEE	19947.4	88.350	17623.5	11.650	2323.9	27.396
   HENDRY	20079.4	91.112	18294.8	8.888	1784.6	28.362
   HIGHLANDS	51395.6	72.509	37266.4	27.491	14129.2	17.605
   LEE	226239.6	76.941	174070.8	23.059	52168.8	17.485
   POLK	337951.2	85.350	288440.7	14.650	49510.5	21.750
   SARASOTA	216630.6	69.761	151124.0	30.239	65506.6	13.664
   SUM OF COUNTIES DISTRICT8	1061241.0	78.184	829904.3 829719.6	21.816	231336.7 231521.4	18.389

   PROJECTION

   
   

   1983	Total Population	Percent 0-64	Total Percent 0-64 65+		Total 65+	Percent 0-14
   CHARLOTTE	69344.0	66.364	46019.7	33.636	23324.3	12.258
   COLLIER	102428.4	79.414	81342.5	20.586	21085.9	18.464
   DESOTO	20515.6	83.594	17149.8	16.406	3365.8	21.719
   GLADES	6476.8	83.617	5415.7	16.383	1061.1	22.697
   HARDEE	20231.6	88.211	17846.5	11.789	2385.1	27.396
   HENDRY	20819.6	90.969	18939.5	9.031	1880.1	28.362
   HIGHLANDS	53330.4	71.942	38367.1	28.058	14963.3	17.605
   LEE	236726.4	76.585	181296.7	23.415	55429.7	17.485
   POLK	346100.8	85.180	294810.1	14.820	52190.7	21.750
   SARASOTA	223820.4	69.625	155835.7	30.375	67984.7	13.664
   SUM OF COUNTIES DISTRICT8	1099794.0	77.897	857023.3 856710.0	22.103	242770.7 243084.0	18.389

   
   

   
   

   1984	Total Population	Percent 0-64	Total Percent 0-64 65+		Total 65+	Percent 0-14
   CHARLOTTE	72972.0	66.474	48507.1	33.526	24464.9	12.258
   COLLIER	107914.2	78.907	85151.7	21.093	22762.5	18.464
   DESOTO	21007.8	83.534	17548.6	16.466	3459.2	21.719
   GLADES	6638.4	83.057	5513.7	16.945	1124.7	22.697
   HARDEE	20515.8	88.073	18068.8	11.927	2447.0	27.396
   HENDRY	21559.8	90.827	19582.1	9.173	1977.7	28.362
   HIGHLANDS	55265.2	71.376	39446.0	28.624	15819.2	17.605
   LEE	247213.2	76.229	188447.9	23.721	58765.3	17.485
   POLK	354250.4	85.011	301152.3	14.989	53098.4	21.750
   SARASOTA	231010.2	69.490	160527.9	30.510	70482.3	13.664
   SUM OF COUNTIES DISTRICT8	1138347.0	77.611	883945.6 883479.4	22.389	254401.4 254867.6	18.389

   PROJECTION

   
   

   1985	Total Population	Percent 0-64	Total Percent 0-64 65+		Total 65+	Percent 0-14
   CHARLOTTE	76600.0	66.583	51002.4	33.147	25597.6	12.258
   COLLIER	113400.0	78.400	88905.3	21.600	24494.7	18.464
   DESOTO	21500.0	83.473	17946.7	16.527	3353.3	21.719
   GLADES	6800.0	82.497	5609.8	17.503	1190.2	22.697
   HARDEE	20800.0	87.934	18290.3	12.066	2509.7	27.396
   HENDRY	22300.0	90.684	20222.5	9.316	2077.5	28.362
   HIGHLANDS	57200.0	70.809	40503.0	29.191	16997.0	17.605
   LEE	157700.0	75.873	195524.4	24.127	62175.6	17.485
   POLK	362400.0	84.842	307466.2	15.158	54933.8	21.750
   SARASOTA	238200.0	69.354	165200.5	30.646	72999.5	13.664
   SUM OF COUNTIES DISTRICT8	1176900.0	77.324	910671.1 910027.8	22.676	266228.9 266872.2	18.389

   PROJECTION

   
   

   These figures come from Community's Exhibit No. 1, as to which all parties stipulated.

   
   

   USE RATES

   
   

6. The parties also agreed that, during the calendar year 1981, cardiac catheterization procedures in the district amounted to 743 at Community, 739 at Memorial Hospital in Sarasota, and 409 at Lakeland Regional, for a total of 1891 procedures, of which 1482 occurred at cardiac catheterization laboratories still in District 8.

   
   

7. Since no cardiac catheterization laboratory in District 8 takes pediatric patients, this segment of the population must be excluded in calculating District 8 cardiac catheterization use rates. Of the total 1981 population of what was then District 8, 18.389 percent was under the age of fifteen. It follows that 834,626 persons 15 or older lived in District 8 in 1981. 1/ Dividing 1891 cardiac catheterization procedures by the adult

   population yields a 1981 use rate of 226.56854 per 100,000 persons for "old" District 8.

   
   

8. Excluding cardiac catheterization procedures performed at Lakeland Regional and excluding the population of Highlands, Hardee and Polk Counties, the 1981 use rate for what has become District 8 can be calculated by dividing 1482 by 521526.76. This yields a use rate of 284.15666 per thousand persons resident in 1981 in the area of which District 8 is now comprised.

   
   

9. In the state as a whole, 28,497 adult cardiac catheterizations occurred in 1981. Community's Exhibit No. 2. Dividing by Florida's projected 1981 population of 10,028.317, Community's Exhibit No. 1, the statewide cardiac catheterization use rate in 1981 was 284.16532. HRS no longer uses the cardiac catheterization projections in the State Health Systems Plan.

   
   

   CALCULATIONS REQUIRED BY RULE

   
   

10. The parties have stipulated to the applicability of Rule 10-5.11(15), Florida Administrative Code, which is in evidence as Joint Exhibit No. 4, and of which official recognition has been taken. This rule prescribes multiple numerical standards. First is a minimum service volume of "300 cardiac catheterizations performed annually . . . within three years . . . [of] initiation of service." Rule 10-5.11(15)(i)(4), Florida Administrative Code. Without a need for catheterization services, no applicant could meet this requirement but the minimum service volume requirement is designed to ensure that the technicians do their work often enough to remain proficient and is not, strictly speaking, a need criterion. It is clear from the evidence that Memorial can meet this minimum service volume requirement. Fifty or sixty procedures had already occurred at the Memorial laboratory by the time of the hearing.

    
    

11. The other arithmetic calculations called for by the cardiac catheterization rule relate specifically to need. Because 1983 is the year in which Memorial initiated cardiac catheterization services, Rule 10-5.11(15)(1), Florida Administrative Code, requires that the number of cardiac catheterization procedures in the service area "Nx" be calculated for 1983. The rule specifies that this is to be accomplished by multiplying the 1981 use rate by the 1983 population. For purposes of the rule, the pertinent 1983 population is the adult population of present District 8, which, based on Community's Exhibit No. 1, amounts to 568,097 persons.

    
    

12. Whether the statewide use rate or the use rate prevailing in what has become District 8 is used, the result is virtually identical. Multiplying by the 1981 use rate calculated with reference to the territory that is now District 8 yields 1614.3365 procedures in 1983. Multiplying by the 1981 use rate for Florida statewide yields 1614.3346. Multiplying by the 1981 use rate for what was then District 8 yields 1287.126, but this number cannot be said to relate to the population to be served in District 8 as it is presently constituted. For purposes of Rule 10-5.11(15)(1), Florida Administrative Code, therefore, "Nx" equals 1614.

    
    

13. Rule 10-5.11(15)(o), Florida Administrative Code, requires that "Nx" be divided by the number of "existing and approved laboratories performing adult procedures in the service area." Memorial's program has never received final approval, even though it is in fact operating and therefore "existing" within the meaning of the rule. Since Community and Sarasota's Memorial also have existing programs, the rule requires that 1614 be divided by three, yielding 538

    as the average number of procedures per laboratory per year. Rule 10- 5.11(15)(o)(1), Florida Administrative Code, provides that there

    
    

    shall be no additional adult cardiac catheterization laboratories established in a service area unless:

    1. The average number of catheterizations performed per year by existing and approved laboratories performing adult procedures in the service area is greater than 600. . . .

       
       

       No party contends that Memorial's application meets this rule criterion. All agree that three is the appropriate divisor.

       
       

14. Nor is there any justification for adding the minimum service volume

    (300) to the need for cardiac catheterizations (1614) which the rule establishes for District 8. The rule treats the 300 as a subset of the 1614 total.

    
    

    COMMUNITY'S LABORATORY UNDERUTILIZED

    
    

15. During the period January 3 to June 30, 1983, the cardiac catheterization laboratory at Community performed 517 catheterizations 2/ for an average of 4.34 procedures per day the laboratory was open. The cardiologists schedule their own procedures, by asking their office staff to arrange times with the Community employee who keeps the appointment book for the laboratory. Tuesday is most popular. During the period from January 3 to June 30, 1983, an average of 4.75 cardiac catheterizations occurred on Tuesdays in Community's laboratory. Wednesdays and Thursdays saw comparable, although lower utilization, but the average number of procedures dropped to 4.08 for Mondays and to 3.74 for Fridays. As a rule, cardiologists in Fort Myers do not perform these procedures on weekends.

    
    

16. The cardiac catheterization laboratory at Community can handle five procedures a day comfortably. A single crew of technicians occasionally did seven cases a day, but this involved working overtime. The laboratory normally in operation no earlier than eight in the morning and no later than two or three in the afternoon. The average case takes an hour and fifteen minutes or so. When manipulation of the catheter beyond a heart valve proves exceptionally difficult, a case may take as long as two and a half hours.

    
    

17. Without adding staff or lengthening its hours or changing its methods, the Community laboratory easily has the capacity to perform 25 cardiac catheterization procedures a week or 108 a month. In no month has this number been exceeded. In only one was it approached. On the basis of a 50 week year, 1250 procedures can be done without changing anything other than physicians' schedules on Mondays and Fridays. In 1982, Community performed only 806 procedures. The laboratory at Community has substantial unused capacity.

    
    

18. Changes short of increasing hours of operation could increase the laboratory's capacity drastically. Of the time expended in a normal cardiac catheterization at Community, only 15 to 20 minutes actually entails use of specialized laboratory equipment. Preparing the patient for catheterization and administering post-catheterization care need not take place inside the laboratory proper. Experience in Florida has taught that moving pre- and post- care outside the laboratory itself makes seven or eight cases a day possible without going beyond two in the afternoon.

19. Changes that would not require a certificate of need could increase Community laboratory's capacity substantially. There are eight cardiologists in the Fort Myers area, all of whom are on staff both at Community and at Memorial, and one possibility would be adding a second shift, or a sixth or seventh day. Either of these steps might entail adding not only catheterization technicians but also additional personnel for ancillary services, however.

    
    

20. There is talk of introducing coronary transluminal angioplasty at Community, which would increase the demands on the laboratory, by some ten percent. (Approximately five percent of cardiac catheterization patients are candidates for coronary transluminal angioplasty and this procedure takes twice as long as the ordinary catheterization, on average.) Changes at Community's laboratory not requiring a certificate of need could readily offset any such an increase in utilization.

    
    

    EMERGENCY CATHETERIZATIONS

    
    

21. A cardiac catheterization constitutes emergency therapy when, in order to restore normal blood flow, the catheter is used to introduce streptokinase, an enzyme that dissolves blood clots. Streptokinase may be injected intravenously so that it reaches a blockage at the desired strength, but there is a risk of untoward side effects. Use of the catheter permits local application of the enzyme to a blood clot blocking an artery. Neither of the cardiac catheterization laboratories in Fort Myers has ever administered streptokinase through a catheter, however.

    
    

22. When a patient is admitted to hospital complaining of chest pains, and other tests do not indicate otherwise, cardiac catheterization may be appropriate, before the patient leaves the hospital. Once or twice, when there was an equipment failure at the Community laboratory, patients in this category had to be discharged and readmitted in order to be catheterized.

    
    

23. On about ten occasions in the course of a year patients admitted with severe chest pains had to wait more than 12 hours for the laboratory to be free and in some of these cases the wait exceeded 24 hours. By comparison, the laboratory is idle for much longer periods weekends. Between two o'clock Friday afternoon and eight o'clock Monday morning, there are of course 66 hours; and there was no evidence of any use of the Community cardiac catheterization laboratory on weekends in recent times.

    
    

    CONTINUITY OF CARE

    
    

24. About forty percent of the patients who are catheterized are deemed appropriate candidates for open heart surgery. Since Memorial does not have open heart surgery capability, patients must be transferred by ambulance to Community, in emergency situations. Otherwise they are discharged from Memorial and later enter Community or another hospital where open heart surgery is performed.

    
    

    EQUIPMENT COMPARABLE

    
    

25. Nobody questions the adequacy of Community's laboratory. Memorial and Community offer identical cardiac catheterization services and each has all the equipment necessary to perform the services offered. Both Memorial and Community have digital vascular imaging equipment, but Community's vascular imaging equipment is not available for cardiac catheterization procedures. It is used in connection with other radiological techniques and is located

    elsewhere in the hospital. Since Memorial does cardiac catheterization in its radiology room, its digital vascular imaging equipment is available for cardiac catheterizations. Memorial cannot get more precise images with its equipment, but computer enhancement does allow precise images to be obtained with the use of less dye. According to uncontroverted testimony, however, the difference in the amount of dye is not large enough to affect the risk "as regards [anaphylactic] type reactions" (T. 403) to the dye.

    
    

26. Memorial also has a U-arm apparatus that Community does not have. This facilitates taking pictures from different angles, but increased facility in this regard is only important in the performance of angioplasty procedures, which Memorial does not offer. Pursuant to Rule 10-11.5(15)(i)(5)(b), Florida Administrative Code, Memorial cannot offer coronary angioplasty because, unlike Community, it does not have facilities for open heart surgery.

    
    

    FINANCES

    
    

27. Memorial's charges for a routine left heart catheterization exceed Community's charges for the same procedure by half, and are about 25 percent higher than average in the country. Memorial's charges exceed Community's for all catheterization procedures.

    
    

28. There was no showing that anybody has ever been denied a cardiac catheterization at Community for inability to pay. The evidence suggested that this is more to the credit of the medical staff than to Community's administration, however.

    
    

29. Memorial obviously had money available to finance initiation of its cardiac catheterization service, and might even make money on the service after a couple of years, if allowed to continue. It is losing money now, at least if its catheterization service is viewed apart from the "spinoff."

    
    

30. One effect of permitting Memorial to operate a duplicative cardiac catheterization service in Fort Myers would be to divert revenues Community would otherwise have received to Memorial. Not only revenues for the catheterization procedures themselves, but also revenues attributable to the use of hospital rooms and other hospital services would be diverted, making the resulting marginal profit available to subsidize medical care at Memorial for which full charges go unpaid.

    
    

31. Memorial has a high charity load and about double the proportion of medicaid patients that Community has. This undoubtedly contributes to making Memorial's charges in many categories among the very highest in the state.

    
    

32. Community realizes profits of about $3,500,000 annually and could, at least theoretically, absorb the drop in profit that would attend its loss of revenue, without raising charges.

    
    

33. But the fact remains that the cost of medical care to the community has increased because of Memorial's higher charges for identical services. In this case, competition increases rather than decreases total charges, as well as costs. The community could expect to pay more for catheterization services in the future if there are two laboratories in Fort Myers.

    MANPOWER

    
    

34. Memorial hired its chief cardiac technician away from Community, which was still seeking a replacement at the time of the hearing. There is every reason to believe that enough staff can be obtained to man both laboratories, but it is the duplication of these salaries, more than the relatively insignificant duplication of capital costs, that makes two cardiac laboratories in Fort Myers a wasteful proposition at present.

    
    

    CONCLUSIONS OF LAW

    
    

35. As the applicant for a certificate of need, Memorial has the burden to establish that its application meets all criteria in issue. In their prehearing stipulation, the parties agreed that criteria set out in Section 381.494(6)(c)(5), (7), (9), (10) and (13), Florida Statutes (1983), are not in issue, and that Section 391.494(6)(d)(5), Florida Statutes (1983), does not apply. Still disputed is whether Memorial's application complies with the following statutory criteria:

    
    

    1. The need for the health care facilities and services and hospices being proposed in relation tot he applicable district 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 hospices in the services and hospices in the service district of the applicant.

    3. The ability of the applicant to provide quality care.

    4. The availability and adequacy of other health care facilities and services and hospices in the service district of the applicant, such as outpatient care and ambulatory or home care services, which may serve as alternatives for the health care facilities and services to be provided by the applicant.

    * * *

    6. The need in the service district of the applicant for special equipment and services which are not reasonably and economically accessible in adjoining areas.

    * * *

    8. The availability of resources, including health manpower, management personnel, and funds for capital and operating expenditures, for project accomplishment and operation; the effects the project will have on clinical needs of health professional training

    programs in the service district; the extent to which the services will be accessible to schools for health professions in the service

    district for training purposes if such services are available in a limited number of facilities; the availability of alternative uses of such resources for the provision of other health services; and the extent to which the proposed services will be accessible to all residents of the service district.

    * * *

    1. The needs and circumstances of those entities which provide a substantial portion of their services or resources, or both, to individuals not residing in the service district in which the entities are located or in adjacent service districts. Such entities may include medical and other health professions, schools, multidisciplinary clinics, and specialty services such as open heart surgery, radiation therapy, and renal transplantation.

    2. The probable impact of the proposed project on the costs of providing health services proposed by the applicant, upon consideration of factors including, but not limited to, the effects of competition on the supply of health services being proposed and the improvements or innovations in the financing and delivery of health services which foster competition and service to promote quality assurance and cost- effectiveness.

    * * *

    1. In cases of capital expenditure proposals for the provision of new health services to inpatients, the department shall also reference each of the following in its findings of fact:

       1. That less costly, more efficient, or more appropriate alternatives to such inpatient services are not available and the

          development of such alternatives has been studied and found not practicable.

       2. That existing inpatient facilities providing inpatient services similar to those proposed are being used in an appropriate and efficient manner.

       3. In the case of new construction, that alternatives to new construction, for example, modernization or sharing arrangements, have been considered and have been implemented to the maximum extent practicable.

       4. That patients will experience serious problems in obtaining inpatient care of the type proposed, in the absence of the proposed new service.

       Section 381.494(6)(c) and (d), Florida Statutes (1983).

       
       

       Also at issue is whether Memorial's application meets the requirements set out in Rule 10-5.11(15), Florida Administrative Code, which provides in part:

       
       

    2. Service Area. Service area means an HRS service district.

    * * *

    (h) Service Accessibility

    1. Travel Time. Cardiac catheterization shall be available within a maximum automobile travel time of 2 hours, under average travel conditions, for at lest 90% of a service area's population.

    2. Hours of Operation. Every cardiac catheterization laboratory shall have the capability of rapid mobilization of the study team for emergency procedures 24 hours a day,

       7 days a week. Applicants for cardiac catheterization laboratories shall document the manner in which they will meet this requirement.

    3. Underserved population Groups. Cardiac catheterization shall be available to all persons in need. A patient's eligibility for cardiac catheterization shall be independent of the ability to pay. Cardiac catheterization services shall be available in each service area to Medicare, Medicaid and indigent patients in need.

       (i) Service Quality.

       * * *

    4. Minimum Service Volume. In order to assure quality of service, there shall be a minimum of 300 cardiac catheterizations performed annually in any adult cardiac catheterizations performed annually in any laboratory performing pediatric cardiac catheterizations, within three years following its initiation of service. Applicants for either of these services must document that proposed laboratories can meet these minimum volume requirements.

    5. Coordination of Services.

    1. Cardiac catheterization laboratories proposed in a facility not performing heart surgery must submit, at the time of certificate of need application, a written referral agreement with a facility providing open heart surgery services which is within

       30 minutes' travel time by emergency vehicle under average travel conditions.

    2. Cardiac catheterization laboratories where coronary angioplasty is performed must be located in health care facilities which also provide open heart surgery.

    * * *

    (1) Need Determination. The need for cardiac catheterization capacity in a service area shall be determined by computing the projected number of cardiac catheterization procedures in the service are. The following formula shall be used in this determination:

    
    

    Nx = Uc x Px Where:

    Nx = Number of catheterization procedures projected to be delivered in Year X;

    Uc = 1981 use rate (number of procedures per hundred thousand population) in the service area;

    Px = Projected population in the service area in Year X; and,

    Year X= The year in which the proposed cardiac catheterization laboratory would initiate service, but not more than two years into the future.

    * * *

    1. In any service area with no cardiac catheterization laboratories, the statewide use rate will be employed in determining the need for cardiac catheterization service.

    2. 1. There shall be no additional adult cardiac catheterization laboratories established in a service area unless:

    a. The average number of catheterizations performed per year by existing and approved laboratories performing adult procedures in their service area is grater than 600; and

    (b) The conditions specified in (i) 4., above, will be met by the proposed laboratory.

    * * *

    3. Applications proposing to establish cardiac catheterization laboratories will not be approved if they would reduce the average volume of procedures performed by laboratories in the service area below 600 adult procedures and 275 pediatric procedures, based on projected need in the service area.

    
    

    There has been no challenge to Rule 10-5.11(15), Florida Administrative Code, which, as the parties stipulated, applies in the present case.

    
    

36. There was no showing that anybody in District 8, as presently constituted, is more than two hours from an existing cardiac catheterization laboratory. Because Memorial initiated its catheterization service in 1983, "Year X" is 1983, not 1985 as Memorial contends. (If 1985 were used, there still would not be an average of 600 procedures per facility, according to Memorial's own calculations.) The evidence failed to show a need, under the statute or the rule, for a new cardiac catheterization service three miles from an existing laboratory.

37. Community's laboratory is adequate to meet the needs for the period specified by the rule. There was no showing that "patients will experience serious problems in obtaining," Section 381.494(a)(d)(4), Florida Statutes (1983), cardiac catheterization services in Fort Myers without a second laboratory. Alternatives to a new facility have not "been implemented to the maximum extent practicable," Section 381.494(6)(d)(3), Florida Statutes (1983), and, indeed, are not needed at present.

    
    

38. For all practical purposes, Memorial's cardiac catheterization services are identical to those at Community, except that they are less numerous and more expensive. Because Memorial does not have open heart surgery capability, any tendency for Memorial's catheterization laboratory in Fort Myers to improve quality of care must necessarily be limited in effect. Competition is ongoing and petitioner proved no improvements in serve as a result.

    
    

39. Memorial's application seeks approval for the duplication of specialized facilities that are already available in close proximity. The inevitable result would be continued and unnecessary additional expense to those who bear the costs of the service, with virtually no offsetting benefit within the purview of rule or statute.

RECOMMENDATION

Upon consideration of the foregoing, it is RECOMMENDED that the Department of Health and Rehabilitative Services deny Memorial's application for a certificate of need for a new catheterization service.

DONE AND ENTERED this 29th day of August 1984 in Tallahassee, Florida.

ROBERT T. BENTON, II

Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 29th day of August 1984.

ENDNOTES

1/ This number does not jibe precisely with every figure in Community's Exhibit No. 1, which does not seem to be internally consistent.

2/ Because winter is much busier than other seasons, it is inappropriate to annualize by doubling this figure.

COPIES FURNISHED:

Ivan Wood, Esquire

Wood, Lucksinger & Epstein

One Houston Center, Suite 1600 Houston, Texas 77010

James M. Barclay, Esquire Department of HRS Building 2, Room 256

1317 Winewood Boulevard

Tallahassee, Florida 32301

David W. Mernitz, Esquire

Stark, Doninger, Mernitz, West & Smith 1030 Merchants Tower, East Tower Indianapolis, Indiana 46204

Susan S. Stockham, Esquire Law Offices of E. G. Boone Post Office Box 1596 Venice, Florida 34284

David Pingree, Secretary Department of HRS

1323 Winewood Boulevard

Tallahassee, Florida 32301

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

AGENCY FINAL ORDER

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

STATE OF FLORIDA

DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES

LEE MEMORIAL HOSPITAL, )

)

Petitioner, )

)

vs. ) CASE NO. 82-1659

)

DEPARTMENT OF HEALTH AND )

REHABILITATIVE SERVICES, )

)

Respondent, )

and )

) FORT MYERS COMMUNITY HOSPITAL, )

)

Intervenor. )

) FORT MYERS COMMUNITY HOSPITAL, )

)

Petitioner, )

)

vs. ) CASE NO. 83-1518

)

DEPARTMENT OF HEALTH AND )

REHABILITATIVE SERVICES, )

)

Respondent. )

)

FINAL ORDER

This cause came on before me for the purpose of issuing a final agency order. The Hearing Officer assigned by the Division of Administrative Hearings (DOAH) has submitted a Recommended Order to the Department of Health and Rehabilitative Services (HRS). A copy of that Recommended Order is attached hereto.

1. Memorial, meaning Lee Memorial Hospital, filed Exceptions to the Recommended Order. A copy of Memorial's Exceptions is attached hereto as Exhibit A. Fort Myers Community Hospital filed a Motion to Strike Memorial's Exceptions. A copy of the Motion is attached hereto as Exhibit A(1).

   
   

2. PDCF, meaning the HRS Office of Community Medical Facilities, filed Exceptions to the Recommended Order. A copy of PDCF's Exceptions is attached hereto as Exhibit B.

(AA) Memorial's Exceptions - These are acknowledged but no ruling thereon is provided. The Motion to Strike is likewise recognized but a ruling thereon is unnecessary. See the ruling on PDCF's Exceptions.

(BB) PDCF's Exceptions - The Exceptions are sustained. Exception (2), which explains that 2.69 is correctly rounded off to 3, is clear and correct. For all practical purposes, the outcome of this case is determined by Exception 2.

FINDINGS OF FACT

The Department hereby adopts and incorporates by reference the findings of fact made by the Hearing Officer.

CONCLUSIONS OF LAW

The overall conclusion of law stated by the Hearing Officer is rejected.

The conclusion amounts to an erroneous or otherwise inappropriate interpretation and application of Rule 10-5.11(15), Florida Administrative Code (FAC). The correct interpretation and application, which compel a different result, are set out in the Exceptions filed by PDCF and the HRS Ruling thereon.

It is ADJUDGED that the application for a certificate of need submitted by Lee Memorial Hospital to operate a cardiac catheterization laboratory is APPROVED.

ORDERED this 19th day of November, 1984, in Tallahassee, Florida.

DAVID H. PINGREE

Secretary

A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO JUDICIAL REVIEW WHICH SHALL BE INSTITUTED BY FILING ONE COPY OF A NOTICE OF APPEAL WITH THE AGENCY CLERK OF HRS, AND A SECOND COPY, ALONG WITH FILING FEE AS PRESCRIBED BY LAW, WITH THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE THE AGENCY MAINTAINS ITS HEADQUARTERS OR WHERE A PARTY RESIDES. REVIEW PROCEEDINGS SHALL BE CONDUCTED IN ACCORDANCE WITH THE FLORIDA APPELLATE RULES.

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a copy of the foregoing was sent to the following named people by United States Mail, at 3:30 p.m. o'clock, this 20th day of November, 1984.

LESLEY MENDELSON, Agency Clerk Department of Health and

Rehabilitative Services 1323 Winewood Boulevard

Building 1, Room 407

Tallahassee, Florida 32301 904/488-2381

COPIES FURNISHED:

Ivan Wood, Esquire One Houston Center Suite 1060

Houston, Texas 77010

James M. Barclay, Esquire and Jay Adams, Esquire

Department of HRS

1323 Winewood Boulevard

Building 1, Room 407

Tallahassee, Florida 32301

David W. Mermitz, Esquire

1030 Merchants Tower, East Tower Indianapolis, Indiana 46204

Susan S. Stockham, Esquire

E. G. Boone, P.A.

Post Office Box 1596

Venice, Florida 34284

Robert T. Benton, II, Hearing Officer Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

Wayne McDaniels, PDDHD Department of HRS

1321 Winewood Boulevard

Tallahassee, Florida 32301

Docket for Case No: 82-001659CON

Orders for Case No: 82-001659CON