STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
SOUTH MIAMI HOSPITAL, )
)
Petitioner, )
)
vs. ) CASE NO. 84-0769RX
)
DEPARTMENT OF HEALTH AND )
REHABILITATIVE SERVICES, )
)
Respondent. )
and )
)
MERCY HOSPITAL, INC., and ) BAPTIST HOSPITAL OF MIAMI, INC., )
)
Intervenors. )
)
) SOUTH MIAMI HOSPITAL, )
)
Petitioner )
) CASE NO. 85-1792RP
vs. )
)
DEPARTMENT OF HEALTH AND )
REHABILITATIVE SERVICES, )
)
Respondent. )
)
FINAL ORDER
These two rule challenges were consolidated with DOAH case number 83-3627, which is a section 120.57(1), Fla. Stat., proceeding concerning the denial to the Petitioner, South Miami Hospital, of certificate of need 2682 for radiation therapy services. The final hearing was bifurcated, with the hearing in case number 83-3627 held in Miami, Florida on November 15 and 16, 1984, and the hearing on the two rule challenge cases held on July 8, 1985, in Miami, Florida and on July 9, 1985, in Tallahassee, Florida. The consolidation was granted so that the record in the section 120.57(1) case would be available in the rule challenge cases. See order dated October 31, 1984.
Case number 84-0769RX is a section 120.56, Fla. Stat., challenge to existing rule 10-5.11(17), Florida Administrative Code (F.A.C.), and case number 85-1792RP is a challenge pursuant to section 120.54(4), Fla. Stat. to proposed rule 10-5.11(1)(u), F.A.C. These cases were consolidated for final hearing by order dated June 12, 1985.
Appearing for the parties in these rule challenge cases were: For South Miami Hospital, Petitioner:
Jean Laramore, Esquire
G. Stephen Pfeiffer, Esquire Laramore and Clark
325 North Calhoun Street Tallahassee, Florida 32301
For the Department of Health and Rehabilitative Services Respondent:
Jay Adams, Esquire Department of Health and Rehabilitative Services 1323 Winewood Boulevard Building One, Suite 407 Tallahassee, Florida 32301
For Mercy Hospital, Inc., Respondent:
Lewis W. Fishman, Esquire Dadeland Towers South Suite 420
9400, South Dadeland Boulevard Miami, Florida 33156
For Baptist Hospital of Miami, Inc., Respondent: Kyle R. Saxon, Esquire
Catlin, Saxon, Tuttle and Evans 800 Alfred I. duPont Building
169 East Flagler Street Miami, Florida 33131
In case 83-3627, Petitioner introduced 11 exhibits which were received into evidence, HRS has 2 exhibits in evidence, and South Miami Hospital has 1 exhibit in evidence. In case numbers 84-0769RX and 85-1792RP, Petitioner has 2 exhibits in evidence, and 1 exhibit marked only for identification. Baptist Hospital has
1 exhibit in evidence.
The transcript from case 83-3627 is in 3 volumes, and the transcript from case 84-0769RX and 84-1792RP is in 2 volumes.
Since there are two records and two sets of exhibits, the following system will be used in this order to identify the record or exhibit cited:
Case number 83-3627 (section 120.57 hearing): Record: T. .
Exhibits: Petitioner's exhibit 1.
Case numbers 84-0769RX and 35-1792RP (rule challenges): Record: TR. .
Exhibits: Petitioner's exhibit 1R.
FINDINGS OF FACT
On June 14, 1983, the Petitioner, South Miami Hospital, properly applied for certificate of need number 2682 for radiation therapy service estimated to cost $3,314,650. Petitioner's Exhibit 1. The application sought approval for the purchase and operation of two linear accelerators, one of 20 million electron volts, and the other of 6 million electron volts. Table 3, Petitioner's Exhibit 1. On October 10, 1983, the Department of Health and Rehabilitative Services, in free- form action, proposed to deny the application, stating that rule 10-5.11(17), Florida Administrative Code, had not been satisfied in that "all radiation therapy units in Dade County have not exceeded the 6,000 procedure per year threshold to justify the operation of an additional unit in this service area." Petitioner's Exhibit 2. Petitioner timely filed a petition for a section 120.57(1), Fla. Stat., hearing, and that petition was assigned DOAH case number 83-3627.
On February 27, 1984, the Petitioner filed a challenge to rule 10- 5.11(17), F.A.C., and this was assigned case number 84-0769RX.
On May 10, 1985, the Petitioner filed a timely challenge to proposed rule 10-5.11(1)(u), F.A.C., and that case was assigned DOAH case number 85- 1792RP.
Rule 10-5.11(17) is presently in effect and provides:
A Certificate of Need for an applicant health care facility to acquire and place in operation a Radiation Therapy Unit (Cobalt, Linear Accelerator, Betatron) shall not be issued unless each existing Radiation Therapy
Unit within the health service area is performing more than 6,000 treatments (patient visits)
per year.
Proposed rule 10-5.11(1)(u) provides:
A Certificate of Need for an applicant health care facility to acquire and place in operation a Radiation Therapy Unit (Cobalt, Linear Accelerator Betatron) shall not be issued unless existing and approved radiation therapy units within the service district are performing an average of more than six thousand (6,000) numerical treatments, or patient visits per year.
The Department of Health and Rehabilitative Services (HRS) published its notice of intent to adopt rule 10-5.11(1)(u) on April 26, 1985, volume 11, number 17, p. 1783 Fla. Admin. Weekly.
South Miami is a non-profit acute care general hospital licensed for
528 beds. T. 15. It provides a full range of medical and surgical services. Id.
There are three major methods of treating cancer: surgery, chemotherapy, and radiation therapy. T.92. Generally speaking, chemotherapy and radiation therapy are prescribed as courses of treatment at separate times. T. 112.
The need for radiation therapy has changed as technology has evolved. In the 1960's, effective chemotherapy did not exist, and radiation therapy was heavily relied upon. In the late 1960's and early 1970's, chemotherapy was advanced, and the earlier kilovolt radiation machines became relatively less useful. In the latter part of the 1970's, million electron volt radiation machines were put into use, and the "need" for radiation therapy consequently began again to rise. Today, in the mid-1980's, medical journals contain articles on combined modalities, using radiation, surgery and chemotherapy at the same time on an inpatient basis. T.122-23,99.
Most cancer centers need two machines, of differing voltage, because varieties of cancer occur either on the surface or deep within the body, and differing radiation energy levels are needed for each. T.127. A two unit radiation program is preferable to one unit because two units provides better economies of scale and a broader range of types of treatment. T. 268.
South Miami Hospital has had an oncology program for nine and one-half years. T.100. The unit has 46 or 48 beds and is staffed with 26 R.N.'s and 2 L.P.N.'s. T. 183, 16. These beds are on one floor dedicated exclusively to the treatment of cancer. T. 16. Associated with these beds are nurses trained in oncology and an oncology team composed of social workers, dieticians, physical therapists, occupational therapists, and a team leader, and a hospice for the terminally ill. T. 16, 91. South Miami does not have a radiation therapy unit.
T. 17. South Miami is currently seeking certification of its oncology program by the American College of Surgeons. T. 91.
In 1984, South Miami averaged 380 patients per day, or about 71 percent occupancy of 528 beds. T. 21, 15. The average daily census of the oncology unit is about 34 cancer patients, but on the day that Patricia Collins, R.N., testified, the census was 22 patients. T. 194, 215.
There were 1,028 patients admitted in fiscal year 1983-84 to South Miami with the diagnosis of cancer. T. 53. In fiscal year 1982-83, there were 1,317 patients admitted by South Miami with a diagnosis of cancer, and there were 1,142 in fiscal year 1981-82, and 1,012 in fiscal year 1980-81. T. 54.
HRS District XI is composed of Dade and Monroe Counties. T. 406-07.
There are 15 existing radiation therapy units in District XI. T. 414. These units are located as follows: Baptist Hospital, 2 units; Cedars of Lebanon Hospital, 2 units; Mercy Hospital, 2 units; Mount Sinai Hospital, 4 units; Northshore Hospital, 2 units: and Jackson Memorial Hospital, 2 units. T. 414-15.
Petitioner's Exhibit 5 is the regionalization map from the District XI Health Plan for 1983 prepared by the Health Council of South Florida, Inc. T. 48-49. On that map, the District XI health plan designates a subdistrict of district XI. T. 49.
South Miami Hospital is located in region D of Petitioner's Exhibit 5. T. 51.
South Miami's primary service area was defined as the area from which approximately 40 percent of its patients originated. T. 75. For specialty services, South Miami's service area is considered to be larger than for routine services. T. 77.
Petitioner's Exhibit 3 is a map of Petitioner's service area as defined by patient origin by postal zip codes. T. 34-35.
The patient service area of South Miami Hospital is roughly the same as subdistrict D and E as identified by the local health planning district. T. 256-57.
The testimony referred to six numbered areas, and several Roman numeral areas, but none of the exhibits identify the Arabic numbered areas or Roman numeral areas. The testimony sought to correlate the patient origins by zip codes, which are tallied on Petitioner's Exhibit 3, and the numbered service areas, but since the numbers are absent from the exhibit, no findings of fact can be made as to this factual matter.
The primary service area proposed by South Miami is bounded by Flagler and West Flagler on the north, by Douglas Road on the East (until it connects with Bird Road) and Biscayne Bay, by the Everglades on the west, and by 232nd Street on the south. T. 42.
Within the service area proposed by South Miami, only Baptist Hospital currently has radiation therapy services. T. 41.
Mercy Hospital is outside the area considered by South Miami to be its primary service area, but the service area of Mercy Hospital overlaps somewhat with South Miami's service area. T. 57.
Patients at South Miami who need radiation therapy travel to other facilities. T. 18.
Almost 100 percent of the cancer patient from the South Miami hospital who must be referred to another hospital for radiation therapy are referred to Baptist Hospital. T. 55. Mercy Hospital's radiation therapy service is not used very often by physicians with patients at South Miami. T. 111.
Baptist Hospital is about three and one-half miles from South Miami Hospital, and Mercy Hospital is about five and one- half miles away. T. 68.
There are 675 physicians on staff currently at South Miami hospital.
T. 22. South Miami has 11 board certified oncologists on staff, but these physicians are not the only physicians treating cancer patients at South Miami. T. 66.
Allen Feinberg, M.D., who is board certified in medical oncology, is on the active staff of both South Miami and Baptist Hospital. T. 90-91. Dr. Feinberg is chairman of the oncology committee at South Miami and physician advisor to the oncology team. T. 91.
There are 14 oncologists who are currently on the active staff of South Miami. T. 110-11. All of these physicians are also on the active staff at Baptist because they need to admit where radiation therapy is available. T.
111. There is no evidence to suggest that Baptist Hospital currently restricts admission of new physicians to active staff privileges. T. 117.
Physicians who practice oncology depend almost 100 percent upon referral of their patients from other physicians. T. 116. Dr. Feinberg receives almost one-half of his patients by referrals from physicians who practice exclusively at one hospital. T. 116.
Primary physicians (such as general practice and family practice), who provide the majority of cancer referrals to oncologists, like to locate their offices adjacent to one hospital, and find it inconvenient to admit patients to more distant hospitals. T. 116.
Dr. J. Kenneth Swords is a family physician and is board certified in family practice. He has been practicing in family practice for twenty-five years. T. 165. He has active privileges at South Miami, but does not at Baptist. T. 165-66.
The family practice physician acts as primary physician for a cancer patient, coordinating other forms of treatment and acting as liaison with the patient and family members. T. 167. He also handles associated medical problems that arise, such as infections, diabetes, heart disease, and the like. Id. The family practice physician may also have developed a long-term relationship with a patient by treatment over years. T. 168.
Dr. Feinberg, as a specialist, serves as an oncology advisor to a primary physician for the patient. T. 95. If the primary physician is not on staff at Baptist Hospital, a transfer of his or her patient to Baptist Hospital results in an inability of the primary physician to see the patient during that time, and causes a loss of continuity of care. T. 95. This may also cause a subjective result of loss of comfort to the patient associated with being seen by the primary physician with whom a relationship has been established. T. 95.
Dr. Swords can obtain "one case" privileges to follow his patient at Baptist, but he has to fill out a form and obtain approval from the chairman of the department, and Baptist only grants two or three such approvals a year. T.
169. Dr. Swords could also apply for full active privileges at Baptist, but he does not want the additional problem of having to attend staff meetings, committee meetings, and to provide emergency room coverage for another hospital. T. 169-70.
Dr. Swords did not know the current practices or rules at Baptist Hospital governing the obligations of courtesy staff physicians with respect to attendance at meetings or emergency room coverage. T. 174. Dr. Swords has not applied for privileges at Baptist Hospital since it acquired its radiation therapy unit. Id.
Thus, the fact that primary physicians typically have staff privileges at only one hospital is mostly a matter of convenience to the physician, and is not caused by restrictions on admissions by the other hospitals. There is, in fact, no evidence in this record of denial of staff privileges to any physician by any hospital in District XI.
Dr. Swords has about one new cancer patient in his practice each month. These patients are usually admitted to the hospital and referred to a surgeon for surgery, and then may receive other forms of treatment. T. 166. In the ten and one-half months of the calendar year prior to the hearing, Dr. Swords had had from four to five patients requiring radiation therapy. T. 168. They were all initially admitted to South Miami and then transferred to Baptist for radiation therapy. T. 168-69. None returned immediately to South Miami. T. 172.
Out of the five patients that Dr. Swords had transferred to Baptist for radiation therapy recently, the radiologist at Baptist has communicated with Dr. Swords about only two of these patients during treatment at Baptist. T.
179. Dr. Swords related one instance where a patient, who had been provided radiation therapy at Baptist, returned again to South Miami for diagnosis, and there were inefficiencies and delays in obtaining his films from Baptist. T. 180.
Dr. Swords' two associates have the same problem as he does following patients at Baptist Hospital. T. 170.
Dr. Swords' experience, however, may not be typical of primary care physicians with cancer patients. The record contains testimony that the majority of family practice or other primary care physicians turn their patients over to oncologists completely and the oncologist thereafter become attending physicians for them. T. 193.
Two major factors relied upon by Dr. Feinberg in determining whether to admit a patient to Baptist or South Miami is the preference of the patient and the hospital at which the referring physician practices exclusively. T.
122. If the patient then needs radiation, Dr. Feinberg admits only to Baptist Hospital. Id. Dr. Feinberg currently admits almost one-half of his patients to Baptist Hospital because South Miami does not have radiation therapy. T. 109- 110.
In previous years, Dr. Feinberg admitted substantially more patients to South Miami. T. 109. Historically he has had closer ties to South Miami, and his office is closer to South Miami. T. 126. If South Miami had radiation therapy, his admissions ratio would revert to the earlier ratio, with many more patients at South Miami than at Baptist. T. 110. Thus, any shift of Dr. Feinberg's patients from Baptist to South Miami as a result of South Miami having radiation therapy would only be a restoration of the status quo before Baptist obtained radiation therapy. Dr. Feinberg and his group of three other oncologists do not face any other inconvenience in using both Baptist and South Miami for patients, with the exception of the inconveniences associated with radiation therapy. T. 114.
Joseph Thomas Ostroski, M.D. is a general surgeon who has been in practice for 17 years. T. 154. In the past 12 years, his practice has specialized in particular in oncological surgery. Id. He is on the active staff of South Miami and Baptist Hospitals. T. 155. He currently is a member of the South Miami Hospital oncology committee, and served as its first chairman when it formed nine or ten years ago. T. 156. His practice is split about equally between South Miami and Baptist Hospitals. T. 162.
Dr. Ostroski prefers to keep patients referred initially to South Miami in South Miami because of the work of the oncologic group at South Miami.
T. 162. He also personally prefers South Miami. T. 163. Dr. Ostroski would operate more at South Miami than Baptist if it had radiation therapy. T. 164.
Victor Dabby, M.D. is a board certified surgeon who has practiced in Coral Gables, Florida, for the past twenty-five years. T. 133. A substantial portion of his practice as a surgeon is in oncological surgery. T. 133. He has privileges at South Miami, Baptist, and Larkin Hospitals, T. 134, but a majority of his work is at South Miami. T. 144.
In 1984, Dr. Dabby guessed that he had referred or transferred from eight to ten patients to Baptist Hospital for radiation treatment. T. 140.
It is possible that rather than move a patient to the radiation therapy units at Baptist Hospital, a physician at South Miami will chose instead another form of treatment. T. 97-98. A cancer patient presents multidisciplinary health care challenge. T. 158. The lack of radiation therapy may cause use of a second choice treatment due to the risk of moving a patient in a fragile condition. T. 159. At times, Dr. Dabby has opted for other forms of treatment because radiation therapy was not available at South Miami. T. 137.
The lack of radiation therapy at South Miami results in inability to treat some emergencies that require radiotherapy, and results in the need to transfer documents, slides, and the patient himself. T. 136.
Some patients refuse to be transferred, thus depriving themselves of radiation therapy. T. 136.
Dr. Feinberg was asked to set forth specific instances where a patient at South Miami, who was a patient needing radiation therapy, failed to get radiation therapy and another form of treatment was substituted. Dr. Feinberg remembered a "patient or two who had spinal cord blocks from tumor that could be radiated or could receive surgery." He admitted that there were many factors in the ultimate choice of modality, but that lack of on-site radiation was one factor. T. 107. He refused, however, to characterize the alternative treatment selected as "inappropriate." Id.
Based upon the findings in paragraphs 49 through 52, it is the further finding of the Hearing Officer that although the lack of radiation therapy may sometimes cause selection of another mode of treatment, the evidence is insufficient to conclude that inappropriate treatment has been the result of a lack of radiation therapy at South Miami, or that the problem of choice of treatment is either substantial or frequent.
Patricia Collins, R.N., is the oncology team coordinator at South Miami. T. 204. The oncology team members provide ancillary services and assistance to patients with cancer. T. 206-203. A number of the cancer patients at South Miami do not have close family or friends in the nearby area, and come to depend upon the oncology team and staff of South Miami to help them cope with their cancer. T. 210.
Elaine Abronski, R.N., is the head nurse for the oncology unit at South Miami. T. 182.
Patients who have cancer are often in pain, and patients who need radiation therapy often have bony pain. Transportation causes a lot of discomfort. T. 94. Radiation therapy is used for bone metastasis, and bone metastasis is very painful, so often patients who are transported for radiation are transported in great pain. T. 189.
Radiation therapy is also extremely fatiguing, and patients spend additional time resting to gain the strength to be transported to radiation and to recover when they return to South Miami. T. 189, 191. Cancer patients, who are inpatients at South Miami, are often weak, and the trip to Baptist for radiation treatment is extremely tiring for them. T. 212.
By becoming fatigued, such patients then cannot take other planned therapies, such as physical therapy. T. 212. They also may become nauseous from the trip, and unable to take medication that they need, such as pain medication. Id. Patients are usually on pain medications at a constant blood level, and the interruption of monitoring of the blood level results sometimes in pain without enough medication. The patients are also on several antibiotics, and at times they miss one of these. T. 187-88.
Patients who have cancer have limited venous access. When they are transported for radiation therapy, their IV's must be disconnected. IV's have been lost as a result of transferring a patient. When this happens, a process begins of trying to locate another vein in which to insert the IV, and this is a long and complicated process. Also, there is risk of infection while the IV is disconnected, or during the process of disconnecting the IV. T. 93-94, 187-88.
Blood transfusions and intravenous chemotherapy must be halted during transportation. T. 212.
There is some additional discomfort and psychological trauma associated with transportation to Baptist for radiation therapy in that patients are transported on a stretcher suitable for a medivan, and must pass visitors in the halls on the way to the van. T. 213. Only those patients who needed oxygen or a stretcher, however, are subjected to this, since some patients are ambulatory and go by van, and others are transported by family members. T. 186.
Other than problems of substantial discomfort and major interruption of therapeutic pain medication, and IV's, transportation usually does not risk major medical disaster. T. 94.
If South Miami obtained a linear accelerator, it would be located in the emergency room, and patients would still have to travel through the halls of South Miami from the fifth floor of the tower building at South Miami to the emergency room. T. 217-18. The cart would be more comfortable, however, than a stretcher used for ambulance-medivan travel. T. 218.
Subjectively, staff at South Miami face the problem of building a good relationship with their oncological patients with the knowledge that if radiation therapy is needed, their patients face the problem of transfers. T.
138. Oncology patients at South Miami usually require repetitive readmission and discharge from the hospital. T. 185. An effort is made for each new admission to assign the patient to the same wing or the same room, and with the same staff. Id. Transportation interrupts the relationship of South Miami staff with the patient. T. 214.
When a cancer patient is referred to Baptist Hospital for radiation therapy, there are delays and inefficiencies which occur due to the need to photocopy the patient's record and the need for the radiologist at Baptist to have time to read the records and films from South Miami. T. 117-18. But there are no delays in obtaining radiation appointments at Baptist. T. 119.
There has not been any problem with the quality of care provided by Baptist Hospital to patients from South Miami needing radiation therapy. T. 195, 216.
As mentioned above, the average daily patient census in the South Miami oncology unit is about 34. T. 194. However, on the day of Ms. Collins' testimony, there were only 22 oncology patients at South Miami. T. 215. Of these, 9 patients had had radiation treatment in the past, and Ms. Collins estimated that about one-half would ultimately have radiation treatment. T.
215. Ms. Collins estimated that several patients would have to travel from South Miami each week to Baptist for radiation treatments. She did not have actual statistics, but testified from her experience that in some weeks five might be transported, and then in other weeks, none would go. T. 220.
Thomas Porter, Certificate of Need Application Review Coordinator for the Respondent, testified that in his opinion, the application of South Miami should be denied. T. 426. In part, Mr. Porter based his opinion upon data as to the number of treatments annually at existing radiation therapy units in District XI as reflected in HRS Exhibits 1 and 2.
HRS relied upon the data contained in HRS Exhibit 1 when it initially reviewed Petitioner's application, and such data is normally relied upon by HRS in review of certificates of need applications. T. 411-12. There was no evidence that any health care facility supplying this data was either suppressing the number of radiation treatments, or denying treatments to patients who needed treatment except as found elsewhere in this recommended order.
In 1983, the radiation therapy units at Cedars of Lebanon, Mount Sinai, and Jackson Memorial all experienced a use rate below 6,000 treatments.
T. 416-17. The two radiation units at Baptist Hospital in 1983 provided an average of 8,874 treatments each. HRS Exhibit 1.
Using the available data for the first six months of 1984 and extrapolating to the last six months, assuming identical use as in the first six months, it is predicted that the radiation therapy units at Mercy, Mount Sinai, Northshore, and Jackson will operate at less than 6,000 treatments per unit for 1984. T. 417. Using the same extrapolation, the two radiation therapy machines at Baptist Hospital would provide 18,410 treatments in 1984, or an average of 9,205 treatments per machine. HRS Exhibit 1.
The Petitioner proposes another method for determining need for radiation therapy units, and did so through the testimony of Jay Cushman. Petitioner's Exhibit 6 was prepared by Mr. Cushman to show, using his method, the need for radiation therapy units in District XI, in subdistricts D and E of the District, and at South Miami Hospital itself. T. 248-49.
Mr. Cushman's analysis shows a need for 2 radiation therapy units in District XI in 1985, and 3 units in 1988. T. 255; Petitioner's Exhibit 6. A similar need for 3 units was shown by Mr. Cushman in 1988 for subdistrict D and
E. T. 248-9. Finally, Mr. Cushman projected a need for 2 radiation units at South Miami Hospital by 1988 based on South Miami's own cancer patient statistics. T. 268.
In Mr. Cushman's opinion, South Miami Hospital is almost at the level of a "community cancer center," which has patients other than cancer patients, but treats its cancer patients in a specially organized and segregated unit. T. 263-64. The only thing lacking to make South Miami a community cancer center is radiation therapy. T. 264. Every such cancer treatment center, having 30 or 40 beds, that aspires to meet the requirements of the American College of Surgeons as a comprehensive community cancer center, should have radiation therapy on site, in the opinion of Dr. Feinberg. T. 121. Dr. Feinberg was of the further opinion that South Miami should have all modalities of treatment because it treats so many cancer patients. T. 104. He admitted that he felt that radiation therapy should not be assigned exclusively to major medical centers, but should be available to large community hospitals. T. 102, 105. In New York, radiation therapy units had existed at many hospitals, and he was "shocked" to find that a hospital with three to five hundred beds did not have one. T. 102. Dr. Ostroski testified: "Well, we have such a good oncologic program, it's a shame that the whole picture isn't completed with an ex-ray unit." T. 161.
The District XI health plan, p. 6, provides that:
Radiation therapy equipment is very expensive to purchase, install and support, and it is thus important to avoid unnecessary duplication. National priorities call for
coordination and consolidation of those services.
The current rule, rule 10-5.11(17), F.A.C., refers to "each existing" radiation unit, and the proposed rule 10-5.11(1)(u) refers to "existing and approved" units. TR. 20. The current rule focuses upon the "health service area," and the proposed rule changes this to "service district." Id. Finally, the current rule requires each existing unit to be performing "more than" 6,000 treatments per year, and the proposed rule only requires that all "existing and approved" units be performing "an average of more than" 6,000 treatments per year. TR. 21.
Mr. Cushman criticized both the current and proposed rules because each considers only the utilization rates of units, and does not consider the other criteria mandated for consideration by section 381.494(6)(c), Fla. Stat. TR. 24.
The two rules are the only rules, except another rule which was held invalid, among the service-specific rules contained in rules 10-5.11(13) through (29), F.A.C., which consider only utilization data and contain no explicit exceptions. See rules 10-5.11(13)-(29), F.A.C.; TR. 25. The existing and proposed radiation therapy rules do not provide any criteria or factors for quality of care, mitigating standards, reference to other criteria, and do not provide for exceptions in "not normal" circumstances.
The state rule, section 10-5.11(17), adopted only a part of the 1979 federal guidelines for radiation therapy services, the utilization threshold of 6,000 treatments per year, and did not adopt two other guidelines: that there be one radiation unit per approximately 150,000 persons and that each new unit be expected to serve 300 new cancer cases within 3 years of installation. TR. 79-80.
Mr. Cushman further criticized the rules because they do not allow consideration of the specific needs of a single institution, such as, in this case, the need of South Miami Hospital to have all three treatment modalities available for its oncology program. TR. 28.
The rule was also criticized by Mr. Cushman because the existence of free standing units, for which a certificate of need is not needed, was not treated as an "extenuating circumstance." TR. 42. It was Mr. Cushman's opinion that the ease by which a free standing unit could be established threatened the existence of hospital-based units. TR. 43. About 90 percent of all radiation therapy is now done on an outpatient basis. TR. 71. But there apparently is only one freestanding unit now in District XI. TR. 72.
Mr. Cushman's primary criticism of the rule was that consideration of only utilization of existing (or existing and approved) units fails to identify "need" of patients for the service, and that need can only be determined by the methodology proposed by Mr. Cushman in the section 120.57 hearing: consideration of the population to be served, the incidence of cancer within the service area, the appropriate treatment rates for new cases of cancer, and consideration of the proper productivity standard for a radiation unit, the number of units in the area, and a review of their utilization and geographic distribution. TR. 26. None of these factors, except utilization, are contained in either of the two rules. TR. 26.
Mr. Cushman was of the opinion that if he had an existing facility as his client that reached 6,000 treatments per year on its existing machine or machines, he would advise that client to consider adding a new machine, and would do so as a matter of planning and productivity for the existing machines. TR. 70. He distinguished this concept of machine productivity from the concept of measuring patient need. Id. He agreed that machine utilization data was useful in planning for need, but that it should not be the sole criteria. TR. 70-71.
Statistics which show the amount of utilization of existing radiation machines correlate precisely with patient "need" for such utilization only if all needs are in fact being met by the utilization. TR. 50. The method thus employs a form of circular reasoning: The unknown element, need, is assumed to be known and identical to utilization, which in turn is based upon the assumption that there are no barriers between the need and the service.
Since the current rule does not consider the factors described above, and does not allow exceptions, and since the statute contains many other factors, Mr. Cushman was of the opinion that the application of the rule by the Department would inevitably be uncertain and inconsistent. TR. 29. To test his hypothesis, Mr. Cushman reviewed all of the decisions made by the Department on all applications for radiation therapy services since rule 10-5.11(17) became effective in 1979. TR. 29, 84-85. These decisions were embodied in "state agency action reports," and are contained in two black volumes marked as Petitioner's Exhibit 2R. Id.
Petitioner's application for certificate of need number 2682, the certificate of need at issue in these cases, was the first denial of a certificate of need by HRS predicated upon strict application of rule 10- 5.11(17), F.A.C. TR. 36, 39-40. Prior to this decision, HRS had made 7 certificate of need decisions without regard to the rule. Id. On 3 occasions, HRS had overridden the rule and granted a certificate of need. TR. 37. The 7 decisions were with respect to certificates of need numbers 1244, 1245, 1247, 1248, 1648, 1688 and 1886. TR. 37. The 3 cases where the rule was overridden are certificates of need numbers 1474, 1475, and 1913. Id.
In certificate of need number 1244, a certificate of need was granted to intervenor Baptist Hospital without consideration of the rule. TR. 38. Petitioner's first application for certificate of need 1245 was similarly denied by HRS without consideration of the rule. Id.
Since the adoption of rule 10-5.11(17), HRS has considered 19 applications for new or expanded radiation therapy units. TR. 30. (Mr. Cushman corrected his totals on Petitioner's Exhibit 3R at a later point in testimony when he admitted that certificate of need number 1686 was not an application for a new unit. TR. 61-62. In the findings which follow, CON number 1686 has been excluded.) Those certificate of need numbers were 1244, 1245, 1247, 1248, 1474, 1475, 1648, 1688, 1886, 1913, 2255, 2549, 2682, 2673, 2824, 2835, 2875, 3083, and 3234. TR. 31-32.
Of the 19 applications, 14 were approved and 5 were denied by HRS. TR. 30.
Of the 5 denials, 2 denials were of applications by the Petitioner in these cases. TR. 35.
In consideration of the 19 applications, Mr. Cushman asserted that HRS granted exceptions to the rule in 13 cases, disregarding certificate of need number 1686. TR. 31.
Of the 13 cases of exceptions, Mr. Cushman testified that in 7 applications, certificates of need numbers 1244, 1245, 1247, 1248, 1648, 1688, and 1886, the rule was not applied at all. TR. 37. In 3 applications, the rule was overridden and the application granted; these were certificate of need numbers 1474, 1475, and 1913. On the last 3 occasions of the 13 exceptions, the rule was applied on a subarea basis, and these were certificates of need numbers 2255, 2549, and 2673. TR. 38.
Mr. Cushman agreed that he erroneously included certificate of need number 1686 in his list of actions by HRS in which rule 10-5.11(17) had not been applied. T2. 61-62.
The following is an analysis from the text of the available state agency action reports of those certificates of need identified by Mr. Cushman.
Of the seven applications for certificate of need in which Mr. Cushman said that the rule was not applied:
The state agency action report on certificate of need number 1244, granted to Baptist Hospital, is not in evidence.
Certificate of need 1245 was denied by HRS on April 9, 1980. State agency action report, p. 5. This was the first application of South Miami. TR. 38. The application was considered primarily against the goals of the local Health Systems Plan and not against the state rule. Id. See state agency action report, CON number 1245, Attachement C.1., p. 2, Petitioner's Exhibit 2R. (Hereafter, citation to portions of each relevant state agency action report will be only to the relevant page numbers or attachments of the particular report.) The rule was not mentioned. TR. 38. Moreover, the state agency action report compared the proposal of South Miami and the concurrent application of Baptist Hospital by considering south Dade County and Monroe County as a geographically discrete service area, distinct from the rest of the service district, and not adequately accessible to radiation therapy units elsewhere in Dade County. These statements are found throughout the state agency action report.
Certificate of need 1247 was approved on April 16, 1980, by HRS for a radiation unit in Pensacola. The application was analyzed based upon a number of criteria of need contained in the 1979-84 Florida Health Systems Plan. The state agency action report agreed with the Panhandle Health Systems Agency (the local health planning agency) that the proposal did not meet these criteria in part because existing machines were not all at 6,000 or more treatments annually. State agency action report, excerpt, p. 2. The certificate of need was granted, however, with no mention of the rule, based upon a finding that the applicant proposed a photon radiation device in the 18 MEV range, a range arguably not served by existing units in the area. State agency action report,
p.5. The report further includes a table IV analyzing need in an adjacent out of state service area, and the table predicts that 55 percent of new cancer patients will need radiation therapy, and that 25 treatments on the average will be deeded for each patient.
In the state agency action report on April 20, 1980, approving certificate of need number 1248, HRS evaluated the need for the radiation unit on a four county subdistrict basis. TR. 66; state agency action report, p. 2. The report considered existing services in the subdistrict and outside the subdistrict (Palm Beach County), and determined that the services outside the subdistrict were too far away. Id. Rule 10-5.11(17) is not mentioned at all in the state agency action report. A goal of the local health systems plan is mentioned: that each unit "should" provide 9,000 treatments annually. That goal, however, is not a threshold requirement of utilization, but was rather an optimum use goal. No statistics were mentioned in the state agency action report concerning whether existing units in the district were exceeding the threshold of rule 10-5.11(17).
Certificate of need number 1648 approved on July 28, 1981, one linear accelerator for Good Samaritan Hospital in Palm Beach County. The state agency action report did not refer at all to the rule 10-5.11(17) to determine need, but rather referred to two alternative methods. First, the application was analyzed with respect to the local health plan goals that each unit "should" provide 9,000 treatments per year, that by 1984, each unit should provide 8,000 treatments per year, and that there should be one unit per 150,000 population. See attachment C.1. Next, under the explicit criterion for "need," rather than refer to rule (17), HRS performed a calculation much like that proposed by Mr. Cushman. HRS accepted 50 percent as the percentage of cancer patients who
require radiation therapy, and used as the expected number of treatments per patient. HRS then apparently used 6,000 treatments per unit for the five existing and approved units, resulting in 30,000 treatments annually as "existing capacity," and from that derived the need. Attachment C.2. Though rule (17) was not mentioned, the existing utilization figures did show that it was satisfied in fact. Attachment C.1. See also TR. 59.
Certificate of need number 1688 was issued by HRS on August 26, 1981, without reference to rule 10-5.11(17), but the utilization rates were in fact in excess of 6,000 treatments for each existing unit per year. See state agency action report, attachment C.1., TR. 62. This certificate of need was issued solely upon reference to the local health systems agency's plan and the need criteria therein. TR. 76. Objective B of that plan was identical to rule 10-5.11(17). Attachment C.1.
HRS approved certificate of need number 1886 on December 31, 1981, for construction of a linear accelerator at North Shore Medical Center in northern Dade County. The approval does not mention rule 10-5.11(17) at all. HRS relied instead upon the local Health Systems Plan, which had a similar goal of 6,000 treatments per year for cobalt machines, and 6,656 treatments per year for linear accelerators. At attachment C.13(a), the state agency action report found that only 7 of 11 existing radiation therapy units in Dade County exceeded 6,000 treatments in 1980, but these statistics were partly in error. There were
3 of 11 units in Dade County that failed to reach 6,000 treatments per year in 1980. See chart, attachment C.2. Those three were at Jackson Memorial Hospital. HRS concluded in the state agency action report that these units at Jackson Memorial were identified by the HSA as being different from the clinical units elsewhere in the county. HRS never stated what this meant with respect to the rule, since the rule was never mentioned, and did not conclusively say that the Jackson Memorial units should be disregarded. How ever, HRS did rely upon a formula to predict need that used 60 percent as the percentage of all persons having cancer who would require some form of radiation therapy, and that each would receive 20 treatments. Attachment C.1.
The following is an analysis of the state agency action reports for the three certificate of need applications in which Mr. Cushman stated that the rule was explicitly overridden:
The state agency action report on certificate of need 1474 is dated March 2, 1981, and indicates that the application was not consistent with chapter 10-5, F.A.C. In particular, the requirement that each existing unit satisfy the 6,000 treatments utilization standard was explicitly found not to have been met. However, the certificate of need was granted using other methodology, some of which was quite similar to that proposed by Mr. Cushman. The rule was disregarded for two reasons: alternative methodologies showed a need not shown by the rule, and utilization of cobalt machines was disregarded. See Attachment C.1, p. 2, attachment C.2, p. 2, and pp. 4 and 5.
Certificate of need number 1475 is not in evidence, and therefore the underlying basis for the decision of the Department to deny that application is not ascertainable, except from the testimony of Mr. Cushman. The decision was probably at the same time that CON number 1474 was decided, however, which was in 1981.
Certificate of need number 1913 was issued on January 22, 1982, to Morton F. Plant Hospital. At attachment C.1. of the state agency action report on that certificate of need, the Department found that existing radiation therapy units in the health service area did not all exceed 6,000 treatments per year, based upon 1980 data, and therefore the proposal was expressly found to be inconsistent with rule 10-5.11(17), F.A.C. In attachment C.2., however, the Department concluded that the certificate of need should be granted based upon an analysis of the need for high energy radiation units. Additionally, the Department used 50 percent as the percentage of new cancer patients who would need radiation treatment.
The following is an analysis of the state agency action reports in which need for radiation therapy units was evaluated by HRS with respect to an area less than the district. It should be noted that there were actually six occasions where HRS relied explicitly upon the needs of a smaller service area:
Certificate of need number 2255 was approved on November 11, 1982, by HRS by reference only to a subarea within the health service district, a single county. TR. 64, 77. However, in fact all existing units were providing in excess of 6,000 treatments per year in the subarea. TR. 65; attachment C.1. Additionally, this certificate of need was approved by HRS with a calculation of need based upon an estimate that 60 percent of cancer patients would need radiation therapy, and that each patient would receive 25 treatments.
Attachment C.2.
In the approval of certificate of need 2549 on June 13, 1983, HRS analyzed need based only upon the subarea including four counties. TR. 65; p. 2, state agency action report. The approval recites that rule 10-5.11(17) has been satisfied, but it is apparent that satisfaction of the rule has been evaluated only on the four county subarea level. There was only one radiation unit in the subarea, and it was operating at 13,940 treatments per year in 1982. Further the state agency action report uses a needs formula similar to that suggested by Mr. Cushman, and states that 50 percent of cancer patients need radiation therapy, and that each will average 30 treatments. State agency action report, p. 2.
The state agency action report on October 10, 1983, approving certificate of need number 2673 applied rule 10-5.11(17) to a subdistrict and found that all units within that subdistrict exceeded that 6,000 treatments requirement, but did not apply the rule to other areas in the district. Attachment C.2.; TR. 66.
As mentioned above, the state agency action report of April 20, 1980, on certificate of need 1248 shows that it was approved using a four county subdistrict, thus adding a fourth CON application that was analyzed not on the district level.
As discussed previously, certificate of need application 1245, the first application by South Miami, did not mention the rule. The state agency action report found as fact that south Dade County and Monroe County are identifiably discrete geographical areas, and that persons living in those areas do not have adequate access to radiation therapy units elsewhere in District XI.
Since it appears in the state agency action report on certificate of need 1245 that the application of Baptist Hospital for certificate of Need 1244 was reviewed comparatively with that of South Miami for certificate of need 1245, it must be concluded that the application of Baptist Hospital for certificate of need 1244 was also reviewed by HRS using the same subarea analysis.
On the same day that the Petitioner's application for certificate of need number 2682 was denied in free-form action by HRS, October 10, 1983, HRS granted a certificate of need number 2673 using a subarea analysis of need. Moreover, HRS used a subarea analysis of need four months earlier, on June 13, 1983, when it granted certificate of need number 2549. Petitioner's application asked HRS to evaluate its application based upon a subarea of District XI. Petitioner's exhibit 1, section III A.4. and map 1. The Department of Health and Rehabilitative Services declined to analyze need based upon the proposed subarea, without explanation, and analyzed need based upon the entire district and strict application of rule 10-5.11(17). Petitioner's exhibit 2.
Based upon the foregoing review of state agency action reports, it is the conclusion of the Hearing Officer that:
The Department of Health and Rehabilitative Services has reviewed
19 applications for certificates of need since 1979 when the current rule 10- 5.11(17) became effective.
In 7 of these applications, the Department did not mention rule 10-5.11(17) at all, and did not analyze the application against the express words of the rule. In these 7, HRS recorded in the state agency action report statistics which show that the 6,000 treatments per unit threshold of the rule was de facto satisfied, but there is no discussion of the rule or the relevance
of these statistics to the rule. In 1 case of these, statistics were explicitly mentioned which did not de facto satisfy the 6,000 treatments requirement.
In 3 of these applications, the rule was expressly mentioned, or at least the chapter in which the rule is contained was mentioned, and HRS made the express finding that the rule was not satisfied in 2 of these cases. In the
2 cases in which the rule was mentioned and found to be not satisfied, HRS granted the certificate of need.
In the 6 cases in which HRS analyzed the application on a subarea basis, in 3 of these cases, the 6,000 treatments standard was expressly found to have been satisfied on only the subarea level, and no analysis of the 6,000 treatments requirement was made on the full district level.
The following chart is a summary of these findings:
Type | Date | CON Number | Was 6,000 treatments per unit de facto satisfied? | HRS decision on the CON Application |
Rule Not | 1980? | 1244* | Unknown | Unknown |
Mentioned | 4-9-80 | 1245* | Not mentioned | Denied |
4-16-80 | 1247 | No | Granted | |
4-20-80 | 1248* | Not mentioned | Granted | |
7-28-81 | 1648 | Yes | Granted | |
8-26-81 | 1688 | Yes | Granted | |
12-31-81 | 1886 | Yes | Granted | |
Rule | 3-2-81 | 1474 | No | Granted |
Overridden | 1-22-82 | 1913 | No | Granted |
1981? | 1475 | Unknown | Denied | |
Subarea Evaluation | 11-11-82 | 2255 | Yes, but only in the subarea | Granted Granted |
6-13-83 | 2549 | Yes, but only in the subarea | Granted | |
10-10-83 | 2675 | Yes, but only in the subarea | Granted | |
4-20-880 | 1248* | Not mentioned | Granted | |
4-9-80 | 1245* | Subarea had no existing units. Analysis was done | Denied |
on District basis, and 6,000 treatments was satisfied.
1980? 1244* Subarea had no Granted
existing units. Analysis was done on District basis,
and 6,000 treatments was satisfied.
*These applications also were reviewed on a Subarea basis.
In the state agency action reports for certificates of need numbers 2835 and 3234, HRS found under the current rule that all existing radiation therapy units were performing more than 6,000 treatments annually, and therefore concluded that the rule was satisfied. But in each case, due to strict application of the existing rule, approved but not yet operational units were not considered in determining "need." Thus, in certificate of need 3234, the certificate of need was granted by HRS when 6 existing machines exceeded 6,000 treatments per year, but at least 5 others were already approved to fill future need. See attachment C1.b. and c. In granting certificate of need 2835 in the same district, HRS found that 6 existing machines exceeded the 6,000 treatments requirement, but noted that 5 more machines were approved to fill future need.
It is the policy of HRS to consider the criteria of rule 10-5.11(17) as well as the criteria in rule 10-S.11(6)(c), F.A.C., such that an application might be denied even if "need" is shown by satisfying subpart (17), and an application might be granted even though subpart (17) was not satisfied, based upon all the other criteria and what Mr. Porter termed "extenuating circumstances." T. 420, 424. As examples of circumstances which might justify granting a certificate of need for radiation therapy even though rule 10- 5.11(17) was not satisfied, Mr. Porter mentioned "accessibility," both financially and geographically, and whether particular groups of people were not receiving a needed service from existing providers. T. 422-23. Another factor that might justify granting a certificate of need despite rule 10-5.11(17) would be if the applicant proposed to offer the service at a substantially reduced cost than existing providers. T. 423.
The Department of Health and Rehabilitative Services further states that it is the policy of the Department to review an application for radiation therapy services against all statutory and rule criteria, and not just against the current and proposed rules under attack in these cases. TR. 123; T. 420, 421.
Thus, HRS in fact construes both rule 10-5.11(17) and proposed rule 10-5.11(1)(u), F.A.C., as not exclusive, without exceptions, but rather, to be waivable or susceptible of being disregarded in certain cases, in the judgement of HRS.
Attached to this final order is an appendix explicitly ruling upon each proposed finding of fact by number.
CONCLUSIONS OF LAW
Jurisdiction exists pursuant to sections 120.54(4) and 120.56, Fla. Stat.
A challenge to a proposed agency rule is governed by the following standard:
To successfully challenge the validity of an agency rule, one must show that (1) the agency adopting the rule has exceeded its authority, (2) the requirements of the rule are not appropriate to the ends specified in
the legislative act, and (3) that requirements contained in the rule are not reasonably related to the purpose of the enabling legislation, but are arbitrary or capricious. Agrico Chemical Co. v. State, Department of Environmental Regulation, 365 So.2d 759 (Fla. 1st DCA 1979), Dept. of Administration, Division of Retirement v. Albanese, 445 So.2d 639 (Fla. 1st DCA 1984).
Department of Professional Regulation, Board of Professional Engineers v. Florida Society of Professional Land Surveyors Case no. AY-273, First District Court of Appeal, September 4, 1985.
The standard to be applied to an existing rule has been determined to be essentially the same as the standard to determine the validity of a proposed rule. Grove Isle, Ltd. v. State, Department of Environmental Regulation, 454 So.2d 571, 573 (Fla. 1st DCA 1984).
Petitioner's proposed conclusions of law argue that the existing and proposed rules are defective in several respects which are summarized as follows:
The rules allows the Department to ignore all of the statutory criteria other than utilization of existing facilities.
The rules do not permit consideration of unusual, and abnormal circumstances.
With respect to the existing rule, the Department has granted exceptions in an inconsistent and arbitrary manner.
The existing and proposed rules allow the Department to consider all other statutory criteria other than utilization only if the numerical threshold of utilization is first satisfied. Neither rule contains the words "not normally" to allow for consideration of other criteria in the abnormal case when the utilization threshold of either rule is not satisfied. Both rules use mandatory language (a certificate of need "shall not be issued") when the numerical utilization threshold is not met.
The Department of Health and Rehabilitative Services admits that it construes the existing rule, and will cons true the proposed rule, to allow and require consideration of all statutory criteria, even though the numerical threshold of the rules are not met; and to grant a certificate of need, based upon all statutory criteria directly contrary to the language of the rule, that a certificate of need "shall not be issued" if the threshold has not been met. See findings of fact 102-104. This has been the past history under the existing rule since 1979. See findings of fact 85-101.
While deference should be paid to the agency with respect to interpretation of unclear language in rules, where there is no room for construction or interpretation, the clear and express language must govern. An agency must follow its own clear rules. Kearse v. Department of Health and Rehabilitative Services, Case No. BA-62, (Fla. 1st DCA, August 20, 1985); State, Department of Natural Resources v. Sunset Realty Corp., 474 So.2d 363 (Fla. 1st DCA 1985). See Chapter 84-173 (1984), amending section 120.68(12)(b), Fla. Stat. This amendment was intended by the Legislature to overrule the result of Best Western Travel Inn v. Department of Transportation, 435 So.2d 321 (Fla. 1st DCA 1983), which had held that an agency could ignore its own rules if it stated reasons. See Staff Analysis and Economic Impact Statement, Committee on (governmental Operations, House of Representatives, dated April 11, 1984, pp. 6- 7.
Both the existing rule and the proposed rule are clear. The Department of Health and Rehabilitative Services has no need to "construe" either rule to permit exceptions contrary to the clear and express language of the rule. The attempt of the Department to cons true the plain language of the rule to permit exceptions, a process directly in conflict with the rule, is not authorized. The validity of these rules must be determined by what they are, not what the Department might wish them to be.
Section 381.494(6)(c) provides in part:
The department shall determine the review ability of applications and shall review applications for certificate-of-need de terminations for health care facilities and services, hospices, and health maintenance organizations in context with the following criteria:
* * *
The availability, quality of care, efficiency, appropriateness, accessibility, extent of utilization, and adequacy of like and existing health care services and hospices in the service district of the applicant.
Both the existing rule and the proposed rule preclude consideration of subparagraph 2 of section 381.494(6)(c), Fla. Stat., in those instances, such as the case at bar, where the 6,000 treatments threshold has not been met. Both rules preclude consideration of the accessibility of existing radiation therapy units in the district to cancer patients. Both rules preclude consideration of the extent of utilization of units relied upon by groups of cancer patients in specific geographical areas in the district. Both rules preclude consideration of the availability, efficiency, appropriateness, and adequacy of existing radiation units for patients. Thus, both rules are in this respect in direct conflict with the mandate of section 381.494(6)(c), Fla. Stat., that "the Department shall" review certificate of need applications "in context with" subparagraph 2 above.
In the section 120.57 portion of the consolidated hearing, the Petitioner sought to present evidence with respect to statutory criterion 2. Findings of fact 14 - 75, while strictly speaking are not relevant to this rule challenge, are relevant to show the nature of the important kinds of evidence which is precluded from consideration by the rule. For example, the Petitioner proved that 6,000 treatments per year per radiation machine is a reasonable level of ordinary productivity, and that the two radiation therapy units at Baptist Hospital, which are relied upon to a great extent by patients in subdistricts D and E, were running more than 9,000 treatments per machine in 1984. The Petitioner further showed that a number of its inpatients suffer substantial discomfort from transfers to Baptist for radiation treatments. Thus, the preclusive effects of the existing and proposed rules in this case have in fact operated to thwart the mandate of section 381.494(6)(c)2, Fla. Stat.
Additionally, both rules preclude consideration of other criteria which, pursuant to the statute, must be considered. The rules preclude consideration of the adequacy of out patient radiation therapy units. Section 381.494(6)(c)4, Fla. Stat., requires consideration of such evidence. The rules preclude consideration of whether the addition of radiation therapy capability at South Miami Hospital will increase competition, and have a good or bad effect upon the cost of these services to cancer patients or upon the quality of care. Section 381.494(6)(c)12 requires consideration of such issues. The rules also preclude consideration of the need for radiation therapy in relation to the district plan and state health plan as required by criterion 1 of section 381.494(6)(c).
The use of 6,000 treatments per machine per year as one criterion for determining the propriety of issuing a certificate of need is within the authority of the Department of Health and Rehabilitative Services to adopt because "utilization" is one of the mandated statutory criteria, supra. The criterion is appropriate to the ends specified in the statute and is reasonably related thereto since the evidence shows that the 6,000 treatments standard is nationally recognized as a reasonable level of productivity for a radiation therapy machine. The defect in the existing and proposed rules is not that the 6,000 treatments criterion is arbitrary and capricious, or that it is unauthorized by the statute, but that the rules preclude balanced consideration of all the other criteria in those instances where the 6,000 treatments criterion is not first satisfied.
The existing and proposed rules in this case have the same defect found with respect to the home health care rule found to be invalid in Department of Health and Rehabilitative Services v. Johnson and Johnson Home Health Care, Inc., 447 So.2d 361 (Fla. 1st DCA 1984). In that case, the Department had a rule that prevented issuance of a certificate of need unless each existing provider within the service area was seeing an average of 300 patients per day by the census of the last quarter. The Court noted that the
300 patients per day standard, while useful as a measure of optimum efficiency, was defective because it precluded balanced consideration of the other criteria of section 381.494(6)(c), Fla. Stat. The Court concluded that the rule exceeded delegated legislative authority because it allowed HRS to ignore some statutory criteria and emphasize others, "contrary to the legislative purpose it is supposed to implement." Unlike the rules in the case at bar, the home health rule did provide two exceptions: when existing providers were "unable" to provide the service or when the new agency would "foster cost containment." 447 So.2d at 362. But since these two exceptions arguably were not broad enough to contain all the missing statutory criteria, it appears that the existence of these two exceptions were not enough to save the rule from a finding that the rule conflicted with the statute. Moreover, the Court found that to the extent HRS tried to save the rule by interpreting the word "unable" to mean "unwilling," the rule was also defective because arbitrary. (This actually not arbitrariness in the rule, but in the application of the rule).
The rules at issue in the case at bar are defective in the same way. First, they conflict with the mandate of section 381.494(6)(c), Fla. Stat., that all criteria be considered in every application for a certificate of need. And second, to the extent that HRS seeks to save the rule by finding exceptions which would be in direct conflict with the explicit language of the rule, the rule is arbitrary and capricious in the sense that these words were used in the home health care case. Indeed, as noted above, the rules here do not even hint of any exceptions, unlike the home health care rules considered by the First District Court of Appeal in the Johnson and Johnson Home Health Care, Inc. case, supra.
It should be noted that the defect in the existing and proposed rules is simply that it is mandatory and does not have exceptions. Thus, they are not like the rule Humana, Inc. v. Department of Health and Rehabilitative Services,
469 So.2d 889 (Fla. 1st DCA 1985). The rule in that case was saved by the addition of the "not normally" exception found in a number of other rules promulgated by HRS to determine need for particular kinds of health services.
469 So.2d at 891. If the existing and proposed rules did not explicit preclude all consideration of the other criteria mandated for consideration by the statute, a much better case might be made for their validity. Humhosco, Inc. v. Department of Health and Rehabilitative Services, 10 F.L.W. 2246 (Fla. 1st DCA,
September 25, 1985). But the Department of Health and Rehabilitative Services in this case must follow its own clear rules, as discussed above. To the extent it seeks to supply a conflicting interpretation allowing exceptions, the home health care case points out that this makes the rule arbitrary and capricious.
The evidence of historical exceptions to the mandatory language of the existing rule shows that health care providers have been subjected to arbitrary and capricious application of the rule. As found as fact, the rule was expressly overridden in 3 of 19 decisions since the rule has been in effect, and was not mentioned at all in 7 of 19 cases. In 1 of these 7 cases, the 6,000 treatments threshold was not satisfied, and in 3 other cases, it was either unknown on this record or not mentioned. In 6 of the 19 decisions, consideration was apparently only given to a subarea within the district. Yet in the case at bar the Department in free form action and at the final hearing proposes to apply the rule strictly so as to preclude all consideration of other criteria. It should be noted that each of the 19 decisions to grant ore deny certificates of need for radiation therapy services in the record in this case may well have been reasonable decisions upon the facts in each case, and the methodologies used therein may also have been reasonable. But so long as HRS has an absolute rule, without any exceptions allowed, the granting of sporadic exceptions directly contrary to the rule is arbitrary and capricious.
The Petitioner further argues that the two rules are invalid for failure to consider the existence of free standing outpatient radiation therapy facilities, which do not require a certificate of need. This is a valid point only to the extent, as discussed above, that the rule precludes consideration of the adequacy of out patient units, since that is one of the statutory criteria. Section 381.494(6)(c)4, Fla., Stat.
However, to the extent that Petitioner complains that the rule does not require free standing units to obtain a certificate of need, that is not the fault of the rule, but is the result of statutes. Only hospitals who propose to provide radiation therapy services requiring capital expenditures of more than
$600,000 need a certificate of need. Section 381.494(1)(c), Fla. Stat. A rule is not invalid for failure to regulate that which is not regulated by statute. Humana, Inc., supra, 469 So.2d at 890.
FINAL ORDER
Upon consideration of the foregoing, it is ORDERED that:
Rule 10-5.11(17), Florida Administrative Code, is invalid as an invalid exercise of delegated legislative authority.
Proposed rule 10-5.11(1)(u) is invalid as an invalid exercise of delegated legislative authority.
DONE and ORDERED this 5th day of November,1985, in Tallahassee, Florida.
WILLIAM C. SHERRILL, JR.
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 5th day of November, 1985.
APPENDIX
RULINGS UPON EACH PROPOSED FINDINGS OF FACT
South Miami Hospital's proposed findings of fact:
The following proposed findings where adopted and found as fact in the body of this recommended order, or if not explicitly found therein, are hereby adopted as findings of fact: 1, 2, 3, 4, 6 (except the first and last sentences), 7(A) through (E), 8(A) through (J)(except sentences 4 and 5 of (B) and sentence 3 of (F)), 10(except the first sentence), and 11 (except the first sentence).
The following proposed findings have been rejected because the Hearing Officer has concluded as a matter of law that the rules exceed statutory authority because they preclude balanced consideration of statutory criteria, and thus the Hearing Officer has not reached the question of whether the rules are reasonably related to the purposes of the statute or appropriate to the ends specified in the statute. These proposed findings are also rejected because they are conclusions of law: 5, 6 (first and last sentences), 10 (first sentence), and 11 (first sentence).
The following proposed finding has been rejected because the state agency action report for certificate of need 1244 is not in evidence, and the testimony is not adequate or not adequately supported on the point: 8(B)(sentences 4 and 5).
The third sentence of proposed finding of fact 8(F) is rejected because the state agency action report was in error when it stated that seven of eleven units in Dade County were performing 6,000 procedures per year.
Proposed finding of fact 9 is rejected as legally irrelevant pursuant to conclusion of law 19.
The Department of Health and Rehabilitative Services's proposed findings of fact:
The following proposed findings of fact were adopted and found as fact in the body of this recommended order, or if not explicitly found therein, are hereby adopted as findings of fact: 1,2,3(except the second sentence), 4, 5, 6, 8, 9, 10, 11, and 12.
The following proposed finding of fact is rejected because in those instances where the 6,000 treatments threshold is not met, the existing and proposed rules preclude consideration of any other rule criteria: 7.
The following proposed finding of fact is rejected because the order of consolidation only permits the record in the section 120.57 hearing to be considered in the rule challenge cases, and not vice versa: 3(second sentence).
Baptist Hospital of Miami, Inc.'s proposed findings of fact:
The following proposed findings of fact were adopted and found as fact in the body of this recommended order, or it not explicitly found therein, are hereby adopted as findings of fact: 1, 2 (except the last sentence), 4, 5, 6, 7(except sentences 2 and 3), 8, 9, 10, 12, 17, 18, and 19.
The last sentence of proposed finding 2 is rejected. There is only perhaps one (1) free standing outpatient radiation unit in District XI, and 15 hospital-based units. TR. 72. Thus, the 90 percent of outpatient treatments must in fact be occurring in the 15 hospital based units rather than in outpatient units. Consequently, although there is no evidence of fraudulent or improper suppression of treatments in this record, the hospitals in District XI which have radiation units certainly are in a position to suppress the number of treatments if they choose to do so.
Proposed finding of fact 3 is rejected. Evidence Which was presented contrary to this finding has been found in findings of fact 49, 51, 52 and 53.
The second and third sentence of proposed findings of fact 7 are rejected. The Hearing Officer needed only 10 to 15 minutes to read through a state agency action report to discover to what extent HRS mentioned or considered the rule, and all of the findings herein pertaining to specific state agency action reports were compiled in that length of time per report. Further, the few mistakes made by Mr. Cushman have been discussed in findings of fact 85- 101, and the totality of those mistakes, hopefully not compounded by mistakes of the Hearing Officer, did not change the conclusions that are inescapable when from finding of fact 101. The decisional history by HRS under the rule has been arbitrary given the fact that the rule is absolute and has no exceptions.
Proposed finding of fact 11 is irrelevant since the state agency action reports themselves are in evidence, and is rejected on that basis.
Proposed findings of fact 13, 15, and 16 are true but misleading since the analysis in each case by HRS was not based upon consideration of the entire District, but was a finding based solely upon a subarea in the district. The essentials of these proposed findings of fact have been dealt with in findings of fact 95B and 97B, C, and D.
Proposed finding of fact 14 is rejected because lacking a basis of fact in the record to make it relevant. The record contains no evidence as to any local health systems agency having subdivided a district, except for District XI, and it further contains no evidence as to why that might be relevant in evaluation of certificate of need decisions in districts other than District XI.
Mercy Hospital, Inc.'s proposed findings of fact:
Proposed finding of fact 1 is rejected as a proposed finding of fact because it is a conclusions of law and has been discussed in that section, to the extent relevant.
The following proposed findings of fact were adopted and found as fact in the body of his recommended order, or if not explicitly found therein, are hereby adopted as findings of fact: 2(except the last sentence), 3, 5, and 6.
The last sentence of proposed finding of fact 2 is rejected. The fact that the state agency action reports in some cases, as noted in finding of fact 100, mentioned that utilization rates of some or all of the units in the district does not compel the conclusion proposed that "it was in fact one of the criteria that had to be met." The Hearing Officer has read each state agency action report, and although a utilization rate may have been mentioned in the state agency action report in some cases, HRS did not state in the report that
the 6,000 treatments threshold "had to be met" or that the rule was satisfied, unless mentioned in the findings above.
Proposed finding of fact 4 has been dealt with in conclusions of law 18 and 19. A number of the facts contained in this proposed finding have in fact been found. But the arguments of law contained in this proposed finding of fact are either contained in the conclusions of law or are irrelevant in view of those conclusions of law.
COPIES FURNISHED:
John Gilroy, Esquire
Dept. of Health and Rehabilitative Services
Building 1, Suite 407
1323 Winewood Boulevard
Tallahassee, Florida 32301
Jean Laramore, Esquire
G. Steven Pfeiffer, Esquire LARAMORE & CLARK, P.A.
325 North Calhoun Street Tallahassee, Florida 32301
Lewis W. Fishman, Esquire 9400 South Dadeland Blvd.
Suite 420, Dadeland Towers South Miami, Florida 33156
Kyle R. Saxon, Esquire Catlin, Saxon, Tuttle & Evans 800 Alfred I. duPont Building Miami, Florida 33131
Steven Huss, General Counsel Department of Health and
Rehabilitative Services 1323 Winewood Boulevard
Tallahassee Florida 32301
David Pingree, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard
Tallahassee, Florida 32301
Liz Cloud, Chief
Bureau of Administrative Code 1802 The Capitol
Tallahassee, Florida 32301
Carroll Webb, Executive Director Administrative Procedure Committee
120 Holland Building Tallahassee, Florida 32301
NOTICE OF RIGHT TO JUDICIAL REVIEW
PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO JUDICIAL REVIEW PURSUANT TO SECTION 120.68, FLORIDA STATUTES. REVIEW PROCEEDINGS ARE GOVERNED BY THE FLORIDA RULES OF APPELLATE PROCEDURE. SUCH PROCEEDINGS ARE COMMENCED BY FILING ONE COPY OF A NOTICE OF APPEAL WITH THE AGENCY CLERK OF THE DIVISION OF ADMINISTRATIVE HEARINGS AND A SECOND COPY, ACCOMPANIED BY FILING FEES PRESCRIBED BY LAW, WITH THE DISTRICT COURT OF APPEAL, FIRST DISTRICT, OR WITH THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE THE PARTY RESIDES. THE NOTICE OF APPEAL MUST BE FILED WITHIN 30 DAYS OF RENDITION OF THE ORDER TO BE REVIEWED.
| Issue Date | Proceedings |
|---|---|
| Nov. 05, 1985 | Final Order (hearing held , 2013). CASE CLOSED. |
| Issue Date | Document | Summary |
|---|---|---|
| Nov. 05, 1985 | DOAH Final Order | Rules are deemed invalid exercise of delegated authority because they preclude balanced consideration of all mandated statutory criteria. |
