STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
PSYCHIATRIC INSTITUTES OF AMERICA, INC., ) d/b/a PSYCHIATRIC INSTITUTE OF ORLANDO, )
)
Petitioner, )
)
v. ) CASE NO. 84-1827
) DEPARTMENT OF HEALTH AND REHABILITATIVE ) SERVICES and HOSPITAL MANAGEMENT )
ASSOCIATES, )
)
Respondents. )
)
RECOMMENDED ORDER
Pursuant to notice, an administrative hearing was held before Diane D. Tremor, Hearing Officer with the Division of Administrative Hearings, on February 19 and 20, 1985, in Orlando, Florida. The issue for determination in this proceeding is whether Hospital Management Associates, Inc. is entitled to a Certificate of Need to construct and operate a 60-bed long-term adolescent psychiatric facility in Orange County, Florida.
APPEARANCES
For Petitioner: C. Gary Williams and
Michael Glazer
Post Office Box 391 Tallahassee, Florida 32302
For Respondent John M. Carlson
HRS: Assistant General Counsel 1323 Winewood Boulevard Building One, Suite 407 Tallahassee, Florida 32301
For Respondent Robert S. Cohen HMA: Post Office Box 669
Tallahassee, Florida 32301 INTRODUCTION
In support of its position that it is entitled to a Certificate of Need, Hospital Management Associates (HMA) presented the testimony of Dr. Max Sugar, accepted as an expert in child and adolescent psychiatry; John R. Chambless, accented as an expert in the architectural design and construction costs of health care facilities; Phil C. Braeuning, accepted as an expert in health care administration of psychiatric hospitals; Noel D. Falls, accepted as an expert in
market feasibility studies and psychiatric bed need methodologies; Roger Munz, accepted as an expert in health care administration; and Howard H. Weston, accepted as an expert in bond financing of health care facilities. HMA's Exhibits 1, 2, 3 and 5 were received into evidence.
Psychiatric Institute of Orlando (PIO) presented the testimony of Anthony Cusati, III, accepted as an expert in health care finance for psychiatric facilities; Dr. Victor R. Gonzalez, accepted as an expert in psychology, child psychology and the treatment of long- and short-term adolescent psychiatric patients; and Carol Moore, accepted as an expert in health care planning and psychiatric bed need methodologies. PIO's Exhibits 1 through 10 were received into evidence.
Reid Jaffe, accepted as an expert in health care planning, testified on behalf of the Department of Health and Rehabilitative Services (HRS).
Subsequent to the hearing, the parties submitted proposed findings of fact and proposed conclusions of law, as well as memoranda in support of their respective positions. To the extent that the parties' proposed findings of fact are not included in this Recommended Order, they are rejected as not being supported by competent substantial evidence adduced at the hearing, irrelevant or immaterial to the issues in dispute or as constituting legal conclusions as opposed to factual findings.
FINDINGS OF FACT
Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found:
In November of 1983, HMA filed its application for a Certificate of Need to construct and operate a 60-bed adolescent treatment center in Orlando, Florida. An omissions response was filed by HMA in January of 1984. Thereafter, HRS issued its initial intent to grant the application and PIO requested an administrative hearing.
HMA is a privately held corporation which owns or manages twelve or thirteen acute care hospitals in the States of Kentucky, West Virginia, Pennsylvania, Missouri, Texas and Florida, several of which are psychiatric hospitals. The proposed long-term psychiatric treatment facility for adolescents is patterned after a 55-bed program currently operated by HMA in Arlington, Texas.
The proposed facility will be a freestanding campus-like setting located on ten to fifteen acres of land in the southern portion of Orlando. The precise site has not yet been selected. The single-story facility will have a total size of approximately 45,000 to 50,000 square feet and will be divided into two separate units which connect into a core area containing various support services, such as offices, a gymnasium, a swimming pool, a media center, and an occupational therapy area. While the location finally selected for the facility will have a bearing on the site costs of the project, the estimated construction costs of approximately 3.1 billion do contain a contingency factor and are reasonable at this stage of the project. Each unit will be served by two interdisciplinary treatment teams headed by a physician or a psychiatrist. Key personnel for the facility, such as department heads and program directors, will most likely be recruited from outside the Orlando area in order to obtain persons with experience in long-term care for adolescents. The treatment program is designed to serve adolescents between the ages of 10 and 19, though
the bulk of patients will be middle school and high school individuals between the ages of 13 and 17. While the primary service area will be adolescents in District 7, the remainder of the central Florida region is identified as a secondary service area. A full educational program at the facility is proposed. The concept of the hospital will be to treat the whole person, not just his psychiatric problems, and the treatment program will include and involve family members and other factors which may have a bearing on the adolescent's ability to fit into society. The form of treatment is based upon a "levels" approach -- a form of behavior modification wherein privileges are granted for appropriate behavior and the patient is allowed to move up to the next succeeding level of privileges. It is contemplated that the average length of stay for a patient will be approximately six months -- the average time anticipated for a patient to move from the admission level to the level of discharge. HMA intends to seek accreditation of its proposed facility from the Joint Commission on Accreditation of Hospitals.
The total estimated project cost for the proposed facility is
$6,307,310.00. Financing is to be obtained either through a local bond issue or by a private lending institution. Based upon an evaluation of HMA's audit reports for the past three years, an expert in bond financing of health care facilities was of the opinion that HMA would be eligible either for a private placement or a bond issue to finance the proposed project.
HMA intends to charge patients $325.00 per day, and projects an occupancy rate of 80 percent at the end of its second year of operation. This projection is based upon a lack of similar long-term psychiatric facilities for adolescents in the area, the anticipated, experience at the Arlington, Texas adolescent facility and the anticipated serving of clients from CYF (Children Youth and Families -- a state program which; serves adolescents with psychiatric and mental problems). Although no established indigent care policy is now in existence, HMA estimates that its indigency caseload will be between 3 and 5 percent. It is anticipated that the proposed facility will become a contract provider for CYF for the care and treatment of their clients and that this will comprise 20 percent of HMA's patient population.
HRS's Rule 10-5.11(26), Florida Administrative Code, relating to long- term psychiatric beds, does not specify a numerical methodology for quantifying bed need. However, the Graduate Medical Education National Advisory Committee (GMFNAC) methodology for determining the need for these beds is generally accepted among health care planners. The GMENAC study was initially performed in order to assess the need for psychiatrists in the year 1990. It is a "needs- based" methodology, as opposed to a "demand-based" methodology, and attempts to predict the number of patients who will theoretically need a particular service, as opposed to the number who will actually utilize or demand such a service. Particularly with child and adolescent individuals who may need psychiatric hospitalization, there are many reasons why they will not seek or obtain such care. Barriers which prevent individuals from seeking psychiatric care include social stigma, the cost of care, concerns about the effectiveness of care, the availability of services and facilities and other problems within the family. Thus, some form of "demand adjustment" is necessary to compensate for the GMENAC formula's overstatement of the need for beds.
The GMENAC formula calculates gross bed need by utilizing the following factors: a specific geographic area's population base for a given age group, a prevalency rate in certain diagnostic categories, an appropriate length of stay and an appropriate occupancy factor. In reaching their conclusions regarding the number of long-term adolescent psychiatric beds needed in District 7, the
experts presented by HMA and PIO each utilized the GMENAC formula and each utilized the same prevalency rate for that component of the formula. Each appropriately used a five-year planning horizon. However, each expert reached a different result due to a different opinion as to the appropriate age group to be considered, the appropriate length of stay, the appropriate occupancy factor and the factoring in of a "demand adjustment."
In calculating the long-term adolescent psychiatric bed need for District 7 in the year 1989, HMA's expert used a population base of ages 0 to 17, lengths of stay of 150 and 180 days, an occupancy level of 80 percent and an admissions factor of 96 percent. Utilizing those figures, the calculation demonstrates a 1989 need for 158 beds if the average length of stay is 150 days, and 189 beds if the average length of stay is 180 days. If the population base is limited to the 10 to 19 age bracket, the need for long-term psychiatric beds is reduced to between 70 and 90, depending upon the length of stay. From these calculations, HMA's expert concludes that there is a significant unmet need for long-term adolescent psychiatric beds in District 7. This expert recognizes that the numbers derived from the GMENAC formula simply depict a statistical representation or indication of need. In order to derive a more exact number of beds which will actually be utilized in an area, one would wish to consider historical utilization in the area and/or perform community surveys and examine other site-specific needs assessment data. Believing that no similar services or facilities exist in the area, HMA's need expert concluded that there is a need for a 60-bed facility in District 7.
In applying the GMENAC methodology, PIO's need expert felt it appropriate to utilize a base population of ages 10 through 17, an average length of stay of 90 days and an occupancy rate of 90 percent. Her calculations resulted in a bed need of 37 for the year 1990. Utilizing a length of stay of 120, 150 and 180 days and a 90 percent occupancy rate, a need of 50, 62 and 75 beds is derived. If an occupancy rate of 80 percent is utilized, as well as a population of ages 10 - 17, the need for beds is 42, 56, 70 and 84, respectively, for a 90, 120, 150 and 180 day average length of stay. The need expert for PIO would adjust each of these bed need numbers by 50 percent in order to account for the barriers which affect the actual demand for such beds.
Since the HMA proposed facility intends to provide service only to those patients between the ages of 10 and 19, use of the 0 - 17 population would inflate the need for long-term adolescent psychiatric beds. Likewise, PIO's non-inclusion of 18 and 19 year olds understates the need. PIO's use of a 90-day average length of stay would tend to understate the actual need in light of HMA's proposed treatment program which is intended to last approximately six months. While some demand adjustment is required to properly reflect the barriers which exist to the seeking of long-term adolescent psychiatric care, the rationale of reducing by one-half the number derived from the GMENAC methodology was not sufficiently supported or justified. Even if HMA's calculations were reduced by one-half, a figure of between 79 and 94 beds would be derived.
The existence of other long-term adolescent psychiatric beds in District 7 was the subject of conflicting evidence. West Lake Hospital in Longwood, Seminole County, holds a Certificate of Need and a license as a special Psychiatric hospital with 80 long-term beds. However, the Certificate of Need was issued prior to the adoption of Rules 10-5.11(25) and (26), Florida Administrative Code, when anything in excess of 28-days was considered long- term. The West Lake application for a Certificate of Need referred to a four- to-six week length of stay -- or a 28 to 42 day period --for adults, and a ten
week, or 70 day length of stay for children and adolescents. In preparing inventories for planning purposes, HRS considers the 40 child and adolescent psychiatric beds at West Lake Hospital to be acute or short-term beds. The West Lake facility is not included in HRS's official inventory of licensed and approved long-term care beds as of October 1, 1984. In fact, the only long-term care beds listed for District 7, in addition to HMA's proposed psychiatric facility, are beds devoted to the treatment of substance abuse.
PI0 is the holder of a Certificate of Need to construct and operate a 60-bed short-term adolescent psychiatric hospital in Southwest Orange County, and is currently planning the actual development and construction of the facility. If PIO is not able to reach the census projections contained in its Certificate of Need application, its ability to generate earnings could be adversely impacted. Even a five percent decrease in PIO's census projections would require PIO to either raise its rates or make reductions in direct costs. This could include a decrease in staffing, thus affecting a reduction in the available programs, problems in attracting quality staff and ultimately a reduction in the quality of care offered at the PIO facility. In a batch subsequent to the HMA application, PIO requested the addition of 15 long-term adolescent psychiatric beds and 15 substance abuse beds.
When an adolescent psychiatric patient is evaluated for placement in a hospital setting, it is generally not possible to determine how long that patient will require hospitalization. The adolescent psychiatric patient is often very guarded, distrusting both parents and other adults, and it is difficult to obtain full and necessary information from both the patient and the parents. Several weeks of both observation and the gathering of data, such as school records, are necessary in order to access the adolescent patient's degree of disturbance. With respect to treatment programs, there is no sharp medical demarcation between a 60-day period and a 90 day period. Patients in short-term facilities often stay longer than 60 days and patients in long term facilities often stay less than 90 days. The length of stay is very often determined by the parents, in spite of the treatment period prescribed by the physician. The treatment programs in both short-term and long-term psychiatric facilities are very similar, and short- and long-term patients are often treated in the same unit. Staffing for the two types of facilities would be basically the same, with the exception, perhaps, of the educational staff.
CONCLUSIONS OF LAW
As the holder of a Certificate of Need for an adolescent psychiatric treatment facility, PIO has standing to challenge the granting of a Certificate of Need to another facility to be located in the same area which will treat the adolescent psychiatric patient. The fact that one facility is designated for the treatment of short-term patients and the other for the treatment of long- term patients does not defeat PIO's standing. The evidence is clear that there is a great overlap in services, in treatment programs, in patients and in staffing requirements between a short-term and a long-term psychiatric treatment facility. While HRS currently has two separate rules regarding the need for short-term and long-term psychiatric facilities, this demarcation for the purposes of determining need and record-keeping on the part of HRS does not eradicate the potential adverse impacts which one type of facility may have on the other. It is concluded that PIO has sufficiently alleged its substantial interest in the outcome of this proceeding so as to participate as a party.
In addition to the overall statutory criteria to be evaluated in determining whether a Certificate of Need should he issued, the proposed
facility must be considered in light of Rule 10-5.11(26), Florida Administrative Code. Many of the statutory and regulatory criteria for review require a comparison and an accessment of the availability, accessibility, utilization and adequacy of like and existing health care services in the same district. The record in this case supports the conclusion that there are, currently, no facilities in District 7 devoted to providing long term care -- to wit, in excess of 90 days, for adolescents with psychiatric problems. The only evidence adduced at the hearing pertaining to other facilities which provide inpatient psychiatric care to adolescents in District 7 was that relating to the facility at West Lake and the approved, but unbuilt, facility of PIO. PIO admits that it is a short-term facility and the record demonstrates that the average length of stay for adolescents at West Lake is less than 90 days. Therefore, those criteria relating to like and similar facilities in District 7 are not relevant to the need for beds proposed in HMA's application.
The question thus becomes one of whether there is a need at all for long-term psychiatric beds for adolescents in District 7. Since HRS has adopted no numerical methodology for establishing a bed need for long-term adolescent psychiatric services, it is appropriate to utilize the GMENAC methodology to derive some estimate of the need for such services. Whether one accepts the manner of calculating the GMENAC methodology proposed by the HA expert or the PIO expert, the record demonstrates that there is clearly an unmet need in District 7 for long-term psychiatric services for adolescents. The figure derived by HMA's expert -- between 158 and 189, based upon average lengths of stay of 150 and 180 days, is admittedly high. The population base utilized, ages 0 to 17, does not reflect the population HMA intends to serve. Based upon the program contemplated by HMA, a 150 or 180 day average length of stay is reasonable, as is the 80 percent occupancy factor. Some adjustment, however, should be made to the end result of the calculation in order to reflect the barriers which exist to the seeking of adolescent psychiatric care. On the other hand, a demand adjustment factor as high as 50 percent, as applied by PIO's expert, was simply not supported by the record in this proceeding. While a long-term psychiatric facility is defined in terms of a 90 day length of stay, the evidence supports the use of a longer period in this instance when calculating need pursuant to the GMENAC methodology. Since Rule 10- 5.11(26)(c)1, Florida Administrative Code, recognizes that an 80 percent average annual occupancy rate is acceptable for the granting of additional long-term beds, use of a 90 rate is unreasonably high. Thus, the figures derived by PIO's expert -- between 19 and 37 beds -- are found to be unreasonably low. By adjusting PIO's calculations upwards and HMA's calculations downwards, and considering the fact that there are no existing long-term adolescent psychiatric facilities in District 7, it is concluded that there is a need for a 60-bed
long-term care facility in that District.
Turning now to the remaining relevant statutory and regulatory criteria, HMA has demonstrated that its prior experience in managing psychiatric facilities and its intent to seek accreditation b the Joint Commission on Accreditation of Hospitals renders it able to provide quality care to its patients. Section 381.494(6)(c)3, Florida Statutes. HMA presented sufficient evidence to establish the short-term and long-term financial feasibility of its proposal, in accordance with Section 381.494(6)(c)9, Florida Statutes. The project is capable of being financed through either a public offering or a private placement of tax exempt municipal or governmental bonds. Given the fact that there are no existing similar facilities in the District and the undisputed need for long-term psychiatric beds for adolescents, HMA should be able to reach its projected 80 percent occupancy level within the first three years of operation. The impact of the proposed project upon PIO's short term facility
was not adequately demonstrated to be adverse. While PIO did adduce evidence to the effect that a 5 percent decrease in its census could result in either rate increases or staff cutbacks, PIO failed to establish what its census projections are, what its rates are and what its staffing pattern is. The Certificate of Need law recognizes that competition can be a beneficial factor and can promote quality assurance and cost-effectiveness. Section 381.494(6)(c)12 and 381.493(2), Florida Statutes. PIO failed to establish that whatever competitive forces the proposed HMA facility may exert upon PIO's short-term facility are necessarily adverse to PIO or the community. The reasonableness of the costs and methods of construction were adequately established by HMA, in accordance with Section 381.494(6)(c)13, Florida Statutes. While the building design may change somewhat as the project progresses to completion and the site costs may need adjustment when the actual-site is chosen, HMA's estimation of construction costs were not shown to be unreasonable. Since there are no existing long-term adolescent psychiatric facilities in District 7, the provisions of Section 381.494(6)(d), Florida Statutes, are incapable of application to this proposed project.
Turning finally to the relevant portions of Rule 10 5.11 (26), Florida Administrative Code, HMA has reasonably, in light of the need for its facility, projected an average annual occupancy rate of 80 percent for its third year of operation and it is undisputed that the facility, no matter where it is located within Orlando, would b within two hours travel time for the population of District 7. Rule 10-5.11(26)(c)2 and 3. As previously concluded, the GMENAC methodology is appropriate for accessing the needs of the community, in light of the fact that HRS has not established another numerical methodology for determining need and that no other needs assessment data was established. Rule 10-5.11(26)(c)4. HMA has sufficiently identified its target population, its service area and the expected length of stay, in accordance with Rule 10- 5.11(26)(d). While its expected sources of referrals and its relationship to other components of the mental health system in District 7 were not identified with specificity, it is recognized that, at this stage of the proceeding, it would be difficult to obtain commitments from psychiatrists or other mental health organizations. The evidence did establish HMA's desires and intent to obtain a contract with the CYF program for the provision of care to its clients. HMA's experience in operating similar facilities and programs should foster its ability to set up referral patterns with providers of psychiatric services once the opening date of its facility can be estimated with more accuracy.
The respondent HMA having demonstrated compliance with all the relevant statutory and regulatory criteria, it is entitled to a Certificate of Need for its proposed project.
Based upon the findings of fact and conclusions of law recited herein, it is RECOMMENDED that HMA grant HMA's application for a Certificate of Need to construct and operate a 60-bed long-term adolescent psychiatric facility in Orlando, Florida.
Respectfully submitted and entered this 9th day of July, 1985, in Tallahassee, Florida.
DIANE D. TREMOR, 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 9th day of July, 1985.
COPIES FURNISHED:
C. Gary Williams and Michael J. Glazer
P. O. Box 391
Tallahassee, Florida 32302
John M. Carlson
Assistant General Counsel 1323 Winewood Blvd.
Building One, Suite 407 Tallahassee, Florida 32301
Robert S. Cohen
O. Box 669
Tallahassee, Florida 32301
David Pingree Secretary
Department of Health and Rehabilitative Services 1323 Winewood Blvd.
Tallahassee, Florida 32301
=================================================================
AGENCY FINAL ORDER
=================================================================
STATE OF FLORIDA
DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES
PSYCHIATRIC INSTITUTES OF AMERICA, INC., d/b/a PSYCHIATRIC INSTITUTE OF ORLANDO,
Petitioner, CASE NO. 84-1827 DEPARTMENT OF HEALTH AND
REHABILITATIVE SERVICES and HOSPITAL MANAGEMENT ASSOCIATES,
Respondents.
/
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) in the above-styled cause submitted a recommended order to the Department of Health and Rehabilitative Services (HRS). A copy of that Recommended Order is attached hereto. Exceptions were filed by Respondent, Department of Health and Rehabilitative Services, and by Petitioner, Psychiatric. Institutes of America, Inc., d/b/a Psychiatric Institute of Orlando.
RULING ON EXCEPTIONS
Paragraph 2 of the findings of fact is based upon competent substantial evidence. PIO's 1st exception is denied.
Paragraph 4 of the findings of fact is based upon competent substantial evidence. PIO's 2nd and 3rd exceptions are denied.
Paragraph 5 of the findings of fact is based upon competent substantial evidence. PIO's 4th exception is denied.
There is competent substantial evidence supporting paragraph 8 of the findings of fact. PIO's 5th exception is denied.
Where the rule provides no methodology for calculating need, and there is no data upon which the average annual occupancy rate for all existing long- term hospital psychiatric beds in the district can be calculated, and where there is no evidence of local need from the local health planning council, it is not inappropriate to consider other means of projecting need. In this case the Hearing Officer has taken the projections of PIO and the projection of HMA and decided on a middle ground. Institution specific planning in determining need for a proposed facility is not appropriate. Since Rule 10- 5.11(26) defines long-term psychiatric services as "a category of services which provides hospital based inpatient services averaging a length of stay of 90 days" it is
inappropriate to calculate need based upon a 150 day average length of stay. By the same token, Rule 10-5.11(26) does not provide age parameters for the application of adult, children and adolescent beds. PIO's 6th exception is granted.
Paragraph 11 of the findings of fact is supported by competent substantial evidence. PIO's 7th and 9th exceptions are denied.
Paragraph 5 of the findings of fact addresses financial feasibility of the proposed project. PIO's 8th exception is denied.
Even if improper institution specific planning is not applied, there is a demonstrated need for the proposed HMA facility. PIO's 10th exception is denied.
The conclusion that m is able to provide quality care to its patients is supported by the findings of fact which are based upon competent substantial evidence. PIO's 11th exception is denied.
The conclusions that HMA presented sufficient evidence to establish the short-term and long-term financial feasibility of its proposal and that HMA proved the reasonableness of the costs and methods of construction, are supported by the findings of fact which are based upon competent substantial evidence. PIO's 12th and 13th exceptions are denied.
The conclusions that the facility, no matter where it is located within Orlando, would be within two hours travel time for the population of District 7, that HMA has sufficiently identified its target population, its service area and expected length of stay are supported by the findings of fact which are based upon competent substantial evidence. PIO's 14th and 15th exceptions are denied.
HRS's first exception is granted, Community Psychiatric Centers, Inc.
v. Department of Health and Rehabilitative Services and PIA, Inc. 10 FLW 1988 (1st DCA August 20, 1985) provides:
To be entitled, CPC must be an affected person. Rule 10-5.02(20), FAC defines an "affected person":(20) "Affected person" means the person whose application/proposal is being reviewed, members of the public who are to be served by the person proposing the project, health care facilities and health maintenance organizations located in the health service area in which the service is proposed to be offered or developed which provide services similar to the proposed services under review and health care facilities and health maintenance organizations which prior to receipt by the agency of the proposal being reviewed, have formally indicated an intention to provide such similar services in the future.
The record does not reveal that CPC falls within any of the four categories of an "affected person.
Therefore, the dismissal of the petition of CPC is affirmed.
The findings herein show that PIO is the holder of a Certificate of Need to construct and operate a 60-bed short-term adolescent psychiatric hospital in Orange County, Florida. The record shows that PIO's application was filed prior to HMA's application herein, however, PIO's application was for short-term adolescent psychiatric beds and HMS's application is for long-term psychiatric beds. For this reason there is no intention to provide "similar services." PIO does not, fall within any of the four categories, and therefore, lack standing to challenge the agency decision to grant a CON to HMA. Its petition should be dismissed. Charter Medical Southeast, Inc., d/b/a Charter Haven Hospital v.
DHRS and Management Advisory and Research Center, Inc., d/b/a Glen Bay Hospital of Florida DOAH Case No. 84-2901.
FINDINGS OF FACT
The findings of fact in the Recommended Order are hereby adopted and incorporated by reference except paragraph 10 of the findings of fact, which contains conclusions of law not findings of fact, and for that reason is deleted.
CONCLUSIONS OF LAW
As the holder of a Certificate of Need for short-term Psychiatric treatment facility, PIO does not have standing to challenge the granting of a Certificate of Need to another facility to be located in the same area which will treat
long-tea adolescent psychiatric0 patients. The fact that one facility is designated for the treatment of short-term patients and the others for the treatment of long-term patients defeats PIO's standing because PIO is not proposing similar services. Community Psychiatric Centers, Inc. v. DHRS 10 FLW 1776 (1st DCA August 20, 1985.) HRS currently has two separate rules regarding the need for short-term and long-tea psychiatric facilities.
In addition to the overall statutory criteria to be evaluated in determining whether a Certificate of Need should be issued, the Proposed facility must be considered in light of Rule 10-5.11(26), Florida Administrative Code. Many of the statutory and regulatory criteria for review require a comparison and an assessment of the availability, accessibility, utilization and adequacy of like and existing health care services in the same district. The record in this case supports the conclusion that there are, currently, no facilities in District 7 devoted to providing long-term care for adolescents with psychiatric problems. The only evidence adduced at the hearing pertaining to other facilities which provide inpatient psychiatric care to adolescents in District 7 was that relating to the facility at West Lake and the approved, but unbuilt, facility of PIO. PIO admits that it is a short-term facility and the record demonstrates that the average length of stay for adolescents at West Lake is less than 90 days. Therefore, those criteria relating to like and similar facilities in District 7 are not relevant to the need for beds proposed in HMA's application.
The questions thus becomes one of whether there is a need at all for long- term psychiatric beds for adolescents in District 7. Since HRS has adopted no numerical methodology for establishing bed need for long-term adolescent Psychiatric services, and there are no existing facilities from which to determine utilization rates, and there was no evidence offered of the local health plan, it is not inappropriate to utilize the GMENAC methodology to derive some estimate of the need for such services. Whether one accepts the manner of calculating the GMENAC methodology proposed by the HMA expert or the PIO expert, the record demonstrates that there is clearly an unmet need in District 7 for
long-term psychiatric -services for adolescents. The figure derived by HMA's expert -- between 158 and 189, based upon average lengths of stay of 150 and 180 days, is admittedly high. Some adjustment, however, should be made to the end result of the calculation in order to reflect the barriers which exist to the seeking of adolescent psychiatric care. On the other hand, a demand adjustment factor as high as 50 percent, as applied by PIO's expert, was simply not supported by the record in this proceeding. A long-term psychiatric facility is defined in terms of a 90 day length of stay. Since Rule 10-5.l1(26)(c)(1), Florida Administrative Code recognizes that an 80 percent average annual occupancy rate is acceptable for the granting of additional long-term beds, use of a 90 percent rate is unreasonably high. Thus, the figures derived by PIO's expert -- between 19 and 37 beds -- are found to be unreasonably low. By adjusting PIO's calculations upwards and HMA's calculations downwards, and considering the fact that there are no existing long-term adolescent psychiatric facilities in District 7, it is concluded that there is a need for a 60 bed
long-term care facility in that District.
Turning now to the the remaining relevant statutory and regulatory criteria, HMA has demonstrated that its prior experience in managing psychiatric facilities and its intent to seek accreditation by the Joint Commission on Accreditation of Hospitals renders it able to provide quality care to its patients. Section 381.494(6)(c)3, Florida Statutes. HMA presented sufficient evidence to establish the short-term and long-term financial feasibility of its proposal, in accordance with Section 381.494(6)(c)9, Florida Statutes. The project is capable of being financed through either a public offering or a private placement of tax exempt municipal or government bonds. Given the fact that there are no existing similar facilities in the District and the undisputed need for long-term psychiatric beds for adolescents, HMA should be able to reach its projected 80 percent occupancy level within the first three years of operation. The impact of the proposed project upon PIO's short-term facility was not adequately demonstrated to be adverse. While PIO did adduce evidence to the effect that a 5 percent decrease in its census could result in either rate increases or staff cutbacks, PIO failed to establish what its census projections are, what its rates are and what its staffing pattern is. The Certificate of Need law recognizes that competition can be a beneficial factor and can promote quality assurance and cost-effectiveness. Section 381.494(6)(c)12 and 381.493(2), Florida Statutes. PIO failed to establish that whatever competitive forces the proposed HMA facility may exert upon PIO's short-term facility are necessarily adverse to PIO or the community. The reasonableness of the costs and methods of construction were adequately established by HMA, in accordance with Section 381.494(6)(c)13, Florida Statutes. While the building design bay change somewhat as the project progresses to completion and the site costs may need adjustment when the actual site is chosen, HMA's estimation of construction costs were not shown to be unreasonable. Since there are no existing long-term adolescent psychiatric facilities in District 7, the provisions of Section 381.494(6)(d), Florida Statutes, are incapable of application to this proposed project.
Turning finally to the relevant portions of Rule 10.5.11(26), Florida Administrative Code, HMA has reasonably, in occupancy rate of 80 percent for its third year of operation and it is undisputed that the facility, no matter where it is located within Orlando, would be within two hours travel time for the population of District 7. Rule 10-5.11(26)(c)2 and 3. As previously concluded, the GMENAC methodology is appropriate for accessing the needs of the community, in light of the fact that HRS has not established another numerical methodology for determining need and that no other needs assessment data was established.
Rule 10.5.11(26)(c)4. HMA has sufficiently identified its target population,
its service area and the expected length of stay, in accordance with Rule 10- 5.11(26)(d). While its expected sources of referrals and its relationship to other components of the mental health system in District 7 were not identified with specificity, it is recognized that, at this stage of the proceeding, it would be difficult to obtain commitments from psychiatrists or other mental health organizations. The evidence did establish HMA's desires and intent to obtain a contract with the CYF program for the provision of care to its clients. HMA's experience in operating similar facilities and programs should foster its ability to set- up referral patterns with providers of psychiatric services once the opening date of its facility can be estimated with more accuracy.
The respondent HMA having demonstrated compliance with all the relevant statutory and regulatory criteria, it is entitled
to a Certificate of Need for its proposed project.
Based upon the foregoing it is
ADJUDGED that (1) HMA's application for a certificate of Need to construct and operate a 60-bed long-term adolescent psychiatric facility in Orlando, Florida, is granted.
DONE on this 1st day of November, 1985, at Tallahassee, Florida.
DAVID H. PINEGREE
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, AID A SECONDCOPY, 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.
| Issue Date | Proceedings |
|---|---|
| Jul. 09, 1985 | Recommended Order (hearing held , 2013). CASE CLOSED. |
| Issue Date | Document | Summary |
|---|---|---|
| Nov. 01, 1985 | Agency Final Order | |
| Jul. 09, 1985 | Recommended Order | Certificate of Need (CON) issued. Competitor failed to demonstrate project would have an adverse impact on its short-term facility. Need for long-term facility existed. |
