STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

TALLAHASSEE MEMORIAL REGIONAL ) MEDICAL CENTER, )

)

Petitioner, )

)

vs. ) CASE NO. 84-2631

)

DEPARTMENT OF HEALTH AND )

REHABILITATIVE SERVICES, )

)

Respondent. )

)

RECOMMENDED ORDER

This matter came on for hearing in Tallahassee, Florida, before the Division of Administrative Hearings by its duly designated Hearing Officer, Robert T. Benton, II, on March 4, 1985. The Division of Administrative Hearings received the transcript of proceedings on March 19, 1985. Subsequently petitioner filed a motion to consolidate proceedings seeking to consolidate the present case with a rule challenge involving the same parties, No. 85-1089R.

The motion to consolidate was denied by order entered May 6, 1985.

The parties are represented by counsel:

For Petitioner: Alfred W. Clark, Esquire

Laramore & Clark, P.A.

325 North Calhoun Street Tallahassee, Florida 32301

For Respondent: Lesley Mendelson, Esquire

and John Carlson, Esquire 1323 Winewood Boulevard

Tallahassee, Florida 32301

Tallahassee Memorial Regional Medical Center (TMRMC) initiated these proceedings by filing a petition for formal administrative hearing on July 3, 1984, seeking "the licensure of 23 of TMRMC's beds as specialty rehabilitation service beds." After the Department of Health and Rehabilitative Services (HRS) transmitted the petition to the Division of Administrative Hearings, pursuant to Section 120.57(1)(b)(3), Florida Statutes (1984 Supp.), Rebab Hospital Services Corporation, allegedly "the holder of CON 2657 permitting it to build a 40 bed comprehensive rehabilitation hospital in Tallahassee," filed a petition to intervene seeking "party status as an intervenor respondent." By order entered November 7, 1984, the petition to intervene was denied.

ISSUES

Whether HRS should license 23 comprehensive rehabilitation beds to TMRMC, at the same time reducing general acute care beds licensed at TMRMC by 23?

Whether, prior to midnight June 30, 1983, TMRMC had 23 comprehensive rehabilitation beds in service?

FINDINGS OF FACT

1. There are "several buildings on the campus" (T. 21) at TMRMC, including the Extended Care Building on Hodges Drive which houses 53 hospital beds, and another building that houses 60 psychiatric hospital beds as well as 60 nursing home beds. Elsewhere there are an additional 598 hospital beds at TMRMC.

   
   

2. TMRMC was licensed at 771 beds (including 60 nursing home beds) on February 3, 1983, when TMRMC's chief operating officer, J. Craig Honaman, wrote Mr. Konrad in HRS' Office of Health Planning and Development as follows:

   
   

   We would like to inform you of an alteration in our acute bed utilization and request your observations relating to the need for

   a Certificate of Need application to reassign the title of the bed function.

   
   

   Historically, Tallahassee Memorial Regional Medical Center has provided rehabilitative services to inpatients of an acute nature, as well as through a progressive care approach in a skilled facility....

   
   

   Therefore, we intend to reassign the 53 beds currently utilized in the skilled nursing facility to a medical rehabilitation unit.

   The change would not affect our license bed capacity. Joint Exhibit No. 6.

   
   

   In reply, Mr. Porter wrote Mr. Honaman a letter dated February 17, 1983, stating:

   
   

   In that you have been providing rehabilitative services to inpatients on a continuous basis, and there will be no increase in licensed bed capacity, this reassignment of beds is not reviewable according to Chapter 10-5, Florida Administrative Cede, the Certificate of Need review process Petitioner's Exhibit No. 5.

   
   

   Effective June 8, 1983, Rule 10-5.11(24), Florida Administrative Code, set out a bed need methodology for comprehensive medical rehabilitation inpatient services. Effective July 1, 1983, Section 395.003(4), Florida Statutes, was amended to provide:

   
   

   The number of beds for the rehabilitation or psychiatric service category for which

   the department has adopted by rule a specialty-bed-need methodology under

   $381.494 shall be specified on the face of the hospital license.

   
   

   Before July 1, 1983, general acute care hospitals like TMRMC had been free to allocate beds among various specialty services on a day to day basis. Until September 1, 1984, HRS issued and renewed TMRMC's license authorizing it to operate a hospital without specifying the number of beds to be dedicated to specialty services.

   
   

3. In the fall of 1983, TMRMC corresponded with Blue Cross, the medicare intermediary for Florida, requesting a distinct part provider number for rehabilitation services, and enclosing Mr. Porter's February 17, 1983, letter to Mr. Honaman. Blue Cross forwarded these materials to the Health Care Finance Administration (HCFA) in Atlanta, who then contacted HRS' Office of Licensure and Certification in Jacksonville for verification. The Office of Licensure and Certification advised HCFA that their records did not reflect rehabilitation beds licensed to TMRMC.

   
   

   EXPANDING SERVICES

   
   

4. When Frances Elise Brown, now TMRMC's Technical Director of Rehabilitation, came to work at TMRMC in 1971, as a physical therapist, TMRMC did not offer speech therapy, occupational therapy or recreational therapy, and did not own what became the Extended Care Building. After TMRMC acquired the Extended Care Building, "there were some physical therapy services provided in that facility." (T. 107) Thereafter, the intensity of physical therapy services increased campus-wide, and in 1978 occupational therapy was "initiated both at Extended Care and in the hospital at the same time." Id. In 1980, TMRMC "initiated speech therapy, which again was delivered both in the hospital and Extended Care at the same time." (T. 107) In 1981, TMRMC acquired an existing outpatient facility that offered physical, occupational and speech therapy. TMRMC "provide[s] services indifferent areas, acute care, long-term, nursing home, home health, in/outpatient services." (T. 102)

   
   

5. Recreational therapy and occupational therapy are also available at TMRMC; and TMRMC enjoys a good working relationship with Williams Orthotics a firm which fits braces and prostheses for patients who need them. Respiration therapy is available as are psychological counseling and the services of a social worker. Nursing services are available, although nobody specifically trained in rehabilitation nursing is on staff. A psychiatrist and an audiologist serve as consultants, but no physiatrist consults.

   
   

6. No substantial changes in rehabilitation services being provided at Extended Care have occurred during the last three years or so, although it might have been during that period that a speech pathologist began spending more time (ten hours a week) at the Extended Care Building. (T. 119) Neither before or after Mr. Honaman's letter of February 3, 1983, announcing "an alteration in . .

   . acute [sick bed utilization," Joint Exhibit No. 6, and an "inten[t] to reassign the 53 [sic] beds," Joint Exhibit No. 6, did TMRMC "change anything about those beds." (T 69) For business reasons, TMRMC was waiting for a distinct part provider number for rehabilitation before proceeding. At one time the thought was to offer comprehensive rehabilitation services in a joint venture with Rehab Hospital Services Corporation, but negotiations collapsed in May of 1983.

   EXTENDED CARE

   
   

7. The Extended Care Building has 23 beds "to the right . . . as one goes in" (T. 66) and 30 beds to the left, but there are no "delineated beds" (T. 116) reserved exclusively for patients in need of rehabilitation. The Extended Care Building houses medically stable patients who need skilled nursing services, whether or not they are suitable candidates for rehabilitation.

   Administratively distinct from TMRMC's acute care facility, the Extended Care Building as a whole has a part-time medical director and a distinct provider number, although TMRMC never received the provider number it sought for rehabilitation beds only. Patients admitted to the Extended Care Building from acute care facilities at TMRMC must first be discharged as acute care patients. They are admitted into the Extended Care Building "according to the screening criteria for extended care." (T. 116) There are no separate rehabilitation admission criteria. The average stay for patients in the Extended Care Building is approximately one month.

   
   

8. On an application for hospital license, TMRMC listed the 53 beds in the Extended Care Building as extended care beds on June 22, 1977. On an application for hospital license dated September 7, 1977, TMRMC listed the 43 beds in the Extended Care Building under the category "SNF (D.P.)," meaning skilled nursing facility, distinct part. TMRMC reported the beds in this category through April 23, 1981, on its renewal applications for hospital licensure. On March 17, 1983, for the first time in a licensure application as far as the evidence shows, TMRMC listed the 53 beds in the Extended Care Building as "SNF/Rehab," meaning skilled nursing facility/rehabilitation. Joint Exhibit No. 1.

   
   

   INVENTORY TAKE

   
   

9. A joint communication from the director of HRS' Office of Licensure and Certification and its deputy assistant secretary for health planning and development dated December 8, 1983, advised hospital administrators that HRS had "arrived at a count of the number of beds in each category for each hospital in Florida," went on to state:

   
   

   We are asking that each hospital review and verify or comment on these counts prior to final agency action. Petitioner's Exhibit No. 10.

   
   

   In response, TMRMC's Mr. Honaman wrote HRS' Jackie Jefferson on December 20, 1983, reporting "[v]arious errors." Petitioner's Exhibit No. 11. An attachment to Mr. Honaman's letter of December 20, 1983, reported 23 "Comprehensive Rehabilitation" beds at TMRMC.

   
   

10. HRS caused notice to be published in the Florida Administrative Weekly on February 17, 1984, Vol. 10, No. 7 of its count of licensed beds in general hospitals by bed type by district, and reported no comprehensive rehabilitation beds at TMRMC. Petitioner's Exhibit No. 12. Mr. Honaman wrote Mr. Rond, administrator of HRS' Comprehensive Health Planning, stating that the "listing is incorrect, as previously reported to you . . . ." Petitioner's Exhibit No.

1. After exchanging letters on the matter with John Adams, a licensure supervisor for HRS, Petitioner's Exhibit Nos. 15 and 16, TMRMC requested a

   formal administrative hearing. Petitioner's Exhibit No. 14. HRS memoranda written on July 26, 1984, reflected HRS' view that TMRMC had no comprehensive rehabilitation beds, Petitioner's Exhibit No. 8, and that recognition of such beds hinged on their being "CARF certified." Petitioner's Exhibit No. 9.

   
   

   CARF STANDARDS

   
   

   1. The Commission on Accreditation of Rehabilitation Facilities (CARF) publishes accreditation criteria and standards for facilities serving people with disabilities. The Extended Care Building meets the safety requirements for physical facilities laid down by CARF (T. 122) and most of the services that CARF requires be offered TMRMC does offer, but TMRMC's Ms. Brown conceded (outside the hearing) that comprehensive rehabilitation is not available at TMRMC. TMRMC's M. T. Mustian was also quoted at hearing as acknowledging that TMRMC does not have a comprehensive rehabilitation program within the meaning of Rule 10-5.11(24), Florida Administrative Code, which references the CARF standards.

      
      

   2. Implicit throughout the CARF standards is the concept of a distinct rehabilitation unit, and there are explicit references to, e.g., "staff organization under the chief executive." Petitioner's Exhibit No. 27, p. 11. "Designated staff should be assigned to the rehabilitation program. Id., p. 39. The standards require that a rehabilitation facility "have clearly written criteria for admission." Petitioner's Exhibit No. 27, p. 27. Beds should be placed in "a designated area which . . . is staffed . . . for the specific purpose of providing a rehabilitation program." Id., p. 39. With respect to medical staff, the standards provide that the "physician responsible for the person's rehabilitation program should possess training and/or experience in rehabilitation" and that the "physician should attend and participate actively in conferences concerning those served." Id., at 39. "Rehabilitation nursing" is to be furnished in addition to basic medical nursing. Id.

      
      

   3. No staff are assigned exclusively to the putative 23-bed unit, nor are records kept separately for rehabilitation beds. TMRMC does not employ a rehabilitation nurse anywhere. There is no medical director of the comprehensive rehabilitation program TMRMC claims to have. The admitting physician sets the course of treatment and decides about discharge. Admitting physicians do not ordinarily attend conferences scheduled with the other therapists.

      
      

   4. In comprehensive rehabilitation units, physical therapists or other specialists typically spend five hours or more daily with a single patient as opposed to the 30 to 45 minutes patients at TMRMC are likely to receive from any one therapist.

      
      

   5. There are no cancer or cardiac rehabilitation patients at TMRMC. The primary caseload consists of stroke victims, patients recovering from joint replacement surgery, "amputee[s and] a few close head injuries." (T. 103) Most patients are older than 45 or 50 and none are admitted under 16 years of age. TMRMC does not furnish vocational training or try to teach people with disabilities to drive automobiles. There is no formal "activities of daily living" program.

      PROPOSED FINDINGS CONSIDERED

      
      

   6. Both parties filed proposed recommended orders, and proposed findings of fact have been considered in preparation of the foregoing findings of fact. Proposed findings have been adopted, in substance unless unsupported by the weight of the evidence, immaterial, cumulative, or subordinate.

      
      

      CONCLUSIONS OF LAW

      
      

   7. For burden of proof purposes, petitioner is in the posture of applying for a hospital license, and has the "burden of establishing entitlement." Rule 28-6.08(3), Florida Administrative Code. See Department of Transportation v.

      J.W.C. Company, Inc., 396 So. 2d 778 (Fla. 1981); Balino v. Department of Health and Rehabilitative Services, 348 So. 2d 349 (Fla. 1st DCA 1977); Zemour, Inc. v. State Division of Beverage, 347 So. 2d 1102 (Fla. 1st DCA 1977).

      
      

   8. Effective July 1, 1983, Ch. 83-244, s. 7 (1983), the hospital licensing law was amended, Ch. 83-244, s. 4 (1983), to insert two additional (the second and third) sentences in Section 395.003(4), Florida Statutes (1983), so that the statute now reads:

      
      

      The department shall issue a license which specifies the number of hospital beds on the face of the license. The number of beds for the rehabilitation or psychiatric service category for which the department has adopted by rule a specialty-bed-need methodology under

      s. 381494 shall be specified on the face of the hospital license. All beds which are not covered by any specialty-bed-need

      methodology shall be specified as general beds. A licensed facility shall not continuously operate a number of hospital beds greater than the number indicated by the department on the face of the license.

      
      

      At issue here is how many "beds for the rehabilitation . . . category for which the department adopted by rule a specialty bed need methodology under s.

      381.494" TMRMC had in place before July 1, 1983.

      
      

   9. Before the statutory amendments took effect, HRS adopted by rule a specialty bed need methodology for comprehensive medical rehabilitation beds, which provides, in part:

      
      

      10-511(24) Comprehensive Medical Rehabilitation Inpatient Services.

      1. Comprehensive medical rehabilitation service is defined as intensive care providing a coordinated multidisciplinary approach to patients with severe physical disabilities such as spinal cord injury, brain injury, stroke, multiple sclerosis, cerebral palsy, hemiplegia, quadriplegia, paraplegia, and other physical disabilities which require an organized program of integrated and coordinated services.

      2. A rehabilitation facility or unit is

         defined as a facility or a distinct part of a facility, a unit, which provides a program of comprehensive medical rehabilitation services and which is designed, equipped, organized, and operated to deliver comprehensive medical rehabilitation services.

         (c) ....

         
         

         1. Standards and criteria.

            1. Unit size. To maximize cost efficiency of comprehensive rehabilitation services, a proposal for new rehabilitation services in a unit must have at least 20 designated beds. A proposal for a new but separate rehabilitation facility must have at least

               40 beds.

               ....

               1. Accessibility comprehensive

                  rehabilitation services must be available to patients in need regardless of ability to pay. Each applicant shall ensure accessibility through Medicare and Medicaid participation.

               2. Programs and services. The scope of rehabilitation services provided must include skilled rehabilitation nursing care, physical therapy, speech therapy, prosthetic and orthopedic devices and services, psychological services and dietary services.

               3. As a minimum, each facility or unit must meet Commission on Accreditation of Rehabilitation Facilities (CARF) standards for hospital-based rehabilitation services. A copy of the standards are incorporated herein by reference.

               
               

         2. Variable services. The actual mix of services will necessarily depend on the population characteristics being served. The following services must be available, if needed, through affiliation or contractual agreement:

            1. Physician services

            2. Nursing services

            3. Physical therapy

            4. Speech therapy

            5. Prosthetic and stroke devices

            6. Inhalation therapy

            7. Psychological services

            8. Occupational therapy

            9. Rehabilitative nursing care

            10. Dietary services

            11. Social work

            12. Vocational evaluation work adjustment

                
                

         3. Optional services. The following services should be offered, if needed:

            1. Driver education

            2. Audiology special education

            3. Vocational counseling

            4. Therapy for children

            5. Job placement

            6. Rehabilitation engineering

         
         

         TMRMC first contends that Rule 10-5.11(24), Florida Administrative Code, is inapposite, arguing that the rule applies only to applications for certificate of need under Section 381.494 et seq., Florida Statutes (1984 Supp.) and has no bearing on licensure decisions. But this argument ignores the explicit reference in the licensure statute to rules "adopted . . . under s. 381.494." Section 395.003(4), Florida Statutes (1984 Supp.) By its terms, the statute makes the certificate of need rule pertinent, and the weight of the expert testimony fully supports this approach.

         
         

   10. In its proposed recommended order, TMRMC also argues that "HRS action in this case amounts to a retroactive application of the Rehab Rule [10- 5.11(24)] and deprives TMRMC of its right to operate its rehabilitation unit, a right which was obtained prior to the effective date of the Rehab Rule." But the "Rehab Rule" took effect before the statute that authorizes and requires separate licensure of rehabilitation beds became effective.

       
       

   11. Another flaw in this contention is the assertion that TMRMC had a rehabilitation unit in the Extended Care Building, either before July 1, 1983, or since. The claim is that a 23-bed unit was in operation when the statutory amendment took effect, but nowhere in the numerous documents in evidence does the number 23 appear until December 20, 1983, about six months later. After TMRMC announced its intentions to set up a 53-bed (not a 23-bed) rehabilitation unit, TMRMC began negotiating with a possible joint venturer to that end and applied to HCFA for a distinct part provider number. The negotiations foundered and the application was denied.

       
       

   12. As a third reason why Rule 10-5.11(24), Florida Administrative Code, should not be considered, TMRMC invokes Section 395.005(5), Florida Statutes (1983) , which provides:

       
       

       Any licensed facility which is in operation at the time of promulgation of any applicable rules under this part shall be given a reasonable time, under the particular circumstances, but not to exceed 1 year from the date of such promulgation, within which to comply with such rule.

       
       

       Putting to one side the circumstance that Rule 10-5.11(24), Florida Administrative Code, was promulgated pursuant to Section 381.494 et seq., Florida Statutes (1983) and not "under this part," the evidence showed that TMRMC was no closer to establishing "a distinct part of [its] facility . . . designed, equipped, organized and operated to deliver comprehensive medical rehabilitation services" in June or July of 1984 than it had been a year earlier.

       
       

   13. Patients in the Extended Care Building in need of physical therapy, occupational therapy, speech therapy and the like may receive these services there just as patients in need of such services in the intensive care unit or on the surgical floor may receive them there. TMRMC did not prove that a

       comprehensive rehabilitation unit exists in the Extended Care Building anymore than a few children scattered over the medical and surgical floors of a general hospital amount to a pediatrics ward.

       
       

   14. TMRMC had the right to establish a rehabilitation unit before July 1, 1983, but the evidence did not show that it exercised this right. Every general hospital in the state was free, before July 1, 1983, to establish or expand a comprehensive medical rehabilitation unit without obtaining a certificate of need. Since July 1, 1983, such action has required a certificate of need. Section 381.494(1)(g), Florida Statutes (1984 Supp.)

RECOMMENDATION

Upon consideration of the foregoing, it is RECOMMENDED:

That HRS deny TMRMC's request to reclassify 23 of its licensed beds as comprehensive rehabilitation beds, without prejudice to a subsequent application if TMRMC obtains a certificate of need.

DONE and ENTERED this 17th day of May, 1985, in Tallahassee, Florida.

ROBERT T. BENTON II

Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 17th day of May, 1985.

COPIES FURNISHED:

Alfred W. Clark, Esquire Laramore & Clark, P.A.

325 North Calhoun Street Tallahassee, Florida 32301

Lesley Mendelson, Esquire and John Carlson, Esquire Department of HRS

1323 Winewood Blvd.

Tallahassee, Florida 32301

David Pingree, Secretary Department of HRS

1323 Winewood Blvd.

Tallahassee, Florida 32301

Docket for Case No: 84-002631CON

Orders for Case No: 84-002631CON