STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

GOOD SAMARITAN HOSPITAL, INC., )

)

Petitioner, )

)

vs. )

)

DEPARTMENT OF HEALTH AND )

REHABILITATIVE SERVICES, )

)

Respondent, ) CASE NO. 84-2635 and )

) BOCA RATON COMMUNITY HOSPITAL, INC. ) and ST. MARY'S HOSPITAL, INC., )

)

Intervenors. )

)

RECOMMENDED ORDER

This case was heard on December 5, 1984, by R. L. Caleen, Jr., hearing officer with the Division of Administrative Hearings, in Tallahassee, Florida. The parties were represented by counsel:

APPEARANCES

For Petitioner: Byron B. Mathews, Jr., Esquire

Douglas Building

2540 Executive Center Circle, West Tallahassee, Florida 32301

For Respondent: Richard A. Patterson, Esquire

Building 1, Room 407

1323 Winewood Boulevard

Tallahassee, Florida 32301

For Intervenors:

Boca Raton William B. Wiley, Esquire Community 666 Lewis State Bank Building Hospital Tallahassee, Florida 32301

St. Mary's W. David Watkins, Esquire Hospital, Inc. 646 Lewis State Bank Building

Tallahassee, Florida 32301 ISSUE

Whether petitioner, Good Samaritan Hospital, Inc., is entitled to have its certificate of need (CON) application reviewed in the June 15, 1984 batching cycle.

BACKGROUND

By petition filed with respondent, Department of Health and Rehabilitative Services (HRS), on July 2, 1954, Good Samaritan Hospital, Inc. (Good Samaritan), requested a hearing to contest HRS's free-form decision that Good Samaritan's CON application (to establish a cardiac catheterization and open heart surgery program) was ineligible for review in HRS's June 15, 1984 batching cycle because the related letter of intent did not meet the deadline imposed fry Rule 10- 5.08(e), Florida Administrative Code, as interpreted by HRS.

On July 18, 1984, HRS forwarded this case to the Division of Administrative Hearings for assignment of a Hearing Officer. Hearing thereafter was set for December 3, 1984.

At the outset of the hearing, Boca Raton Community Hospital, Inc.'s (Boca Raton), and St. Mary's Hospital, Inc.'s (St. Mary's), motions to intervene in support of HRS's free-form action were granted. By intervening on the day of hearing, both intervenors accepted the case as it was and are bound by the facts which were conclusively established by Good Samaritan's and HRS's pretrial stipulation then in effect. Even if intervenors were not so bound, the facts admitted in the stipulation were also established by evidence at hearing.

At hearing, Good Samaritan presented the testimony of Gregory J. Walker and Edward O. Holloway; Petitioner's Exhibit Nos. 1 through 7 and 7A were received in evidence. HRS presented the testimony of W. Eugene Nelson. Intervenors presented no witnesses but Boca Raton's Exhibit Nos. 1 and 2 were received in evidence.

The transcript of hearing was filed on December 18, 1954; proposed findings of fact and conclusions of law were filed by January 3, 1985. A ruling on each proposed finding of fact has been made either directly or indirectly in this Recommended Order, except where such proposed findings of fact have been rejected as subordinate, cumulative, immaterial, or unnecessary. 1/

The relevant facts are taken from the party's pretrial stipulation and set out below:

FINDINGS OF FACT

1. "[HRS] has adopted a Rule 10-5.08, F.A.C., which makes provision for the review of CON applications in specific time sequences, known as "batching cycles." The purpose of this rule was to implement the statutory mandate of ss. 381.494(5), Florida Statutes, which required that:

   
   

   The Department by rule shall provide for the applications to be submitted on a timetable or cycle basis, provide for review on a timely basis; and provide for all completed applications pertaining to similar types of services, facilities, or equipment affecting the same service district to be considered in relation to each other no less often than four times a year.

   Rule 10-5.08, F.A.C., states that the letter of intent and application schedules were established "[i]n order that applications pertaining to similar types of services, facilities, or equipment affecting the same service district may be considered in relation to each other for purposes of competitive review.

   
   

2. "Under Rule 10-5.08, F.A.C., June 15, 1984, was the beginning of a batching cycle for "hospital projects" that included certificate of need requests by hospitals for cardiac catheterization laboratories and open heart surgery programs.

   
   

3. To enter a batching cycle, an applicant must first have filed a letter of intent ("LOI") with [HRS] and the Local Health Council at least thirty (30) days prior to filing an application. The LOI deadline for the June 15, 1984, batching cycle was thus May 16, 1984. There was, however, one exception to this requirement of filing an LOI thirty (30) days in advance. This exception, known as the "grace provision," was found at Rule 10 5.08(e), F.A.C.

   
   

   In cases where a letter of intent was filed within five working days of the letter of intent deadline, a grace period of 10 days from the deadline date for receipt of letters of intent shall be established to provide an opportunity for a competing applicant to file a letter of intent.

   
   

4. "On or about May 14, 1984, St. Mary's Hospital in West Palm Beach submitted a letter of intent to file a CON application for a cardiac catheterization laboratory and an open heart surgery program. St. Marys' [sic] LOI was for entry in the June 15, 1984, batching cycle. This date of Nay 14, 1984, was within five (5) working days of the LOI deadline for the June 15, 1984, batching cycle.

   
   

5. "Boca Raton Community Hospital [also] filed a letter of intent to apply for a CON for cardiac catheterization and open heart surgery. Boca Raton's LOI was filed in April of 1954, a time period greater than five (5) working days prior to the LOI deadline.

   
   

6. "On May 29, 1984, Good Samaritan filed with [HRS] and the Local Health Council a letter of intent to establish cardiac catheterization and an open heart surgery program in order to compete for CON approval with the similar services proposed by St. Marys [sic]. Good Samaritan's May 29, 1984, LOI sought entry into the June 15, 1984, batching cycle.

   
   

7. "May 29, 1984, was within ten (10) days from the deadline date for receipt of letters of intent for the June 15, 1984, batching cycle.

   
   

8. "Good Samaritan does not view itself as directly competing with Boca Raton Community Hospital for patients or services due to the distance between these facilities. Good Samaritan does view itself to be in direct competition with St. Marys [sic]. All three hospitals are, however, in the same HRS Service District and [HRS] reviews CON applications for cardiac catheterization laboratories and open heart surgery on the basis of whether there is a need for such laboratories or programs in the service district.

   
   

9. "On June 15, 1984, Good Samaritan submitted its [CON] application to [HRS], together with the required Four Thousand Dollar ($4,000.00) application fee. [HRS] refused to accept this application for review in its June 15, 1984,

   batching cycle and returned the application and the filing fee to Good Samaritan. [HRS] advised Good Samaritan that the next batching cycle it could enter for this application would be the October 15, 1984, batching cycle.

   
   

10. "Good Samaritan timely filed a request for formal proceedings pursuant to ss. 120.57, Florida Statutes (1983), regarding [HRS's] refusal to accept its application in the June 15, 1984, batching cycle. The Division of Administrative Hearings has jurisdiction over the parties and over the subject matter of this proceeding.

    
    

11. "Effective September 6, 1984, and subsequent to the Department's refusal to accept Good Samaritan's application for the June 15, 1984, batching cycle, [HRS] amended Rule 10-5.08(e). The new rule, as amended, reflects the requirements that the Department contends are applicable to Good Samaritan in this case prior to the amendment.

    
    

12. "[HRS's] refusal to accept Good Samaritan's application in the June 15, 1984, batching cycle prevents Good Samaritan from having its proposed project reviewed comparatively and competitively with St. Marys' [sic] or Boca Raton's similar proposals, because [HRS] does not review CON applications comparatively and competitively unless they are filed in the same batching cycle.

    
    

13. "[HRS] approved in part [sic] both St. Marys' [sic] and Boca Raton's CON applications. CON #3367 was issued to St. Marys [sic] for a cardiac catheterization laboratory and CON #3366 was issued to Boca Raton for a cardiac catheterization laboratory. These actions by [HRS], however, have not yet become final and are subject to formal administrative hearings requested by Good Samaritan.

    
    

14. "[HRS] takes the position that the approvals of the cardiac catheterization laboratories at St. Marys [sic] and Boca Raton count against the need for an additional cardiac catheterization laboratory as proposed by Good Samaritan if Good Samaritan's application is considered in a later batching cycle."

    
    

    CONCLUSIONS OF LAW

    
    

15. The Division of Administrative Hearings has jurisdiction over the parties and subject matter of this proceeding. 2/ Section 120.57(1), Fla. Stat. (1983).

    
    

16. The sole issue in this case is whether HRS lawfully excluded or, recognizing the free-form nature of its proposed action, may lawfully exclude Good Samaritan's CON application from the June 15, 1984, batching cycle. The plain wording of Rule 10-5.O5(1)(e), Florida Administrative Code, then in effect, is controlling and resolves the issue in Good Samaritan's favor. This rule provides a 10-day "grace period" for filing letters of intent where "a letter of intent was filed within five working days of the letter of intent deadline. (e.s.)" Here, the only prerequisite for triggering the grace period was met: a letter of intent (St. Mary's) was clearly filed within five working days of the LOI deadline. Good Samaritan filed its letter of intent within the ensuing 10-days grace period triggered by St. Mary's filing.

    
    

17. Rules of construction which apply to statutes also apply to administrative rules. Where, as here, the plain wording of a rule (or statute) is clear and unambiguous, there is no room for construction. Neither an agency

    nor a court is "free to add words to steer a [rule] to a meaning which its plain wording does not supply." St. Joe Paper Company v. Department of Revenue, So.2d (Fla. 1st DCA, Case No. AY-114, Opinion filed November 9, 1984). All that remains is to give effect to the wording of the rule.

    
    

18. Here, HRS seeks to "interpret" its rule--with the aid of non-rule policy--to mean "all" letters of intent pertaining to a batching cycle must be filed within five days of the deadline in order to trigger the grace period. But the clear wording of the rule requires only the filing of one, or "a",

    letter to trigger the grace period. The interpretation urged by HRS contradicts the clear wording of the rule; it is, therefore, clearly erroneous and unauthorized, and not entitled to the deference ordinarily given to an agency's interpretation of its own rule. See, Pan American World Airways, Inc. v.

    Florida Public Service Commission, 427 So.2d 716, 719 (Fla. 1983).

    
    

19. HRS and the intervenors, aware that their interpretation contradicts the rule, cite E.M. Watkins and Co., supra, as authority for the proposition that agencies need not abide by their own rules--that they may deviate from their rules so long as the deviation is adequately explained.

    
    

20. In Watkins, the court relied on the wording of Section 120.68(12)(b) as authority for this proposition. The statute, as it then existed, required a reviewing court to remand when it found an agency's exercise of discretion to be:

    
    

    (12)(b) Inconsistent with an agency rule . . . if deviation is not explained by the agen-

    cy; . . .

    
    

    Although Watkins allowed deviation from a rule if the deviation was explained, the same court, on other occasions, was reluctant to abandon the principle that agencies must abide by their own rules. See, Gadsden State Bank v. Lewis, 348 So.2d 343, 345 (Fla. 1st DCA 1977)("Recognizing that the Department's experience

    . . . may account for [its] discomfort with the unintended consequences of its rules, we affirm that agencies must honor their own substantive rules until, pursuant to Section 120.54, Fla. Stat. (Supp. 1976), they are amended or abrogated.") Also see, Harry's Restaurant and Lounge v. Department of Business Regulation, 456 So.2d 1206 (Fla. 1st DCA 1984).

    
    

21. The matter is now beyond debate. In 1974, the Florida Legislature amended Section 120.68(12) so that reviewing courts are required to remand if they find the agency's exercise of discretion to be "[i]nconsistent with an agency rule." Section 120.68(12)(b), Fla. Stat. (Supp. 1974). Here, the interpretation urged by HRS is inconsistent with the plain wording of its own rule. Hence this interpretation must be rejected--now, or meet certain rejection by a reviewing court--later.

    
    

22. Accordingly, it is concluded that, by operation of Rule 10-5.08(1)(e), Good Samaritan has a right to have its CON application reviewed in the June 15, 1984 batching cycle. Further, it must be accorded all procedural and substantive rights enjoyed by others whose applications were properly included in this batching cycle.

RECOMMENDATION

Based on the foregoing, it is

RECOMMENDED:

That HRS enter a final order requiring that Good Samaritan's CON application be reviewed in the June 15, 1984 batching cycle.

DONE and ORDERED this 13th day of February, 1985, in Tallahassee, Florida.

R. L. CALEEN, 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 13th day of February, 1985.

ENDNOTES

1/ Good Samaritan's proposed findings of fact 1 through 25, are established by the evidence and hereby adopted by reference.

2/ Although the basic evidentiary facts are undisputed, Section 120.57(1) jurisdiction remains because HRS's non-rule policy interpretation of Rule 1- 5.08(1)(e), is at issue. When an agency relies on non-rule policy, the policy must be reasonably justified on the record by presentation of evidence appropriate to the issue. See, E. M. Watkins and Co. v. Board of Regents, 414 So.2d 583, 588 (Fla. 1st DCA 1982).

COPIES FURNISHED:

Byron B. Mathews, Jr., Esquire Douglas Building

2540 Executive Center Circle, West Tallahassee, Florida 32301

Richard A. Patterson, Esquire Bldg. 1, Room 407

1323 Winewood Blvd.

Tallahassee, Florida 32301

William B. Wiley, Esquire 666 Lewis State Bank Bldg. Tallahassee, Florida 32301

W. David Watkins, Esquire 646 Lewis State Bank Bldg. Tallahassee, Florida 32301

David Pingree, Secretary Dept. of Health and

Rehabilitative Services 1323 Winewood Blvd.

Tallahassee, Florida 32301

Docket for Case No: 84-002635CON

Orders for Case No: 84-002635CON