STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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RECOMMENDED ORDER

Respondent United Medical Corporation (Bay Psychiatric)'s motion to dismiss the petition filed by Charter Woods Hospital, Inc. came on for hearing on September 25, 1984, at which time the Department of Health and Rehabilitative Services (HRS) joined the motion to dismiss. The parties are represented by counsel:

For Petitioner: Chris H. Bentley, Esquire

Fuller & Johnson, P.A.

300 East Park Avenue Post Office Box 1739

Tallahassee, Florida 32302

and

Bondurant Miller Hishon and Stephenson 2200 First Atlanta Tower

Two Peachtree Street North West Atlanta, Georgia 30383

For Respondent: Douglas L. Mannheimer, Esquire Department of Culpepper, Turner and Mannheimer Health and 318 North Calhoun Street Rehabilitative Post Office Drawer 11300 Services Tallahassee, Florida 32302-3300

For Respondent: Philip Blank, Esquire

Bay Psychiatric 2011 East Virginia Street

Tallahassee, Florida 32301

ISSUE

Whether an out-of-state corporation doing business as a psychiatric hospital located out of state and as a counseling servico located in Florida's District I is entitled to formal administrative proceedings on an application for certificate of need filed by another party seeking a certificate of need to construct an 80-bed long-term psychiatric hospital in District I?

For present purposes Bay Psychiatric's well-pleaded, factual allegations in its petition for formal hearing are assumed to be true. The petition alleges essentially the following

ASSUMED FACTS

1. Bay Psychiatric proposes to build an 80-bed long-term psychiatric hospital in Bay County, Florida, and HRS proposes to grant it certificate of need No. 3204 authorizing it to do so. The proposed hospital's primary service area is to be HRS Districts l and 2.

   
   

2. Petitioner operates a free standing psychiatric hospital in Dothan, Alabama, which "includes beds defined as long-term psychiatric beds by Rule 10- 5.11(26), Florida Administrative Code, and beds defined as short-term psychiatric beds by Rule 10-5.11(25), Florida Administrative Code." Approximately one quarter of the Dothan hospital's patients come across the state line from HRS Districts l and 2. Last year the Dothan hospital experienced less than an 80 percent occupancy rate of its long-term beds, less than a 75 percent occupancy rate of its adult short-term beds, and less than a

   70 percent occupancy rate of its other short-term beds. If Bay Psychiatric receives a certificate of need, the Dothan hospital "will be substantially and adversely affected because any patients admitted to the proposed UNITED MEDICAL facility would otherwise likely have been admitted to CHARTER WOODS HOSPITAL.

   
   

3. Petitioner also operates a "counseling and intervention facility located in Panama City, Florida, "offering various outpatient services which "at least in part" are the types of outpatient services Bay Psychiatric would offer at its proposed hospital. Because of "a finite patient population" petitioner's counseling facility would also be "substantially and adversely affected " if Bay Psychiatric receives a certificate of need.

   
   

   CONCLUSIONS OF LAW

   
   

4. Petitioner's citizenship is not material here. Consistent with the Privileges and Immunities Clause of the Federal Constitution, `Article 4, section 2, petitioner can be at no disadvantage on account of being organized under the laws of a state of the United States other than Florida. Even if petitioner were organized under the laws of another country, that fact should not work to its prejudice. Bernal vs. Fainter, 104 S. Ct. 2312 (1984) . In re Griffith, 413 U.S. 717 (1973).

   
   

   EXISTING INPATIENT FACILITY

   
   

5. Location, without regard to citizenship, bears importantly on the question of petitioner's standing or party status, however. A hospital located outside of Florida is necessarily located, as here, outside the health service district in which a new hospital is proposed to be built.

6. The petition adequately pleads injury in fact to petitioner's hospital by claiming that it will lose patients if Bay Psychiatric opens its doors. But, under the holding in Agrico Chemical Company vs. Department of Environmental Regulation, 406 So.2d 478 (Fla. 2nd DCA 1981), injury in fact is not enough by itself, especially "injuries to a competitor's profit and loss statement." 406 So.2d at 487. In order to confer party status, the injury must be "of a type or nature which the proceeding is designed to protect". Id. Nothing in the applicable rules indicates that competitive injury to an inpatient psychiatric facility outside the health service district area is within the regulatory zone of interest.

   
   

7. The statute itself must also be looked to. In part, the statute provides:

   
   

   (c) The department shall determine the reviewability of applications and shall review applications for certificate-of-need determinations for health care facilities and services, hospices, and health maintenance organizations in context with the following criteria:

   2. The availability, quality of care, efficiency, appropriateness, accessibility, extent of utilization, and adequacy of like and existing health care services and hospices in the service district of the applicant.

   4. The availability and adequacy of other health care facilities and services and hospices in the service district of the applicant, such as outpatient care and ambulatory or home care services, which

   may serve as alternatives for the health care facilities and services to be provided by the applicant.

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

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

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

      1. That less costly, more efficient or more appropriate alternatives to

         such inpatient services are not available and the development of such alternatives has been studied and found not practicable.

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

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

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

   
   

   Section 381.494(6), Florida Statutes (1983) (emphasis supplied)

   
   

   Although not all of the criteria are expressly limited to the service district of the applicant, Section 381.494(6)(c)(2), Florida Statutes (1983), which pertains explicity to inpatient facilities, is so limited. Nor does Section 381.494(6)(d) Florida Statutes (1983) evince any purpose to protect the competitive position of inpatient facilities outside the health service district. Section 381.494(6)(d), Florida Statutes (1983) should be read in pari materia with Section 381.494(6)(c)(2) , Florida Statutes (1983) so that "existing inpatient facilities" should be understood to refer only to facilities in the district. Like the rules, therefore, the statute defines no zone of interest that would include petitioner's Dothan hospital.

   
   

   OUTPATIENT CLINIC

   
   

8. Petitioner's "counseling and intervention facility" is located within the same HRS district in which Bay Psychiatric proposes to build a psychiatric hospital. Again petitioner has adequately alleged adverse effect on its facility, but the ill effect is not within the zone of interest the statute and rules describe. Counsel for petitioner conceded at hearing that it holds no HRS license or certificate of need for its "counseling and intervention facility," nor are any required. If petitioner's outpatient facility were enough to give it party status in proceedings like these, any psychiatrist in private practice would also have standing. The statute and rules do not contemplate this. Cf. NME Hospitals, Inc. d/b/a Seven Rivers Community Hospital v. Department of Health and Rehabilitation Services and Community Care Systems, Inc. d/b/a Community Care of Citrus County, No. 84-0905 (HRS; August 29, 1984)(acute care general hospital in the same district lacks standing to challenge issuance of a certificate of need for construction of a psychiatric hospital).

RECOMMENDATION

It is, accordingly, RECOMMENDED:

That the Department of Health and Rehabilitative dismiss the petition for formal proceeding.

DONE AND ENTERED this 26th day of October, 1984, at Tallahassee, Florida.

ROBERT T. BENTON, II

Hearing Officer

Division of Administrative Hearings 2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 26th day of October, 1984.

COPIES FURNISHED:

Douglas L. Mannheimer, Esquire

318 North Calhoun Street Post Office Drawer 11300

Tallahassee, Florida 32302-3300

William E. Hoffman, Jr. James A. Dyer

Bondurant Miller Hishon and Stephenson

2200 First Atlanta Tower Two Peachtree Street, N.W. Atlanta, Georgia 30383

F. Philip Blank, Esquire

241 East Virginia Street Tallahassee, Florida 32301

Chris H. Bentley, Esquire Fuller & Johnson, P.A.

300 East Park Avenue Post Office Box 1739

Tallahassee, Florida 32302

David Pingree, Secretary Department of Health and

Rehabilitative Services 1323 Winuwood Boulevard

Tallahassee, Florida 32301

Docket for Case No: 84-003114

Orders for Case No: 84-003114