STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
LAWNWOOD MEDICAL CENTER, INC., )
)
Petitioner, )
)
vs. ) CASE NO. 84-4033
) (CON 3363)
DEPARTMENT OF HEALTH AND )
REHABILITATIVE SERVICES, )
)
Respondent, )
and )
) INDIAN RIVER COMMUNITY MENTAL ) HEALTH CENTER, INC., )
)
Intervenor. )
)
RECOMMENDED ORDER
Pursuant to notice, an administrative hearing was held before William C. Sherrill, Hearing Officer with the Division of Administrative Hearings, on March 26, 1986, in Ft. Pierce, Florida. The parties were represented by counsel:
APPEARANCES
For Petitioner: Donna H. Stinson, Esquire
Moyle, Flanigan, Katz, FitzGerald & Sheehan, P.A. The Perkins House, Suite 100
118 N. Gadsden Street Tallahassee, Florida 32301
For Intervenor: Jonathan S. Grout, Esquire
Dempsey & Goldsmith
307 West Park Avenue Tallahassee, Florida 32301
For Respondent: John Gilroy, Esquire
Department of Health and Rehabilitative Services
1323 Winewood Boulevard
Tallahassee, Florida 32301
At issue is the application of Lawnwood for a certificate of need number 3363 to convert twelve short term psychiatric beds to twelve short term inpatient hospital substance abuse beds.
Indian River Community Mental Health Center, Inc. (Indian River), was granted leave to intervene in these proceedings as an existing provider of similar services in District IX, and as the holder of a certificate of need to provide similar services in the same District.
Lawnwood presented at hearing the testimony of: Sharon R. Heinlen, who was designated as an expert in health planning and hospital administration; Judge Marc Cianca, Martin County Judge; Peggy Cioffi, Coordinator, Martin County Alcohol and Drug Abuse Program. The latter two witnesses were offered by videotaped deposition on a date subsequent to the hearing, the record having been left open for that purpose, and their depositions are a part of the record.
DHRS presented the testimony of Elizabeth Dudek, DHRS Community Medical Facilities Consultant Supervisor, who was accepted as an expert in health planning and certificate of need review in Florida.
Indian River offered Mr. John R. Ashcraft, Executive Director of the Savannas Hospital, Port St. Lucie, Florida.
Lawnwood exhibit 1 was accepted into evidence, as were DHRS exhibits 1 and
2.
FINDINGS OF FACT
Harbour Shores Hospital is a 60-bed short-term psychiatric facility,
with 36 adult beds and 24 adolescent beds. The facility opened in October 1985, and had an occupancy of 62 percent at the time of the final hearing in March 1986. T. 14, 20. The hospital is an integral part of Lawnwood Medical Center, Inc., located in Ft. Pierce, Florida, and Lawnwood is owned by Hospital Corporation of America. T. 13-14. Hospital Corporation of America now operates 5,000 psychiatric beds in the United States. T. 18.
Lawnwood Medical Center, Inc. (Lawnwood), submitted an application for certificate of need number 3363 on June 14, 1984, for the conversion of 12 short-term psychiatric beds to 12 short-term inpatient hospital substance abuse beds. T. 15. No construction is needed to convert these 12 beds. T. 16. The Department of Health and Rehabilitative Services (HRS) initially denied the application. T. 106.
All references in this order to Harbour Shores Hospital shall include the Petitioner, Lawnwood, unless specifically stated otherwise.
The parties stipulated that the only issue in this case is need and any ancillary issue which is based upon need. T. 4-5. HRS has a rule governing short and long-term hospital inpatient hospital substance abuse beds, which is rule 10-5.11(27), Florida Administrative Code. Subparagraph (f)1 of the rule contains what HRS calls bed allocations" and calculates need for a health service district as a whole.
Harbour Shores Hospital is located in St. Lucie County in Health District IX. District IX is composed of St. Lucie, Indian River, Martin, Okeechobee, and Palm Beach Counties. HRS Ex. 2, p.7.
The District IX Local Health Council has identified two subdistricts for purposes of allocating short term psychiatric and substance abuse beds. Subdistrict 1 is St. Lucie, Martin, Indian River, and Okeechobee Counties, and subdistrict 2 is Palm Beach County. HRS Exhibit 2, p. 7; T. 110.
HRS proposes to determine need as of January 1989 using the date of the application as the starting point for the five year period specified in rule 10- 5.11(27)(f)1, Florida Administrative Code. T. 107-6. The basis of this decision is a new policy by HRS to implement the Gulf Court decision.
There is a need for only 1 additional short-term substance abuse bed in District IX by January 1989 based upon Rule 10-5.11(27)(f)1, Florida Administrative Code. T. 109. HRS Exhibit 1.
HRS proposes also to refer to such need for short term substance abuse beds as indicated by local health council plans, relying upon rule 10- 5.11(27)(h)3, Florida Administrative Code. T. 110. The local health plan for District IX allocates needed beds based upon the subdistricts described above. HRS Exhibit 2, p. 6. Further, the local health plan has adopted the method of HRS found in rule 10-5.11(27), supra, for calculating need, and calculates such need using the HRS rule factor of .06 substance 3. All references in this order to Harbour Shores Hospital shall include the Petitioner, Lawnwood, unless specifically stated otherwise.
The parties stipulated that the only issue in this case is need and any ancillary issue which is based upon need. T. 4-5. HRS has a rule governing short and long term hospital inpatient hospital-substance abuse beds, which is Rule 10-5.11(27), Florida Administrative Code. Subparagraph (f)1 of the rule contains what HRS calls bed "allocations" and calculates need for a health service district as a whole.
Harbour Shores Hospital is located in St. Lucie County in Health District IX. District IX is composed of St. Lucie, Indian River, Martin, Okeechobee, and Palm Beach Counties. HRS Ex. 2, p.7.
The District IX Local Health Council has identified two subdistricts for purposes of allocating short-term psychiatric and substance abuse beds. Subdistrict 1 is St. Lucie, Martin, Indian River, and Okeechobee Counties, and subdistrict 2 is Palm Beach County. HRS Exhibit 2, p.7; T. 110.
HRS proposes to determine need as of January 1989 using the date of the application as the starting point for the five-year period specified in Rule 10-5.11(27)(f)1, Florida Administrative Code. T. 107-8. The basis of this decision is a new policy by HRS to implement the Gulf Court decision.
There is a need for only 1 additional short-term substance abuse bed in District IX by January 1989 based upon Rule 10-5.11(27)(f)1, Florida Administrative Code. T. 109. Exhibit 1.
HRS proposes also to refer to such need for short term substance abuse beds as indicated by local health council plans, relying upon rule 10- 5.11(27)(h)3, Florida Administrative Code. T. 110. The local health plan for District IX allocates needed beds based upon the subdistricts described above. HRS Exhibit 2, p. 6. Further, the local health plan has adopted the method of HRS found in rule 10-5.11(27), supra, for calculating need, and calculates such need using the HRS rule factor of .06 substance abuse beds per 1,000 population in each of the two subdistricts. HRS Exhibit 2, pp. 5 and 8, paragraph II. Using current estimates of the populations of each subdistrict in January 1909,
HRS projects that subdistrict 1 will have a surplus of 15 substance abuse beds in 1989, and all net need (16 beds) will be in subdistrict 2, which is Palm Beach County. T. 111; HRS Exhibit 1. HRS has not adopted these subdistricts by rule. T. 128-29. There was no evidence to substantiate the reasonableness of the subdistricts adopted in the local health plan. T. 131.
The following is a summary of the existing and approved short-term substance abuse beds in District IX, showing county of location, and occupancy rates for 1985:
Humana Hospital | 16 | Licensed | Indian River | 8509 |
Sebastian | ||||
Lake Hospital | 16 | Licensed | Palm Beach | 3558 |
Palm Beaches | ||||
Fair Oaks | 17 | Licensed | Palm Beach | 3807 |
Savannas | 20 | Approved | St. Lucie |
Hospital Beds Status County Patient Days Occupancy
145.7%
60.7%
60.7%
The number of patient days at Fair Oaks, however, is for four months, August, October, November, and December 1985. Thus, the actual number of patient days, 1269, has been multiplied by 3 to obtain an estimate for an entire year. T. 23- 24, 61-62.
The occupancy rate is the number of patient days divided by the product of the number of days in the year (365) and the number of licensed beds. Using the statistics in paragraph 10, the average occupancy rate for the three existing facilities in District IX was 88.8 percent. If one assumes, as did Petitioner's expert, that the utilization rates for short-term substance abuse beds will at least remain the same as in 1935, with the addition of the 20 new beds at Savannas Hospital, District IX may have an occupancy rate of 63.8 percent and subdistrict 1 may have an occupancy rate of 64.8 percent . The 20 new beds at the Savannas Hospital are those granted to Indian River Community Mental Health Center, Inc., and are projected to open in November 1986. T. 83.
As discussed above, Harbour Shores Hospital had been in operation about five months by the time of the March 1986 hearing, and its 60 short term psychiatric beds were averaging 62 percent occupancy, which is about 15 percent above the occupancy projected in its certificate of need application. T. 38. Harbour Shores serves patients from the four counties of subdistrict 1, St. Lucie, Martin, Indian River, and Okeechobee, and serves a significant number of patients from Palm Beach County as well; three to four percent of its patients also come from Brevard and Broward Counties. T. 19.
About 80 percent of the patients at Harbour Shores in the first five months of its operation had a substance abuse problem secondary to the primary diagnosis of mental illness. T. 30, 50, 63. This is consistent with experience throughout Florida. T. 63. Most of these "dually diagnosed" patients have been through a detoxification program before entering Harbour Shores Hospital. T. 30.
In its beginning months of operation, Harbour Shores has had patients referred from the courts, law enforcement agencies, community and social agencies, physicians, and from HRS. T. 21-22, 59. Harbour Shores can expect to obtain substance abuse referrals from these agencies. Staff at Harbour Shores works with the DWI Board, Students Against Drunk Driving, and school administrative personnel. T. 39-40. In October and November 1985, Harbour Shores received 38 requests from physicians, the courts, law enforcement
agencies, and social agencies, for admission of patients for substance abuse treatment. T. 22, 49. There is no evidence that Harbour Shores had any such requests in December 1985 or January 1986. In February 1986, it had 14 such requests, and in March to the date of the hearing, it had 5 requests. T. 48. There is no evidence as to whether these requests were for short or long-term substance abuse services, or whether these were requests from different patients or multiple requests from the same patient. There is also no evidence that the persons requesting substance abuse treatment were not adequately treated at existing facilities. Thus, the data from these few months is not an adequate basis for determining future need for short term substance abuse beds.
Ms. Peggy Cioffi is the coordinator for the Martin County Alcohol and Drug Abuse Program. Deposition, Ms. Peggy Cioffi, p. 2. Ms. Cioffi testified as to the need for substance abuse services in her area. She did not testify as an expert witness. Her program is primarily designed to assist the County Court in referrals of misdemeanants and others within the Court's jurisdiction who need substance abuse services. Id. Ms. Cioffi has difficulty placing persons needing inpatient or residential treatment. Id. at p. 3. She related an example of a county prisoner who asked to be detained in jail three months for lack of an alcohol program. Id. at p. 4. Ms. Cioffi did not state whether this person needed residential or inpatient hospital care. She also had recently reviewed a 14 page county court docket and determined that 67 percent of those charged represented alcohol or drug related offenses. Id. Ms. Cioffi did not clearly show how she was able to infer this fact. Further, Ms. Cioffi was unable to tell from this statistic how many of these defendants needed short term inpatient hospital substance abuse treatment. Id. at p. 6. She stated that a very high percentage of these could benefit from some kind of services, but did not separate the kinds of services, Id. at p.7. Ms. Cioffi stated that she often had to wait to find a place for a person in the following facilities: Dunklin, CARP, and Alcohope. Id. at p. 5. Ms. Cioffi stated that these were "residential" facilities, but she did not state whether these facilities were the equivalent of short-term inpatient hospital substance abuse facilities. These facilities are located in District IX, Id. at p. 7, but are not short-term in patient hospital substance abuse beds licensed as such. See paragraph 10 above. See also T. 96-99. In summary, although Ms. Cioffi identified a generalized need for residential or hospital substance abuse treatment, she did not draw any distinction between the two services. If there was a similarity, she did not provide evidence of the similarity. Lacking evidence in the record that need for residential treatment programs can be used to show need for inpatient hospital beds, Ms. Cioffi's testimony is insufficient to show need for the services sought by the Petitioner.
The Honorable Marc Cianca is a County Judge in St. Lucie County. Deposition, Judge Marc Cianca, p. 2. Judge Cianca was of the opinion that his area attracted semi-young people with substance abuse problems in greater numbers than the retirement population. Id. at 17-18. He frequently was frustrated in his efforts to find substance abuse services for defendants in his Court. Id. at 3-5. Judge Cianca felt that most of the people he saw needed long-term therapy, beginning with inpatient services, followed by long-term follow-up programs. Id. at 12-14. Like the testimony of Ms. Cioffi (which concerned the same group of persons before the County Court), Judge Cianca did not clearly distinguish need for short-term inpatient hospital substance abuse services from need for all other forms of substance abuse treatment, and the record on this point is silent as well. For this reason, Judge Cianca's opinion that 100 short-term inpatient hospital substance abuse beds are needed must be rejected.
The testimony of Ms. Cioffi and Judge Cianca is insufficient as a predicate for determining need for the inpatient hospital beds sought by the Petitioner for another reason, and that is the lack of evidence that the persons identified as needing substance abuse services will have the ability to pay for such services at Petitioner's facility, or that third party payment will be available for them. The people in need in Ms. Cioffi's testimony normally do not have funds to pay for treatment. Cioffi, p. 8. Similarly, a substantial number of the people in need seen by Judge Cianca do not have insurance coverage and would not be able to use Harbour Shores unless they qualified for Medicaid and unless Harbour Shores took all of those qualified for Medicaid. Id. at 7, 15-16. A substantial number of the persons needing substance abuse treatment do not have jobs or insurance and must rely upon "welfare" for services. Id. at 15, 17. These persons cannot afford certain programs, and must rely upon state aid through programs such as those provided by Indian River Community Mental Health Center, and for these programs there is always a waiting list. Id. at
There is no evidence that any of these persons are eligible for Medicaid. Ms. Sharon Heinlen, Director of Planning and Development for Harbour Shores Hospital, who testified for the Petitioner as an expert in health planning and hospital administration, had not studied the Medicaid population in the area to determine need. T. 76. Although Harbour Shores had about 15 percent of its psychiatric patient days devoted to Medicaid patients, T. 33, the validity of this percentage for substance abuse patients, or for the reasonably near future, was not established by other evidence. Petitioner's formal application for this certificate of need projects 5 percent of its gross revenues from Medicaid and another 5 percent devoted to bad debt, indigents, and Baker Act cases. Petitioner's Exhibit 1, p. 5. But the application does not state whether this percentage will be evenly distributed among psychiatric and substance abuse patients. In any event, the percentages of indigent care and Medicaid care are too small to satisfy the need identified by Judge Cianca and Ms. Cioffi. Stated another way, the need identified by those two witnesses is not relevant to Petitioner's application except with respect to a small percentage.
Harbour Shores plans to have after care for substance abuse patients. T. 40.
The Savannas Hospital is the name of the hospital to be completed in November 1986 to provide, among other services, 20 short term inpatient hospital substance abuse beds under the certificate of need granted to Indian River Community Mental Health Center, Inc. T. 82-83. The primary service area of the Savannas Hospital will be the same four counties as now served by Harbour Shores Hospital, as well as Palm Beach County. T. 84. The Savannas Hospital intends to be licensed. T. 84. The Savannas Hospital is located in Port St. Lucie, in St. Lucie County. T. 95-96. The service proposed is a comprehensive substance abuse service. T. 87. Five of the twenty substance abuse beds will be devoted to detoxification. T. 92.
The Savannas Hospital will be operated by the Mediplex Group in partnership with Indian River Community Mental Health Center, Inc. T. 82. The land will be owned by Mediplex. T. 95. The Savannas Hospital will be a private, for profit, hospital, while the Mental Health Center will be a not-for- profit facility. T. 86. The Savannas Hospital publicly states that it will take five percent indigent patients, which does not include Medicare. T. 87. There is no commitment to provide more indigent care. T. 89. All other patients acre expected to be fully paying. T. 93. The actual figure for free or nonpaying patients has not yet been calculated. T. 94. The Savannas Hospital will not serve Medicaid substance abuse patients because it is a freestanding facility. T. 36, 86.
Humana Hospital Sebastian is the closest facility to Harbour Shores currently in operation providing inpatient short-term hospital substance abuse services, and Humana Sebastian can accept Medicaid patients. T. 59.
Ms. Elizabeth Dudek testified for HRS as an expert in health planning and certificate of need review in Florida. Ms. Dudek has reviewed all of the applications made in District IX for substance abuse beds since November 1983, and as a supervisor, has reviewed all of the applications in the state for substance abuse beds. T. 104. She has been in contact with the District Alcohol, Drug Abuse, and Mental Health Program Office and has attended public hearings, as well as administrative hearings, concerning substance abuse beds in District IX. T. 104-05. She also listened to all of the evidence presented at the final hearing. It was Ms. Dudek's opinion that there was no need for the substance abuse beds sought by the Petitioner. T. 127-28.
Ms. Sharon Heinlen was also qualified as an expert in health planning, as well as hospital administration. T. 13. Ms. Heinlen has only recently moved to Florida, T. 11, 66, and stated that she did not know Florida well enough to know what might be the best thing to advocate in Florida with respect to whether all hospitals should provide all services. T. 65-66. She had conducted studies of District IX, however. T. 66. The average occupancy rates for District IX testified to by Ms. Heinlen were mathematically incorrect, and the correct lower rates do not support her opinion that additional short term substance abuse beds are needed. See FF 11. The fact that about 80 percent of the psychiatric patients now are at Harbour Shores Hospital also have a substance abuse problem does not necessarily support Ms. Heinlen's opinion as to need. See FF 12. This statistic is consistent with experience in all of Florida, and therefore should be accommodated by the HRS numeric need methodology. Moreover, it must be inferred that hospitalization of these patients as psychiatric patients was proper, rather than as substance abuse patients, and that even if additional substance abuse beds were available, these patients still would need to be in a psychiatric bed for treatment of the primary diagnosis. As discussed in FF 14, the data concerning recent requests for substance abuse services at Harbour Shores Hospital is not sufficient to conclude that a need exists for additional beds. As discussed in FF 17, Ms. Heinlen did not have an adequate basis for any opinion as to the need for short-term substance abuse beds for Medicaid patients in District IX. Finally, Ms. Heinlen testified that there was a waiting list for patients to be admitted to licensed short-term substance abuse beds at Fair Oaks and Lake Hospital, but the testimony was hearsay. T. 28. Since this evidence conflicts with the relatively low occupancy rates at these same facilities, and has not otherwise been corroborated by non-hearsay evidence, it must be rejected as a basis for a finding of fact. Further, due to the conflict with the low occupancy rates, it is rejected as a basis for Ms. Heinlen's expert opinion. In summary, Ms. Heinlen's expert opinion that there is a need for short-term, inpatient hospital substance abuse beds in District IX must be rejected.
It is the position of HRS that even if the rule showed a need, the occupancy factor would be a factor in showing no need. T. 134. Conversely, if the rule showed no need, the occupancy factor would be one factor among others which night show need. Id.
CONCLUSIONS OF LAW
Jurisdiction in this case exists over the parties and the subject matter pursuant to section 120.57(1), Fla. Stat.
The only issue in this case is whether there is a need for the 12 short-term inpatient hospital substance abuse beds sought by the Petitioner. Ancillary legal issues exist only if based upon need.
The Department of Health and Rehabilitative Services has adopted rule for determining need for short-term (and long-term) substance abuse services. That rule, Rule 10-5.11(27), Florida Administrative Code, is applicable to this case.
There is need for only 1 of the 12 beds sought by the Petitioner pursuant to subparagraph (f)1 of rule 10-5.11(27). See FF 8. This calculation of need is the appropriate one in this case because it is based upon a planning horizon which is established using the date of the application as the beginning date. The policy which establishes this planning horizon is the policy adopted by the Department to implement Gulf Court Nursing Center v. Department of Health and Rehabilitative Services, 483 So.2d 700 (Fla. 1st DCA 1986). This is a reasonable interpretation of the Gulf Court decision given the Court's emphasis in that decision upon the application filed with HRS as the document giving rise to significant status and interests in the process of obtaining a certificate of need. Therefore, calculations of need under the rule using anything other than the 1984 application date as the starting point for calculating the five-year planning horizon are legally incorrect. It should be noted that the Petitioner objected to testimony concerning the existence of this policy, T. 108-09, and objection was taken under advisement, T. 109. The objection is now overruled. Formulation of agency policy is one of the major purposes of a Section 120.57(1), Fla. Stat., hearing. McDonald v. Department of Banking and Finance, 346 So.2d 549 (Fla. 1st DCA 1977).
Rule 10-5.11(27)(e) provides, in effect, that if (as in this case) there is no need for new substance abuse beds in the district using subparagraph
(f) of the rule, then an application for such a certificate of need will "not normally" be approved. The rule further states that such a certificate of need may be approved, notwithstanding a lack of need shown by subparagraph (f), if need is demonstrated by the criteria in section 381.494(6)(c), Fla. Stat., and subparagraph (h) of rule 10-5.11(27), Florida Administrative Code. The Petitioner has primarily sought to justify its application pursuant to these criteria.
Subparagraph (h)1 of the rule provides:
No additional or new hospital inpatient substance abuse beds shall normally be approved in a Department service district unless the average occupancy rate for all existing hospital based substance abuse inpatient beds is at or exceeds 80% for
the preceding 12 month period
This criterion is satisfied, assuming that what is intended by this portion of the rule is to calculate a 12-month average for the district as a whole. The occupancy rate was 88.8 percent for 1985. See FF 11. However, this occupancy rate does not count the 20 approved beds at the Savannas Hospital as "existing." The pool of beds now in service is only 49, so the addition of 20 more beds at the Savannas Hospital will dramatically reduce the average occupancy rate for the District. In finding of fact 11 this is estimated at 63 percent assuming constant 1985 demand levels. While demand should increase with the increase in
population, District IX average occupancy levels should remain below 80 percent in the coming year. Thus, although the criterion of subparagraph (h)1 is satisfied, the potential need identified by that criteria will be largely satisfied by the addition of the beds at Savannas Hospital.
Subparagraph (h) 2 of the rule provides:
2. Hospitals seeking additional beds must demonstrate that beds designated for inpatient substance abuse services have had an annual average occupancy rate of greater than 80 percent for the preceding 12 month period.
This criterion has not been satisfied since Fair Oaks and Lake Hospital had occupancy levels of 60 percent in 1985. See FF 10.
Subparagraph (h)3 of the rule provides that "the type of service and the number of proposed beds are consistent with the needs in the community, stated in the Local Health Council plans. . . . However, section 381.494(7)(b)1, Fla. Stat., provides in part that "the elements of an approved district plan which are necessary to the review of any certificate-of-need application shall be adopted by the department as a part of its rules." HRS has not adopted the subdistricts found in the District IX plan as a rule. See FF 9. The Department argues that it proposes only to use the local health plan for "allocation" to subdistricts of bed need calculated under the HRS rule. In so doing, the Department is using an "element" of the local plan made "necessary to the review of any-certificate-of-need application" by rule 10-5.11(27)(h)3. Moreover, the distinction that the local plan is only used for "allocation" of beds rather than calculating need is artificial and not appropriate. Call it what one will, the Department in this case is calculating bed need by subdistrict and is using the subdistrict element, as well as the method of calculating need by subdistrict, straight from the local plan.
Even if rule 10-5.11(27)(h)3 had not made the local plan "necessary" for certificate of need review with respect to psychiatric and substance abuse beds, the "necessity" of the local plan was already established by section 381.494(6)(c)1, which provides:
(c) The department . . . Shall review applications for certificate-of-need in context with the following criteria:
1. The need . . . in relation to the applicable district plan. . . .
(E.S.)
In summary, it appears that the Department has violated section 381.494(7)(b)1, Fla. Stat., by failing to promulgate as a rule those elements of the District IX local health plan "necessary for review of the instant application for a certificate of need; specifically here, the elements concerning calculation (or allocation) of net bed need by subdistricts. See Upjohn Healthcare Services, Inc. v. Department of Health and Rehabilitative Services , No. BH-479 (Fla. 1st OCA, July 22, 1986).
What result flows from this conclusion? Section 381.494(7)(b)1, Fla. Stat., does not give a clue as to what the result should be. Moreover, that section must be construed on an equal basis with section 381.494(6)(c)1, Fla.
Stat., which mandates that the Department consider need in relationship to the local health plan. It would be a bizarre result indeed if the agency could avoid the mandate of section 381.494(b)1, that it must consider the local health plan, by violating the mandate of section 381.494(7)(b)1, that it must adopt elements of the local plan as rules. Resolution of this apparent conundrum is found in federal law. Section 300m-6(g) of Title 42, U.S.C.A., cited in Gulf Court, supra, 483 So.2d at 706, provides that "in approving or disapproving applications for certificates of need . . . a State Agency shall take into account recommendations made by health systems agencies with the State under section 3001-2(f) of this title." Moreover, 42 C.F.R. section 123.412(a) provides that the State Agency must review applications for certificates of need against a number of criteria, including in subparagraph (1) "the relationship of the health services being reviewed to the applicable health systems plan . . .
." The health systems agencies and health systems plan were the predecessors of the local health councils and local health plans in place today. University Medical Center, Inc. v. Department of Health and Rehabilitative Services, 483 So.2d 712, 716 (Fla. 1st DCA 1986) (on motion for rehearing). Thus, the requirement of section 381.494(6)(c)1, Fla. Stat., that HRS consider need in relationship to the local health plan is a requirement of federal law. For this reason, section 381.494(6)(c)1 must be given full force and effect. In the case at bar, the provisions of the local health plan which pertain to need must be considered even though HRS has not adopted these as rules, in violation of section 381.494(7)(b)1, Fla. Stat. There may be other remedies available for the violation of section 381.494(7)(b)1, but disregard of section 381.494(6)(c)1 and federal law is not one of them.
Returning then to subparagraph (h)3 of rule 105.11(27), the evidence in this case shows that there is no need for the services proposed by the Petitioner in this case. There are surplus short-term substance abuse beds in the four county subdistrict that is the primary service area of the Petitioner. Need may exist in Palm Beach County, considered separately as a subdistrict, but Petitioner has not adequately proven the extent of its ability to serve patients that far south of its proposed facility.
Subparagraph (h)4 of the rule requires a minimum size of ten beds, which is satisfied by the Petitioner's application.
Subparagraph (h)5 of the rule provides that the Petitioner must "identify" the expected sources of referrals, the expected average length of stay, the service area, and the target population to be served. The Petitioner has not adequately identified the average length of stay. The Petitioner has attempted to show a target population to be served and the expected source of referrals, but for the reasons discussed in findings of fact 11, 14, 15, 16, 17, 22, and 23, the evidence is not sufficient to satisfy this criterion. The Petitioner has adequately demonstrated its service area. See FF 12.
Subparagraph (h)6 provides that substance abuse services must be provided in a clearly identifiable unit within a hospital and must have trained staff. Since only need is at issue, this criterion is not applicable.
Subparagraph (h)7 provides that all hospital based substance abuse treatment programs must be formally linked with outpatient programs. This criterion was satisfied. See FF 18.
Subparagraph (h)8 gives preference to "conversion of underutilized beds in other services. . . ." The Petitioner intends to convert 12 of its 60 short term psychiatric beds to substance abuse beds, but did not prove that the
60 short term psychiatric beds were underutilized. To the contrary, in a mere five months of its operation, Harbour Shores Hospital's psychiatric beds were at
62 percent occupancy, 15 percent above that projected in its initial application. See FF 12. This criterion is clearly not satisfied.
Subparagraph (h)9 provides that the applicant must indicate the percentage of patient days it will allocate to indigent clients, Medicaid clients, private pay patients, and others. The Petitioner has so "indicated," and this criterion has been facially met. However, as discussed in FF 17 the need for indigent and Medicaid patient care was never quantified, and the Petitioner only proposed to serve a small percentage of such need as may exist.
Subparagraph (h)10 of the rule provides that new substance abuse programs must be able to project an average 70 percent occupancy in the second year of operation, and an average of 80 percent in the third year of operation. The Petitioner has not credibly made such projections since the evidence fails to show basis need.
In summary, criteria 4, 6, and 7 of the ten criteria in subparagraph
(h) of the rule have very little to do with establishing need, even though the rule in subparagraph (e) provides that subparagraph (h) criteria may be used as an alternative to subparagraph (f) to establish need. With respect to the remaining exceptional criteria of subparagraph (h), the Petitioner has not presented sufficient evidence of a "not normal" circumstance to show need for 12 short-term inpatient hospital substance abuse beds. Further, exceptional circumstances have not been shown under any of the several statutory criteria.
Consequently, it must be concluded on the record of this case that there is no need for 12 short-term inpatient hospital substance abuse beds as sought by the Petitioner.
RECOMMENDED ORDER
Upon consideration `of the foregoing, it is recommended that the Department of Health and Rehabilitative Services enter its final order denying the application of Lawnwood Medical Center, Inc., for the conversion of 12 short- term psychiatric beds to 12 hospital inpatient short term substance abuse beds, certificate of need number 3363.
DONE and ENTERED this 5th day of August 1986, in Tallahassee, Florida.
WILLIAM C. SHERRILL
Hearing Officer
Division of Administrative Hearings The Oakland Building
2009 Apalachee Parkway
Tallahassee, Florida 32399-1550
(904) 488-9675
FILED with the Clerk of the Division of Administrative Hearings this 5th day of August 1986.
APPENDIX ONE TO RECOMMENDED ORDER IN DOAH CASE NUMBER 84-4033
Pursuant to Section 120.59(2), Fla. Stat., the following are specific rulings upon all proposed findings of fact submitted by the parties using the same numbers by the parties. A. Findings of Fact proposed by Lawnwood Medical Center Inc.
Adopted in FF 1 and 2.
Adopted in FF 1.
Adopted in FF 4.
The first sentence is adopted in FF 1. The next two sentences are adopted in FF 9. The last sentence is adopted in FF 12.
All of this proposed finding of fact is rejected as irrelevant. Lawnwood's tactical decisions on an earlier application are not relevant to the issue of need absent a legal right to set aside the grant of beds to Indian River Community Mental Health Center and to obtain comparative review with the Indian River application.
The first two sentences are statements of law, not of fact. The last sentence is irrelevant since the agency in a section 120.57(1) hearing does not have to prove a basis for a valid rule.
All of this proposed finding of fact is rejected due to relevancy. Absent further facts to show the basis for the grant of a certificate of need to Indian River, no comparison to the application of the Petitioner can be made. HRS may have been completely wrong to grant 20 substance abuse beds to Indian River, but that wrong would not be justification to exacerbate the district bed surplus by approval of the application in this case.
All of this proposed finding of fact is accepted, except that the occupancy rate of 98.8 percent and 80 percent are rejected because these rates appear to be mathematical errors. See FF 10 and 11. Also, the last sentence is rejected because the HRS witness did not know for a fact that opening new beds would cause "more patient days." T. 140.
Adopted in FF 12 and 14.
The first sentence is adopted in substance in FF 13. The last sentence is rejected due to lack of proven need.
The first three sentences are adopted in FF 14. The last sentence is rejected for lack of sufficient evidence. See the next paragraph 12.
This finding of fact is rejected for- several reasons. The first sentence is based primarily upon the testimony of Ms. Cioffi, since she was the witness most directly involved in trying to place actual patients. However, as discussed in FF 15 and 17, Ms. Cioffi's testimony, coupled with the remainder of the record evidence, including the testimony of Judge Cianca, commingles evidence concerning residential and inpatient hospital substance abuse programs, thus making it impossible to discern need for inpatient hospital beds. Further, the-testimony appears to identify a kind of need that the Petitioner does not seek to serve in any substantial way: Medicaid and indigent patients. The second sentence refers to the testimony of Ms. Heinlen which was hearsay in that it was the results of her telephone survey. T. 28. Moreover, the survey did not provide precise data for the facilities which were relevant: Fair Oaks, Lake Hospital, and Humana Sebastian. A finding that these facilities have a waiting time of six weeks cannot be made on hearsay evidence of an imprecise nature when direct evidence of 60 percent occupancy rates at Fair Oaks and Lake Hospital exists. For the same reasons as set forth above the third sentence of this proposed finding must also be rejected.
The first two sentences have been substantially adopted in the text of FF 15 and 16, but the third sentence has been rejected in FF 16. The fourth sentence is true, but irrelevant as discussed in FF 17. The fifth sentence is
rejected as irrelevant since follow-up outpatient treatment is not relevant to the issue of need for inpatient hospitals substance abuse beds.
This finding off fact is adopted as modified in FF 15. Ms. Cioffi did not distinguish between residential care and inpatient hospital care.
This finding of fact was adopted as modified in FF 15. Ms. Cioffi did not testify that such defendants were "in need of some sort of substance abuse treatment." Cioffi, p. 4.
This finding of fact is rejected. Ms. Heinlen specifically testified that she could not give comparative statistics, see T. 32, and thus the adjective "high" has no comparative value. Judge Cianca did not mention the elderly or transients, but rather testified concerning persons moving into the area who were "semi-young." See FF 16.
The first two sentences have been substantially adopted in FF 14. The last sentence is adopted in FF 18.
This finding of fact is rejected due to the primary finding that insufficient need exists.
Adopted FF 8, except that the need projection for 1990 is legally irrelevant and immaterial due to the lack of need projected.
Adopted FF 19.
Rejected as not supported by the evidence. T. 92.
Rejected as not supported by the evidence. The lack of need shown by the evidence leads to the inference that the addition of 10 or 12 additional substance abuse beds at Harbour Shores will serve patients that would otherwise have been served at the Savannas Hospital, thus diminishing its revenues.
Rejected as not supported by evidence. Petitioner's expert, Ms. Heinlen, testified that licensed substance abuse beds devoted to detoxification were counted as substance abuse beds under the HRS rule, that you could "play with the statistics" and "say the five detox beds were not being used for treatment and, therefore, there were more treatment beds needed somewhere else if you wanted to." T. 41-42. This is not a sufficient predicate to exclude detoxification beds from the count.
Rejected as phrased. See FF 24. Ms. Dudek testified that failure to satisfy the occupancy requirement would result in no need even if need were shown numerically, but that if no need were shown numerically (which is implicitly intended to mean pursuant to the rule formula), then occupancy would be a circumstance among others, but would not drive a need conclusion by itself. T. 134.
Findings of fact proposed by Indian River Community Mental Health Center.
Adopted FF 2.
Adopted FF 2 and 7.
Adopted FF 1.
Adopted FF 12.
Adopted FF 12.
Adopted FF 12, except the last sentence is rejected because the need for psychiatric beds is irrelevant. The only issue is the need for substance abuse beds.
The first two sentences are adopted in FF 1. The last sentence is irrelevant since the only question at issue is need for short term substance abuse beds.
Adopted FF 14, except that the fifth sentence is rejected because there is no evidence as to what the local referral agencies may have assumed or known.
Rejected because the proposed finding is not relevant. The record does not indicate how any such study would have been relevant to the issue of need in District IX.
The first sentence is adopted in FF 13. The last sentence is rejected for lack of evidence and because need for psychiatric beds is relevant.
Adopted FF 13.
Adopted FF 13.
Adopted FF 14.
Rejected because there are not four or five pages of listed services in Petitioner's Exhibit 1.
Adopted FF 19.
Adopted FF 10.
Adopted FF 10 and 11, except the occupancy rates of 98.6 percent and
80 percent are rejected because the math is wrong.
Adopted FF 21.
Rejected because the projections of another facility for Medicaid patients is irrelevant to show need for Medicaid patients. An applicant may select patient mix for fiscal reasons of its own wholly distinct from patient need.
Adopted FF 17.
Adopted FF 17.
Adopted FF 22.
Adopted FF 22.
Adopted FF 23.
Adopted FF 23.
Adopted FF 23.
Rejected as irrelevant since it was not shown that CARP is the equivalent to licensed inpatient short term hospital substance abuse beds.
Adopted FF 23.
Rejected as irrelevant. The evidence does not show need can be projected from statistics concerning the percentage of elderly persons, adolescents, transients, alcohol related accidents, or problem drinkers in District IX. Arguably any of these statistics might be correlated with need, but the evidence for such correlation is lacking in the record. Moreover, the Petitioner does not rely upon this general testimony in it proposed findings of fact.
Rejected as irrelevant for the reasons stated in paragraph 29.
Rejected as irrelevant for the reasons stated in paragraph 29.
Rejected as irrelevant. The need for long term substance abuse beds is not at issue in this case.
Adopted in FF 17.
Rejected as irrelevant. Of course any hospital can take an indigent patient or a Medicaid patient without expectation of Medicaid reimbursement, but the record does not contain evidence that any hospitals now providing short term substance abuse care either do or do not take significant numbers of indigents.
Rejected as not relevant. Since the ultimate conclusion has been made that there is no need, the issue of occupancy levels is moot.
Rejected as irrelevant since this case involves only short term substance abuse need.
The first sentence is rejected as not being supported by the citation of the record. Ms. Heinlen only testified as to reasons why hospitals chose to provide differing services; she did not express an opinion as to whether this is good health planning. T. 64. The second sentence is rejected as not being an issue in this case since only need is at issue.
Rejected as irrelevant. The tactics of an applicant for a certificate of need in a prior batch are irrelevant to this hearing absent additional evidence to show that precise basis for such tactics.
Adopted in FF 8, 10, 19, and 22.
Adopted FF 19.
Adopted FF 19.
Adopted FF 20.
Adopted FF 9.
Adopted FF 9.
Adopted FF 9.
Adopted FF 9.
Rejected as not supported by the testimony cited.
Rejected as irrelevant since there is no contention by the Petitioner that need exists due to general (as opposed to specific) growth in population.
Rejected as irrelevant.
Adopted FF 16 and 17.
Adopted FF 16 and 17.
Adopted FF 15 and 17.
Findings of fact propose by the Department of Health and Rehabilitative Services.
Adopted FF 1.
Adopted FF 12.
Adopted FF 6.
Adopted FF 9.
Adopted FF 7.
Adopted FF 8.
Adopted FF 10.
Adopted FF 8 and 10.
Adopted FF 13.
Rejected as irrelevant. There is no evidence in the record to correlate these statistics with need for short term A substance abuse beds. Moreover, the Petitioner does not propose these facts as findings of fact.
Adopted FF 10 and 11, except the occupancy rate of 96.8 percent is rejected as being mathematically incorrect.
Rejected as mathematically incorrect.
Rejected as irrelevant, though true, since there is no need for any beds.
COPIES FURNISHED:
John F. Gilroy, Esquire Department of Health and
Rehabilitative Services 1323 Winewood Boulevard Building One, Suite 407 Tallahassee, Florida 32301
Donna H. Stinson, Esquire The Perkins House, Suite 100
118 N. Gadsden Street Tallahassee, Florida 32301
Jonathan S. Grout, Esquire Dempsey & Goldsmith, P.A.
307 West Park Avenue Tallahassee, Florida 32301
William Page, Jr.
Secretary
Department of Health and Rehabilitative Services
1323 Winewood Boulevard
Tallahassee, Florida 32301
| Issue Date | Proceedings |
|---|---|
| Aug. 05, 1986 | Recommended Order (hearing held , 2013). CASE CLOSED. |
| Issue Date | Document | Summary |
|---|---|---|
| Nov. 04, 1986 | Agency Final Order | |
| Aug. 05, 1986 | Recommended Order | Certificate Of Need to convert psychiatric beds denied. Petitioner failed to demonstrate need in district or show under utilization of existing psychiatric beds. |
