STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

HUMANA HOSPITAL NORTHSIDE, )

)

Petitioner, )

)

vs. ) CASE NO. 84-4070

)

DEPARTMENT OF HEALTH AND )

REHABILITATIVE SERVICES, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, an administrative hearing was held before Diane D. Tremor, Hearing Officer with the Division of Administrative Hearings, on October 28, 1985, in Tallahassee, Florida. The issue for determination in this proceeding is whether petitioner is entitled to perform cardiac catheterization procedures at its facility.

APPEARANCES

For Petitioner: John H. French and James Hauser

Messer, Vickers, Caparello, French and Madsen

Post Office Box 1876 Tallahassee, Florida 32302

For Respondent: R. S. Power

Office of General Counsel Building 1, Room 407

1323 Winewood Boulevard

Tallahassee, Florida 32301 INTRODUCTION

In support of its position that it is entitled to perform cardiac catheterization services without further Certificate of Need review, petitioner offered the deposition testimony of Dipak K. Mukherjee, M.D., a Board-certified internist and a Board-certified cardiologist, and Nathan M. Hameroff, M.D., a diagnostic radiologist, as well as the testimony of Thomas F. Porter, the former supervisor of HRS's Certificate of Need Section. Petitioner's Exhibits 1 through 11 were received into evidence.

The respondent HRS presented the testimony of Constantine J. Contis, the Director of Planning for the Health Council of Pasco/Pinellas, Inc., and Herbert Edward Straughn, a Medical Facilities Consultant with HRS. HRS's Exhibits A through H were received into evidence.

On December 30, 1985, Largo Medical Center, Inc. petitioned to intervene in this proceeding. By Order entered on January 3, 1986, that petition was denied

as having been untimely filed. On February 3, 1986, Largo Medical Center moved to stay further proceedings before the Division of Administrative Hearings pending a decision by the Second District Court of Appeal on Largo's petition for review of the Order denying its petition to intervene. That motion to stay is likewise denied.

Subsequent to the hearing, both parties filed proposed findings of fact and proposed conclusions of law, and those documents have been carefully considered. Except as noted in the appendix attached hereto, the parties' proposed findings of fact are accepted and/or incorporated in this Recommended Order.

FINDINGS OF FACT

Based upon the oral and documentary evidence adduced at the hearing, the following relevant facts are found:

1. The petitioner's facility opened in January of 1976 as the Hubert Rutland Hospital. Its name was subsequently changed to Gateway Community Hospital and, after purchase by petitioner, it became Humana Hospital Northside.

   
   

2. Dr. D. K. Mukherjee, Board-certified in internal medicine and cardiology, came to petitioner's facility in 1976 for the prime purpose of developing a cardiac catheterization laboratory, and assisted in preparing a list of equipment necessary to begin operation of such a laboratory. On December 31, 1976, petitioner's predecessor entered into a medical equipment service agreement for cardiac catheterization and monitoring equipment. That equipment, costing less than $100,000.00, was delivered to the hospital on or before June 17, 1977. Since that time, cardiac catheterization procedures, as defined in Rule 10-5.11(15), Florida Administrative Code, have been performed on a continuous and regular basis at petitioner's facility in Special Procedures Room No. 3. Over the past eight to nine years, the longest interval between the performance of such procedures has been approximately one or two weeks. Special Procedures Room No. 3, while also utilized for other purposes, has the equipment, staff and support services necessary for providing the studies and procedures associated with cardiac catheterization. The hospital itself is capable of providing the ancillary diagnostic services, such as hematology studies, electrocardiography, chest x-rays, blood-gas studies, pathology, blood chemistry analysis and nuclear studies pertaining to cardiology.

   
   

3. Prior to July 1, 1977, Certificate of Need review was not required for the purchase of cardiac catheterization equipment by a hospital unless it involved a capital expenditure of more than $100,000.00. Commencing on July 1, 1977, Certificate of Need review was required when a health care facility sought to provide a substantial change in service, defined as a service which was not offered on a regular basis within the prior twelve-month period. Section 381.494(1)(c), Florida Statutes, and Rule 10-5.02(19), Florida Administrative Code.

   
   

4. Because of technological and scientific advances, petitioner desired to replace and update the equipment purchased in 1976 for the performance of special procedures. Accordingly, in April of 1984, it submitted an application for a Certificate of Need to replace special procedures equipment at a project cost of $1,269,000.00. The application, in Section 3 stating the need and justification for the project, noted that:

   
   

   "Our existing equipment is totally inadequate to perform state-of-the-art cardiac catheter-

   ization and coronary angioplasty. When we began performing cardiac catheterization in 1977 this equipment was adequate, but today it is totally unacceptable. This proposed equipment will not only provide state-of-the- art equipment for these procedures, but will do so in a cost-effective manner since combined utilization of such high cost equip- ment contributes to the reduction of the cost of medical care."

   
   

   HRS issued petitioner Certificate of Need number 3261 for the replacement of special procedures equipment at a total project cost of $1,269,000.00, as requested. However, in a cover letter transmitting the issued Certificate of Need to the petitioner, HRS noted:

   
   

   "Please be advised that neither this office, the Office of Licensure and Certification nor the Local Health Council has documen- tation to support the performance of cardiac

   catheterization procedures at this hospital."

   
   

5. Local Health Councils are private nonprofit corporations which contract with HRS to conduct local planning activities, including the collection of data, the publication of various utilization reports and the development of Local Health Plans. When HRS reviews proposed health care projects which require a Certificate of Need, it utilizes the data submitted to it by the various Local Health Councils, particularly in those instances where its rules contain a methodology or formula which includes as a factor an accounting of existing facilities or services. Application of the methodology contained in HRS's rule for determining the need for additional cardiac catheterization laboratories requires a knowledge of the number of procedures performed per year by existing and approved laboratories. Rule 10-5.11(15), Florida Administrative Code.

   
   

6. The Health Council of Pasco/Pinellas, Inc. collects data from hospitals within Pasco and Pinellas Counties regarding bed utilization and service information. Hospitals in the district are requested to complete and submit certain information on a "Monthly Hospital Utilization Form." Among the items of information requested is the number of cardiac catheterization procedures performed during the reporting period. The Health Council also publishes and distributes annual and semi-annual utilization reports for the district.

   
   

7. There is no provision in the statutes or rules which require hospitals to report utilization or service data to the various Local Health Councils, and HRS itself does not require that such information be reported to it. It is not unusual for hospitals to report inaccurate, incomplete or inconsistent data to Local Health Councils. Indeed, it is recognized in the "1984 Annual Hospital Utilization Report for District V Pasco/Pinellas Health Council, Inc." that, while all hospitals in the District submitted monthly hospital utilization information,

   
   

   "One limitation to this report involves those institutions who did not, for various reasons, submit data for beds by service categories and/or data pertaining to specialty services." HRS Exhibit F, p. 1.

   The form utilized by the Pasco/Pinellas Health Council contains no definition of cardiac catheterization procedures and no directions as to how to complete the form.

   
   

8. While it has regularly submitted a monthly utilization form to the Local Health Council, petitioner has never reported the performance of cardiac catheterizations at its facility. The various reports published by the Local Health Council do not list petitioner as performing cardiac catheterization procedures.

   
   

9. While a health care facility may obtain a written determination from HRS that a given service is exempt from Certificate of Need review due to its "grandfathered" status, there is no agency rule or policy which requires a facility to obtain such a written exemption. It has generally been the agency policy that equipment and services acquired by a facility prior to the date that such acquisition became reviewable under the Certificate of Need law are not reviewable on a retroactive basis.

   
   

   CONCLUSIONS OF LAW

   
   

10. The issue in dispute between the parties is whether Humana Hospital Northside is entitled to offer and perform cardiac catheterization services without submitting an application for a Certificate of Need. The issue arises by the apparent placement of a condition or restriction upon the Certificate of Need which was granted to the petitioner for the purchase of special procedures, equipment and renovation.

    
    

11. It is petitioner's contention that it began performing cardiac catheterization procedures and services prior to July 1, 1977, and was thus governed by the Certificate of Need statutes and rules as they existed at that time. Since the capital expenditure for the equipment fell below the threshold amount for Certificate of Need review, the initiation of cardiac catheterization services was not then subject to review. Petitioner further contends that it is not now seeking to offer a "substantial change-in service" as defined in Section 381.494(1)(g), Florida Statutes, and Rule 10-5.02(19), Florida Administrative Code, inasmuch as it has regularly and continuously been providing cardiac catheterization proceedings since early 1977.

    
    

12. The respondent HRS offered no evidence to dispute the fact that petitioner has indeed been providing cardiac catheterization services on a regular and continuous basis from pre-July 1, 1977 to the present time. Instead, HRS takes the position that since petitioner never reported to the Local Health Council that it was performing such services, it is now somehow estopped from claiming a "grandfather" exemption from Certificate of Need review.

    
    

13. There is competent and substantial evidence demonstrating that petitioner began performing cardiac catheterization procedures prior to July 1, 1977, at a time when Certificate of Need review was not required, and has continued to perform such services on a regular basis. Accordingly, petitioner was exempt from Certificate of Need review when it initiated such services and continues to maintain that exempt status so long as it regularly and continuously performs such services.

    
    

14. Respondent's theory of estoppel is both inapplicable and unproven. First, HRS has cited no authority, and the undersigned is aware of no authority,

    which requires a hospital or other health care facility to report utilization statistics to the Local Health Council or to HRS. While data reporting by individual health care institutions may be an essential factor in health care planning, the responsibility for such planning and the gathering of accurate data lies with HRS and the Local Health Councils, and not with the individual health care providers. In the absence of legislative mandate or agency rule or policy requiring a facility to provide specific accurate information, a facility's failure to do so does not act to deprive it of its right to provide medical services without State approval except where statutorily required.

    
    

15. As the party asserting the affirmative defense of equitable estoppel, HRS had the burden of providing the facts necessary to satisfy the essential elements thereof. An estoppel arises when there is a willful or negligent representation as to some material fact and the party claiming the estoppel both relies on that representation and detrimentally changes his position based upon the representation. HRS failed to present any evidence that it relied on the utilization reports submitted by the petitioner in making any calculations or decisions regarding Certificate of Need determinations in the service area or otherwise injuriously changed its position on the basis of such reporting (or lack of reporting) by the petitioner. There simply was no showing that either HRS, the Local Health Council or the public in general was harmed by petitioner's failure to report the number of cardiac catheterization procedures performed. Absent such proof, respondent's claim of estoppel fails.

RECOMMENDED ORDER

Based upon the findings of fact and conclusions of law recited herein, it is RECOMMENDED THAT HRS withdraw or delete any intended restrictions upon petitioner's Certificate of Need Number 3261 and recognize that petitioner does not require a separate Certificate of Need for the provision of cardiac catheterization services.

Respectfully submitted and entered this 21st day of March, 1986.

DIANE D. TREMOR

Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 21st day of March, 1986.

APPENDIX TO RECOMMENDED ORDER IN CASE NO. 84-4070

The proposed findings of fact submitted by the petitioner Humana Hospital Northside and the respondent Department of Health and Rehabilitative Services have been accepted and/or incorporated in this Recommended Order, except as noted below:

Petitioner

11. Rejected. While Dr. Hameroff did testify as stated in this proposed finding, that testimony was conjectural and without an adequate predicate. This witness further testified that he did not complete the forms and, indeed, was not aware of the form about which inquiry was made.

Respondent

7. Rejected, as not being supported by competent substantial evidence.

COPIES FURNISHED:

John H. French and James Hauser, Esquire

Messer, Vickers, Caparello, French and Madsen

Post Office Box 1876 Tallahassee, Florida 32302

R. S. Power, Esquire Office of General Counsel Building 1, Room 407

1323 Winewood Boulevard

Tallahassee, Florida 32301

William Page, Jr.

Secretary

Department of Health and Rehabilitative Services

1323 Winewood Boulevard

Tallahassee, Florida 32301

Steve Huss, General Counsel Department of Health and

Rehabilitative Services 1323 Winewood Boulevard

Tallahassee, Florida 32301

Thomas M. Beason, Esquire

118 N. Gadsden Street

The Perkins House, Suite 100 Tallahassee, Florida 32301

Docket for Case No: 84-004070

Orders for Case No: 84-004070