STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
ADVENTIST HEALTH SYSTEM/SUNBELT, ) INC., d/b/a FLORIDA HOSPITAL, )
)
Petitioner, )
)
vs. ) CASE NO. 85-0747H
)
STATE OF FLORIDA, HOSPITAL )
COST CONTAINMENT BOARD, )
)
Respondent, )
and )
)
THE PUBLIC COUNSEL, )
)
Intervenor. )
)
RECOMMENDED ORDER
The formal hearing in this case was held before William C. Sherrill, Jr., the designated Hearing Officer for the Division of Administrative Hearings, on November 25, 1985. Appearing for the parties were:
For Petitioner: W. David Watkis, Esquire
Oertel & Hoffman, P.A.
2700 Blairstone Road, Suite C Tallahassee, Florida 32301
For Respondent: Curtis Ashley Billingsley, Esquire
Hospital Cost Containment Board
325 John Knox Road Building L, Suite 101
Tallahassee, Florida 32303
For Intervenor: Kevin J. O'Donnell, Esquire
Office of Public Counsel
202 Blount Street Tallahassee, Florida 32301
At issue is whether the Petitioner may amend its fiscal year 1984 budget, the period of time such amendment may be allowed, and calculation of adjustment to base pursuant to section 395.509(11), Fla. Stat. (1985).
The Petitioner presented the testimony of James Bracher, Scott Miller, and Richard Earl Morrison, and 10 exhibits. The Respondent presented the testimony of Pace Allen and 3 exhibits. The Intervenor presented no witnesses and 1 exhibit. The Hearing Officer, sua sponte, has included 1 exhibit. See conclusion of law 2.
The transcript is in two volumes, separately numbered.
References to volume one will be "T1. ," and references to volume two will be "T2. ." The abbreviation "FF" means findings of fact.
FINDINGS OF FACT
The Petitioner, Florida Hospital, is a tertiary care hospital located in Orange County, Florida, and consisting of three different campuses, with a total of 1,075 licensed beds. It is the second busiest and biggest hospital in Florida. T2. 9,20.
Florida Hospital submitted its original FY 1984 budget to the Hospital Cost Containment Board (HCCB) on October 31, 1983. Petitioner's Exhibit 5.
The FY 1984 budget was revised at least once through informal negotiation with HCCB staff before it was considered by the HCCB, and these revisions were accepted by the staff of the HCCB. T1. 54, 104. These changes were not placed in evidence.
The HCCB reviewed Petitioner's FY 1984 budget at its meeting on April 19, 1984. T1. 54; Petitioner's Exhibit 4. The budget was accepted and not selected for public hearing, and the HCCB found that Petitioner's hospital had one of the top three highest case mixes in the state. Petitioner's Exhibit 4.
Petitioner's 1984 fiscal year ran from January 1, 1984 to December 31, 1984. T1. 52.
Although the budget was not considered by the HCCB until April, 1984, the budget was effective for all of fiscal year 1984. T1. 54.
By letter dated October 11, 1984, but received October 15, 1984, Florida Hospital submitted an amended FY 1984 budget to the Hospital Cost Containment Board. T1. 54; T2. 51;
Petitioner's Exhibit 6. The amendment thus was submitted 289 days after the beginning of Petitioner's 1984 fiscal year, using the date of receipt as the date of submission, and 77 days from the end of the fiscal year.
By letter dated February 11, 1985, the HCCB staff notified Florida Hospital that its amended 1984 budget would not be accepted because it was received less than 90 days before the end of Florida Hospital's 1984 fiscal year. T1. 54-55; Petitioner's Exhibit 2. Florida Hospital is not aware of any analysis made by the staff of the HCCB with respect to the merits of the proposed amendment. T1. 56. In the fall of 1984, the HCCB applied the 90 day policy to all hospitals which submitted proposed budget amendments. T1. 7, 13. The policy was initiated in late summer or early fall, 1984. T1. 6,7. The HCCB did not provide the Petitioner with any other reason for the proposed denial of its amendment. T1. 23. The HCCB has now abandoned its policy of refusing to accept budget amendments within the last 90 days of the fiscal year, and that issue is not present in this case because the HCCB does not rely upon it to deny the amendment proposed by the Petitioner. T1. 11, 27.
Effective May 18, 1984, the Legislature substantially amended the Health Care Cost Containment Act of 1979, section 395.501, et seq., Fla. Stat. Chapter 84-35, Laws of Florida (1984).
Historically, there was no practice or policy of the HCCB or its staff to either encourage or discourage amendment of budgets after submission to the HCCB, and although such amendments were not required by law, amendments were routinely allowed. T1.
Under prior law, the HCCB had no regulatory authority over hospital budgets, and could not require a hospital to revise its budget or to abide by its budget. T1. 40. The HCCB only had the power to subject the hospital to a public hearing. Id. It often occurred that hospitals would revise a budget under the former law, after preliminary staff analysis and recommendation, and it is inferred that often such amendments were prompted by the possibility that the unrevised budget would trigger a public hearing. T1. 39.
In fiscal year 1984, ninety-nine hospitals submitted amendments or other changes to their budgets after initial budget Submission to the HCCB. Petitioner's Exhibit 1. Sixty-five of
those amendments were accepted by the staff of the HCCB or the HCCB and became a part of the hospital's 1984 budget. Id.
At least fifteen or twenty of the attempts to amend the FY 1984 budget set forth above were filed after the particular fiscal year had already begun. T1. 70. The majority of these fifteen or twenty were changes or amendments submitted prior to the time that the particular budget was submitted to the board of the HCCB. Id. In most eases, these fifteen or twenty amendments were accepted by the HCCB. T1. 71. Thus, it was common for the HCCB to accept amendments to the FY 1984 budget after the beginning of that fiscal year. There is no evidence, however, that any of these amendments accepted by the HCCB had the effect, under the amended 1984 law, of reducing the variance between a 1984 budget as originally filed and 1984 audited actual experience to diminish or entirely avoid the base year adjustment required by section 395.509(11), Fla. Stat. (1985).
On March 6, 1984, Kissimmee Memorial Hospital submitted an amendment to its FY 1984 budget after the beginning of that fiscal year. Its fiscal year was calendar year 1984. This amendment was accepted by the HCCB in April, 1984, and was effective retroactively and prospectively, for the entire fiscal year. T1. 71-77; Petitioner's exhibit 7, worksheets C-3, C-4 and X-4.
Of the fifty FY 1984 files reviewed at the HCCB by Scott Miller, witness for the Petitioner, one contained an amendment to a budget which was accepted by the HCCB after the HCCB had approved the budget. T1. 77. That hospital was Central Florida Regional Hospital. Id. The fiscal year for Central Florida Regional Hospital was calendar year 1984. T1. 79. The HCCB accepted the budget during their June, 1984, meeting. T1. 79; Petitioner's Exhibit 8. Subsequently, by letter dated September 21, 1984, Central Florida Regional Hospital submitted a proposed amendment to its FY 1984 budget. T1. 79-80. The proposed amendment was received by the HCCB on September 24, 1984, and sought an amendment due to receipt of favorable prior year Medicare settlements. Petitioner's Exhibit 8, letter of September 21, 1984, and worksheets C-2 and X-4; T1. 81. This was 22 days before the HCCB received the amendment proposed by the Petitioner in this case, and was more than 90 days from the end of the 1984 fiscal year. Apparently the amendment proposed by Central Florida Regional Hospital was subjected to the same 90 day amendment policy as Petitioner's amendment, but since the amendment of Central Florida Regional Hospital was submitted with more than 90 days left in the fiscal year, the amendment was not precluded by
application of that policy. T1. 7, 13. The amendment proposed by Central Florida Regional Hospital related to past and future periods, and was proposed to be effective for the entire fiscal year. T1. 136, 81. The amendment was concerned solely with actual experience, the receipt of a Medicare settlement, which was a single unusual revenue event. The HCCB accepted the amendment, T2. 69, and the amendment became effective for the entire 1984 fiscal year. T1. 80-81; T2.69. (Specifically, staff of the HCCB accepted the amendments, the amendments were entered into the HCCB computer, this was deemed to be acceptance by the HCCB itself, and the amendments were averaged on the computer for the entire 12 month period. T2. 67, 69-70.) The effect of the amendment was to increase net revenue per adjusted admission by about $180, and this increase was too small to have any impact upon the issue of whether Central Florida Regional Hospital would be subject to a base year adjustment pursuant to section 395.509(11), Fla. Stat. (1984). T1. 61-62.
The policy described in finding of fact 8 above was never promulgated by the HCCB as a rule. T1. 9, 12. No general written notice was given to hospitals potentially affected by the policy. T1. 13. The first notice given to hospitals of the existence of the policy was when staff of the HCCB notified a particular hospital in response to proposed fiscal year 1984 budget amendments. Id. Florida Hospital first learned of the existence of the policy when its attempted budget amendment was rejected by the HCCB staff on February 11, 1985. T1. 54-55.
The amendment proposed by the Petitioner to its FY 1984 budget included a reduction of about 21,000 patient days, and a reduction of about 1900 admissions from the original budget. T1.
Additionally, the amendment sought to increase revenue amounts which resulted primarily from a change in case mix. Id. Finally, there were increases in expenses for malpractice insurance and data processing software. Id.
Revenues respond quite directly to increases or decreases in case mix. T1. 68. Case mix is a mathematical expression of the intensity of services provided to the patient, T2. 16, which correlates to the degree of illness of the patient. Id. The average case mix is 1.0. T2. 17.
In the summer and early fall of 1983, when the Petitioner prepared its original budget for 1984, case mix standards did not exist, T1. 61, and the 1984 budget was not based upon a case mix. Id. Case mix data for fiscal years 1982 and 1983 became available in January, 1984. T1. 135.
Florida Hospital's case mix, and its revenues, increased in fiscal year 1984 primarily due to the introduction of the Medicare prospective payment system on October 1, 1983. T1. 59, 65, 96. Additionally, in the market served by Florida hospital there was increased activity from health maintenance
organizations and preferred provider organizations. T1. 59. The Medicare prospective payment system was a major change in the reimbursement system. T1. 119. These changes in the health care market caused Florida Hospital to experience a decrease in length of stay and an increase in the intensity of services rendered to sicker patients. This occurred because the new Medicare System, as well as HMO's and PPO's, were intended to reduce hospital stays and treat less sick patients outside the hospital. T1. 59.
The budget of Florida Hospital was initially prepared and submitted in October, 1983, with virtually no actual experience under the new Medicare prospective payment system. T1. 95-96. See also findings of fact 2 and 19, supra. Florida Hospital hired two consultants to assist it in trying to predict the impact of the new Medicare program. T1. 95.
Florida Hospital receives many of its patients on referral from other hospitals which cannot provide services to such patients. T2. 18, 33-34. Thus, Florida Hospital is relied upon by the surrounding area to treat sicker patients. T2. 25. It is hard to predict trends in such referrals, and consequently, it is difficult to predict the impact of other market changes,
such as the Medicare changes and the success of health maintenance organizations described above, since Florida Hospital must rely on referrals.
Health maintenance organizations in the first year of operation in the surrounding community were able to substantially reduce days of care, and this success was not predictable by Florida Hospital when it formulated its FY 1984 budget. T2. 14-
Additionally, the Orlando area in the last two years has experienced significant unpredictable increases in population, which added to the foreseeability problems of Florida Hospital. T2. 18-20.
Over the several years preceding fiscal year 1984, Florida Hospital experienced a trend of increasing open heart surgical procedures. T1. 60. In 1984, Florida Hospital originally budgeted for a significant increase over 1983, to its maximum capacity using a 5 day week. Id. But the demand continued, and in 1984, Florida Hospital began doing open heart
surgery on weekends. T1. 61. This decision, coupled with a decrease in length of stay per surgery, resulted in an increase in open heart surgeries greater than originally predicted in the 1984 budget. Id; T1. 110-111. Florida Hospital might have anticipated using weekends when it prepared its 1984 budget, but did not do so because weekend work is not a normal practice. T1. 112. In the fall of 1983, the national trend for open heart surgery was showing a decrease in such procedures. T1. 135-36.
Additionally, Florida Hospital experienced a shift of less complicated surgeries, such as cataract surgeries, from inpatient to outpatient procedures, resulting in an overall increase in intensity of the remaining surgical procedures. T1. 62-63. The Hospital has no control over this choice, since it is made by physician and patient and is affected by reimbursement policies of insurance and governmental programs. Id.
Florida Hospital monitors its budget on a monthly basis, but does not have specific criteria for evaluating the meaning of trends. T1. 86-87. A change of 5 percent would cause concern to Florida Hospital but other circumstances would be evaluated. T1. 87.
In the first two months of the first quarter of FY 1984, Florida Hospital experienced a slight increase of admissions over budget estimates. T1. 85-88. In a letter to the HCCB dated March 23, 1984, Florida Hospital noted that the intensity of its case mix for Medicare patients had increased about 50 percent since 1979, and that the length of stay had dropped 0.2 days from 1983 to 1984. Intervenor's Exhibit I. At the time the letter was prepared, the Hospital had no way of knowing if the non-Medicare case mix was the same. T1. 109. The data further showed a trend away from psychiatric patient days, which produce less revenue per day, toward more intense forms of care, which produce more revenue per day. Id. The letter was sent to provide information requested by staff of the HCCB, and to explain changes to the budget as originally submitted. Id.; T1. 104.
While March and April of 1984 showed some signs of a change from predictions in the budget, it was not until June, 1984, that Florida Hospital experienced a significant decline in patient days. T1. 97-98. Even then, it was determined that the June, 1984, experience was not a good trend indicator, but was an anomaly. Id. This was shown to be the case when June, 1984, was compared to June, 1985. Id. Moreover, these were only gross trends in patient days and admissions, and were not specific for case mix. T1. 99. In fact, Florida Hospital finished the fiscal
year at about the gross revenue level it had predicted in its 1984 budget; the problem was an increase in intensity of case mix, with lower patient days generating higher revenue per adjusted admission. Id.
In June, 1984, Florida Hospital received a Medicare settlement for two or three prior years. The settlement was $10 million, and the timing of the receipt of such settlements was not within the control of Florida Hospital. T1. 63, 93.
Significant variances were first noticed by Florida Hospital in revenue per adjusted admission in July, 1984. T1.
The variances were cumulative from April, 1984. T1. 100.
The vice president for finance at Florida Hospital, Scott Miller, was first aware of the amendments to the Hospital Cost Containment law, chapter 84-35, Laws of Florida (1984), establishing a base year adjustment for fiscal year 1984 based upon actual experience in 1984, in June, 1984. T1. 100. Section 395.509(11), Fla. Stat. (1984), requires comparison of the 1984 budget for net revenues per adjusted admission filed with the HCCB with the audited actual experience of each hospital for such revenues.
The bulk of the work in preparation of the proposed amendment to its FY 1984 budget, Petitioner's Exhibit 6, was done in August, 1984, based upon data to June 30, 1984. T1. 92, 83.
One of the reasons for submitting the amended budget was to diminish the base year adjustment described in finding of fact
30 above. T1. 100. Since the potential loss to Florida Hospital is over $10,000,000, it is likely that this was a major cause for the amendment. Additionally, the proposed amendment was submitted to more honestly reflect changes in the predicted budget. T1. 102.
From a purely fiscal point of view, without consideration of regulatory consequences, there is an incentive to underestimate revenues and overestimate expenses. T2. 26-27.
During the preparation of the proposed budget amendment, Florida Hospital did not consult the Florida Hospital Reporting System Manual, and did not talk with any employee of the HCCB for advice with respect to the proposed amendments. T1. 130.
The proposed budget amendment submitted in October, 1984, dealt with the entire fiscal year 1984, and did not
distinguish between portions of the year which already had been completed and the remainder of the fiscal year. T1. 131-132. As set forth in finding of fact 16, the basis of the proposed amendment was actual experience in fiscal year 1984, T1. 139-140, and contained revenues actually received that were substantially greater than originally predicated. With respect to future periods, the budget was a projection.
Due to seasonal variances, unpredictable receipt of lump sum payments, and variations in changes in admissions for various types of cases, it is not practicable to prorate the budget of Florida Hospital, as proposed to be amended, in daily, monthly, or quarterly segments, T1. 133, and the proposed amended budget does not contain a method for such proration.
A budget can be defined as a projection for a future time of expenditure and revenue, and it reflects anticipated goals. T1. 127, 131.
There is no evidence in the record to suggest that Florida Hospital has ever attempted to avoid a public hearing by underestimating revenue, and there is no evidence in the record to suggest that Florida Hospital's original FY 1984 budget contained intentional underestimations of revenue or intentional overestimations of reductions from gross revenue. As found in findings of fact 18 through 31, Florida Hospital's original FY 1984 budget was based upon the best information then available.
It took six months to prepare, T. 127, and was reasonable at the time submitted.
Florida Hospital submitted amendments to its budgets in FY 1982 and 1983. Petitioner's Exhibit 1. In years prior to 1984, Florida Hospital had submitted amendments to budgets after the beginning of its fiscal year. T1. 134.
Florida Hospital has claimed in previous years that it offers services not offered by other hospitals in its group. T2. 72-73. Through discussions with the staff of the HCCB, it was agreed between Florida Hospital and the staff of the HCCB that Florida Hospital could delete from its FY 1984 budget revenues and expenses associated with kidney transplant, employee housing, pathologist laboratory fees, sales of gasoline to employees, and a laundry. T2. 73-74. See Petitioner's Exhibit 10, attachment 2 and 3. The effect of deletion of these items from the FY 1984 budget was to delete a predicted $3,231,000 in revenue. Petitioner's Exhibit 10, attachment 1.
When Florida Hospital filed its audited actual experience for 1984, the HCCB had a new staff analyst assigned to review the budget of Florida Hospital, and the new analyst concluded that the items described in finding of fact 40 should be included in the actual report initially, Petitioner's Exhibit 10, attachment 4, but that these items would be "pulled back out" for purposes of analysis later. T2. 75. However, Respondent's Exhibit 1 did not implement this agreement. Instead, the items described above were deleted from the FY 1984 budget but were included in the FY 1984 actual experience figures on this exhibit. Id. The total amount of revenue actually received for these items in FY 1984, which should be deleted from the FY 1984 actual experience of Florida Hospital pursuant to the understanding with staff of the HCCB, is $4,074,415. If this amount is not deleted, Florida Hospital's base year adjustment pursuant to section 395.509(11), Fla. Stat. is larger by nearly $3 million. T2. 76.
Respondent's Exhibit 1 computes the FY 1984 net revenue per adjusted admission for Florida Hospital for the following: FY 1984 original budget; FY 1984 budget as proposed to be amended; FY 1984 budget if the proposed amendment is allowed for only the last
77 days of the fiscal year; and the 1984 actual experience. T2. 51-53. As discussed in finding of fact 41, the figure for 1984 actual experience does not delete the items discussed in that finding.
Respondent's Exhibit 2 computes the adjustment to base year if the proposed amendment is not accepted, and if the items described above in findings of fact 40 and 41 are not deleted from actual experience. T2. 56-58. The amount of this adjustment would be $13,771,310 which is $344.52 per adjusted admission for FY 1986. Respondent's Exhibit 2.
Respondent's Exhibit 3 computes the adjustment to base year if the proposed amendment is accepted for the 77 days remaining in the fiscal year, and if the items described above in findings of fact 40 and 41 are not deleted from actual experience. T2. 59-60. The amount of this adjustment would be $10,476,400, which is $262.09 per adjusted admission for FY 1986. Respondent's Exhibit 3.
If the proposed amendment is not accepted, but the items described in findings of fact 40 and 41 are deleted from actual experience, the adjustment to base year would be $10,871,303, which is $271.97 per adjusted admission for FY 1986. Petitioner's Exhibit 9.
If the proposed amendment is accepted for the 77 days remaining in the fiscal year, and if the items described in findings of fact 40 and 41 are deleted from actual experience, the adjustment to base year would be $7,760,747, which is $190.15 per adjusted admission for FY 1986. Petitioner's Exhibit 9.
If the proposed amendment is accepted by the HCCB to be effective for the entire FY 1984, the budgeted net revenue per adjusted admission for Florida Hospital is $4,008.70. Respondent's Exhibit 1. Assuming that the deductions from actual experience in 1984 are not made (see findings of fact 40 and 41), the net revenue per adjusted admission actually experienced by
Florida Hospital in 1984 was $4,346.66. Id. Since the difference between these two figures is less than 10 percent above the budgeted amount, $4,008.70, the base year of Florida Hospital would not be adjusted pursuant to section 395.509(11), Fla. Stat., if the proposed amendment were accepted for the entire fiscal year. This result would occur even though the deductions from revenue described above are not made.
CONCLUSIONS OF LAW
Jurisdiction exists pursuant to section 120.57(1), Fla. Stat. (1985).
Official recognition is taken of the Final Order in Psychiatric Institutes of America, d/b/a Lake Hospital of the Palm Beaches v. State of Florida, Hospital Cost Containment Board, DOAH case number 85-1666H, and the Recommended Order of this Hearing Officer in that case, a copy of which is in evidence as a Hearing Officer Exhibit. The Hospital Cost Containment Board has construed its statutory authority to preclude consideration of proposed amendments to budgets which have been executed and are no longer prospective. The analysis in the Recommended Order and Final Order in that case apply to the case at bar and are adopted by reference. See FF 37 herein.
In this case, however, there is evidence that the HCCB formerly allowed amendments to budgets rather freely when such amendments were submitted before acceptance of the budget by the HCCB, and those amendments were operative retrospectively for portions of the budget year. See FF 10 through 13. In one instance, a budget amendment was allowed after the HCCB had accepted the budget, but, nonetheless, was made effective both retrospectively and prospectively. See FF 14.
In view of the Final Order in the Psychiatric Institutes of America case, supra, the former practice of the HCCB was in error to the extent that such amendments were retrospective, and that former practice is not a proper basis for such a result in this case.
The former practice described in findings of fact 10 through 14 does, however, form a basis for allowing the proposed amendment of Florida Hospital to have prospective effect for the
77 days which remained in its fiscal year when the amendment was filed. As discussed in paragraphs 7 and 8 of the Recommended Order in the Psychiatric Institutes of America case, acceptance of prospective revisions of a budget would have been within the implied authority of the HCCB because "indispensable or useful to the valid purposes of a remedial law." Coca Cola Co., Food Division v. State, Department of Citrus, 406 So.2d 1079, 1081 (Fla. 1981). See also former rules 4D-1.06, 4D-1.03, and 4D- 1.04, Florida Administrative Code, which permitted waivers of "any or all portions" of rules pertaining to the content and timing of budget reports.
The proposed amended budget of Florida Hospital dealt with the entire fiscal year as a whole, and did not attempt to carve out only the remaining portion of the year. This was a logical and reasonable procedure, since it was not practicable to prorate the budget into monthly or quarterly segments. See FF 36. Moreover, this procedure was required by section 395.507(6)(a), Fla. Stat. (1985), which specifies that the budget to be filed with the HCCB be a budget for an entire fiscal year. To the extent that the proposed amended budget had 77 days left in the fiscal year, it was prospective in nature and truly a budget as defined in the Final Order of the Psychiatric Institutes case, supra. The argument of the Intervenor that the proposed budget cannot be considered because it does not solely address the remaining 77 days of the fiscal year is thus rejected in light of section 395.507(6)(a), Fla. Stat. (1985).
The proposed amendment of Florida Hospital is justified on this record. The amounts proposed are based upon real figures, the accuracy of which has not been questioned, that reasonably could not have been anticipated when Florida Hospital originally prepared its FY 1984 budget. See FF 16 through 31.
The proposed amendment was prepared and submitted within a reasonable time after Florida Hospital had sufficient data upon which to propose such an amendment. See FF 27 through 31. Even without the 90 day policy, it does not appear that Florida
Hospital could have submitted the amendment sooner. The lack of knowledge of Florida Hospital regarding this policy was not the cause of delay in submitting the proposed amendment. The existence of the 90 day policy is legally irrelevant on this record. It is not proposed by the HCCB as a basis for decision in this case.
Since the reasonableness of the proposed amendment has been shown, and there is no dispute as to the accuracy of the figures, all evidence that Florida Hospital seeks this amendment in part to avoid a base year adjustment is legally irrelevant.
In proposed findings of fact 46 through 48, the Intervenor, the Public Counsel, argues that the HCCB incorrectly interprets section 395.509(11), Fla. Stat. (1985), to calculate the reduction of the budget for 1986. The Public Counsel argues that the HCCB must, pursuant to that section simply calculate a figure per adjusted admission for FY 1984 (the excess over 10 percent of budgeted to actuals), and then take that figure and multiply it against 1986 adjusted admissions to calculate the total reduction from net revenues in 1986. The HCCB has chosen, however, to first calculate the total excess revenues for FY 1984, and then to divide this by the number of adjusted admissions for FY 1986 to obtain the amount to be deducted from each adjusted admission in FY 1986. The interpretation of the statute by the HCCB is entirely permissible, and must be followed. Department of Professional Regulation, Board of Medical Examiners v. Durrani,
455 So.2d 515, 517 (Fla. 1st DCA 1984). The statute refers in the very last part to a reduction "by the amount of such excess which is over 10 percent." It is entirely permissible for the HCCB to first compute the "amount of such excess" in total dollar amount for FY 1984, and then to prorate this excess per FY 1986 adjusted admission. See Respondent's Exhibits 2 and 3.
Finally, as found in findings of fact 40 and 41, a correct calculation of the 1986 adjustment pursuant to section 395.509(11) must delete the revenue and expense items mentioned in those findings of fact.
In accordance with the foregoing, the proposed amendment should be accepted for the 77 days remaining in the fiscal year, but rejected for portions of the fiscal year which were past when the amendment was filed. The method of calculating adjustment pursuant to section 395.509(11) proposed by the HCCB should be followed, except that the adjustment for the items in findings of fact 40 and 41 should be made. Thus, the adjustment to total net revenues for FY 1986 for Florida Hospital should be in the total
amount of $7,760,747, and the amount per adjusted admission should be $190.15, as set forth in finding of fact 46.
It is therefore recommended that the Hospital Cost Containment Board enter its Final Order approving the proposed amendment to the FY 1984 budget of Florida Hospital only for the last 77 days, and, as a result, calculating the adjustment pursuant to section 395.509(11), Fla. Stat. (1985), in the following amounts: subtraction of a total of $7,760,747 net revenues from FY 1986 budget, which is subtraction of $190.15 net revenues per adjusted admission for the FY 1986 budget.
DONE and ENTERED this 7th day of February, 1986, in Tallahassee, Florida
WILLIAM C. SHERRILL, 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 7th day of February, 1986.
APPENDIX TO RECOMMENDED ORDER, CASE NO. 85-0747H
Rulings upon Proposed Findings of Fact.
Pursuant to section 120.59(2), Fla. Stat., the following are specific rulings upon all proposed findings of fact submitted by the parties. The numbers herein correspond to the numbers of each proposed finding by party. Findings of fact in this recommended order are indicated by the abbreviation "FF".
Findings of Fact Proposed by the PETITIONER, Florida Hospital.
Adopted, FF 1.
Adopted, FF 2.
law. law.
Adopted, FF 3.
Adopted, FF 4.
Adopted, FF 6.
Adopted, FF 7.
Adopted, FF 8.
Adopted, FF 9.
Rejected because the proposed finding is a question of
Rejected because the proposed finding is a question of
Adopted, FF 10.
Adopted, FF 11.
Adopted, FF 12.
Rejected because of insufficiency of evidence that this
categorical, all inclusive finding of fact can be mode. There is a marked distinction between amendments submitted by Hospitals before acceptance of the budget by the HCCB, and amendments submitted after the budget has been accepted by the HCCB. See FF 10, 11, 12, 13, and 14. Further, of the ninety-nine instances of amendment, the Petitioner presented only one occasion when an amendment was accepted after the budget had been approved by the HCCB and was accepted for the entire fiscal year, some of which had already been executed. See FF 14.
Through 19. Adopted, FF 13.
20. Through 28. Adopted, FF 14.
Adopted, FF 8 and 14.
Adopted, FF 15.
Adopted, FF 8.
Adopted, FF 15.
Adopted, FF 15.
Adopted to the extent found in FF 11 end 12, and the remainder rejected for lack of evidence.
Adopted, FF 8.
Rejected because irrelevant since the basis for the 90 day incipient policy is not at issue because the policy is not at issue.
Adopted, FF 7 and 8.
Adopted, FF 8.
Adopted, FF 15.
Adopted, FF 8.
True, but irrelevant and therefore rejected.
Rejected because not supported by the evidence. As found in FF 17 through 31, Florida Hospital was aware of the amended law, effective May 18, 1984, that subjected hospitals to a potential base year adjustment resulting from FY 1984 budget data, but as also found in those findings, Florida Hospital could not prepare its proposed amendment any sooner due to lack of data.
The delay in filing the amendment, on this record, occurred due to lack of data, not lack of notice concerning the 90 day policy.
Adopted, FF 39.
Adopted in part, FF 39. However, the purpose of prior year amendments cannot be a portion of this finding of fact because there is insufficient evidence. Without evidence as to the nature of such prior year amendments, and given the reverse incentive in those years to understate revenues to avoid public hearing, it cannot be concluded that the motives for such amendments were to "present a fair document to the HCCB."
Adopted, FF 8.
and 48. Adopted, FF 16.
and 49. through 51. Adopted, FF 17.
52. and 53. Adopted, FF 18.
54. and 55. Adopted, FF 19.
56. and 57. Adopted, FF 20.
58. and 59. Adopted, FF 21.
60. and 61. Adopted, FF 22.
Adopted, FF 21.
Rejected. It is unclear from the evidence whether volume of patient days and admissions "magnifies" the impact of changes in market conditions. It could be statistically true that a greater volume produces more reliable predictions due to a larger base pool of data, which averages out small anomalies in data.
Adopted, FF 19.
through 69. Adopted, FF 23.
70. and 71. Adopted, FF 24.
Adopted, FF 38.
Adopted, FF 29.
Adopted, FF 31.
Adopted, FF 28.
and 77. Adopted to the extent modified in FF 38. To the extent not adopted in the modified language, it is rejected for lack of evidence.
Adopted, FF 33.
Since there were no other definitions given in the record, adoption of this finding as proposed would be misleading. T1. 127-128. Thus, it is rejected as phrased.
Adopted, FF 37, except this is the same definition, not "another" definition.
Rejected as phrased. There is not evidence in the record that the budget which is the subject of testimony at T1.
129 was prepared or used in any manner with respect to past time in the budget year.
Adopted in the introduction, but not, strictly speaking, a finding of fact.
Adopted, FF 42.
and 86. Adopted, FF 43.
and 87. Adopted, FF 44.
88. and 89. Adopted, FF 14.
Adopted to the extent relevant in the introduction.
Adopted, FF 40.
Rejected as unnecessary and cumulative to FF 40.
Adopted, FF 40.
through 96. Adopted, FF 41.
Adopted, FF 45.
Adopted, FF 46.
Findings of Fact Proposed by the RESPONDENT, HCCB.
The first sentence is adopted, FF 9. The next two sentences are rejected as issues of law, not fact. The next sentence is adopted, FF 7 and 9. The last sentence, also a matter of law, is rejected because not fact.
Adopted only to the extent in FF 8, and remainder is rejected as unnecessary and irrelevant since the policy is not used by the HCCB to deny amendment in this ease.
Adopted, FF 5 and 7.
Adopted, FF 8, except the last sentence, which is not relevant as discussed above.
The first two sentences are adopted as modified in FF
The next sentence is adopted in FF 16. The next sentence is adopted as modified in FF 26. The last sentence is adopted as modified in FF 27 and 29.
The first sentence is adopted in FF 16, the second sentence is adopted in FF 19, the last two sentences are adopted in FF 23.
The first sentence is adopted in FF 3. The last sentence is true, T2. 51, but not relevant.
Adopted, FF 32 and 34.
Adopted, FF 35.
Adopted, FF 40.
The first sentence is rejected for the reasons stated in FF 40 and 41. The second sentence is rejected as an issue of law, and also rejected because irrelevant: there does not appear to be any statute allowing or prohibiting the HCCB to "disregard" any portion of a budget. But as found in FF 10, there is apparently some discretion afforded the HCCB, discretion that is exercised frequently.
Adopted, FF 14 and 8.
Findings of Fact Proposed by the INTERVENOR, The Public Counsel.
Adopted, FF 1.
Adopted, FF 9.
Adopted, FF 2.
Adopted, FF 2, 3, and 4.
Adopted as modified in FF 16.
and 7. Adopted as modified in FF 16, but there is not enough evidence to show a "trend."
Adopted, FF 3 and 4.
Adopted, FF 7.
Adopted, FF 16.
Adopted, FF 31.
Adopted, FF 19.
Adopted, as modified in FF 27 and 29.
Adopted, FF 30.
Adopted, FF 30.
Adopted, FF 32.
The record contains no evidence that the subject matter of the proposed amendment is incorrect, or false, and thus the motive for such amendment is largely irrelevant. For this reason, this finding is rejected.
Adopted, FF 34.
Rejected because the record citation does not support the proposed finding.
Rejected because misleading. The proposed amendment does not relate to a specific future time, but in fact relates to the remaining days of the fiscal year, since that was all that was left of the budget year when the amendment was filed.
Adopted, FF 35.
Adopted as modified, FF 35.
Adopted as modified, FF 36.
Adopted as modified, FF 36.
Adopted as modified, FF 35.
Adopted, FF 36.
Adopted, FF 26 and 36.
Adopted as modified, FF 35 and 36.
Adopted as modified, FF 35 and 36.
Adopted, FF 19 and 20, except the last sentence, which is cumulative and unnecessary.
Rejected because irrelevant.
Rejected as irrelevant and cumulative to FF 20.
Adopted, FF 20.
Rejected as irrelevant and cumulative to FF 20.
Adopted, FF 19.
Rejected as irrelevant. See FF 18 and 20. The record supports only one conclusion regarding the prospective payment system: no one knew what massive changes would occur in the
market place prior to actual implementation of that system for a number of months. Awareness that PPS was on the way, without knowing what it would do, is irrelevant.
Adopted as modified, FF 30.
Rejected as irrelevant. See FF 15 through 31, which conclude that the Petitioner acted in a timely manner to prepare and submit its proposed amendment.
Adopted, FF 37.
Adopted, FF 38.
Adopted, FF 10.
Adopted, FF 3 and 10.
Adopted, FF 12.
Adopted as modified, FF 12.
Adopted as modified, FF 12. Further, the point is irrelevant.
Rejected because the proposed finding is an issue of
law.
Rejected because inextricably mixed with the issue of
law contained in proposed finding 46.
Rejected because inextricably mixed with the issue of law contained in proposed finding 46.
COPIES FURNISHED:
Curtis Ashley Billingsly, Esquire Hospital Cost Containment Board
325 John Knox Road Building L, Suite 101
Tallahassee, Florida 32303
David Watkins, Esquire Oertel & Hoffman, P.A.
2700 Blairstone Road, Suite C Tallahassee, Florida 32301
Jack Shreve, Public Counsel Office of Public Counsel
202 Blount Street Tallahassee, Florida 32301
T. L. Trimble, Esquire 2400 Bedford Road Orlando, Florida 32803
James Bracher, Executive Director Hospital Cost Containment Board
325 John Knox Road Tallahassee, Florida 32303
| Issue Date | Proceedings |
|---|---|
| Feb. 07, 1986 | Recommended Order (hearing held , 2013). CASE CLOSED. |
| Issue Date | Document | Summary |
|---|---|---|
| Feb. 07, 1986 | Recommended Order | Amendment to fiscal year budget permitted. Reasonable amendment shown. Hospital Cost Containment Board can compute excess total dollars and pro-rate adjusted admissions figure. |
