STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
DOCTORS MEMORIAL HOSPITAL, )
)
Petitioner, )
)
vs. ) CASE NO. 86-2111H
) HOSPITAL COST CONTAINMENT BOARD, ) EXECUTIVE OFFICE OF THE ) GOVERNOR, STATE OF FLORIDA, )
)
Respondent. )
)
RECOMMENDED ORDER
Pursuant to written notice a formal hearing was held in this case before Larry J. Sartin, duly designated Hearing Officer of the Division of Administrative Hearings, on June 24 and 25, 1986, in Tallahassee, Florida.
APPEARANCES
For Petitioner: John H. Parker, Jr., Esquire
Parker, Hudson, Rainer & Dobbs 1200 Carnegie Building
133 Carnegie Way Atlanta, Georgia 30303
and
Robert A. Weiss, Esquire Parker, Hudson, Rainer & Dobbs The Perkins House, Suite 101
118 North Gadsden Tallahassee, Florida 32301
For Respondent: Curtis A. Billingsley, Esquire
Assistant General Counsel Hospital Cost Containment Board Woodcrest Office Park
Building L, Suite 101
325 John Knox Road Tallahassee, Florida 32303
STATEMENT OF THE CASE
On June 2, 1986, the Petitioner, Doctors Memorial Hospital, filed a Petition for Formal Administrative Hearings [sic] contesting the recommendations of the Respondent, the Hospital Cost Containment Board, with regard to the Petitioner's 1987 fiscal year budget. The Petitioner sought in its Petition an Order accepting the fiscal 1987 budget as submitted by the Petitioner.
Contemporaneously with the filing of its Petition in this case, the Petitioner filed a Petition to Determine the Invalidity of Illicit Rules of the
Hospital Cost Containment Board, in which the Petitioner challenged an alleged unpromulgated rule of the Respondent. The challenge of the alleged unpromulgated rule was assigned case number 86-2014R and that case was consolidated with this case for purposes of hearing. A separate Final Order in case number 86-2014R has been issued simultaneously with this Recommended Order.
In paragraph 10 of the Petition filed in this case, the Petitioner has raised a number of constitutional issues. Those issues are beyond the jurisdiction of the Division of Administrative Hearings and are therefore not addressed in this Recommended Order.
At the final hearing, the Petitioner presented the testimony of Robert William Lasko, James J. Bracher, Larry Murray, Thomas Dean Meadows, Douglas E. Pierce, Aldric M. Borders, Terry Lynn Richardson and John Pattillo. Messrs.
Murray and Meadows were accepted as experts in health care finance, including hospital budgeting, and Mr. Pattillo was accepted as an expert in health care finance.
The Petitioner's exhibits 1-14, 16-21 and 26-27 were marked as "DMH" exhibits and were accepted into evidence.
The Respondent presented the testimony of Mr. Pierce and Mr. Pattillo. No exhibits were offered by the Respondent.
Prior to the commencement of the final hearing in this case, the parties filed a Joint Prehearing Stipulation in which certain facts were stipulated to. Those facts are accepted, infra.
The parties have timely filed proposed orders which contain proposed findings of fact. A ruling on each proposed finding of fact has been made either directly or indirectly in this Recommended Order. Additionally, attached to this Recommended Order is an Appendix which indicates where proposed findings of fact which have been accepted have been made in this Recommended Order and why proposed findings of fact which have not been accepted have been rejected.
The Appendix is hereby incorporated as a part of the Findings of Fact portion of this Recommended Order.
ISSUE
Whether the Petitioner's 1987 budget for its fiscal year beginning July 1, 1986 and ending June 30, 1987 should be approved pursuant to Sections 395.509(2), (5), and (7), Florida Statutes (1985)?
FINDINGS OF FACT
The Parties.
The following findings of fact were contained in the Joint Prehearing Stipulation:
The Petitioner's name and address are Doctors Memorial Hospital, 401 E. Byrd Avenue, Bonifay, Florida 32425. Doctors Memorial is located and operating in Holmes County. Doctors Memorial is owned by National Healthcare of Holmes County, Inc.
The name and address of the agency affected are the Hospital Cost Containment Board, Executive Office of the Governor, State of Florida,
Woodcrest Office Park, Building L, Suite 101, 325 John Knox Road, Tallahassee, Florida 32303. The HCCB I.D. number of Doctors Memorial is 10-0078.
Doctors Memorial has standing in these matters based on the facts alleged in its petitions.
The Petitioner is the only hospital located in Holmes County, Florida.
The Petitioner was previously owned by the Holmes County Hospital Authority. The Petitioner was acquired by its present owner in November of 1984.
The Petitioner is an investor-owned hospital.
The Petitioner's fiscal year begins on July 1 of each year and ends on June 30 of the following year.
Hospital Groupings.
There are approximately 217 general acute care hospitals in Florida. Those hospitals are grouped into 10 general hospital groups, including one for teaching hospitals, for purposes of determining whether a hospital's budget is subject to further review.
The Petitioner has been placed in the Respondent's Group 1, which consists of 17 hospitals, most of which are located in North Florida and the Panhandle. The average gross revenue per adjusted admission (hereinafter referred to as the "GRAA") of the hospitals in Group 1 has been considerably lower than the average GRAA of all other Florida hospitals.
All of the hospitals in Group 1 have a fiscal year beginning October 1 of each year except the Petitioner. Therefore, except for the Petitioner, the 1987 fiscal year of all of the hospitals in Group 1 begins October 1, 1986.
The "150-day letter".
The Petitioner received a "150-day letter" prior to the preparation of its 1987 budget. The information contained in the 150-day letter was based upon data as of January 31, 1986.
The 150-day letter indicated that the 50th percentile GRAA of the most recently approved budgets of Group 1 hospitals was $2,518.00.
It was indicated in the 150-day letter that the upper 20th percentile GRAA of the most recently approved budgets of Group 1 hospitals was $3,390.00.
It was indicated in the 150-day letter that the maximum allowable rate of increase (hereinafter referred to as the "MARI") for 1987 was 7.2 percent. The MARI consists of the National Hospital Input Price Index (hereinafter referred to as the "NHIPI") of 3.7 percent and "plus points" of 3.5 percent.
The Petitioner's 1987 Budget.
The following finding of fact was contained in the Joint Prehearing Stipulation:
On or about March 27, 1986, Doctors Memorial submitted to the HCCB its projected 1987 fiscal year budget. Doctors Memorial's 1987 fiscal year begins on July 1, 1986, and runs through June 30, 1987.
The Petitioner budgeted GRAA for 1987 of $3,009.00. This amount is
39.8 percent greater than its approved 1986 budgeted GRAA of $2,151.44.
The Petitioner's 1987 budget also included the following pertinent amounts: net revenue per adjusted admission (hereinafter referred to as "NRAA") of $2,025.00, total gross revenue of $4,397,436.00, total net revenue of
$2,959,958.00 and operating revenue of $149,188.00.
Gross revenue represents the amount patients are charged. Net revenue represents the amount of patient charges actually collected less certain write- offs or deductions.
Determination of Whether the Petitioner's Budget was Subject to Review.
The Petitioner's 1987 budgeted GRAA ranks between the 50th and the upper 20th percentile GRAA for Group 1 hospitals.
The Petitioner's rate of increase in its 1987 budgeted GRAA over its approved 1986 budgeted GRAA of 39.8 percent is in excess of the MARI of 7.2 percent for 1987.
Based upon these facts, the Petitioner's 1987 budget was not subject to automatic approval by the Respondent.
The Respondent's Preliminary Findings and Recommendations.
The following finding of fact was contained in the Joint Prehearing Stipulation:
On May 16, 1986, Doctors Memorial received the Staff analysis and preliminary findings and recommendations relative to its 1987 fiscal year budget. Doctors Memorial was advised that the Staff would recommend to the HCCB that Doctors Memorial's budgeted gross revenue per adjusted admission and net operating revenue per adjusted admission for fiscal 1987 be adjusted downward for reasons set forth in the Staff analysis. Doctors Memorial timely filed its petition challenging Staff's recommendations on May 30, 1986.
The Respondent preliminarily recommended that the Petitioner's GRAA be reduced by $599.00 from $3,009.00 to $2,410.00 and that the Petitioner's NRAA be reduced by $406.00 from $2,025.00 to $1,619.00.
The amount of GRAA approved by the Respondent included the Petitioner's 1986 approved GRAA of $2,151.00, $80.00 attributable to inflation and $179.00 attributable to an increase in the average length of stay (hereinafter referred to as the
"ALOS") at the Petitioner.
The recommendation of the Respondent with regard to the reduction in GRAA would allow the Petitioner an increase of 12.04 percent in GRAA for 1987 over the Petitioner's 1986 budgeted GRAA.
If no other adjustments are made in the Petitioner's 1987 budget, the proposed reduction in GRAA and NRAA will result in a total reduction of
$875,139.00 of total gross revenue from $4,397,436.00 to $3,522,297.00 and a total reduction of $593,166.00 of total net revenue from $2,959,958.00 to
$2,366,792.00. This would result in an operating loss of $443,978.00.
In its preliminary findings and recommendations the Respondent indicated that it was concerned by the fact that the Petitioner's 1987 budgeted increase in GRAA exceeded the MARI and that most of the projected 38 percent increase in operating expenses per adjusted admissions over 1986 budget was attributable to increases in salaries and benefits.
The Respondent also indicated the following policy applied in its preliminary findings and recommendations:
Current agency policy states that hospital's [sic] exceeding the MARI can only increase gross revenue per adjusted admission to the National Hospital Input Price Index (NHIP) of 3.7 percent without further justification. Any increase in excess of the NHIPI must be sufficiently justified and quantified to staff.
This policy was set out in memoranda to all financial analysis personnel of the Respondent from Mr. John Pattillo Chief Financial Analyst of the Respondent, dated May 16, 1986 and June 19, 1986.
Section 395.509(5), Florida Statutes (1985)-- Is the Petitioner's Rate of Increase in its GRAA Just, Reasonable and Not Excessive?
On May 30, 1986, the Petitioner submitted Objections to the Respondent's preliminary findings and recommendations in an effort to support its increase in its GRAA.
The increase in the Petitioner's 1987 budgeted GRAA includes an across-the-board patient rate increase of 6.8 percent. The Petitioner has not increased its patient rate since October of 1984.
The balance of the increase in the Petitioner's 1987 GRAA is attributable to the following facts.
The NHIPI is a average rate of inflation for hospitals in the United States. It represents the additional costs of providing services by hospitals in the Country caused by inflation. The NHIPI of 3.7 percent should be allowed in determining the Petitioner's GRAA rate of increase for 1987. This would result in an increase in the Petitioner's GRAA for 1987 over its approved 1986 budgeted GRAA of $80.00 ($2,151.00 1986 GRAA x 3.7 percent NHIPI = $80.00).
In determining what GRAA rate of increase should be approved it is reasonable to also take into account an inflation rate which takes into account Florida's unique characteristics compared to the rest of the country. In Florida, there are more elderly, Medicare patients are much older on average, there is an impact on health care costs from seasonality, there is a migrant labor force, Medicaid coverage is poor, the cost of living is higher than in most southern states and there are a large number of standard metropolitan statistical areas (areas with a city with a population or a county with a central city, with a population greater than 50,000 people).
The rate of inflation unique to Florida is not capable of quantification absent evidence on a case by case basis.
Other than the fact that the Petitioner's Medicare and Medicaid coverage is higher than most other areas of the State of Florida, the characteristics unique to Florida which affect inflation do not apply in this case.
The Petitioner has budgeted Medicaid utilization of 10.7 percent (in the upper 20th percentile of the State where the average is only 3.9 percent), Medicare utilization of 65 percent (in the upper 20th percentile of Group 1 hospitals) and uncompensated indigent care of 11.1 percent (above the 50th percentile of the State 50th percentile of 6.2 percent). These figures represent an extremely high percentage of patients who do not pay full charges (almost 87 percent).
The Respondent recognizes that hospitals with Medicaid utilization in the upper 20th percentile statewide may tend to have a higher GRAA than similar hospitals. The Respondent did not, however, take this consideration into account in reviewing the Petitioner's budget for 1987.
Using an appropriate method of quantifying the effect of Medicaid on the Petitioner's GRAA, the Petitioner proved that its high Medicaid utilization would justify an additional 198.64 of GRAA for 1987.
Using appropriate methods of quantifying the effect of Medicare and indigent care on the Petitioner's GRAA, the Petitioner proved that it was justified in including an additional $32.39 of GRAA attributable to Medicare and an additional $96.77 of GRAA attributable to indigent care.
In 1986 the Petitioner budgeted $29,421.00 for insurance expense. In 1987 the Petitioner budgeted $77,000.00 for insurance. The Petitioner cannot control the amount of its insurance expense.
In Order for the Petitioner to recoup the additional cost of insurance the Petitioner must increase its net revenue in an amount equal to the increase in its insurance costs and its gross revenue in an even greater amount. Based upon the Respondent's own method of increasing GRAA on account of the increase in insurance costs, the additional GRAA attributable to the increase would be
$48.38.
Taking into account the effect of Medicare and Medicaid on the difference in gross revenues and net revenues, the Petitioner would be justified in increasing its GRAA from 1986 to 1987 by $162.83 on account of the increase in insurance costs.
Beginning in the second calendar quarter of 1986, the Petitioner added physician specialists from its courtesy staff to active staff. Physicians added include a cardiologist in January of 1986, an orthopedic surgeon, a urologist, a general surgeon, a thoracic and vascular surgeon and a specialist in internal medicine. Several of these physicians moved their practices from Washington County Hospital, which has been experiencing financial difficulties.
The addition of physician specialists can have a significant impact on the intensity of services offered at a hospital and its GRAA. This is especially true at a hospital as small as the Petitioner. For example, the addition of the cardiologist at the Petitioner in January of 1986, resulted in six to seven patients a day on average at the Petitioner.
The addition of the thoracic surgeon, the cardiovascular surgeon, the orthopedic surgeon and the cardiologist could have the effect of increasing GRAA by $121.31 due to the increase in intensity of services caused by their addition.
The Respondent did not allow any increase in the Petitioner's GRAA on account of the addition of physicians to the Petitioner's staff or the impact of their addition on the intensity of services at the Petitioner. The only rationale offered by the Respondent for not taking these facts into account was based upon speculation by Mr. Pierce that the added physicians might resolve their reasons for leaving Washington County Hospital and leave the Petitioner's staff. The fact that the Petitioner added a family practitioner and a GYN and general surgeon since April of 1986 and an internist in July of 1986 supports a conclusion that it does not appear that the added physicians will be leaving the Petitioner any time in the near future.
In its 1987 budget the Petitioner projected an increase in its ALOS of
5.5 days. This amounts to an increase of 0.7 days over the 1986 budgeted ALOS of the Petitioner of 4.8 days.
The Petitioner's budgeted ALOS for 1987 was based upon the actual ALOS of the Petitioner from July of 1985 to February of 1986 of 5.57 days. More recent data through May of 1986 proves that the actual ALOS for 1986 is 5.57 days. It is doubtful that this ALOS for the first 11 months of 1986 will change substantially during the last month of the Petitioner's 1986 fiscal year.
The Respondent allowed an increase in the Petitioner's GRAA based upon the impact of an increase in its ALOS of 0.35 days. Initially, however, the Respondent's analyst who reviewed the Petitioner's budget had recommended approval of the 0.7 day increase contained in the Petitioner's budget. This recommendation was not accepted because of the Respondent's policy of limiting the rate of increase in a hospital's GRAA to the NHIPI.
The Respondent ultimately allowed an increase in the Petitioner's GRAA based upon the impact of an increase in its ALOS of 0.35 days. This increase amounted to an additional $179.00 of GRAA.
The increase in GRAA approved by the Respondent attributable to an increase of 0.35 days ALOS was based upon the actual ALOS of the Petitioner for the first 6 months of the 1986 fiscal year. No greater increase was allowed because the Respondent was concerned that the ALOS for the entire 1986 fiscal year might fluctuate because of seasonality.
Based upon the actual ALOS of the Petitioner through May of 1986, the budgeted ALOS increase of 0.7 days and a total budgeted ALOS of 5.5 days for 1987 is reliable and should be accepted.
An ALOS of 5.5 days justifies an increase in the Petitioner's 1986 GRAA of $36O.00. The methodology utilized by the Petitioner in arriving at this amount is reasonable.
The Petitioner budgeted a 6 percent increase in salaries per manhour over that level of salaries existing at the time the 1987 budget was prepared (March of 1986). This increase includes a 5 percent merit salary raise which the Petitioner normally gives to its employees on their anniversary dates and a
1 percent increase attributable to merit raises between March of 1986 and the end of the 1986 fiscal year.
The additional increase in salary and benefit costs budgeted for 1987 over 1986 is attributable to the fact that the current owner of the Petitioner has replaced non-technical employees such as aides and orderlies with more skilled personnel such as registered nurses. Also, the Petitioner's increase in census and budgeted admissions and the fact that those increases have resulted in the need for more skilled personnel has caused the increase in salary and benefits costs.
The Petitioner's total average salaries, benefits and manhours are very reasonable when compared with hospitals located in surrounding counties. The Petitioner's total salaries per FTE and the total benefits per FTE are below the 50th percentile of hospitals in surrounding counties. The Petitioner's total manhours also are below the 50th percentile for hospitals in Group 1.
It is unreasonable for the Respondent to expect the Petitioner to reduce its salary and benefit costs in the amount recommended by the Respondent. The Petitioner would very likely lose employees which would affect the Petitioner's ability to provide quality services.
The salary and benefits budgeted by the Petitioner for 1987 are reasonable.
The Petitioner has projected a 5 percent operating margin in its 1987 budget. This operating margin is reasonable. This would result in total operating revenue over expenses of $149,188.00 and an after-tax profit of
$81,561.00.
If the Respondent's recommended GRAA and NRAA were proper and no other changes were made to the Petitioner's budget, the Petitioner's operating margin would be a minus 18.8 percent.
The Respondent recommended that the Petitioner reduce salary and benefits expenses in the 1987 budget by $432,544.00 to the Petitioner's 1986 level of salary and benefits. This reduction, which is unreasonable, would result in an operating margin of 0.3 percent and an operating profit of
$7,850.00 before taxes. The evidence does not support a finding of fact that the Respondent's recommendation is reasonable.
An operating margin of 5 percent is substantially less than the average operating margin for other investor-owned hospitals in the State of 13.3 percent. In reviewing hospital budgets, the Respondent generally compares the operating margin of the hospital subject to review with similar hospitals in Florida. The Respondent did not do so in this case.
The recommendations of the Respondent would adversely affect the Petitioner's ability to earn a reasonable rate of return. The recommendations of the Respondent could drastically hinder the Petitioner's ability to efficiently operate.
The Petitioner's budgeted 1987 expenses are reasonable.
In 1985 the Petitioner reported a budgeted GRAA of $2,234.66. The Petitioner's audited actual 1985 GRAA was $2,467.69. The Petitioner's actual experience with regard to GRAA in 1985 was 10.4 percent greater than its budgeted GRAA.
In 1985 the Petitioner reported a budgeted NRAA of $1,392.39. The Petitioner's audited actual 1985 NRAA was $1,899.48. The Petitioner's actual experience with regard to NRAA in 1985 was 36.4 percent greater than its budgeted NRAA.
In 1986 the Petitioner reported a budgeted GRAA of $2,151.44. The Petitioner's audited actual 1986 GRAA was $2,865.92. The Petitioner's actual experience with regard to GRAA in 1986 was 33.2 percent greater than its budgeted GRAA.
In 1986 the Petitioner reported a budgeted NRAA of $1,454.70. The Petitioner's actual experience with regard to NRAA in 1986 was 36.4 percent greater than its budgeted NRAA.
The Petitioner's 1987 budgeted GRAA ranks 8th out of the 17 hospitals in Group 1, only 1 ranking higher than the 50th percentile hospital. This comparison is based upon the 1986 budgeted GRAA of the hospitals in Group 1 as of January 31, 1986, fiscal year adjusted.
The Petitioner's 1986 budget was low when compared with other Group 1 hospitals. Its GRAA ranked 12th and its NRAA ranked 14th out of 17 hospitals. These rankings were below the 50th percentile. The Petitioner's budgeted GRAA and GRAA for 1986 were, however, considerably lower than its actual 1986 GRAA and NRAA as discussed supra.
Based upon the foregoing, it is concluded that the Petitioner's rate of increase in its 1987 budgeted GRAA over its approved 1986 budgeted GRAA is just, reasonable and not excessive. The Petitioner has proved that in addition to its 1986 budgeted GRAA of $2,151.00, it is entitled to GRAA in 1987 for additional physicians it has added to its staff ($121.00), inflation ($80.00), its increased ALOS ($360.00), its high rate of Medicare use ($32.00), its high rate of Medicaid use ($199.00), its high rate of indigent care use ($97.00), and to cover the increase in its insurance costs ($163.00). The Petitioner has also proved that it is entitled to a reasonable rate of return.
The Petitioner has justified an amount of 1987 budgeted GRAA in excess of the $3,009.00 of GRAA included in its 1987 budget.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction of the parties to, and the subject matter of, these proceedings. Section 120.57, Florida Statutes (1985).
Section 395.509(1), Florida Statutes (1985), requires that all Florida hospitals file their budgets with the Respondent for approval. Pursuant to Section 395.507(6), Florida Statutes (1985), hospital budgets are to be filed at least 90 days prior to the commencement of the hospital's next fiscal year.
The budget year involved in this proceeding is the Petitioner's fiscal year beginning July 1, 1986, its 1987 fiscal year. On or about March 27, 1986, which is at least 90 days prior to the commencement of the Petitioner's next fiscal year subject to budget review, the Petitioner filed its 1987 fiscal year budget with the Respondent in compliance with Sections 395.507(6) and 395.509(1), Florida Statutes (1985).
Section 395.509(1), Florida Statutes (1985), further provides that a hospital's budget shall be deemed approved unless it is disapproved by the Respondent within 120 days after it is filed with the Respondent. In order to determine whether a budget is subject to automatic approval, Section 395.507(2), Florida Statutes (1985), provides that the Respondent is required to group hospitals according to certain characteristics contained in the statute and the Respondent's rules to allow meaningful comparisons of the hospitals in the group. The Respondent, as required by Section 395.507(2), Florida Statutes (1985), has established 10 general hospital groups, including one for teaching hospitals, to which the approximately 217 general acute care hospitals in Florida have been assigned.
The Petitioner has been placed in the Respondent's Group 1. Group 1 consists of 17 hospitals, most of which are located in North Florida and the Panhandle.
Pursuant to Section 395.509(2), Florida Statutes (1985), a hospital's budget must be approved by the Respondent as submitted unless the Respondent determines that:
The hospital's GRAA equals or exceeds the upper 20th percentile value for GRAA as established 150 days prior to the next fiscal year of the hospital for its group; or,
The hospital's GRAA equals or exceeds the 50th percentile value for GRAA as established
150 days prior to the next fiscal year of the hospital for its group, and the rate of increase of the hospital's GRAA in its budget submitted for approval and its GRAA in its most recently approved budget exceeds the MARI.
The Respondent sent the Petitioner a "150-day letter" prior to the time the Petitioner prepared its 1987 budget. This letter informed the Petitioner of the upper 20th and the 50th percentile values for GRAA of Group 1,
150 days prior to the Petitioner's 1987 fiscal year. The upper 20th percentile
GRAA was $3,390.00 and the 50th percentile GRAA was $2,518.00. The 150-day letter also informed the Petitioner that the MARI for 1987 was 7.2 percent.
The MARI is defined by Section 395.502(15), Florida Statutes (1985), as "the maximum rate at which a hospital is expected to increase its average gross revenues per adjusted admission for a given period." The MARI consists of the NHIPI (the "market basket index," which is a measure of inflation in hospital input prices) and "plus points" (additional percentage points added to the market basket index to adjust for the Florida specific experience).
The Petitioner's GRAA in its 1987 budget was $3,009.00. The 50th percentile value for GRAA as established 150 days prior to its fiscal year of the Petitioner for Group 1 was $2,518.00. The 20th percentile value for GRAA as established 150 days prior to the next fiscal year of the Petitioner for its group was $3,390.00. Therefore, the Petitioner's GRAA for 1987 exceeds the 50th percentile but is not in the upper 20th percentile.
The MARI for 1987 was 7.2 percent, consisting of the NHIPI of 3.7 percent and "plus points" of 3.5 percent. The Petitioner's rate of increase in 1987 GRAA over its 1986 GRAA is 39.8 percent. Therefore, the Petitioner's rate of increase exceeds the MARI.
Because the Petitioner's rate of increase in its 1987 GRAA over its approved 1986 budgeted GRAA exceeds the MARI and the Petitioner's 1987 GRAA exceeds the 50th percentile value for GRAA, as established 150 days prior to its fiscal year, of the hospitals in Group 1, the Petitioner's 1987 budget was not subject to automatic approval by the Respondent pursuant to Section 395.509(2), Florida Statutes (1985).
Pursuant to Section 395.509(2), Florida Statutes (1985), if a budget is not automatically approved pursuant to that Section, the Respondent is given authority to "approve, or approve as amended, a budget with a rate of increase greater or lesser than the maximum allowable rate of increase (the MARI) pursuant to subsection (5)."
Section 395.509(5), Florida Statutes (1985), provides in pertinent part, the following:
If the budget of a hospital is not subject to automatic approval because of the provisions of paragraph (2)(a) or paragraph (2)(b), the board shall review the budget to determine whether the rate of increase contained in the budget is just, reasonable, and not excessive. The board shall disapprove any budget, or part thereof, as excessive that contains a rate of increase which is not necessary to maintain the existing level of services of the hospital or, if the hospital increases its existing level of services, any amount not necessary to accomplish that increase. In making such determination and in considering any budget amendment filed by a hospital pursuant to subsection (3), the board
shall consider the following criteria:
The efficiency, sufficiency, and adequacy of the services and facilities provided by the hospital.
The cost of providing services and the value of the services to the public.
The ability of the hospital to improve services and facilities.
The ability of the hospital to reduce the cost of services.
The ability of the hospital to earn a reasonable rate of return.
The accuracy of previous budget submissions by the hospital compared to the actual experience of the hospital.
The number of patient days reimbursed by Medicare or Medicaid.
The number of patient days attributable to the medically indigent.
The research and educational services provided by the hospital if it is a teaching hospital.
The projected expenditures or revenues for or from construction of facilities or new services which are subject to regulation under s. 381.494 may not be included in the budget of a hospital until the construction or services are approved or authorized by the state health planning agency.
The cost of opening a new hospital, for the first 3 years. [Emphasis added].
Under Section 395.509(5), Florida Statutes (1985), the Petitioner is entitled to include in its budget for 1987 an amount of GRAA equal to its previously approved budgeted GRAA of $2,151.44 plus an amount of increase in its GRAA which is "just, reasonable, and not excessive." In this case, the Petitioner must justify the 39.8 percent increase in its GRAA for 1987 as being just, reasonable, and not excessive in order for its budget to be approved as submitted. See, Department of Transportation v. J.W.C. Company, Inc., 296 So.2d 778 (Fla. 1st DCA 1981). Any amount of this proposed increase in GRAA which "is not necessary to maintain the existing level of services . . . or, if the [Petitioner] increases its existing level of services, any amount not necessary to accomplish that increase should be disapproved.
In determining whether the Petitioner's proposed 39.8 percent rate of increase in GRAA should be approved, the Respondent took the position that the Petitioner was entitled to an increase in its GRAA equal to the NHIPI and that any amount of increase in excess of that amount had to be sufficiently justified and quantified by the Petitioner. The NHIPI is an average inflation rate for hospitals in the United States. For 1987 the NHIPI was 3.7 percent. Therefore, the Respondent determined initially that the Petitioner was entitled to an
$80.00 increase ($2,151.44 1986 GRAA x 3.7 percent NHIPI = $80.00) in its GRAA for 1987.
The Respondent also allowed the Petitioner an increase in its 1987 GRAA over its 1986 GRAA of $179.00 on account of a 0.35 days increase in the ALOS at the Petitioner's hospital. The Petitioner had budgeted an increase of
0.7 days in its ALOS in its 1987 budget. The Petitioner only allowed half of this amount because the Respondent was concerned that the ALOS of the Petitioner based upon the actual ALOS of the Petitioner through the first 6 months of its 1986 fiscal year, which is all the information the Respondent had at the time of its review, might fluctuate during the remainder of the 1986 fiscal year because of seasonality.
Based upon the foregoing, the Respondent disallowed the Petitioner's budgeted GRAA for 1987 of $3,009.00 and allowed the Petitioner a 1987 GRAA of
$2,410.00. The GRAA allowed by the Respondent consists of the Petitioner's 1986 GRAA of $2,151.44 plus $80.00 attributable to the NHIPI and $179.00 attributable to the increase in the ALOS accepted by the Respondent. This represents a 12.04 percent increase in the Petitioner's GRAA from 1986 to 1987.
As a result of the decrease in the Petitioner's 1987 GRAA the Respondent also reduced the Petitioner's NRAA for 1987 by $406.00 from $2,025.00 to $1,619.00.
The proposed recommendations of the Respondent will reduce the Petitioner's total gross revenue, if no other adjustments are made to the Petitioner's budget, from $4,397,436.00 to $3,522,297.00 and its total net revenue from $2,959,958.00 to $2,366,722.00. These reductions will result in an operating loss of $443,978.00.
The preliminary findings and recommendations of the Respondent were sent to the Petitioner in a letter dated May 15, 1986. In response to the Respondent's preliminary recommendations, the Petitioner submitted objections to the Respondent on May 30, 1986, in an attempt to justify its proposed 39.8 percent increase in its 1987 budget GRAA.
In its Proposed Order, the Petitioner essentially argued in its Conclusions of Law that the reasons given by the Respondent for not accepting its 1987 budget as filed were not justified. That, however, is not the test in this case. The test in this case is whether the Petitioner's budgeted rate of increase in its GRAA is just, reasonable and not excessive based upon an application of the criteria of Section 395.509(5), Florida Statutes (1985).
One of the criteria to be considered in reviewing a hospital's budget is the "cost of providing services and the value of the services to the public." Section 395.509(5)(b), Florida Statutes (1985). The Petitioner proved that the cost of providing services budgeted for 1987 justifies an increase in its GRAA for 1987 over its approved 1986 budgeted GRAA.
The evidence clearly supports a conclusion that the Petitioner's 1986 budgeted GRAA of $2,151.00 should be increased by the NHIPI of 3.7 percent. The NHIPI represents the national rate of inflation experienced by hospitals during the past year. The Respondent in fact agreed that the Petitioner was entitled to an increase in its GRAA based upon the NHIPI.
In Doctors Memorial Hospital v. Hospital Cost Containment Board, DOAH Case No. 86-2014R (Final Order issued July 25, 1986), it was concluded that the Respondent's policy that hospitals subject to budget review pursuant to Section 395.509(5), Florida Statutes (1985), are entitled to an increase in their GRAA for the NHIPI and must justify any amount of increase in GRAA in excess thereof
was an invalid rule. It does not follow, however, that the policy cannot be relied upon in a Section 120.57 proceeding. In order for the policy to be applied, however, the policy must be "clearly explicated and . . . supported by record foundation." See Home Health Professional Services, Inc. v.
Department of Health and Rehabilitative Services, 463 So.2d 345, 348 (Fla. 1st DCA 1985).
Based upon the evidence in this case it is concluded that the policy of the Respondent at issue in this proceeding is valid. Essentially, all that the Respondent has done in adopting its NHIPI policy is to recognize that hospitals should be allowed to increase their GRAA from one year to the next for inflation. Although it is true that the Respondent did not make much of an attempt to support its policy of using the NHIPI, the evidence does support a conclusion that it is proper to increase a hospital's GRAA for inflation.
If the Respondent's policy were found to be invalid as applied in this case it would not help the Petitioner's position. A determination that the Respondent's decision to automatically allow hospitals to increase their GRAA by the NHIPI is invalid would simply mean that each hospital would have to prove that any amount of increase in its GRAA is reasonable, even amounts attributable to inflation.
What the Petitioner really wants is a conclusion of law that the Respondent must automatically allow hospitals an increase in their GRAA based upon the MARI. Chapter 395, Florida Statutes (1985), does not support such a conclusion.
The MARI is essentially a national rate of inflation (the NHIPI) plus points attributable to the fact that Florida is different from the rest of the Country. The MARI, however, is specifically limited in its application to the determination of whether a hospital's budget is subject to automatic approval if the hospital budgets GRAA which equals or exceeds the 50th percentile and is less than the upper 20th percentile of the GRAA value of the hospitals in its group. Chapter 395 does not provide that all hospitals are entitled to a rate of increase in their GRAA of at least the MARI. In fact, Section 395.509(2), Florida Statutes (1985), specifically provides that if it is determined that a hospital's budget is subject to review and not automatic approval, the Respondent may approve, or approve as amended, "a budget with a rate of increase greater or lesser than the maximum allowable rate of increase [the "MARI"] . . .
." [Emphasis added]. Thus, the Legislature has provided that if a hospital's budget is not subject to automatic approval that hospital is not entitled as a matter of law to an increase in its GRAA equal to the MARI.
The only exception provided by Chapter 395 to the Respondent's authority to approve a rate of increase greater or lesser than the MARI is if a hospital's GRAA is in the upper 20th percentile and its GRAA rate of increase does not already exceed the MARI. Section 395.509(2), Florida Statutes (1985). Under those circumstances, the Respondent cannot reduce the hospital's GRAA rate of increase below the greater of the NHIPI plus 2 percent or the "median absolute dollar value increase in gross revenues per adjusted admission for all other hospitals in its group . . . ." The fact that the Legislature provided this exception to the Respondent's ability to reduce a hospital's rate of increase above or below the MARI and did not specify that the Respondent's ability to reduce the rate of increase above or below the MARI in other instances supports a conclusion that the Petitioner is not entitled to an increase equal to the MARI.
Finally, the fact that hospitals with a GRAA below the 50th percentile of their group may increase their GRAA by an amount equal to or in excess of the MARI does not support a conclusion that the Petitioner is entitled to such an increase. Although this may in fact occur under Chapter 395, the fact remains that it is clearly provided that the Respondent may approve a rate of increase in GRAA in excess of or below the MARI if the hospital's budgeted GRAA is between the 50th and 80th percentiles and it exceeds the MARI.
These conclusions do not mean that the Petitioner may not be entitled to a rate of increase in its GRAA in excess of the NHIPI. Nor has the Respondent taken such a position. The Respondent has simply taken the position that any amount of increase in excess of the NHIPI must be substantiated by the hospital. To reject this "policy" it would be necessary to conclude that the Respondent must accept whatever rate of increase a hospital includes in its budget.
In this case the Petitioner did prove that Florida is different from other areas of the United States. Because of certain characteristics which are unique to Florida, the inflation rate in Florida is generally higher than the NHIPI. The Petitioner failed to prove, however, that the unique characteristics which generally apply in Florida apply to the area in which the Petitioner is located. In fact, the evidence failed to prove that any of Florida's unique characteristics exist in Holmes County. Therefore, it is concluded that the Petitioner has failed to prove that it is entitled to an increase in its 1987 GRAA over its 1986 GRAA attributable to inflation in excess of the NHIPI.
In addition to proving that it is reasonable to increase its 1987 GRAA by the NHIPI, the Petitioner proved that it was just, reasonable and not excessive to increase its 1987 GRAA over its 1986 budgeted GRAA on account of the cost of providing Medicaid, Medicare and indigent patient care, an increase in the cost of insurance, the effect of adding a cardiologist, a cardiovascular surgeon, an orthopedic surgeon and a thoracic surgeon, and the effect of an increase in the ALOS at the Petitioner from 4.8 days in 1986 to 5.5 days in 1987. The facts supporting this conclusion will not be restated here. It is important to note, however, that the Respondent did not offer any evidence to refute the proof relied upon in making the findings of fact concerning the effect of these items on the Petitioner's GRAA. Instead, the Respondent argued in its Proposed Final Order and Proposed Recommended Order that the Petitioner did not "independently prepare or audit any of the assumptions used as argument." The Respondent further argued that the Petitioner "has submitted oral testimony as 'evidence' in support of its extraordinary rate of increase." The Respondent's argument is without merit. The evidence presented by the Petitioner constitutes competent substantial evidence even if it was "oral evidence." There is no requirement that a witness must verify his testimony about the finances of a hospital with "verified or audited" proof.
The Petitioner also proved that its methods of quantifying the effect on its increase in GRAA from 1986 to 1987 based upon the proven increases in
costs, are appropriate methods. An application of the Petitioner's methodologies proved that it is reasonable to increase the Petitioner's GRAA in 1987 in the following amounts:
Effect of Medicaid | $198.64 |
Effect of Medicare | 32.39 |
Effect of Indigent Care | 96.77 |
Cost of Insurance | 162.83 |
Effect of Additional Physicians | 121.31 |
Effect of Increase in ALOS | 360.00 |
The Respondent presented testimony concerning alternative methods of taking into account the various justifications for the Petitioner's increase in GRAA. The testimony concerning the Respondent's alternative methodologies was insufficient to support a finding that those methodologies were more appropriate than the methodologies used by the Petitioner, however.
As to the method of taking into account the effect of a high rate of Medicaid, Medicare and indigent care, the testimony of the Respondent's witness was very sketchy and not persuasive. When asked about the methodology used by the Respondent, the Respondent's witness stated that the methodology was "just something that was developed. I don't--just evolved." The Respondent simply failed to prove that its methodology is the appropriate method for calculating the effect on the Petitioner's GRAA of its high Medicaid, Medicare and indigent care use. The Petitioner on the other hand presented the testimony of experts in health care finance in support of its methodology.
The Petitioner also presented the testimony of experts in support of the methodologies used in quantifying the effect of the increase in its ALOS. The Respondent failed to prove that those methodologies were not appropriate or that its methodologies were more appropriate or accurate.
Section 395.509(5)(e), Florida Statutes (1985), provides that the "ability of the hospital to earn a reasonable rate of return" is to be considered in determining whether a hospital's rate of return is just, reasonable and not excessive.
The Petitioner has projected a 5 percent operating margin in its 1987 budget. This rate of return will result in total operating revenue over expenses of $149,188.00. This projected rate of return is reasonable compared to the statewide average operating margin of 13 percent for investor-owned hospitals. Even though the Respondent normally compares the operating margin of a hospital subject to review to the state average, it did not do so in this case.
The Respondent recommended to the Petitioner that it reduce its salary and benefits by $432,544.00. This reduction would result in an operating margin of only 0.3 percent and an operating profit of only $7,850.00. This recommendation is not reasonable. The Petitioner's budgeted salary and benefits costs are reasonable and a reduction in these costs of the magnitude recommended by the Respondent could very well effect the ability of the Petitioner to continue to provide quality of care to the
community that it serves.
It should be pointed out that the Respondent is not required to provide a hospital subject to budget review with a method of adjusting its budget to insure that it makes a profit where the Respondent has properly
disallowed a rate of increase in the hospital's GRAA. All that is required is that the Respondent determine if the rate of increase is just, reasonable and not excessive. If it determines that the rate of increase is not just, reasonable and is excessive, the Respondent then may reduce the rate of increase. It is then the responsibility of the hospital to adjust its budget to insure that it can make a profit if it wants to avoid a negative operating margin and if it is possible for the hospital to make such an adjustment.
If a hospital is not able to adjust its budget to insure that it does not have a negative operating margin, the hospital has the burden of so proving. If a hospital can prove that it is not possible to avoid a negative operating margin, that fact would mitigate against a recommended reduction in its GRAA.
In this case the Petitioner has proved that it is not reasonable to reduce its GRAA in the amount recommended by the Respondent and expect the Petitioner to be able to earn a reasonable rate of return. This conclusion further supports a conclusion that its budgeted GRAA is just, reasonable and not excessive.
Finally, Section 395.509(5)(f), Florida Statutes (1985), provides for consideration of the "accuracy of previous budget submissions by the hospital compared to the actual experience of the hospital." Based upon a comparison of the Petitioner's 1985 and 1986 budgeted GRAA and NRAA to its actual experience clearly shows that the Petitioner has greatly exceeded its projections in the past.
It appears that the Legislature, in requiring that the accuracy of a hospital's previous budget submissions be taken into account in reviewing its budget, intended to limit a hospital's rate of increase if it tends to exceed its budgeted GRAA in its actual experience. Otherwise, a hospital could obtain approval of a budgeted rate of increase in its GRAA and then increase its GRAA in its actual experience even higher without approval year after year. As long as the actual GRAA increase is not sufficiently high enough for the penalty provisions of Section 395.5094, Florida Statutes (1985), to apply, a hospital could consistently charge a GRAA in excess of its approved budgeted GRAA. For example, in this case, if the Petitioner's 1987 GRAA is approved and the Petitioner's actual 1987 GRAA is even higher, as it has been in the past two years, the Petitioner would in effect be able to obtain an increase in its GRAA for 1987 over its GRAA for 1986 in excess of 39.8 percent. Such a result would be contrary to the intent of the Legislature.
Based upon a consideration of only Section 395.509(5)(f), Florida Statutes (1985), it would be reasonable to conclude that the Petitioner's total rate of increase in its GRAA should not be approved. If this were the only factor to consider it would be difficult, if not impossible, based upon the record in this case, to quantify the amount of reduction in the rate of increase for the Petitioner's past inaccuracies. The Petitioner's past inaccuracies are not the only relevant factor in this case, however. This criterion must be considered along with the other relevant criteria of Section 395.509(5), Florida Statutes (1985). In particular, it appears that if the Petitioner's GRAA for 1987 is reduced because of the inaccuracy of the Petitioner's previous budget submissions such a reduction could result in the Petitioner's inability to earn a reasonable rate of return. This conclusion was unrebutted by the Respondent. But for this conclusion, it would be appropriate to reduce the Petitioner's 1987 GRAA because of its past inaccuracies if the amount of an appropriate reduction had been quantified.
Based upon the foregoing, it is concluded that the Petitioner has proved that its 1987 budgeted GRAA is just, reasonable and not excessive. Therefore, the Petitioner's budget for its 1987 fiscal year should be approved as submitted.
Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Petitioner's 1987 fiscal year budget filed with the
Respondent be approved as submitted.
DONE and ENTERED this 25th day of July, 1986, in Tallahassee, Florida.
LARRY J. SARTIN
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 25th day of July, 1986.
APPENDIX TO RECOMMENDED ORDER, CASE NO. 86-2111H
The parties have submitted proposed findings of fact. It has been noted below which proposed findings of fact have been generally accepted and the paragraph number(s) in the Recommended Order where they were accepted. Those proposed findings of fact which have been rejected and the reasons for their rejection have also been noted. Paragraph numbers in the Recommended Order are referred to as "RO ."
Petitioner's Proposed Findings of Fact Paragraph Number:
Accepted in RO 1 and 2.
Accepted in RO 1, 3 and 4.
Accepted in RO 13-15.
Accepted in RO 6-8.
The first sentence of this proposed finding of fact is accepted in RO 9 and 10. The remainder of this proposed finding of fact is rejected as not relevant. The percentiles of Group 1 hospitals for GRAA relevant to this proceeding are those as of 150 days prior to the beginning of the Petitioner's fiscal year.
The first sentence of this proposed finding of fact is accepted in RO
The second sentence is rejected because only the percentiles of Group 1 hospitals for GRAA 150 days prior to the beginning of the Petitioner's fiscal year are relevant. The last sentence is accepted in RO 17.
The first three sentences of this proposed finding of fact are accepted in RO 12 and 14 except that the portion of the second sentence to the effect that hospitals between the 50th and 80th percentile GRAA are automatically entitled to an increase in their GRAA equal to the MARI is rejected as contrary
to the law. The next to the last sentence of this proposed finding of fact is rejected as irrelevant. The last sentence is accepted in RO 65 and 66.
Accepted in RO 28 and 29.
Except for the amount of total gross revenue, this proposed finding of fact is accepted in RO 15, 16, 20, 21 and 24. The correct amount of total gross revenue is $4,397,436.00, not $4,907,436.00 as suggested by this proposed finding of fact.
The first sentence of this proposed finding of fact is accepted in RO
The second sentence is accepted in RO 59. The remainder of the proposed finding of fact is rejected as irrelevant. There is no requirement in the law that the Respondent suggest how the Petitioner should adjust its budget to reflect a recommendation from the Respondent as to what its budgeted GRAA should be.
Accepted in RO 27.
This proposed finding of fact is rejected as not relevant. Section 395.509(4), Florida Statutes (1985), provides that hospitals are to be grouped to "assist" in making determinations under Section 395.509(5), Florida Statutes (1985). This does not preclude a hospital subject to review under Section 395.509(5), from making comparisons with other groups of hospitals such as those throughout the State or in neighboring counties. The Petitioner, however, failed to prove that such comparisons are relevant in this proceeding.
The first two sentences of this proposed finding of fact are accepted in RO 67. The last sentence is rejected for the same reasons paragraph 12 was rejected.
Accepted in RO 68.
15-18. These proposed findings of fact are rejected for the same reasons paragraph 12 was rejected.
Accepted in RO 52 and 53.
Accepted in RO 54.
Accepted in RO 55, 56 and 59.
Accepted in RO 41-44.
The first sentence of this proposed finding of fact is rejected as not relevant. The rest of the proposed finding of fact is accepted in RO 41 and 42.
Accepted in RO 43.
Accepted in RO 44.
Accepted in RO 45 and 46.
Accepted in RO 47 and 48.
Accepted in RO 49 and 50.
This proposed finding of fact is rejected. This proposed finding of fact is essentially argument as to what constitutes competent substantial evidence in this proceeding.
Accepted in RO 50 and 51.
This proposed finding of fact is rejected. This proposed finding of fact is essentially argument as to whether certain testimony should be accepted in support of a finding of fact.
(page 13): Accepted in RO 57.
Except for the last sentence, this proposed finding of fact is accepted in RO 57 and 60. The last sentence is rejected. The Petitioner's 1986 GRAA already includes a reasonable rate of return which is in turn included in its 1987 budgeted GRAA. It would not be proper to include an additional amount of profit in determining whether its projected rate of increase in its GRAA for 1987 is just, reasonable and not excessive.
Accepted in RO 60.
Accepted in RO 61.
Accepted in RO 61.
This proposed finding of fact is rejected. It is not relevant to this proceeding because each case must be judged on its own merits.
Accepted in RO 34.
Accepted in RO 35 and 36.
Accepted in RO 37.
40-42. These proposed findings of fact are rejected as essentially argument concerning the weight to be given to certain evidence.
Accepted in RO 38.
Accepted in RO 39.
Accepted in RO 40.
Accepted in RO 40.
47 and 49. The proposed findings of fact contained in these paragraphs deal primarily with the rule challenge brought by the Petitioner in D0AH Case No. 86-2014R. Therefore, most of these proposed findings of fact are not relevant to this proceeding. The first sentence in paragraph 49 has been accepted in RO 22 and 30. See also RO 26 and 31-33.
48. This proposed finding of fact is rejected as not supported by the weight of the evidence. See RO 31-33.
50. Most of these proposed findings of fact are accepted in RO 30, 36, 37, 40, 43, 51, 69 and 70. The proposed findings of fact contained in this paragraph which are inconsistent with those RO paragraphs are rejected as not supported by the weight of the evidence.
51 and 52. This proposed finding of fact is rejected as not relevant and not supported by the weight of the evidence. The evidence does not prove that what the Respondent has done in budget amendment cases is applicable to a budget review case or that what the Respondent has done in other cases is equally applicable in this case.
This proposed finding of fact is rejected as not relevant.
This proposed finding of fact is rejected as not relevant.
Accepted in RO 1.
Respondent's Proposed Findings of Fact Paragraph Number:
The first sentence of this proposed finding of fact is accepted in RO 3 and 13. The last sentence is rejected as a statement of law.
Accepted in RO 12, 14, 23, 28 and 29.
The first sentence of this proposed finding of fact is rejected as a statement of law. Except for the last sentence, the remainder of this proposed finding of fact is accepted in RO 63-66. The last sentence is rejected as argument.
The first two sentences of this proposed finding of fact are accepted in RO 45 and 46. The remainder of this proposed finding of fact is rejected as not relevant.
The first two sentences of this proposed finding of fact are rejected as statements of law. The remainder of the proposed finding of fact are accepted in RO 26, 31 and 33.
Except for the last sentence this proposed finding of fact is accepted in RO 41 and 44. The last sentence is rejected as unsupported by the weight of the evidence.
The first two sentences of this proposed finding of fact are rejected as not relevant and contrary to the law. The third sentence is hereby accepted. The fourth through sixth sentences are rejected as statements of the law and argument. The rest of the proposed finding of fact is hereby accepted.
This proposed finding of fact is rejected as argument. There is absolutely no requirement that a witness who otherwise has knowledge of the finances of a hospital must present documentary evidence to support and substantiate his or her testimony. If the Respondent has any doubts as to the truth of the Petitioner's witnesses, it had ample opportunity prior to the final hearing to discover evidence which would disapprove the evidence presented by
the Petitioner's witnesses or to present other testimony to refute the testimony of the Petitioner's witnesses. The testimony of the Petitioner's witnesses constitutes competent substantial evidence of a kind which is always presented and acceptable in administrative proceedings.
This proposed finding of fact is rejected as unsupported by the weight of the evidence. Although there was some evidence to support this proposed finding of fact, that evidence was to sketchy and unpersuasive to overcome the evidence concerning the Petitioner's methods of computing a just, reasonable and not excessive 1987 GRAA.
COPIES FURNISHED:
John H. Parker, Jr., Esquire Parker, Hudson, Rainer & Dobbs 1200 Carnegie Building
133 Carnegie Way Atlanta, Georgia 30303
Robert A. Weiss, Esquire Parker, Hudson, Rainer & Dobbs The Perkins House, Suite 101
118 North Gadsden Tallahassee, Florida 32301
Curtis A. Billingsley, Esquire Assistant General Counsel Hospital Cost Containment Board Woodcrest Office Park
Building L, Suite 101
325 John Knox Road Tallahassee, Florida 32303
James J. Bracher Executive Director
Hospital Cost Containment Board Woodcrest Office Park
Building L, Suite 101
325 John Knox Road Tallahassee, Florida 32303
=================================================================
AGENCY FINAL ORDER
=================================================================
STATE OF FLORIDA HOSPITAL COST CONTAINMENT BOARD
DOCTORS MEMORIAL HOSPITAL,
Petitioner,
vs. CASE NO. 86-2111H
HOSPITAL COST CONTAINMENT BOARD, EXECUTIVE OFFICE OF
THE GOVERNOR, STATE OF FLORIDA,
Respondent.
/
FINAL ORDER
This cause came before the Hospital Cost Containment Board for consideration and final agency action, after notice, on July 30, 1986. After an administrative hearing was conducted before a Hearing Officer of the Division of Administrative Hearings, a Recommended Order was rendered by the Hearing Officer. No exceptions have been filed by the parties.
The Recommended Order, a copy attached hereto and hereby made a part of this Order, has been considered. It is ordered:
The findings and fact in the Recommended Order are adopted.
The conclusions of law, except as modified herein, are adopted. The hospital's methodology of quantifying the effect of changes upon its gross revenue per adjusted admission as referenced at page 22 of the Recommended Order, although acceptable for purposes of this case, may not be the most appropriate methodology of quantifying effects upon gross revenue per adjusted admission for general application to all hospitals in the budget review process. The appropriate methodology for quantifying increases in gross revenue per adjusted admission may vary depending upon the facts of each case.
The recommendation of the Hearing Officer is adopted.
WHEREFORE, the Hearing Officer's Recommended Order, as modified herein, is adopted as the Hospital Cost Containment Board's Final Order. Doctors Memorial Hospital's budget for its 1987 fiscal year is approved in the amount of $3,009 gross revenue per adjusted admission and $2,025 net revenue per adjusted admission for its 1986 fiscal year.
DONE AND ORDERED this 30th day of July, 1986, at Miami, Florida.
Peter J. Levin, Chairman Hospital Cost Containment Board
325 John Knox Road Building L, Suite 101 Tallahassee, Florida 32303 904/488-1295
COPIES FURNISHED:
John H. Parker, Jr., Esquire 1200 Carnegie Building
133 Carnegie Way Atlanta, Georgia 30303
Robert A. Weiss, Esquire
118 North Gadsden Street Suite 118
Tallahassee, Florida 32301
Curtis Ashley Billingsley, Esquire
325 John Knox Road Building L, Suite 101 Tallahassee, Florida 32303
| Issue Date | Proceedings |
|---|---|
| Jul. 25, 1986 | Recommended Order (hearing held , 2013). CASE CLOSED. |
| Issue Date | Document | Summary |
|---|---|---|
| Jun. 04, 1987 | Agency Final Order | |
| Jul. 25, 1986 | Recommended Order | Petitioner proved budget rate of increase was just, reasonable and not excessive. |
