STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

PIA PSYCHIATRIC HOSPITALS, INC. ) d/b/a ORANGE PSYCHIATRIC INSTITUTE, )

)

Petitioner, )

)

vs. ) CASE NO. 88-4156

) STATE OF FLORIDA, DEPARTMENT OF ) HEALTH AND REHABILITATIVE SERVICES, )

)

Respondent )

)

and )

) HCA HEALTH SYSTEMS, INC., d/b/a ) HCA WEST LAKE HOSPITAL, )

and FLORIDA HOSPITAL, )

)

Intervenors. )

)

RECOMMENDED ORDER

Pursuant to notice, formal hearing in this proceeding was conducted on January 9-12, 1989, in Tallahassee, Florida, before Mary Clark, Hearing Officer.

The parties were represented as follows:

For Petitioner PIA Michael J. Glazer, Esquire Psychiatric Hospitals, Ausley, McMullen, McGehee, Inc. d/b/a Orange Carothers & Proctor Psychiatric Institute (OPI): 227 South Gadsden Street

Tallahassee, Florida 32301

John T. Brennan, Jr., Esquire Bonner & O'Connell

900 Seventeenth Street, NW Washington, D.C. 20006

For Respondent Lesley Mendelson, Esquire Department of Health Assistant General Counsel and Rehabilitative Department of Health and Services (HRS): Rehabilitative Services

2727 Mahan Drive

Tallahassee, Florida 32308

For Intervenor HCA Chris Haughee, Esquire

Health Systems, Inc., Catherine Peek McEwen, Esquire d/b/a West Lake Moffitt, Hart & Herron, P.A. Hospital (West Lake): 216 South Monroe Street,

Suite 300

Tallahassee, Florida 3230

For Intervenor Steve Boone, Esquire

Florida Hospital: Boone, Boone, Klingbeil, Boone & Roberts

1001 Avenida Del Circo Venice, Florida 33595

BACKGROUND AND PROCEDURAL MATTERS

On March 30, 1988, Petitioner, OPI, filed its application for Certificate of Need (CON) for 60 short-term psychiatric beds in Orange County, Florida, HRS District VII. The application was assigned CON 5544. After requesting and obtaining additional information from the applicant, HRS completed its review, and on June 28, 1988, issued its State Agency Action Report (SAAR) denying the application.

OPI filed a timely petition for formal hearing in response to the denial. Motions to intervene by West Lake and Florida Hospital were granted,

without objection, in an order dated October 12, 1988.

In pre-hearing orders, the parties were required to file a joint pre- hearing statement and pre-filed direct testimony of their experts. In their joint pre-hearing statement, the parties stipulated as follows:

... that the application either satisfies the following criteria or that such criteria are not applicable:

Section 381.705(1)(h), (only as to the following clause: "the availability of ... funds for capital and operating expenditures, for project accomplishment and operation; and (2)(3), Florida statutes (1987).

While the parties have stipulated that OPI has available funds for capital and operating expenditures, this is not intended to be a stipulation that the application satisfies the financial feasibility criterion contained in section 381.705(1)(i), Florida Statutes (1987) or that the projected project costs are reasonable.

Rule 10-5.011(1)(o)(4)(g), (5)(g), Florida Administrative Code. It is agreed that rule 10-5.011(1)(o)(5)(g) is already satisfied in District VII.

At the hearing OPI presented the testimony of six witnesses: Richard Warden, Gene Newell, William K. Stratford, Alan M. Cohen, M.D., Thomas J. Ebejer, and Carol Moore. With the exception of its exhibits #16, 17 and 19,

OPI's exhibits #1-34 were received in evidence. Ruling on the admissibility of exhibits #16, 17 and 19 was taken under advisement. Exhibit #16 including bed utilization data from 3/1/87 to 1/29/88, was considered in the preparation of this Recommended Order and is received into evidence. Exhibits #17 and 19, including discharge and occupancy data from non-psychiatric beds are rejected as irrelevant, as more fully discussed below.

HRS presented the testimony of a single witness, Reid Jaffe, and four exhibits, all received into evidence without objection.

West Lake presented the testimony of four witnesses: Martin Lazorltz, M.D., Dennis Menard, Mark Richardson, and Rick Knapp. Its exhibits #1-6, and 9 and 11, were received in evidence. Exhibits #8 and 10 were withdrawn.

Florida Hospital presented the testimony of Ted Hirsch and Wendy Thomas.

Its exhibits #1-9 were received in evidence, including (without objection) exhibit #8, the deposition of Jack Holton.

After the hearing and filing of the transcript each party submitted thorough proposed recommended orders, with detailed findings of fact and conclusions of law. These have been carefully considered in the preparation of this Recommended Order and specific rulings on the proposed findings of fact are found in the attached appendix.

ISSUES

The issue for determination is whether Petitioner, OPI, is entitled to CON #5544, for a 60-bed adult short-term psychiatric hospital in Orange County, Florida, HRS District VII.

FINDINGS OF FACT

The Parties

1. OPI is a wholly-owned subsidiary of PIA Psychiatric Hospitals, Inc. (PIA), which is a subsidiary of National Medical Enterprises, Inc. (NME). PIA is one of the country's largest providers of psychiatric hospital services, with over 50 facilities throughout the United States. One of its existing facilities is Laurel Oaks Hospital in Orange County Florida. This is an 80-bed specialty hospital, licensed to provide short-term psychiatric and substance abuse services to children and adolescents.

   
   

2. HRS is the state agency designated by law to implement and enforce the CON program in Florida pursuant to Sections 381.701-381.715, F.S. (1987).

   
   

3. Intervenor, West Lake, is an 80-bed licensed psychiatric hospital in Longwood, Seminole County, Florida, in HRS District VII. West Lake's license is for 40 short-term beds, 30 long-term beds, and 10 substance abuse beds. West Lake treats children, adolescents and adults.

   
   

4. Intervenor, Florida Hospital, is a licensed full-service acute care facility with over 1,000 beds in three locations: Orlando, Altamonte Springs and Apopka, Florida. It has 105 licensed short-term psychiatric beds serving adolescents and adults at its Orlando and Altamonte Springs campuses, in HRS District VII.

   The OPI Proposal

   
   

5. OPI proposes to develop a 60-bed free standing short-term psychiatric hospital to treat adults (over 18 years of age). Although the hospital will be located in Orange County, no specific site has been selected.

   
   

6. The total gross square footage for the facility is 45,000 square feet, with a total project cost of $7,324,000.00, to be funded by NME.

   
   

   The facility will have three wings with provisions for both locked and unlocked units; and will include, like other PIA hospitals, the usual contingent of bedrooms, classrooms, dining rooms, group and activity rooms, therapy rooms, seclusion rooms, a kitchen, gymnasium, pool, nurses station, laboratory, pharmacy, and general maintenance and housekeeping areas.

   
   

7. OPI will treat a standard range of psychiatric disorders, but has not yet identified any specific programs. The anticipated average length of stay is

   18 to 21 days.

   
   

8. OPI has identified Orange County as its primary service area but, based on its experience with Laurel Oaks, it expects a significant number of patients will be drawn from Seminole County and from Osceola County. It will not attempt to draw patients from Brevard, the fourth county in District VII.

   
   

9. Referrals will come from a variety of sources, including mental health professionals in the area and other mental health service-providers, as well as from direct patient inquiries.

   
   

   The patient will be admitted by a psychiatrist on the staff of the hospital and, after an initial evaluation and development of a treatment plan, will have the advantage of a wide range of treatment modalities delivered by a multi- discipline treatment team.

   
   

10. OPI projects a gross charge of $433.00 per day in the unlocked unit and $478.00 per day in the locked unit, with a payor mix of 10% Medicare, 3% indigent, 5% private pay, 79% insurance, 2% CHAMPUS, and 1% PPO/HMO.

    
    

11. OPI's pro forma statement relies on a 50% occupancy for year one and 75% for year two, with a projected loss of $1,173,000.00 and gain of $65,000.00 respectively. (OPI Exhibit 3, p. 40)

    
    

    Need for the project as addressed in the "fixed need pool" and

    "need methodology" rules.

    
    

12. Rule 10-5.008(2)(a), F.A.C., requires HRS to publish a fixed need pool for each applicable planning horizon at least 15 days in advance of the letter of intent deadline in each batching cycle. In this case the fixed need pool was published in the February 12, 1988 issue of the Florida Administrative Weekly.

    
    

13. In arriving at a net need of zero short term psychiatric beds in District VII, HRS, with one variation, applied the need methodology for short- term psychiatric beds described in Rule 10-5.011(1)(0)4., F.A.C.

    
    

    This is a two-step process involving the development of net numeric need based on a formula utilizing projected population data and approved and licensed beds, and the scrutiny of occupancy rates for existing beds.

    The parties in this case agree that under the first step of the process there is a net need for at least 60 short-term psychiatric beds in District VII for the January 1993 planning horizon. Those beds could be allocated, under the formula in Rule 10-5.011(1)(o)4.a. and b., F.A.C., to either a general or speciality hospital.

    
    

14. The second step of the process requires a determination of whether minimum occupancy standards have been met pursuant to subparagraph e. of the rule. For adult short term psychiatric beds, the standard is at least 75% occupancy; for child and adolescent beds, the standard is 70%. Both are to be determined based on an average annual occupancy rate "... for the preceding 12 month period."

    
    

15. This step presents a major issue in this case, as the occupancy rates arrived at by OPI substantially exceed those found by HRS and the Intervenors' planning experts.

    
    

16. The phrase "preceding 12-month period" is not defined in the methodology rule; that is, the rule does not provide a specific event for the close of the 12-month period. For the purposes of arriving at the fixed need pool, HRS cannot consider that period to be the 12 months immediately preceding the application date, as the fixed need pool must be published in advance of that date.

    
    

17. Because of various deadlines associated with the publication of the fixed need pool, in this case HRS had to complete its calculations for fixed need by February 4, 1988. At that time, data for the full calendar year 1987 was not available.

    
    

    HRS felt it necessary to use a standard baseline of data, uniform across all eleven districts, in order to ensure fair treatment of potential applicants state-wide who would be relying on the fixed need pool. For that reason, and because HRS also needed time to verify the data it obtained, HRS utilized the 12-month period of October 1986 through September 1987, for the February 1988 publication of the fixed need pool.

    
    

18. The fixed need pool is not divided into age categories, so HRS' Office of Comprehensive Health Planning uses the lower of the two standards for short- term psychiatric beds, 70% occupancy. This resulted in a zero need in $he fixed need pool, because the occupancy rate for all existing short-term psychiatric beds in District VII from October 1986 through September 1987 was 67.7%.

    
    

19. HRS' review of PIA's application and omissions response for purposes of the SAAR entitled a slightly different approach, utilizing data from calendar year 1987 to calculate the occupancy rate. This data reflected a district-wide rate of 72.71% and an Orange County rate of 68.66%, both below the 75% threshold for adult beds. When data from Laurel Oaks Hospital is excluded from the Orange County calculations, the rate is 56.2%.

    
    

20. Even OPI's health planning expert, Carol Moore, concedes that it is appropriate to exclude all data and all statistics relating to child and adolescent beds. In District VII, however, the data is not reported in that manner.

21. In District VII, two short-term psychiatric hospitals are dedicated solely to the treatment of children and adolescents: Laurel Oaks in Orange County, and CPC Palm Bay in Brevard County.

    
    

    In other facilities such as West Lake and Florida Hospital, which treat both adults and youths under the age of 18, HRS considers all beds as "available" to adults if they are not otherwise specifically identified. This is a nonrule policy, but one clearly articulated and justified by HRS' expert health planner, Reid Jaffe.

    
    

22. OPI insists that the appropriate "12-month period" for calculation of occupancy rates is March, 1987 through February, 1988, the period immediately preceding the application deadline. This is a reasonable reading of the rule. Yet when data relating to facilities which treat only child and adolescent patients are excluded from the calculation, the resulting occupancy rates for the March 1987 through February 1988 period are 73.3% in District VII, and 57.4% in Orange County. When all existing short-term psychiatric beds are included for that same period, the 75% threshold is still not met; the occupancy rate in District VII is 74%, and in Orange County is 71.2%.

    
    

23. The District I local health council, under contract with HRS, provides data for short-term psychiatric bed utilization in the district. Another available source of data is the Hospital Cost Containment Board (HCCB).

    
    

    Acute care general hospitals report psychiatric patient days to the HCCB by diagnostically related groups (DRGs), further subdivided into major diagnostic categories (MDCs). MDC 19 relates to mental diseases and disorders.

    
    

    Utilizing the data reported under MDC 19, OPI was able to satisfy the 75% occupancy threshold. Those calculations are found in OPI's exhibits #17 and 19. For the first nine months of 1987, the occupancy rate in District VII is found to be 78.2%, based on the MDC 19 data combined with the local health council data. When the HCCB data is annualized with a straight line projection the occupancy rate for calendar year 1987 is 80%.

    
    

24. This use of HCCB data is inappropriate for several reasons.

    
    

    The data reflects patient days for psychiatric patients treated in non- psychiatric beds in licensed acute care hospitals. Those same beds are available for non-psychiatric patients and are not the beds referenced in Rule 10-5.011(1)(o)4.e, FAC as "existing adult short term inpatient psychiatric beds."

    
    

    Carol Moore for OPI counted only patient days, not the beds available to treat the patients. Her approach inflated occupancy, as counting only beds used by a patient results in a 100% occupancy. Consistency in utilizing MDC 19 data would require the consideration of all acute care beds available for psychiatric patients. The occupancy rate for acute care beds in District VII is 50%. This translates into approximately 2000 empty beds in District VII.

    
    

    Finally, the MDC 19 data is based on the primary discharge diagnosis, which may be skewed. The hospitals are given discretion in selecting which diagnosis is primary in patients with multiple diagnoses, and hospitals may be motivated to classify a patient to maximize third-party payment.

    
    

25. Applying the fixed need pool and the methodology in Rule 10- 5.011(1)(a)4., Florida Administrative Code, the OPI project is not needed.

    Neither the fact that West Lake has a short term occupancy rate of over 100%, because it utilizes some licensed long term psychiatric beds for short-term patients, nor the fact that some beds in Orange County were "off-line" or in a start up phase during 1986-87, affects this finding.

    
    

    Had there been patient demand for the off-line beds, the two facilities, Florida Hospital and Orlando Regional Medical Center, could have placed the patient in another bed in the hospital and provided the same psychiatric services.

    
    

    The facilities in the start up phase are meant to be protected by the occupancy threshold, as it helps insure their beds are properly utilized before additional beds are approved.

    
    

    Consistency With the State and Local Health Plans

    
    

26. The State Health Plan in effect when the project was reviewed is the 1985-1987 plan. It includes three goals. Goals 1. and 2., by their own terms, apply only through 1987. Goal 1. substantially reiterates the need methodology, including the 75% occupancy threshold. The threshold in the plan, however, requires consideration of both existing and approved beds, resulting in a lower occupancy level in District VII than if only existing beds were considered.

    
    

    Goal 2. urges the development of a continuum of high quality, cost effective private sector mental health substance abuse services. The objectives under this goal relate directly to policies regarding appropriate treatment settings and third party reimbursement practices, and are not relevant to this project.

    
    

    Goal 3. relates primarily to public mental health services and is not applicable to this project.

    
    

27. The local health plan applicable to review of OPI's project is the 1985 local health plan for District VII. Part 3 of the plan addresses policies and priorities for psychiatric and substance abuse services.

    
    

    OPI's project is partially consistent with the relevant policies in that plan.

    
    

28. Policies 3 and 4 adopt the need methodology of Rule 10-5.011(1)(o), Florida Administrative Code. As discussed above, those policies are not satisfied by the project.

    
    

    Policy 6 addresses certain priorities to be given for approval of applicants who are especially committed to serving underserved groups, who reallocate existing underutilized beds, who propose geriatric service, and who propose long-term services for children and adolescents.

    
    

    With its projected 3% indigent and 10% medicare classification, OPI's commitment to the underserved is minimal. It has stated an intent to provide services to geriatric patients, but has not defined any program for those services. OPI has stated its intent to comply with policies 7, 8, 9 and 10, relating to availability of emergency services, accreditation by the Joint Commission on Accreditation of Hospitals (JCAH), consistency with the state and local mental health plans, and coordination of services with other mental health services providers.

    Like and Existing Services

    
    

29. Sections 381.705(1)(b), and (2)(b) and (d), F.S. require consideration of the availability, quality of care, efficiency, appropriateness, accessibility, extent of utilization and adequacy of like and existing health care services in the service district.

    
    

30. In Orange County there are no other facilities providing short term psychiatric services to adults only. There are, however, three facilities providing those services to adults, as well as children and adolescents. In 1987, and in the twelve months preceding the date of application, none of those facilities had an occupancy rate over 61%. District-wide, there were eight such facilities, only two of which had an occupancy rate of over 75%, both in Seminole County. One of those, Florida Hospital, in Altamonte Springs, dropped to 73.5% in the more recent 12-month period prior to the application date. The existing facilities are plainly underutilized.

    
    

31. No credible evidence was presented to show that these existing facilities are inappropriate, inefficient or inaccessible, or that they do not provide good quality care.

    
    

    Financial Feasibility

    
    

32. OPI's pro forma is based in part on its projected occupancy rates of 50% the first year, and 75% the second year. While the Laurel Oaks facility has enjoyed a favorable occupancy rate (over 90%), that facility serves only children and adolescents. OPI's proposed adult facility has no unique attributes which would suggest a substantially greater success in filing beds than the other like facilities in Orange County already discussed above.

    
    

33. OPI's pro forma was presented by its health care finance expert, Gene Newell, who reviewed, but did not prepare the document. His opinion that the project will be financially feasible is based on extensive experience with PIA facilities, including four of PIA's psychiatric facilities in Florida.

    
    

34. The expenses and patient days (including average length of stay) are based on PIA's experience in its other facilities. That experience has been a financial success, and nothing in the OPI project, save perhaps its location in an area where similar facilities are underutilized, would distinguish it from its corporate sisters.

    
    

    The Costs and Methods of Construction

    
    

35. The intervenors call it a "generic" design; OPI calls it a prototype. In either case, the design for this project is essentially the same as other PIA facilities, including Medfield, in Clearwater, a facility whose design and construction was previously approved by HRS.

    
    

36. Although specific programs have not been developed, the design is flexible enough to accommodate a variety of programs which may be selected later when the administrator is hired.

    
    

37. There were two errors in the application's listing of furniture and equipment according to Thomas Ebejer, Senior Vice-President of design and construction for PIA. Those errors, the inclusion of medical office building furniture and a computational error in figuring the cost of day treatment

    furniture, result in an overstatement of costs of approximately $57,000.00. On the other hand, some computer equipment and a biofeedback machine were not included in the costs.

    
    

    The net result of those errors does not materially affect the reasonableness of the total construction and equipment cost.

    
    

    Availability of Health Manpower

    
    

38. As planned, the OPI project will be appropriately staffed, and it is likely that with aggressive recruitment techniques, including competitive salaries, and retention bonuses, the necessary staff will be hired.

    
    

39. However, as conceded by OPI witnesses, there is a shortage of nurses in District VII. PIA Administrator Richard Warden blames the shortage on the proliferation of nursing agencies, and argues that if the agencies were controlled, the nursing shortage could be alleviated. No evidence was presented that any controls are likely.

    
    

40. Qualified social workers and counselors are also difficult to recruit in District VII. When Laurel Oaks was licensed, other facilities lost staff. West Lake presently provides funding to Seminole Community College to expand the size of their nursing classes, as one step to alleviate the staff shortage.

    
    

    Impact on the Cost of Services and the Effect of Competition

    
    

41. Competition for limited manpower resources and its resulting increase in the cost of services and degradation of quality is but one aspect of the impact of a new project's arrival in an area already adequately served.

    
    

42. Nothing in OPI's application reflects an intent to provide some unique or innovative service. The programs it is considering are being offered already in facilities such as West Lake and Florida Hospital. Existing providers are having problems filling their beds.

    
    

    OPI's expert planner claims that its patient days will be derived primarily from growth in the marketplace but admits that there will still be an impact on existing providers.

    
    

    OPI will tap into other facilities' referral sources and will compete for patient referrals.

    
    

43. Population statistics do not support the opinion that growth will fill the beds. Growth in the geographical area is slowing, particularly in Orange County.

    
    

    Adult psychiatric services average lengths of stay are decreasing in all of District VII, except in Osceola County, where there is a high Medicare utilization of beds.

    
    

    Between 1984 and 1987, in Orange County, the adult use rate, defined by the local health council as days per thousand population over the age of 15, dropped from 62.55 to 49.89.

    
    

    The trend is toward shorter lengths of stay and more use of outpatient services. This is influenced in part by third-party payment practices.

    This leaves existing providers as the primary readily available source of patients.

    
    

44. OPI candidly admits that it intends to continue its practice of marketing sources of referrals that will provide "better patients". Its limited commitment to indigent care means that the more lucrative patients will be drawn from the existing providers.

    
    

    Existing providers will be pressured to increase their charges or decrease the quality of care.

    
    

    Competition from OPI in this case will degrade, rather than enhance, quality assurance and cost-effectiveness.

    
    

    Other Criteria and Summary of Findings

    
    

45. OPI's ability to provide quality of care and its record of such in other facilities was never seriously questioned in this proceeding.

    
    

46. The parties have stipulated that a portion of the statutory criteria in Section 381.705(1)(h), F.S., related to the availability of capital and operating funds, and section 381.705(2)(e), F.S. are met or are inapplicable, but other statutory criteria are also either irrelevant or deemed immaterial. These include criteria related to economies from the operation of joint or shared resources, the need for research or educational services, special needs of health maintenance organizations, and others.

    
    

47. Despite a showing of numeric need by application of the rule methodology, OPI's project does not meet the occupancy standard in the rule.

    
    

    It is close, if one accepts OPI's contention that data for the 12 month period immediately prior to application must be considered, even though that data is not available at the time the fixed need pool is published. "Close" is not enough in a health planning process that provides for changing needs with frequent periodic batching cycles. If the occupancy rate is close this cycle, it may increase enough to reflect need in the next cycle, or it may decrease enough to unquestionably rule out need.

    
    

48. Existing facilities have the ability and capacity to meet the demand for adult short term psychiatric services in the horizon year.

    
    

49. An infusion of 60 additional beds in that market will negatively affect the cost of health care either by causing existing facilities to raise their rates or the new facility to raise its rates in order to maintain financial feasibility.

    
    

50. OPI's proposed project is not needed.

    
    

    CONCLUSIONS OF LAW

    
    

51. The Division of Administrative Hearings has jurisdiction over the parties and subject matter in this proceeding pursuant to Section 120.57(1),

    F.S. and Section 381.709(5), F.S.

52. OPI, as applicant, has the burden of demonstrating its entitlement to the CON it seeks. Florida Department of Transportation v. J.W.C. Co., 396 So.2nd 778 (Fla. 1st DCA 1981).

    
    

53. Intervenors, West Lake and Florida Hospital have standing to participate in this proceeding pursuant to Section 381.709(5)(c), F.S. They are existing facilities which have proven their established programs would be substantially affected by grant of a CON to OPI in the same HRS service district.

    
    

54. HRS Rule 10-5.008(2)(a), FAC provides that when HRS has published its fixed need pool, as required, at least 15 days prior to the letter of intent deadline,

    
    

    ... those pools shall not be changed or adjusted in the future regardless of any future changes in need methodologies, population estimates, bed inventories, or other factors which would lead to different projection of need, if retroactively applied.

    
    

    The pools are fixed, therefore, at the time of publication, and conflicting theories, such as OPI's as to how to apply the methodology for arriving at the pool should not be entertained at a Section 120.57(1) F.S. hearing on a CON application.

    
    

55. Assuming that it is appropriate to entertain such theories when, as here, the parties were given no prior point of entry, HRS reasonably and adequately articulated and justified its policy in arriving at a zero fixed need. McDonald v. Department of Banking and Finance, 346 So.2nd 569 (Fla. 1st DCA 1977.

    
    

56. In addition, HRS has specifically rejected the use of HCCB discharge data from acute care general hospitals in computing short term psychological occupancy rates under the rule. See Final Order issued on February 2, 1989, in Charter Medical-Orange Co., Inc. and Orlando General Hospital, Inc. v. Department of Health and Rehabilitative Services, Cases 87-4748/87-4753. See 11 FALR 1087, 1088.

    
    

57. A zero need pool does not alone preclude the award of a CON. A balanced consideration of other statutory and rule criteria is required. Balsam

    v. Department of Health and Rehabilitative Services, 486 So.2nd 1341 (Fla. 1st DCA 1986)

    
    

58. When other material criteria are considered, however, the project still falls short. It is inconsistent with state and local health plans; it will further deplete limited health manpower resources; assuming that its projected use rates are achieved, existing providers will be substantially negatively impacted.

OPI's project is not novel; as described in the application and at hearing, it is much like its other projects around the county and is little different from other facilities already serving adult short-term psychiatric patients in the area. It does not propose to serve indigents in large numbers, but rather will affirmatively recruit more desirable patients, leaving the indigents to existing facilities.

Again, its success will be achieved at the expense of those existing facilities, affecting consumers and frustrating the intent of the CON program.

RECOMMENDATION

Based on the foregoing, it is, hereby RECOMMENDED:

That Petitioner's application for CON 5544, be denied.

DONE and RECOMMENDED this 22nd day of May, 1989, in Tallahassee, Florida.

MARY CLARK

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, FL 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 22nd day of May, 1989.

APPENDIX

The following constitute specific rulings on the parties' proposed findings of fact.

Proposed Findings by OPI

1. Adopted in paragraph 1.

2. Adopted in paragraph 2.

3. Adopted in paragraph 3.

4. Adopted in paragraph 4.

5-6. Included in background statement.

7. Adopted in paragraph 5 and 6. 8-9. Adopted in paragraph 6.

1. Adopted in paragraph 7.

2. Adopted in paragraph 8.

3. Adopted in paragraph 9.

4. Adopted in substance in paragraph 7. 14-17. Adopted in summary in paragraph 9. 18-19. Adopted in paragraph 10.

1. Adopted in paragraph 11.

2. Rejected as unnecessary.

3. Rejected as inconsistent with the weight of evidence. 23-24. Rejected as unnecessary

25-26. Adopted in substance in paragraph 13. 27-29. Rejected as unnecessary.

1. Adopted in paragraph 18 and paragraph 19.

2. Adopted in paragraph 17, except that the conclusion that the time-period is inappropriate is rejected.

3. Rejected as inconsistent with reason. If the occupancy over 100% should be considered, then all of West Lakes' long term beds should be included in the calculation as those are available for use under West Lake's practice.

4. Rejected as inconsistent with the methodology rule and with reason. Again, the available beds need to be part of the calculation if the patient days are included.

5. Adopted in part in paragraph 22.

35-67. Rejected as unnecessary, argumentative, the testimony of Mark Richardson was not credited as dispositive of the issue of need.

68. Rejected as unnecessary, though immaterial and cumulative. 77.

78. Adopted in summary in paragraph 45. 80.

81-83. Rejected as unnecessary.

84. Rejected as contrary to the weight of evidence. 85-89. Rejected as unnecessary or cumulative.

90. Rejected as contrary to the weight of evidence. The testimony regarding difficulties in making referrals to West Lake and Florida Hospital was not materially credited.

91-96. Rejected as unnecessary. Quality of care was not at issue. 97-102. Rejected as cumulative and unnecessary.

103-104. Adopted in summary in paragraph 46.

1. Rejected as unnecessary.

2. Adopted in paragraph 38.

107-110. Rejected as unnecessary.

111. Adopted.

111-120. Adopted in summary in paragraph 34, except that OPI failed to demonstrate how it will achieve the occupancy rates it projects when other existing facilities in the area are substantially below those rates.

121-122. Addressed in paragraph 46.

123. Rejected a unnecessary.

124-125. The conclusion that competition will be a positive factor is rejected as contrary to the evidence.

126-136. Adopted in summary in paragraphs 25 and 37.

137-142. Addressed in paragraph 28. OPI's commitment to the underserved is minimal.

143-154. Rejected as unnecessary or argument on the evidence rather than findings of fact.

Proposed Findings by HRS

1. Addressed in Background statement.

2. Adopted in paragraph 1.

3. Adopted in paragraph 5.

4. Adopted in paragraph 27.

5. Adopted in summary in paragraph 28.

6. Rejected as immaterial.

7-9. Adopted in summary in paragraph 27 and paragraph 28.

1. Adopted in paragraph 26.

2. Adopted in paragraph 13 and paragraph 14.

3. Adopted in paragraph 17.

4. Rejected as unnecessary.

5. Adopted in paragraph 17.

15-16. Rejected as argument, although the methodology is substantially adopted.

17. Adopted in paragraph 19 and paragraph 43. 18-20. Rejected as unnecessary.

1. Rejected as argument.

2. Adopted with qualification in paragraph 32.

3. Rejected as argument.

4. Rejected as immaterial.

5. Adopted in paragraph 28.

6. Rejected as unnecessary.

Proposed Findings By West Lake

1. Adopted in paragraph 1.

2. Adopted in paragraph 2.

3. Adopted in paragraph 3.

4. Adopted in paragraph 4.

5. Adopted in paragraph 5.

6. Adopted in paragraph 8.

7. Adopted in paragraph 7.

8. Adopted in paragraph 6.

9. Adopted in paragraph 12 and paragraph 13.

10. Adopted in paragraph 13.

11-13. Rejected as unnecessary.

1. Adopted in paragraph 14.

2. Adopted in paragraph 18.

3. Adopted in paragraph 22.

17-18. Adopted in paragraph 17.

1. Adopted in paragraph 18.

2. Adopted in paragraph 19.

3. Adopted in paragraph 22.

4. Adopted in paragraph 23.

5. Adopted in paragraph 20.

6. Adopted in paragraph 21.

7. Adopted in paragraph 22.

8. Rejected as unnecessary.

27-28. Adopted in paragraph 23.

29-33. Adopted in paragraph 24.

34. Rejected as unnecessary.

35-37. Adopted in paragraph 25.

38. Rejected as unnecessary.

39-40. Adopted in substance in paragraph 26.

41. Adopted in part in paragraph 27.

42-48. Adopted in part in paragraph 28.

1. Adopted in paragraph 29.

2. Adopted in paragraph 30 and paragraph 31. 51-56. Rejected as unnecessary.

57. Adopted in paragraph 45.

58-68. Rejected as unnecessary. 69-70. Rejected as irrelevant.

71. Rejected as unnecessary.

72-73. Adopted in substance in paragraph 39.

1. Adopted in substance in paragraph 41.

2. Addressed before, in rulings on Florida Hospital's proposed findings. 76-77. Rejected as immaterial.

1. Rejected as unnecessary.

2. Rejected as a statement of testimony.

3. Rejected as unnecessary.

4. Adopted in substance in paragraph 42.

82-83. Rejected as a statement of testimony.

1. Adopted in part in paragraph 38.

2. -Adopted in part in paragraph 40.

86-97. Rejected as unnecessary.

1. Adopted in paragraph 43.

2. Adopted in paragraph 44.

3. Rejected as unnecessary.

101-104. Rejected as unnecessary or contrary to the evidence. 105-111. Rejected as cumulative.

112-126. Rejected as unnecessary. Proposed Findings By Florida Hospital

1-11. Rejected as unnecessary. The parties agree there is numeric need.

1. Adopted in paragraph 14.

2. Rejected as unnecessary.

3. Adopted in paragraph 19.

15-21. Rejected as unnecessary.

22. Adopted in paragraph 43.

23-24. Adopted in paragraph 42.

25-28. Adopted in paragraph 43. 29-30. Rejected as unnecessary.

31. Adopted in paragraph 23.

32-33. Adopted in substance in paragraph 24.

34. Rejected as cumulative.

35-38. Rejected as unnecessary.

39-42. Rejected as contrary to the evidence, except for the reservations regarding meeting occupancy goals and that effect on feasibility.

43. Adopted in paragraph 35. 44-45. Rejected as argument.

1. Adopted in paragraph 39.

2. Adopted in part in paragraph 40.

3. Adopted in paragraph 26 and paragraph 27.

4. Adopted in paragraph 28.

5. Rejected as unnecessary.

6. Adopted in paragraph 28.

7. Adopted in summary in paragraph 4.

8. Adopted in summary in paragraph 3. 54-55. Adopted in paragraph 42.

1. Adopted In paragraph 43.

2. Adopted in paragraph 44.

59-67. Rejected as cumulative and unnecessary. 68-69. Adopted in paragraph 47.

70-71. Adopted in substance in paragraph 48. 72-79. Rejected as cumulative.

COPIES FURNISHED:

Gregory L. Coler, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard

Tallahassee, FL 32399-0700

Sam Power, Agency Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard

Tallahassee, FL 32399-0700

John Miller General Counsel

Department of Health and Rehabilitative Services 1323 Winewood Boulevard

Tallahassee, FL 32399-0700

Michael J. Glazer, Esquire Ausley, McMullen, McGehee, Carothers & Proctor

227 South Gadsden Street Tallahassee, FL 32301

John T. Brennan, Jr., Esquire Bonner & O'Connell

900 Seventeenth Street, Northwest Washington, D.C. 20006

Lesley Mendelson, Esquire Assistant General Counsel Department of Health and Rehabilitative Services 2727 Mahan Drive

Tallahassee, FL 32308

Chris Haughee, Esquire Catherine Peek McEwen, Esquire Moffitt, Hart & Herron, P.A.

216 south Monroe Street, Suite 300 Tallahassee, FL 32301

Steve Boone, Esquire

Boone, Boone, Klingbeil, Boone & Roberts

1001 Avenida Del Circo Venice, FL 335955

Docket for Case No: 88-004156

Orders for Case No: 88-004156