STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
MEASE HEALTH CARE, )
)
Petitioner, )
)
vs. )
)
DEPARTMENT OF HEALTH AND )
REHABILITATIVE SERVICES, )
)
Respondent, )
)
and )
) MORTON F. PLANT HOSPITAL, INC., )
)
Intervenor. ) CASE NOS. 89-0726
) 89-0727
)
)
ST. ANTHONY'S HOSPITAL, )
)
Petitioner, )
)
vs. )
)
DEPARTMENT OF HEALTH AND )
REHABILITATIVE SERVICES, )
)
Respondent, )
)
and )
) BAYFRONT MEDICAL CENTER and ) ALL CHILDREN'S HOSPITAL, INC., )
)
Intervenors. )
)
RECOMMENDED ORDER
The final hearing in this case was held from June 19 through 23, 1989, in Tallahassee, Florida, and on July 31, and August 1, 1989, in Clearwater, Florida, before Donald D. Conn, Hearing Officer, Division of Administrative Hearings.
APPEARANCES
For Petitioners: W. David Watkins, Esquire
P. O. Box 6507
Tallahassee, Florida 32314-6507 (Mease Health Care)
Ivan Wood, Esquire 1221 Lamar, Suite 1400 Four Houston Center
Houston, Texas 77010-3015 and
John H. Parker, Esquire 1200 Carnegie Building
133 Carnegie Way Atlanta, Georgia 30303 (St. Anthony's Hospital)
For Respondent: Guyte McCord, Esquire
P. O. Box 82
Tallahassee, Florida 32302 (Department of Health and Rehabilitative Services)
For Intervenors: Cynthia Tunnicliff, Esquire
P. O. Drawer 190 Tallahassee, Florida 32302 (Morton F. Plant Hospital)
Stephen A. Ecenia, Esquire
P. O. Drawer 1838 Tallahassee, Florida 32301 (Bayfront Medical Center)
Darrell White, Esquire
P. O. Box 2174
Tallahassee, Florida 32316-2174 (All Children's Hospital)
STATEMENT OF THE ISSUE
The issue in this case is whether either Mease Health Care (Mease) or St.
Anthony's Hospital (St. Anthony's), or both, meet the statutory and rule criteria for a Certificate of Need (CON) to operate an open heart surgery program, and therefore, whether the Department of Health and Rehabilitative Services (Department) should approve either, or both, of their CON Applications.
PRELIMINARY STATEMENT
At the hearing, Mease called six witnesses, and introduced 18 exhibits; St. Anthony's called 12 witnesses and introduced 21 exhibits; the Department called one witness and introduced 3 exhibits; Morton F. Plant Hospital (Plant) called five witnesses and introduced 3 exhibits; Bayfront Medical Center (Bayfront) called three witnesses and introduced 5 exhibits; and All Children's Hospital (Children's) called one witness and introduced 2 exhibits. Late-filed depositions were filed on behalf of Mease and Bayfront. Official recognition was taken of the Final Order in St. Mary's Hospital v. Department of Health and Rehabilitative Services, et al., 9 F.A.L.R. 6159 (DOAH 1987). The transcript of the final hearing, consisting of 11 volumes, was filed on August 29, 1989, and thereafter, Mease filed an unopposed Motion for Extension of Time For Filing of Proposed Recommended Orders, which was granted on September 25, 1989, allowing posthearing memoranda and proposed recommended orders to be filed by November 6, 1989. The Appendix to this Recommended Order contains a ruling on each timely filed proposed finding of fact.
Prior to the commencement of the final hearing, several Motions were filed, including: (1) A Motion In Limine filed on June 13, 1989, on behalf of Plant which was granted, excluding any proof on the issue of whether Mease has an inpatient cardiac catheterization program, except as to any changed circumstances since the Final Order was filed in Mease Hospital and Clinic v.
Department of Health and Rehabilitative Services, et al., 10 F.A.L.R. 3713 (DHRS 1988); (2) A Joint Motion In Limine and For Official Recognition filed by Children's and Bayfront on June 16, 1989, which was granted, excluding any proof on issues previously determined between the parties in St. Anthony's Hospital v. Department of Health and Rehabilitative Services, et al., 11 F.A.L.R. 2193 (DHRS 1989), except as to new evidence and issues not previously raised by the parties in that case; and (3) A Motion In Limine and For Sanctions filed by Mease on June 16, 1989, directed against Plant, which was denied.
FINDINGS OF FACT
The Parties
Mease is a 278 bed, non-profit acute care hospital located in Dunedin, Florida, which is within the Department's Service District V. Its service area is mid-Pinellas through Pasco Counties, with mid-Pinellas to northern Pinellas being its primary service area. It has operated a special procedures room since before July 1, 1977, but that room is not a cardiac catheterization laboratory. The special procedures room has been staffed with persons trained in treating critical care patients, with special knowledge of cardiovascular medication and catheterization equipment. The catheterization team usually consists of a physician, special procedures nurse, and at least two dedicated radiographer technologists. Procedures performed at Mease in the special procedures room include renal arteriograms, pulmonary arteriograms which involve passing a catheter through a right side chamber of the heart into the lungs, as well as cerebral and femoral arteriograms. Pulmonary angiograms, right ventriculography and right atrial injections are all currently performed at Mease, with right catheterization procedures performed in the CCU and special procedures lab. The special procedures room is not used by radiologists or cardiologists at Mease to do any therapeutic or diagnostic studies of the left chambers of the heart, but rather these procedures are performed at Plant or Largo Medical Center in Clearwater. The Mease special procedures room does not have the more sophisticated equipment necessary to perform catheterizations in the left chambers of the heart, and such equipment would be found in a CCL. Mease does not have a CON for inpatient cardiac catheterization, but does have a separate pending application for such program. It has an outpatient cardiac catheterization lab which opened in April, 1989. Mease proposes to do angioplasties on an outpatient basis, which is contrary to the Department's Rule 10-5.011(1)(e)2b, which defines this as an inpatient procedure. Mease Clinic is located adjacent to Mease Hospital/Dunedin, and consists of approximately 90 physicians who have a contractual relation with Mease. Mease Clinic is a major source of referrals for Mease Hospital/Dunedin.
St. Anthony's is a 434 bed, not-for-profit acute care hospital located in St. Petersburg, Florida, which is within the Department's Service District V. Its primary service area is southern Pinellas County, south of Ulmerton Road, where 80% of its patients reside. It provides a full range of services, including inpatient cardiac catheterization, with a CCL, coronary care unit, holter monitor service, and echocardiography laboratory. St. Anthony's presently has 5 cardiologists on staff, and will be adding 3 more. It offers a full array of diagnostic services including nuclear cardiography, basic
electrocardiography, a magnetic resonance imaging unit. St. Anthony's is also the site of the Rogers Heart Foundation which performs research, education, and clinical diagnostic studies involving cardiovascular diseases.
Plant is a 740 bed, general acute care, not-for-profit hospital located on an 11 building campus in Clearwater, Florida, approximately 3 to 4 miles south of Mease. It provides a wide range of services, including open heart surgery, medical/surgical with all subspecialties, obstetrics and psychiatry.
It also operates a nursing home, ACLF, ambulatory surgery center, rehabilitation center, and arthritis center.
Bayfront is a 518 bed, not-for-profit, full service acute care hospital located in St. Petersburg, Florida, adjacent to Children's. It is connected to Children's by an enclosed passageway, and operates a shared diagnostic, open heart surgery and cardiac catheterization program with Children's. The usual procedure under this shared progam is that adult patients requiring open heart surgery are admitted to Bayfront the day prior to surgery, and then are prepared and transported through the passageway by Bayfront personnel to Children's, where the actual surgery is performed. Normally the patient is kept overnight at Children's following surgery, and is then returned to Bayfront by Bayfront personnel to continue recovery, and eventual discharge.
Children's is a 113 bed children's hospital located in St. Petersburg, Florida, approximately two miles from St. Anthony's. It is a full service tertiary facility, which serves as a referral center for children from throughout the State of Florida, and will have 6 operating rooms, 2 CCLs, and 13 ICU beds when construction underway is completed. It has an approved CON for 55 additional beds. Two of its operating rooms are used for open heart surgery.
It has an open heart surgery program which has been in operation since the early 1970's, with 3 pediatric cardiologists and 12 to 15 adult cardiologists on staff.
The Department is the state agency which is responsible for administering Sections 381.701 through 381.715, Florida Statutes, the "Health Facility and Services Development Act", under which applications for Certificates of Need (CON) are filed, reviewed, and either granted or denied by the Department.
Currently, Children's/Bayfront, Plant, and Largo Medical Center, which is located near Ulmerton Road in central Pinellas County, have existing open heart surgery programs. There is an additional approved CON for an open heart surgery program at Bayonet Point Hospital in Pasco County. The 3 existing programs each have more than one operating room dedicated for open heart surgery. For every dedicated open heart surgery suite, approximately 500 open heart surgery cases can be performed per year, and thus, each of these existing programs in District V has the capacity to perform well over 500 cases each year.
The Applications
On or about September 28, 1988, Mease filed an application with the Department for a CON to implement an open heart surgery program at its hospital in Dunedin, Florida. This application was designated as CON Application Number 5679. The Department reviewed this application, and on October 13, 1988, forwarded an omissions letter to Mease. Mease responded to the omissions letter on November 14, 1988, and on November 15, 1988 the Department deemed its application complete. Thereafter, the Department reviewed and considered all
material received from the applicant, and issued its State Agency Action Report (SAAR) on or about January 12, 1989, noticing its intent to deny CON 5679.
Mease timely filed a petition for formal hearing to challenge the Department's notice of intent to deny this CON, and Plant timely intervened in opposition to this application.
On or about September 28 1988, St. Anthony's filed an application with the Department for a CON to implement an open heart surgery program at its hospital in St. Petersburg, Florida. This application was designated as CON Application Number 5678. The Department reviewed this application, and on October 13, 1988, forwarded an omissions letter to St. Anthony's. St. Anthony's responded to the omissions letter on November 11, 1988, and the Department deemed its application complete. Thereafter, the Department reviewed and considered all materials received from the applicant, and issued its SAAR on or about January 12, 1989, noticing its intent to deny CON 5678. St. Anthony's timely filed a petition for formal hearing to challenge the Department's notice of intent to deny this CON, and both Bayfront and Children's timely intervened in opposition to this application.
On or about May 26, 1989, Mease filed certain revisions to its CON application, purportedly by agreement of counsel. However, these revisions were not filed with, or reviewed by, the Department in the preparation of its SAAR.
The applicants and intervenors in this proceeding are all located in District V, which is composed of Pinellas and Pasco Counties. There are no subdistricts within District V for purposes of open heart surgery programs, and the Department's numeric need methodology for such programs. The open heart surgery and population growth rates for northern Pinellas and Pasco Counties exceed that of southern Pinellas County, south of Ulmerton Road. However, the total population of south Pinellas exceeds that of northern Pinellas. Utilization rates are also lower in south Pinellas than elsewhere in District V.
Stipulations
The parties stipulated that:
The licensure and accreditation of each hospital in this proceeding is not at issue and does not have to be proven;
The equipment proposed by Mease and St. Anthony's is adequate, and the costs projected for that equipment are reasonable, as well as the costs associated with architectural design and construction;
St. Anthony's and Mease have the ability to finance the proposed project costs;
St. Anthony's, Bayfront and Children's have stipulated to each other's standing in Case Number 89-0727;
Plant has stipulated that Mease renders quality care in its existing programs; and
The term "case" means "admissions" or "discharges", and there can be multiple procedures performed in each case.
State Health Plan
Objective 4.2 of the State Health Plan applicable to this application is to "maintain an average of 350 open heart surgery procedures per program in each district through 1990." (Emphasis Supplied.) The goal set forth in the State Plan relative to open heart surgery programs is to ensure the appropriate availability of such services at reasonable costs. These applications are not consistent with Objective 4.2. If these application were to be approved, there would be 6 (3 existing and 3 approved) programs in the District. The number of procedures projected for 1990 is 1271, and if this is divided by 6 programs, the result is an average of only 212 procedures per program. If only one of these two application were to be approved, and the number of procedures projected for 1990 were to be divided by 5 instead of 6, the result of 254 would still fall below the 350 standard. Approval of either of these applications will also significantly and adversely impact the ability of the already approved program in the District, located at Bayonet Point Hospital in Pasco County, to achieve an acceptable level of service.
In the State Health Plan narrative, it is recognized that "quality of patient care is a primary concern in open heart surgery programs due to the potential consequences to the patient of poorly trained and/or skilled staff." In order to ensure quality, and in recognition of the relationship between the volume of open heart surgery procedures and quality, the State Plan references the Department's requirement, set forth by rule, that a minimum of 200 adult procedures be performed within 3 years of initiation of an open heart program. The narrative also notes that a broad range of services must be provided to fulfill the requirements of an open heart surgery program. Both of these applications are partially consistent with these narrative statements in the State Health Plan since they have a record of providing quality care, and offering a complete range of services within departments at these hospitals, where a broad range of diagnostic techniques and expertise are available. However, it was not established that a minimum of 200 adult open heart surgical procedures would be performed at either Mease or St. Anthony's within three years of initiation of this program.
Local Health Plan
The applicable portions of the District V Health Plan recommend that in a comparative review of open heart surgery applications, preference should be given to those hospitals with a documented record as a major referral center for open heart surgery, and which serve the entire community regardless of ability to pay, using the proportion of Medicaid patient days of the planning area total as a measure. The Local Plan also recommends that future expansion of open heart surgical programs occur so as to serve population areas which will generate a minimum of 350 open heart operations annually. Finally, the Local Plan states that applicants should be able to justify the projected minimum number of 200 procedures stated in the Department's rule within three years of the beginning of service, there should be a numeric need shown in accordance with the Department's numeric need methodology for open heart surgery, existing programs should be performing the number of procedures required in the Department's methodology, and priority should be given to applicants in areas which do not have existing or approved programs. District V is not divided into subdistricts for purposes of determining the need for additional open heart surgery programs.
Neither of the applicants in this case are major referral centers, and neither provides a significant volume of services to Medicaid or chronically
underserved groups, as discussed further below, although they have provided services to those who are unable to pay. According to the Department's numeric need methodology, there is no need for any additional open heart surgery programs in District V. There are existing open heart programs in both north and south Pinellas County, the primary service areas of each of these applicants.
The Department's Numeric Need Methodology and the "350 Standard"
Rule 10-5.011(1)(f)8, Florida Administrative Code, sets forth the Department's methodology for calculating the numeric need for additional open heart surgery programs. It provides a formula by which the number of open heart procedures for the horizon year, in this case 1990, are to be estimated. (See Finding of Fact 19 for an explanation of the interchangeable use of the terms "procedures" and "cases".) Pursuant to the formula, there are projected to be 1271 open heart surgery procedures performed in 1990 in District V. This number of projected procedures is then divided by 350 procedures in order to determine the number of programs which will be needed. See Rule 10-5.011(1)(f)11b. Using this methodology, the Department has identified the need for 3.6 (rounded to 4) programs in the District in the horizon year. Since there are currently 3 existing (Plant, Bayfront/Children's and Largo Medical Center) and 1 approved program (Bayonet Point Hospital) in District V, the Department has concluded that there is no projected numeric need for either of these additional programs in 1990. The Department will not normally approve a CON for a new open heart surgery program unless a numeric need is projected under its methodology.
In performing the calculations under its numeric need methodology, the Department correctly determined that the actual use rate in District V was
110.35 procedures per 100,000 population. This actual use rate properly does not adjust for outmigration of residents of District V to facilities outside the District. It has been the consistent policy of the Department in determining actual use rates to consider only the total number of procedures performed at facilities within the District since the numeric need methodology calculates the need for additional programs within the same District. As long as there are sufficient resources to serve the volume of patients needing service in a given District, it does not matter where those patients reside. Patients choose to go to another District for open heart services for many reasons other than a lack of resources within their own District, such as physician preference.
Therefore, it cannot be concluded that all patients who outmigrate for one reason or another will return to their own District for services if an additional program is approved. For this reason, as well as the double counting of the same patients which would result if they were counted in determining the actual use rate in both the District in which they reside, and in the District to which they outmigrated for service, the Department's interpreptation and policy is reasonable.
For purposes of applying the Department's numeric need methodology rule, the words "cases", "procedures", and "admissions" are used interchangeably. This is the result of the historical development of the rule, which preceded the development and implementation of DRG's precisely defining "procedures". Thus, while the rule states that need for open heart surgery programs shall be determined by computing the projected number of open heart surgical "procedures", the Department has consistently interpreted this rule to mean the number of "cases", and used the number of "cases" in performing the calculations under the methodology. Hospitals reporting data to local health councils generally report the number of cases or discharges, and most health
planners similarly use the number of patients or discharges when calculating the need for a new program. Through the testimony of Michael L. Schwartz, an expert in health care planning, Mease erroneously attempted to inflate the need projected under the rule by using "procedures" instead of "cases" in its calculations. It applied the multiplier of 1.77 or 1.44 to reported "cases", since this represents an estimate of the number of procedures per case, and thus incorrectly projected a need for an additional program. The Mease methodology is in error because it is inconsistent with the Department's reasonable, historical interpretation and application of this rule, as well as the manner by which data is reported under the rule to local health councils.
Recognizing that the numeric need methodology does not project the need for any additional programs, the applicants herein both seek to justify the approval of their applications under a "not normal" rationale, which relies primarily upon outmigration of patients from District V to Hillsborough County in District VI. In fact, outmigration is the only "not normal" circumstance raised in the Mease application. Therefore, arguments at hearing that the existence of the Mease Clinic should also constitute a "not normal" circumstance are rejected. The data demonstrates insignificant outmigration from Pinellas County. From July 1987 through June 1988, only 32 patients (5.9%) outmigrated from north Pinellas where Mease is located and only 36 (6.8%) outmigrated from south Pinellas where St. Anthony's is located. The main outmigration was from Pasco County in which approximately 85.5% of Pasco residents receiving open heart surgery (488 of 571) outmigrated from District V. However, there is now a CON approved program in Pasco County which will be located at Bayonet Point Hospital which will be available to serve Pasco residents who have been outmigrating to District VI.
There is a direct relationship between the volume of open heart surgery procedures performed at a facility and the quality of care provided at such facility, with lower mortality rates generally at hospitals with higher volumes than those with low volumes. Therefore, in addition to its numeric need calculation, the Department has also developed a "350 Standard" to address patient safety and quality of care concerns by ensuring that each existing and approved open heart surgery program achieves a volume sufficient to assure quality and efficiency prior to approval of a new program. Rule 10- 5.011(1)(f)11aI, Florida Administrative Code, prohibits the establishment of new open heart surgery programs unless:
. . . the service volume of each existing and approved open heart surgery program within the service area is operating at and is expected to continue to operate at a minimum of 350 adult open heart cases per year. . .
Bayfront/Children's urges an interpretation and application of the 350 Standard in a manner which would require each existing and approved program to actually operate at the level of 350 cases per year. Since approved programs are not yet operational, and therefore cannot operate at the 350 level, they argue that the intent of this Standard, as set forth in the above-cited rule, is to preclude the approval of any additional programs while there are approved programs, or existing programs which are not meeting the 350 Standard. To the contrary, the Department and the applicants urge that the 350 Standard be applied by averaging the actual number of cases at existing programs, and the number of cases which are reasonably projected to be performed at approved programs. Under this interpretation, as long as the average between cases which
are performed at existing, and which are reasonably projected to be performed at approved programs exceeds 350, then the further approval of an additional program is not prohibited.
Having considered the testimony and evidence presented by the parties, and in particular the testimony of Sharon Gordon-Girven, who was accepted as an expert in health planning, which is found to be more credible, consistent, and reasonable on this point than the testimony of Michael C. Carroll, who was accepted as an expert in health planning and hospital administration, it is found that the Department's interpretation and application of the 350 Standard is reasonable and consistent with the terms of Rule 10-5.011(1)(f)11aI. The Department has consistently applied this 350 Standard since this rule's adoption by averaging caseloads at existing programs and reasonably projected caseloads for approved programs. To interpret this Standard as urged by Bayfront/Children's would impose a moratorium on new open heart surgery programs while there is an already approved, but not operational, program in a District, or while a newly operational program has not yet attained the 350 Standard. There is no basis for this prohibitory interpretation which would not only reduce competition, but would also be inconsistent with sound health planning and the State Health Plan Objective 4.2, as discussed above.
Quality of Care
Both Mease and St. Anthony's are accredited by the Joint Commission on Accreditation of Health Care Facilities and have a record of providing quality care in their existing programs.
On average, hospitals performing greater than 200 open heart procedures per year have superior surgical outcomes than hospitals doing less than 200 procedures. Mortality rates are significantly lower at hospitals performing more than 200 procedures annually than at those performing less. It was established that there is a direct relationship between volume of open heart surgical procedures and quality of care at facilities with open heart surgery programs. Therefore, the existence of more open heart programs than are needed in an area may result in some existing programs not achieving sufficient volume to assure patient safety and quality of care.
Rule 10-5.011(1)(f)5d, Florida Administrative Code, was adopted by the Department in order to set forth the minimum volume deemed necessary to assure quality of care, and provides, in part:
There shall be a minimum of 200 adult open heart procedures performed annually, within 3 years after initiation of service, in any institution
in which open heart surgery is performed for adults.
Although the applicants urge that they will be able to meet this threshold level within three years, they failed to establish by competent substantial evidence that they would actually attract the patients necessary to perform either the number of open heart procedures projected in their applications, or this minimum number of 200 procedures required by the Department to assure quality of care in its third year of operation, given the current pattern of physician referrals in the area, their market share in relation to those of existing programs, and actual utilization levels for the existing District V programs. Without the assurance of sufficient volume to meet the 200 procedure threshold established by the Department by rule, the validity of which is not at issue in this case, the applicants have failed to
show that they will be able to achieve and maintain a patient volume in their proposed program which will assure quality of care in their proposed open heart surgery program.
St. Anthony's sought to question the quality of care provided at the Bayfront/Children's program by citing an 8% mortality rate in 1987-88, and a 5.5% rate in 1988-89, while 3% is the national standard. However, mortality rates are only one indicator of quality, and a significant number of these cases at Bayfront/Children's involved complex open heart surgery on patients whose mean age was significantly higher than would be expected in a normal case mix, which presents a greater risk potential than less complex surgery on a younger case mix. In any event, this issue was not clearly raised in St. Anthony's application. Further, the evidence that was received, including testimony of physicians on staff at St. Anthony's and Children's/Bayfront, establishes that the quality of care at the Children's program is excellent, and that scheduling problems relating to availability of operating rooms are being resolved. It was not shown that there is any adverse impact on quality from having to move patients between Bayfront and Children's for open heart surgery.
The fact that Mease does not have a CON for an inpatient cardiac catheterization program adversely affects the potential quality of care of any open heart surgery program at its facility since the medically preferred practice when performing such surgery is to have inpatient cardiac catheterization available. Open heart surgery programs do not, and should not, operate without this inpatient cardiac catheterization capability.
Availability and Access
While the addition of these two new programs would obviously increase the availability of services in the District, open heart surgery services are already reasonably available in District V. St. Anthony's is only two miles from the Bayfront/Children's program in St. Petersburg, and Mease is located in Dunedin, approximately 3 to 4 miles north of Plant in Clearwater. The two hour travel time standard is already being met in District V, and geographic accessibility will not be appreciably or significantly increased by these proposals. There is excess capacity in existing and approved open heart surgery programs in District V during most of the year, including at the Bayfront/Children's and Plant programs. Therefore, there is ready access to, and availability of open heart surgery services to patients in the District.
The applicants did not establish that approval of their applications would enhance access to open heart surgery services for the medically indigent. Despite the assertion in these applications that each program would be available to the underserved, there is no definite commitment to serve charity care patients as a percentage of total patient days or of total revenue. Bayfront and Children's exceed St. Anthony's in their commitment to indigent, charity care. As a percentage of total patient days in 1987, Medicaid patients represented 2.3% of St. Anthony's, and 2.1% of Mease's total patient days, while for Children's, Medicaid patients in 1987 represented 34.2%, and for Bayfront, they represented 8.9% of total patient days.
While unstable patients who have to be transferred from one hospital to another face increased risks, it was not shown that transfers from Mease to Plant, or from St. Anthony's to the Bayfront/Children's program have actually jeopardized the safety of patients or resulted in a reduction in the quality of care received by patients. Transfer delays are exacerbated by seasonal increases in population in District V, but there continues to be a reasonable
likelihood that patient transfers can be accommodated, even during seasonal population increases, without adverse impacts to patient care. However, a large majority of open heart surgery cases are non-emergency that can be scheduled for surgery after diagnosis without any compromise in patient care. Emergency patients can be given priority, and there are sufficient available beds to accommodate emergency patients, regardless of seasonal delays, and such seasonal delays do not establish that there is a lack of available beds in District V which would require the approval of either of these applications.
Alternatives Considered
The applicants did not fully explore alternatives, including less costly alternatives, to a new program at their facility, such as a joint or shared program with an existing provider. This would have been particularly relevant to these applications since District V already has a quality joint program at Bayfront/Children's which is operating successfully in the community. A less costly alternative to approval of either, or both, of these applications would be greater utilization of existing programs, especially where excess capacity exists, such as at the Bayfront/Children's and Plant programs, and in view of there being an already approved program in District V at Bayonet Point.
Personnel Availability and Costs
There has been a long-term shortage of nurses, particularly in intensive care and open heart surgery, and this shortage is present in District V not merely for nursing staff, but also for technical support staff, and is particularly acute in operating room and critical care personnel. It is not always possible to fill open heart surgery or critical care nursing positions with trained personnel. At hearing, St. Anthony's proposed a joint training program with St. Joseph's Hospital in Tampa for open heart personnel. However, this was not explicitly raised in the St. Anthony application, and therefore, it cannot be considered.
The applicants will compete with existing providers in attracting open heart surgery nursing and technical staff. The implementation of these new programs would have an adverse impact on the ability of existing and approved programs to attract and retain trained open heart surgery nursing and technical staff, and can reasonably be expected to increase personnel costs for these providers.
The salaries and benefits identified in these applications are generally reasonable and complete. However, Mease's estimate of the number of additional nursing positions, or FTE, which would be required throughout the hospital to accommodate the workload resulting from an open heart surgery program is incomplete and inadequate, and St. Anthony's failed to fully consider the need for additional personnel for its proposed open heart step-down unit, angioplasty recovery, open heart "stat" lab, and resperator machine operators.
Financial Feasibility
In their applications, Mease has projected 200 open heart surgery cases, and St. Anthony's has projected 150 open heart surgery cases, in their first year of operation; Mease has projected 240 cases and St. Anthony's projected 200 cases in their second year; St. Anthony's projected 250 cases in their third year of operation, but Mease did not include a third year projection. However, it is specifically found that these projections are not reasonable, based upon the testimony and evidence received, as well as the
results of the Department's numeric need methodology calculations, performed pursuant to Rule 10-5.011(1)(f)8, the validity of which is not at issue in these proceedings.
A basic assumption used by Mease in the preparation of its pro forma is flawed. The utilization projections which drive the necessary calculations in the pro forma are based upon a percentage of patients who have cardiac catheterizations who subsequently have to have open heart surgery. That percentage is 25%, but is based upon experience in which the facility at which these patients received this treatment had both inpatient cardiac catheterization and open heart surgery programs. Mease does not have inpatient cardiac catheterization, and therefore, there is a reasonable likelihood that the percentage of cardiac catheterization patients who would choose to be transferred from another facility, such as Plant, to Mease for open heart surgery would be substantially less than 25%, thereby reducing Mease's projected utilization. For example, it was shown that 75% of patients who receive inpatient cardiac catheterization remain at the same hospital for open heart surgery, if that becomes necessary and if that hospital has both programs.
The pro forma which has been filed by St. Anthony's includes revenues that St. Anthony's is already receiving for treatment of patients who are subsequently transferred to Bayfront/Children's for open heart surgery. This amounts to approximately $11,000 per admission which St. Anthony's is already receiving and which, therefore, should not have been shown on its pro forma of revenues to be expected from a new open heart surgery program. The inclusion of this amount results in inflating St. Anthony's revenue projections. Additionally, St. Anthony's has incorrectly estimated its Medicare utilization at 65%, while it should have been estimated at 80% of patient mix. This error also has the effect of inflating expected revenues, and placing unjustified greater significance than there should be on its proposed fixed price discount, which is discussed later, and which applies only to non-Medicare, non-Medicaid, non-charity cases.
For the July 1990, planning horizon in District V, the Department's numeric need methodology projects that there will be 1271 open heart surgery procedures. With referral patterns in place and existing providers with operational and well regarded programs, it is unlikely that either applicant would have an automatic, equal share of the District's pool of open heart patients, or even that they would perform the number of procedures projected in their pro forma for their first and second years of operation. In fact, the 3 existing providers in District V performed 1215 procedures (355 at Children's,
416 at Plant, and 444 at Largo Medical Center) between July 1987 and June 1988, leaving fewer than 56 procedures projected through the Department's numeric need methodology for the one already approved program and these applicants, if they were to be approved. It defies logic and reason to argue that the applicants will achieve their projected caseloads, given the existing levels of service at existing programs in District V, the fact there is an additional program that has already been approved, and the fact that the Department's numeric need methodology projects 1271 procedures in 1990.
Since the applicants base their assessment of financial feasibility upon their unsubstantiated, inflated projections, and since the applicants have not established the reasonableness of these projections, the long-term financial feasibility of these proposed new programs has not been shown. Further, the applicants have also failed to establish that they can reasonably be expected to achieve the level of 200 procedures in their third year, and therefore, they
have also failed to show that they can achieve that minimum level which the Department, by rule, requires to ensure quality of care.
In other respects, the assumptions used by the applicants in their pro forma are reasonable, including their inflation factor for income, bad debt, expenses, and depreciation.
Effect on Competition and Costs
It cannot be determined whether there will be a significant difference between the charges proposed by each of these applicants and the actual charges at existing providers. Actual charges are dependent on case mix, Medicare percentage, payor mix and illness severity. Meaningful charge comparisons can only be made for hospitals in the same Hospital Cost Containment Board (HCCB) peer grouping based on case mix, Medicare percentage and location, and the parties in this case are in various groupings. This finding is based on the testimony of Margo Kelly, who was accepted as an expert in health care planning and finance, and Larry Ward, an expert in hospital finance and financial feasibility, and applies to both overall hospital charges and charges for specific services. There are simply too many variables to make any meaningful comparison of charges between hospitals which are in different HCCB peer groupings.
A unique aspect of the St. Anthony's application is that it has proposed a fixed fee of $32,000, adjusted 6% annually for inflation, for open heart surgery for the first 3 years of the program, if approved. However, this factor is not as significant as it may appear from St. Anthony's pro forma since St. Anthony's has erroneously underestimated its Medicare mix at 65% instead of 80%, based upon actual Medicare percentages at existing programs, and thus, the mix of patients to whom this fixed fee would apply was overestimated by 15%.
The fixed fee program is applicable to such a limited number of patients that the program is insignificant as a factor upon which approval of this application should be based. Additionally, based on the testimony of Sharon Gordon-Girven, it is found that while a fixed fee may be an attractive aspect of a CON application, it is not a "not normal" circumstance which can be used to approve an application notwithstanding a showing of no numeric need.
It has not been shown whether there would be an appreciable positive impact on costs in the health care community if either, or both, of these applications were approved. When health care services are duplicated and associated costs are spread over the same number of patients, charges for those patients tend to increase. The evidence showns there is virtually no price competition for open heart surgery services.
Mease has underprojected charges for its open heart surgery program by estimating an average length of stay of only 10 days instead of 13, which is the average at other area hospitals, and also by failing to include cardiac catherization charges, which should be included for those patients on whom both a catheterization and open heart surgerical procedure are performed in the same episode of care.
As previously discussed, there would be greater competition among existing and approved programs in District V for trained open heart surgery and critical care nurses, which are in short supply, and it can reasonably be expected that greater competition for trained personnel who are in short supply will eventually result in higher salaries and health care costs.
Impact on Existing and Approved Programs
As discussed above, approval of these applications will adversely affect the ability of existing providers to attract and retain trained open heart surgery and critical care RNs due to the already existing shortage of personnel to fill these positions, and the fact that one already approved program would become operational prior to either of these programs, if they were to be approved.
The proposed primary service area for Mease overlaps with the primary service area of Plant, and the primary service area of St. Anthony's overlaps with the primary service area of the Bayfront/Children's program. Therefore, these facilities are competing for the same open heart surgery patients.
Patients referred to Plant by Mease physicians for open heart surgery account for approximately 30% of Plant's current total caseload, and if these patients are lost, the financial impact on Plant would be approximately $4.5 to
$5 million in lost revenues. The same surgical group that does 90% of the surgeries at Plant is expected to do open heart surgeries at Mease, if the Mease CON is approved.
The viability of the Bayfront/Children's program might be endangered, financially and programatically, if the St. Anthony's application is approved. From July 1987, through June 1988, 39% of the adult open heart surgical procedures performed at Bayfront/Children's were referred from St. Anthony's cathing cardiologists. A substantial number of these patients can be expected to be lost if the St. Anthony's program is approved, and this can reasonably be expected to significantly decrease utilization of the Bayfront/Children's program, with resulting loss in revenues. Bayfront reasonably estimates a resulting loss of $400,000 in its net income. It was also shown that Bayfront is already incurring a net loss in income from its open heart surgery program, which would only be exacerbated by the loss of a substantial number of patients to St. Anthony's.
Comparision of Applicants
While St. Anthony's does have an existing inpatient cardiac catheterization program, Mease does not. The Mease outpatient cardiac cath lab only opened in April, 1989, and therefore, its experience to date with outpatient cardiac catheterization is minimal. Mease proposes to do angioplasties in its outpatient cardiac cath lab, which is specifically prohibited by Departmental Rule 10-5.011(1)(e)2b, and is an unacceptable medical practice. Thus, while St. Anthony's patients would be able to receive complete and continuous care at its facility, Mease patients would still have to be transferred to another hospital for inpatient cardiac caths and angioplasties. There is already an approved open heart surgery program in the northern part of District V which will be located at Bayonet Point, and this new program will address the outmigration circumstance which has been occuring from Pasco County to Hillsborough County, upon which Mease has based its "not normal" argument in support of its application. Although population growth is greater in northern Pinellas than in south Pinellas, the total population of south Pinellas remains larger, and thus, there remains a larger population base for open heart surgery in south Pinellas than in north Pinellas. There is only one open heart surgery program in south Pinellas (Bayfront/Children's) while there are two existing programs in north Pinellas (Largo and Plant). Mease has only 5 operating rooms, while St. Anthony's has 12, and total beds at St. Anthony's exceed beds at Mease by 434 to 278.
Of the two applications at issue on this proceeding, St. Anthony's is the superior application for an additional open heart surgery program in District V, if one were to be approved.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties, and the subject matter in this cause. Section 120.57(1), Florida Statutes.
As the applicants for a CON, Mease and St. Anthony's bear the burden of establishing, by competent substantial evidence, their entitlement to a CON to operate an open heart surgery program. Florida Department of Transportation
v. J.W.C. Co., Inc., 396 So.2d 778 (Fla. 1st DCA 1981); Rainbow Community Hospital v. Department of Health and Rehabilitative Services, 453 So.2d 1200 (Fla. 1st DCA 1984). Specifically, they must meet the criteria set forth in Section 381.705, Florida Statutes, and Rule 10-5.011(1)(f), Florida Administrative Code, based on a balanced consideration of all matters enumerated therein. Humana, Inc. v. Department of Health and Rehabilitative Services, 469 So.2d 889 (Fla. 1st DCA 1985); Department of Health and Rehabilitative Services
v. Johnson & Johnson, 447 So.2d 361, 363 (Fla. 1st DCA 1984). The weight to be given to each criteria is not fixed, but varies depending on the facts of each case. North Ridge General Hospital v. NME Hospitals, 478 So.2d 1138 (Fla. 1st DCA 1985); Collier Medical Center, Inc. v. Department of Health and Rehabilitative Services, 462 So.2d 83 (Fla. 1st DCA 1985).
The Department's Interpretation of Its Rules:
The "350 Standard" and "Cases" vs. "Procedures" Bayfront/Children's argue that Rule
10-5.011(1)(f)11aI, Florida Administrative Code, the text of which is set forth in Finding of Fact 21, precludes the granting of additional CONs unless each existing and approved open heart surgery program is operating at the
level of 350 cases per year. This position is based upon the plain meaning of this rule, according to Bayfront/Children's.
It is clear, however, that programs which are "approved" and not yet operational, cannot perform 350, or any other number of cases in a year. The effect of this interpretation, then, would be to prohibit the approval of any additional open heart surgery programs in a Service District as long as there are any approved, but not yet operational programs, already in that District. If the Department had intended such a moratorium, it could have simply stated,
by rule, that no new programs would be approved if there is an already approved, but not yet operational, program in a District. The testimony and evidence establishes that, in fact, this has not been the policy of the Department since this rule was enacted. St. Mary's Hospital v. Department of Health and Rehabilitative Services, 9 FALR 6159 (DOAH 1987); St. Joseph's Hospital v.
Department of Health and Rehabilitative Services, DOAH Case No. 88-4364 (Final Order filed June 23, 1989).
The Department urges an interpretation of this rule that would only preclude the approval of an additional program if existing and approved programs in a District fail to achieve an average of 350 cases annually. Support for
this position is found within another subsection of Rule 10-5.011(1)(f) wherein it is stated that "the provision of open heart surgery in the service area shall be consistent with the needs reflected in the Local Health Plan and the Florida State Health Plan." See Subsection 7, Rule 10-5.011(1)(f). Section 381.705(1)(a), Florida Statutes, also provides that CON applications are to be reviewed in relation to the State Health Plan. As found at Finding 13, above, the State Health Plan sets forth the Objective of maintaining "an average of 350 open heart surgery procedures per year". Therefore, the reading and interpretation of the "350 Standard" urged by Bayfront/Children's would be inconsistent with Section 381.705(1)(a), and also the requirement of Subsection
7 of this same Rule, by being inconsistent with the State Health Plan. The Department's interpretation of its "350 Standard" is also consistent with the principles of sound health planning since it allows for the implementation of the State Health Plan.
The Department's Rule 10-5.011(1)(f)8 sets forth its numeric need methodology for open heart surgery programs. Mease urges an interpretation of this rule which is inconsistent with the long standing interpretation given to it by the Department. The rule, by its terms, refers to "procedures" in defining certain terms used in the formula for calculating numeric need, but the Department has historically, and consistently used the data reported to local health councils as the basis upon which its calculations are made, and the evidence established that such data is reported to local health councils as "cases" rather than "procedures". The parties stipulated that there can be multiple procedures in each case, and therefore, if "procedures" is used in applying the numeric need formula instead of "cases", a greater projected need will be forecast. Mease applied a multiplier to the number of "cases" reported to local health councils in an attempt to estimate the number of "procedures" which were performed in these "cases". However, there is no evidence that this interpretation of the Department's numeric need methodology has ever been applied, and to the contrary, it was shown that such an interpreation would be inconsistent with the prior application of this rule since its adoption.
While it is axiomatic that words of common usage in a statute or rule should be given their plain meaning, it is also recognized that great deference must be given to an agency's interpretation of its own statutes and rules, and duly enacted rules of an agency should be interpreteted in a manner which will avoid absurd or illogical results. An agency's interpretation of its own rules or statutes must not be overturned unless clearly erroneous, unreasonable, or in conflict with some provision of the State's Constitution or the plain intent of the statutes. Carter v. Department of Professional Regulation, Board of Medicine, Case No. 89-1227 (Fla. 1st DCA, Op. filed September 20, 1989); P. Crosby Associates v. State Board of Independent Colleges, 506 So.2d 490 (Fla. 5th DCA 1987); Department of Environmental Regulation v. Goldring, 477 So.2d 532, 534 (Fla. 1985); Gar-Con Development, Inc. v. Department of Environmental Regulation, 468 So.2d 413, 414, (Fla. 1st DCA 1985); Pan American World Airways, Inc. v. Florida Public Service Commission, et al., 427 So.2d 716, 719 (Fla. 1983); Department of Health and Rehabilitative Services v. Framat Realty, Inc., 407 So.2d 238, 241 (Fla. 1st DCA 1981).
The consistent, historical interpretation given to the "350 Standard" by the Department is reasonable, consistent with the State Health Plan, and avoids the illogical and unintended consequences of imposing a moratorium on additional CON approvals in a District that already has one approved, but not operational, program until that approved program becomes operational and achieves a 350 case level. It is noted that this interpretation by the Department has recently been found to be an invalid exercise of delegated
legislative authority solely on the ground that it constitutes a rule which has not been formally adopted under Section 120.54, Florida Statutes. Lakeland Regional Medical Center, et al. v. Department of Health and Rehabilitative Services, et al., DOAH Case Number 89-2157R, Final Order filed November 15, 1989. A ruling on the issue of whether the Department's interpretation of the "350 Standard" is permissible was expressly reserved in the Lakeland Regional Medical Center case. The Department can, and did, fully explicate its unpromulgated interpretation of the "350 Standard" in this case, which is, therefore, applied herein to these facts and parties. McDonald v. Department of Banking and Finance, 346 So.2d 569 (Fla. 1st DCA 1977). See Sarasota County Public Hospital Board and Adventist Health System v. Department of Health and Rehabilitative Services and Venice Hospital, DOAH Case Nos. 89-1412 & 89-1413, Final Order of DHRS filed November 17, 1989.
The Department's application of its numeric need methodology using "cases" rather than "procedures" is also reasonable and consistent with the manner in which data is reported by hospitals to local health councils, and thus, the evidence in this record does not establish that the Department's use of "cases" is in error. See St. Mary's Hospital v. Department of Health and Rehabilitative Services, 9 F.A.L.R. 6159, 6187 (DOAH 1987). To vary from the Department's historical interpretation of this rule would be to substantially change its numeric need methodology in a manner which would render all prior projections of need, and health planning decisions based thereon, meaningless and irrelevant. Such a result would be inconsistent with the "hallmark of evenhanded administrative regulation -- the rational exercise of power leading to a consistent result . . ." University Community Hospital v. Department of Health and Rehabilitative Services, et al., 472 So.2d 756, 758 (Fla. 2nd DCA 1985).
Based upon the foregoing, it is concluded that there is no basis to apply the prohibitory interpretation of the "350 Standard" urged by Bayfront/Children's in this matter, or the use of "procedures" rather than "cases" in the application of the Department's numeric need methodology, as urged by Mease.
Balanced Consideration of Criteria
It is certainly clear that these CON applications do not meet the Department's numeric need methodology which projects 1271 open heart surgery procedures for District V in 1990. When this projection is divided by 350, a numeric need for 3.6 (rounded to 4) programs is established. Since there are 3 existing and one approved program in this District, the Department and Intervenors urge the denial of CONs 5678 and 5679.
However, this is just one of the criteria that must be weighed and considered, and is no more important than any of the other criteria. Therefore, while a determination of the lack of numeric need may serve as a starting point in the review of these applications, all criteria enumerated in Section 381.705(1)(2), Florida Statutes, must be balanced in arriving at a recommendation on these CONs.
Section 381.705(1)(a), Florida Statutes, requires that CON applicants demonstrate consistency with State and Local Health Plans. These applications are not consistent with Objective 4.2 of the State Health Plan, which provides that an average of 350 open heart surgery procedures per program be maintained. When factors beyond the mere facial application of the Department's numeric need methodology are considered, it becomes readily apparent that approval of these
applications would also not be consistent with the additional State Health Plan narrative which stresses the importance of quality of care. It was not shown that Mease or St. Anthony's would reach a level of 200 procedures annually by their third year of operation. They would, therefore, be unable to achieve the volume of procedures which the Department has established in order to ensure quality of care.
The applicants have failed to establish that approval of their applications will increase the accessibility and availability of needed services in the District. Open heart surgery programs are already geographically and economically accessible and available, especially with an approved program which will become operational prior to 1990. The two hour travel time standard is already being met in the District. Waiting times experienced by patients at Mease and St. Anthony's who require a transfer for open heart surgery are not excessive, and do not present a danger to patients. Existing programs in the District are rendering quality care to open heart surgery patients. There is significant excess capacity in the existing programs. Thus, there are adequate open heart services in District V. Approval of these applications would, therefore, be inconsistent with Section 381.705(1)(b), Florida Statutes.
While the applicants have a record of providing quality care to patients, the failure of the applicants to show that there is a reasonable likelihood of performing 200 procedures by their third year of operation results in the conclusion that they have not shown that the proposed open heart surgery programs will render quality care. The Department has established a clear and specific standard to ensure quality of care, and has adopted that standard by rule. See Rule 10-5.011(1)(f)5d. Quality of patient care is a particularly important criteria, and in this case the applicants have failed to show that approval would be consistent with this requirement of Section 381.705(1)(c). RHPF, Inc. v. Department of Health and Rehabilitative Services, 9 F.A.L.R. 2048, 2063 (HRS 1987).
Reasonable alternatives to these proposed programs may exist in District V, but there is no evidence in the record which would show that the applicants fully explored or considered them. The applicants have not met the requirement to review the probable economies and improvements in service that may be derived from joint or shared programs. Section 381.705(1)(d)(e), Florida Statutes.
There is a long-standing shortage of trained and experienced open heart surgery and intensive care RNs and technical support staff in the District. Existing programs have consistently experienced vacancies in these positions, despite aggressive recruiting efforts. These new programs would be competing with other existing providers for critical personnel, and approval of additional programs in District V would have an adverse impact on the ability of existing and approved programs to attract and maintain these trained nursing and technical personnel. Increased competition for personnel in short supply can reasonably be expected to increase personnel costs. Therefore, the applicants have failed to establish that necessary personnel resources and health manpower are available for these proposed new programs, as required by Section 381.705(1)(h). However, it has been stipulated that these applicants have the financial resources to finance proposed project costs. Section 381.705(1)(h).
The record fails to establish the long-term financial feasibility of either program. Assumptions used by the applicants in their pro forma are unreasonable, and are not supported by the record. The utilization projections upon which the financial feasibility of these new programs depend are not
credible. Existing market shares, referral patterns, and satisfaction with existing programs have not been taken into account. The applicants' inability to establish long-term financial feasibility also results in their inability to show that they will achieve 200 procedures by their third year, the service level required by the Department to ensure quality of care. The fact that Mease does not have an inpatient cardiac cath program was not taken into account in developing its pro forma, resulting in an unsubstantiated inflating of its utilization projections. St. Anthony's has inflated its revenue projections by erroneously including revenues it is already receiving, and incorrectly underestimating its Medicare percentage. Thus, the applicants have failed to meet the criteria found at Section 381.705(1)(i).
It has not been shown that approval of these applications will have a positive impact on the costs of providing open heart surgery. In fact, greater competition for limited trained personnel necessary to staff this program may actually increase personnel costs. It cannot be determined if any significant difference exists in charges proposed by the applicants, and charges at existing programs. Section 381.705(1)(l), Florida Statutes.
Section 381.705(1)(n) requires an assessment of the applicant's past and proposed provision of health care services to Medicaid patients and the medically indigent. While they have asserted that their open heart surgery programs would be available to the medically indigent, there is no definite commitment to charity care as a percentage of total patient days or total revenue. Both applicants do accept Medicaid patients, but as a percentage of total patient days, Medicaid patients at Bayfront and Children's exceed St. Anthony's. It was not established that open heart surgery programs are unavailable or inaccessible for indigent and Medicaid patients in District V.
These applicants do propose capital expenditures for the provision of new inpatient health care services, and as a result, Section 381.705(2), Florida Statutes, is relevant to the review of these applications. However, the applicants have failed to establish that they did study less costly, more efficient, or more appropriate alternatives to the new open heart surgery programs they have proposed, and therefore, they did not establish any basis upon which a finding could be made that such alternatives either do not exist, or are not practicable, as required by Section 381.705(2)(a). Since it has been found that open heart surgery is presently available and accessible to residents in District V, the applicants have also failed to meet the criteria for approval found at Section 381.705(2)(d), which provides that patients will experience serious problems in obtaining inpatient care of the type proposed. There is no competent substantial evidence which would show that existing providers of open heart surgery in District V are not providing such services in an appropriate and efficient manner, as specified by Section 381.705(2)(b).
Outmigration as a "Not Normal" Circumstance
It has previously been decided that outmigration cannot be used to vary the "actual use rate" calculated under the Department's numeric need formula, since Rule 10-5.011(1)(f)8 neither mentions nor makes provision for, the inclusion of any extrinsic evidence of either in or outmigration. In fact, the methodology contained in the rule refers specifically to "in the service area". St. Anthony's Hospital v. Department of Health and Rehabilitative Services, et al., 11 F.A.L.R. 2193, 2219 (DHRS 1989). However, while outmigration is not a factor in calculating the "actual use rate" used in the Department's numeric need methodology, it has been recognized as a "not normal", or special circumstance which may be considered in support of a CON application
when no numeric need is projected, since it may be indicative of a lack of access or availability of services within a District. Humana, Inc. v.
Department of Health and Rehabilitative Services, 469 So.2d 889, 891 (Fla. 1st DCA 1985); Bayonet Point Regional Medical Center v. Department of Health and Rehabilitative Services, 516 So.2d 995, 997 (Fla. 1st DCA 1987). Where special circumstances are established that remove a CON application from the Department's methodologies which are based upon local demand and need, the calculation of need based upon use rates and population figures within a particular service district is not required. University Community Hospital v Department of Health and Rehabilitative Services, et al., 472 So.2d 756, 758 (Fla. 2nd DCA 1985).
The applicants in this case have failed to establish, by competent substantial evidence, that significant outmigration is occuring from Pinellas County such that it should be considered a "not normal", or special circumstance. The significant outmigration for open heart surgery which is occuring is from Pasco County to Hillsborough County. However, there is an approved open heart surgery program to be located in Pasco County at Bayonet Point which will be available for residents of Pasco County who may choose to remain in Pasco County for such services rather than travel to Hillsborough County. Thus, any access or availability problem for residents of Pasco County has already been addressed with the approval of the Bayonet Point open heart surgery program. As has been found above, it was not shown in this case that existing facilities are inaccessible, unavailable, or that the quality of care at such facilities is lacking. Therefore, there is no basis upon which these applications could be approved under a "not normal" exception to the application of the Department's numeric need methodology, based upon outmigration.
In conclusion, CONs 5678 and 5679 should be denied based upon a balanced consideration of the criteria found at Section 381.705, Florida Statutes, and in particular those criteria discussed above relating to consistency with State and Local Health Plans and the Department's numeric need methodology, quality of care, availability and accessibility of existing programs, long-term financial feasibility, personnel availability and costs, and the impact which approval of this program would have on existing providers and health care costs. It was not established that outmigration exists as a "not normal" circumstance which should be used in reviewing the applications at issue in this case.
Based upon the foregoing, it is recommended that the Department enter a Final Order which denies the application of Mease for CON 5679, and of St.
Anthony's for CON 5678.
DONE AND ENTERED this 29th day of November, 1989 in Tallahassee, Florida.
DONALD D. CONN
Hearing Officer
Division of Administrative Hearings The DeSoto Building
1230 Apalachee Parkway
Tallahassee, Florida 32399-1550
Filed with the Clerk of the Division of Administrative Hearings this 29th day of November, 1989.
APPENDIX
Rulings on Proposed Findings of Fact filed by Mease:
Adopted in Finding 1.
Adopted in Finding 8.
Adopted in Finding 1.
Rejected as irrelevant and not based on competent substantial evidence. 5-6. Adopted in Finding 1.
7-8. Rejected as immaterial.
Rejected in Finding 31, and otherwise as immaterial.
Rejected as immaterial.
Rejected in Findings 34, 35 and otherwise as immaterial.
Adopted in Finding 24.
Rejected in Findings 31, 46.
Rejected as irrelevant and immaterial.
15-16. Rejected in Finding 43, and otherwise as immaterial.
17-18. Adopted in Finding 1, but otherwise Rejected as unnecessary, and not based on competent substantial evidence.
Rejected in Finding 11.
Adopted in Finding 7, but otherwise Rejected as unnecessary.
Rejected in Findings 11, 49.
rejected as immaterial and not based on competent substantial evidence.
Rejected in Finding 40.
24-33. Rejected in Finding 38, and otherwise as immaterial and not based on competent substantial evidence.
34-35. Rejected as irrelevant and immaterial.
36. Adopted in Findings 49, 50.
37-38. Rejected in Findings 21, 26.
39-43. Rejected in Finding 17, and otherwise as irrelevant and immaterial.
Adopted in Finding 38.
Rejected as irrelevant and immaterial.
46-48. Rejected in Finding 32, and otherwise as irrelevant.
49. Rejected in Finding 30.
50-51. Rejected as immaterial and unnecessary.
Rejected in Findings 45, 47.
Rejected as immaterial.
Adopted and Rejected in part in Finding 46.
Rejected as immaterial and irrelevant.
Adopted in Finding 40.
Rejected as unnecessary.
Rejected in Findings 7, 30 and otherwise as speculative.
59-62. Adopted in Finding 11, but otherwise Rejected as unnecessary and immaterial.
63-64. Rejected as not based on competent substantial evidence.
Adopted in Finding 2.
Adopted in Finding 11.
Rejected as unnecessary.
Adopted in Finding 30.
Rejected as immaterial and unnecessary.
Adopted and Rejected in part in Finding 51.
Adopted in Findings 15, 17.
Rejected in Finding 44, and otherwise as immaterial.
Rejected in Finding 31.
74-80. Adopted and Rejected, in part, in Findings 12, 19.
81-85. Adopted and Rejected, in part, in Finding 20 and otherwise Rejected as immaterial.
Rejected as not based on competent substantial evidence.
Rejected in Finding 50, and otherwise as irrelevant. 88-89. Rejected as immaterial and irrelevant.
Rejected in Findings 7, 30, and otherwise as unnecessary.
Rejected as irrelevant and immaterial.
Rejected as immaterial.
Rejected in Findings 7, 30, and otherwise as unnecessary.
Rejected in Findings 27, 49.
Rejected in Findings 1, 29, and otherwise as immaterial.
Rejected as unnecessary and immaterial.
Adopted in Finding 24, but otherwise Rejected in Findings 1, 29.
Rejected in Findings 38, 41.
99-100. Rejected in Finding 46, and otherwise as immaterial.
Rejected in Finding 43.
Rejected in Finding 45.
Rejected in Finding 46.
104-105 Rejected in Findings 37, 38, 41.
106-107 Rejected in Findings 34-36.
Rejected in Finding 38.
Adopted, in part, in Finding 12.
Rulings on Proposed Findings of Fact filed by St. Anthony's:
Rejected as unnecessary.
Adopted in Findings 12, 24.
Adopted in Finding 12. 4-6. Adopted in Finding 9.
Adopted in Findings 8, 9.
Rejected as immaterial.
Adopted in Findings 20, 44.
10-13. Adopted in Finding 2, but otherwise Rejected as unnecessary and cumulative.
14-15. Rejected as immaterial and unnecessary.
Rejected in Finding 31.
Adopted in Finding 7.
18-20. Adopted in Finding 40, but otherwise Rejected as 21-22. Adopted in Findings 7, 20.
Adopted in Finding 2.
Rejected in Finding 11.
Rejected in Finding 11, and otherwise as immaterial. 26-27. Adopted and Rejected, in part, in Finding 11, and
otherwise Rejected as immaterial.
Adopted in Findings 4, 5.
Rejected as irrelevant and immaterial.
Rejected as irrelevant and not based on competent substantial evidence.
Adopted in Finding 40.
Rejected in Finding 20.
Rejected in Finding 18, and otherwise as irrelevant.
34-36. Rejected in Findings 11, 20 and otherwise as irrelevant. 37-42. Rejected in Findings 28, 30, 31 and otherwise as not
based on competent substantial evidence.
43-47. Rejected in Finding 28.
Rejected as not based on competent substantial evidence.
Adopted in Finding 17.
Adopted in Findings 18, 20.
Rejected in Finding 18.
Rejected in Findings 18, 20.
Adopted in Finding 40.
Adopted in Finding 20.
Rejected in Findings 13, 14, 16.
Rejected in Findings 16, 27, 30, 31.
Rejected as immaterial, unnecessary and cumulative.
Adopted in Finding 11, but otherwise Rejected as irrelevant.
Rejected in Findings 14, 30.
Rejected in Findings 17, 18, 20.
Rejected as immaterial and irrelevant.
Rejected in Findings 27, 37, 40, 41.
Rejected in Findings 11, 20 and otherwise as irrelevant and immaterial.
64-66. Rejected in Finding 17, and otherwise as irrelevant and not based on competent substantial evidence.
67-68. Adopted in Finding 24, but Rejected in Finding 27.
Rejected in Finding 41.
Adopted in Finding 36.
71-80. Adopted in Finding 44, but Rejected in Findings 43, 45 and otherwise as not based on competent substantial evidence.
81-85. Adopted in Finding 36, but Rejected in Findings 34, 35.
86. Adopted in Finding 7, but otherwise Rejected as unclear. 87-90. Rejected in Findings 17, 47-49, 51.
Rejected in Findings 27, 51.
Rejected in Findings 34, 35, 48.
Adopted in Findings 1, 52.
94-99. Adopted in Finding 52, but otherwise Rejected as immaterial and not based on competent substantial
evidence.
Rulings on Proposed Findings of Fact filed by the Department:
Adopted in Findings 12, 24.
Adopted in Findings 8, 9. 3-6. Adopted in Finding 2.
Rejected as unnecessary and immaterial.
Rejected in Finding 31, and otherwise as not based on competent substantial evidence.
9-10. Adopted in Finding 5, but otherwise Rejected as immaterial and unnecessary.
Adopted in Finding 31.
12-15. Adopted in Finding 4, but otherwise Rejected as immaterial and unnecessary.
Adopted in Finding 28.
Rejected in Finding 43. 18-19. Adopted in Finding 28.
Adopted in Findings 7, 20, 52, but otherwise Rejected as immaterial and unnecessary.
Adopted in Finding 1.
Adopted in Finding 19.
Adopted in Finding 7.
Adopted in Finding 3, but otherwise Rejected as immaterial and unnecessary.
Adopted in Findings 7, 30.
Adopted in Finding 45.
Adopted in Finding 50.
Adopted in Finding 20, but otherwise Rejected as unnessary.
Adopted in Findings 13, 30, 35.
Adopted in Finding 40.
Adopted in Finding 17.
Adopted in Finding 18.
Rejected as unnecessary and cumulative.
Adopted in Finding 21, but otherwise Rejected as unnecessary and cumulative.
Adopted in Finding 17.
Adopted in Finding 18.
37-38. Adopted in Finding 20.
39. Adopted in Findings 34, 35. 40-41. Adopted in Finding 30.
42. Adopted in Findings 45, 47-51.
43-44. Rejected as unnecessary and cumulative. Rulings on Proposed Findings of Fact filed by Plant:
Adopted in Finding 1.
Adopted in Finding 2.
Adopted in Finding 3.
Adopted in Finding 4.
Adopted in Finding 1.
Adopted in Findings 16, 17.
Adopted in Finding 11.
Adopted in Findings 7, 30.
Rejected as immaterial and unnecessary.
Adopted in Finding 17.
11-12. Adopted in Finding 19.
13-14. Adotped in Findings 19, 20.
15-16. Adopted in Finding 1, but otherwise Rejected as immaterial and unnecessary.
17. Rejected as unnecessary.
18-19. Adopted in Findings 7, 30.
Adopted in Finding 36.
Adopted in Findings 35, 47, but otherwise Rejected as unnecessary.
Adopted in Findings 25, 27 but otherwise Rejected as immaterial and unnecessary.
Adopted in Finding 34.
Adopted in Findings 37, 38.
25-26. Adopted in Finding 46, but otherwise Rejected as unnecessary.
27. Rejected in Finding 42.
28-30. Adopted in Findings 45, 50.
Ruling on Proposed Findings of Fact filed by Bayfront/Children's:
Adopted in Finding 2.
Adopted in Finding 9.
Adopted in Finding 5.
Rejected as unnecessary and immaterial.
Adopted in Finding 5.
Adopted in Finding 31, but otherwise Rejected as cumulative.
Adopted in Finding 4.
Rejected as immaterial and cumulative.
Adopted in Findings 4, 49.
10-13. Adopted in Finding 4, but otherwise Rejected as unnecessary and cumulative.
14-17. Adopted in Finding 28, but otherwise Rejected as unnecessary and cumulative.
18-19. Rejected as immaterial and unnecessary.
20-28. Adopted in Findings 39, 44, but otherwise Rejected in Finding 43 and as immaterial and unnecessary.
Adopted in Finding 7, but otherwise Rejected as unnecessary and immaterial.
Adopted in Findings 11, 49, but otherwise Rejected as unnecessary.
Adopted in Findings 7, 30, 40.
Rejected as unnecessary and immaterial.
Adopted in Finding 17.
Adopted in Finding 18.
Rejected as cumulative.
Adopted in Finding 21, but otherwise Rejected as unnecessary.
Adopted in Finding 17.
Adopted in Findings 49, 51. 39-40. Adopted in Finding 18.
41-44. Adopted in Finding 20, but otherwise Rejected as unnecessary and cumulative.
Adopted in Finding 30, but otherwise Rejected as cumulative and unnecessary.
Adopted in Finding 18, but otherwise Rejected as cumulative and unnecessary.
Adopted in Findings 34, 35, 47, 48.
Adopted in Finding 51.
49-51. Adopted in Findings 30, 31.
Adopted in Findings 34, 35, 47, 48.
Rejected as unnecessary and immaterial.
Rejected as cumulative.
COPIES FURNISHED:
W. David Watkins, Esquire
P. O. Box 6507
Tallahassee, FL 32314-6507
Ivan Wood, Esquire 1221 Lamar, Suite 1400 Four Houston Center
Houston, TX 77010-3015
John H. Parker, Esquire 1200 Carnegie Building
133 Carnegie Way Atlanta, GA 30303
Guyte McCord, Esquire
P. O. Box 82 Tallahassee, FL 32302
Cynthia Tunnicliff, Esquire
P. O. Drawer 190 Tallahassee, FL 32302
Stephen A. Ecenia, Esquire
P. O. Drawer 1838 Tallahassee, FL 32301
Darrell White, Esquire
P. O. Box 2174
Tallahassee, FL 32316-2174
S. Power, Agency Clerk 1323 Winewood Boulevard Tallahassee, FL 32399-0700
John Miller, General Counsel 1323 Winewood Boulevard
Tallahassee, FL 32399-0700
Gregory Coler, Secretary 1323 Winewood Boulevard
Tallahassee, FL 32399-0700
=================================================================
AGENCY FINAL ORDER
=================================================================
STATE OF FLORIDA
DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES
MEASE HEALTH CARE,
Petitioner,
CASE NO.: 89-0726
vs. CON NO.: 5679
DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES,
Respondent,
and
MORTON F. PLANT HOSPITAL, INC.,
Intervenor.
/ ST. ANTHONY'S HOSPITAL,
Petitioner,
vs. CASE NO.: 89-0727
CON NO.: 5678
DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES,
Respondent,
and
BAYFRONT MEDICAL CENTER and ALL CHILDREN'S HOSPITAL, INC.,
Intervenors.
/
FINAL ORDER
This cause came on before me for the purpose of issuing a final agency order. The Hearing Officer assigned by the Division of Administrative Hearings (DOAH) in the above-styled case submitted a Recommended Order to the Department of Health and Rehabilitative Services (HRS). A copy of that Recommended Order is attached hereto.
RULING ON EXCEPTIONS FILED BY ST. ANTHONY'S HOSPITAL
St. Anthony's takes exception to the Hearing Officer's grant of the Joint Motion in Limine and for Official Recognition filed by Intervenors, Bayfront Medical Center ("Bayfront") and All Children's Hospital, Inc. ("All Childrens's"), excluding any proof on evidence or issues previously addressed by the parties in St. Anthony's Hospital vs. Department of Health and Rehabilitative Services, et al., 11 FALR 2193 (HRS 1989), except as to evidence of changed circumstances. St. Anthony's also excepts to findings of fact affected by the ruling on the Motion. The Hearing Officer properly ruled on the Motion; therefore, the exception is denied.
St. Anthony's excepts to the inclusion of Bayonet Point in the inventory of existing and approved open heart programs in District V and affected findings of fact. Bayonet Point is properly included in the inventory. The exception is denied.
St. Anthony's takes exception to those portions of the findings of fact at paragraph 20 relating to whether outmigration of open heart surgery patients from District V to District VI constitutes a "not normal" circumstances which would justify approval of St Anthony's application. The Hearing Officer's findings that outmigration from Pinellas County is insignificant and that not normal circumstances were not proved are supported by competent, substantial evidence; therefore, the exception is denied.
St. Anthony's takes exception to the findings of fact at paragraphs 28 and 34 relative to the Hearing Officer's conclusion that certain evidence presented at hearing relating to such findings constituted an improper update or amendment to St. Anthony's application. The exception is denied.
St. Anthony's takes exception to the findings of fact at paragraphs 28 and 30 relative to quality of care and capacity at the All Children's/Bayfront Program. The findings are supported by competent, substantial evidence; therefore, the exception is denied.
St. Anthony's takes exception to the findings of fact at paragraphs 39, 44, and 45 insofar as they relate to St. Anthony's fixed price commitment. The Hearing Officer's finding at paragraph 44 that St. Anthony's fixed price commitment is not a "not normal" circumstance which can be used as a basis for approval of an application notwithstanding lack of numeric need is correct. The exception is denied.
St. Anthony's asserts that findings of fact 33, regarding exploration of possible alternatives to a new program, is tainted by evidence received in an unrelated case. In finding of fact 33 the Hearing Officer comments on the joint program at Bayfront and All Children's which is operating successfully. He also finds that a less costly alternative to approval of either application is greater utilization of existing programs. Finally, he notes the approval of a program at Bayonet Point. The findings of the Hearing Officer are supported by competent, substantial evidence in the record of this proceeding. Counsel does not request that this case be remanded to the Division of Administrative Hearings; but instead, urges the department to reject the Recommended Order and approve St. Anthony's application. If the Hearing Officer had inadvertently considered non-record evidence, remand would be the appropriate remedy. I find no merit to counsel's assertion. The exception is denied.
RULING ON EXCEPTIONS
FILED BY MEASE HEALTH CARE (MEASE)
Mease excepts to the Hearing Officer's ruling on the Motion in Limine filed by Morton Plant. The exception is denied.
Mease excepts to finding of fact one (1). The findings of fact contained therein are supported by competent, substantial evidence; therefore, the exception is denied. Official notice is taken of Florida Medical Center et al vs. HRS, Case Number 88-3970R, 88-4018R, and 88-4019R (DOAH 6/29/89). The Hearing Officer's comment regarding Mease.'s proposal to do outpatient angioplasties does not affect the decision in this case due to the lack of need for a new open heart surgery program.
Mease takes exception to findings of fact 13, 17, 18, 19, and 20, and all related conclusions of law, to the extent that they are based upon the Hearing Officer's legal conclusion that use of the word "procedures" in the department's numeric need methodology at Florida Administrative Code Rule 10- 5.011(1)(f)8, and objective 4.2 of the State Health plan, should be interpreted to mean "cases". To accept Mease's position would result in an overstated need. Quality of care in a hospital's open heart surgery program is directly related to the volume of open heart cases. (See finding of fact 22. at page 16 of the Recommended Order). The exception is denied.
Exception 4 reiterates St. Anthony's exception 4 and is denied.
Mease's exceptions to findings of fact 29, 32, 33, 52, and 53 are denied as the findings are supported by competent, substantial evidence.
FINDINGS OF FACT
The Department hereby adopts and incorporates by reference the findings of fact set forth in the Recommended Order except where inconsistent with the conclusions of law stated in this Order.
CONCLUSIONS OF LAW
The Department hereby adopts and incorporates by reference the conclusions of law set forth in the Recommended Order except where inconsistent with the following:
Numeric need for open heart surgery programs is calculated by use of the formula found in Section 10-5.011(1)(f), Florida Administrative Code.
Subparagraph 11 of the numeric need rule reads as follows:
There shall be no additional open heart surgery programs unless:
the service volume of each existing and approved open heart surgery program within the service area is operating at and is expected to operate at a minimum of
350 adult open heart surgery cases per year . . .
the conditions specified in subparagraph 5.4, above, will be met by the proposed program.
(b) no additional open heart surgery programs shall be approved which would reduce the volume of existing open heart surgery facilities below 350 open heart surgery procedures annually for adults .
Section 10-5.011(1)(f)11, Florida Administrative Code.
The 350 procedure level is an important threshold bearing on quality of care (see finding 21 Recommended Order page 16). It has been found repeatedly in administrative review of applications for open heart surgery programs that there is a direct relationship between the volume of procedures and quality of care, and that the patient death rate increases substantially in hospitals doing less than 350 procedures per year. See St. Joseph's Hospitals vs. HRS, 11 FALR 5793 at 5801, 5803, and 5805 (HRS 6/23/89); Sarasota County Public Hospital Board vs. HRS, 11 FALR 6248 at 6258, Humana of Florida, Inc. and Florida Hospital vs. HRS et al, Case Numbers 89-1279, 89-1280, 89-1282, and 89- 1283,
Recommended Order of December 12, 1989, page 13, findings 19 and 20; Hillsborough County Hospital Authority and Lakeland Regional Medical Center vs. HRS, Case Numbers 89-1286 and 89- 1287, Recommended Order of December 7, 1989,
page 33, finding 55.
I conclude that the rule should be applied as written and that numeric need should be found only where each existing and approved open heart surgery program within the service area is operating at a minimum level of 350 open heart cases per year. The rule is sufficiently flexible in that it allows approval despite lack of numeric need where there is a "not normal" situation. 1/ It is good health planning to allow newly approved providers to become operational and reach the 350 procedure level as soon as possible and before new programs are authorized.
I am not unmindful that the conclusion reached here departs from an established practice of interpreting subparagraph 11 of the need rule by averaging the number of cases done by the existing providers and finding subparagraph 11 to be satisfied if the average was 350 cases or more. As previously stated, I am now satisfied that application of the rule as written is more consistent with sound health planning. I also note that in Lakeland Regional Medical Center et al vs. HRS et al, Case Number 89-2157R (DOAH 11/15/89), the averaging policy was declared to be an invalid exercise of delegated legislative authority.
Based upon the foregoing, it is
ADJUDGED, that the application of Mease Health Care, Inc. for CON 5679 be DENIED. It is further adjudged that the application of St. Anthony's Hospital for CON 5678 be DENIED.
DONE and ORDERED this 23 day of January, 1990, in Tallahassee, Florida.
Gregory L. Coler Secretary
Department of Health and Rehabilitative Services
by Deputy Secretary for Programs
ENDNOTE
1/ All applicable criteria are weighed in making a decision on a CON application and the lack of numeric need may be outweighed where there is a not normal situation. Subparagraph 2 of Section 10-5.011(1)(f), Florida Administrative Code.
A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO JUDICIAL REVIEW WHICH SHALL BE INSTITUTED BY FILING ONE COPY OF A NOTICE OF APPEAL WITH THE AGENCY CLERK OF HRS, AND A SECOND COPY, ALONG WITH FILING FEE AS PRESCRIBED BY LAW, WITH THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE THE AGENCY MAINTAINS ITS HEADQUARTERS OR WHERE A PARTY RESIDES. REVIEW PROCEEDINGS SHALL BE CONDUCTED IN ACCORDANCE WITH THE FLORIDA APPELLATE RULES. THE NOTICE OF APPEAL MUST BE FILED WITHIN 30 DAYS OF RENDITION OF THE ORDER TO BE REVIEWED
Copies furnished to:
Guyte McCord, Esquire MACFARLANE, FERGUSON, ALLISON
& KELLY
215 S. Monroe Street, Ste 804 Post Office Box 82
First Florida Bank Bldg. Tallahassee, FL 32302
W. David Watkins, Esquire OERTEL, HOFFMAN, FERNANDEZ, &
COLE, P.A.
P. O. Box 6507 Tallahassee, FL 32314-6507
Ivan Wood, Esquire 1221 Lamar, Suite 1400 Four Houston Center Houston, TX 77010-3015
John H. Parker, Esquire 1200 Carnegie Building
133 Carnegie Way Atlanta, GA 30303
Cynthia Tunnicliff, Esquire Post Office Drawer 190 Tallahassee, FL 32302
Stephen A. Ecenia, Esquire Post Office Drawer 1838 Tallahassee, FL 32301
Darrell White, Esquire Post Office Box 2174 Tallahassee, FL 32316-2174
Donal D. Conn Hearing Officer
Division of Administrative Hearings The DeSoto Building
1230 Apalachee Parkway
Tallahassee, FL 32399-1550
FALR
Post Office Box 385 Gainesville, FL 32602
Wayne McDaniel (PDDR) Susan Lincicome (PDRH)
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that a copy of the foregoing was sent to the above-named people by U.S. Mail this 25 day of January, 1990.
R. S. Power, Agency Clerk Assistant General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Building One, Room 407
Tallahassee, Florida 32399-0700 904/488-2381
| Issue Date | Proceedings |
|---|---|
| Nov. 29, 1989 | Recommended Order (hearing held , 2013). CASE CLOSED. |
| Issue Date | Document | Summary |
|---|---|---|
| Jan. 23, 1990 | Agency Final Order | |
| Nov. 29, 1989 | Recommended Order | Certificate Of Need denied primarily because lack of consistency with state and local health plans, quality of care, and impact on existing programs. |
