STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

MARTIN MEMORIAL HOSPITAL )

ASSOCIATION, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 89-1451RU

)

DEPARTMENT OF HEALTH AND )

REHABILITATIVE SERVICES, )

)

Respondent, )

and )

) JFK MEDICAL CENTER, INC., AMI-PALM ) BEACH GARDENS MEDICAL CENTER and ) BOCA RATON COMMUNITY HOSPITAL, INC. )

)

Intervenors. )

)

FINAL ORDER OF PARTIAL DISMISSAL

This matter came to be considered upon the filing of a Motion to Dismiss on behalf of the Department of Health and Rehabilitative Services, Respondent, on July 18, 1989, and Responses to an Order to Show Cause entered on July 24, 1989. In considering the Respondent's Motion to Dismiss, the factual allegations set forth in the Petition filed by Martin Memorial Hospital Association, Inc., must be accepted as true. Pizzi v. Central Bank and Trust Co., 250 So.2d 895 (Fla.

1971); St. Francis Parkside Lodge of Tampa Bay v. Department of Health and Rehabilitative Services, 486 So.2d 32 (Fla. 1st DCA 1986). However, official recognition can also be taken of the Petition filed by Martin Memorial Hospital in Case Number 89-1649, which was previously consolidated herewith. Rule 221- 6.020, Florida Administrative Code.

This action presents two distinct challenges to the Respondent's "Notice of Open Heart Surgery Program Fixed Need Pool" published in the Florida Administrative Weekly on February 10, 1989: (1) Whether the need numbers published in said Notice are invalid since they have not been adopted pursuant to rulemaking proceedings; and, (2) Whether the Respondent's policy regarding administrative review of its fixed need determinations is also an invalid rule due to its not having been adopted through formal rulemaking procedures.

The Petitioner, Martin Memorial Hospital Association, Inc., is a 336 bed acute care hospital in Martin County, Florida, which is located in the Respondent's Service District IX. On or before February 27, 1989, the Petitioner timely filed with the Respondent a Letter of Intent to file a Certificate of Need application for the establishment of a new open heart surgery program in District IX. The challenged Notice states that the Respondent has projected, as a fixed need pool, that no additional open heart surgery programs are needed in District IX for January 1991, and further provides a point of entry for persons whose substantial interests are affected

by this Notice to request a hearing under Section 120.57, Florida Statutes. In fact, Petitioner has availed itself of that point of entry by filing a Petition in Case Number 89-1649, which seeks a hearing pursuant to Section 120.57 to resolve certain factual disputes concerning the numbers published in said Notice.

In this proceeding, Petitioner asserts, in part, that the Respondent's "calculation of net need" is an improperly adopted rule, because "this need determination implements law and policy, and is a statement of general applicability." See paragraphs 6 and 9 of the Petition. By its Motion to Dismiss, the Respondent asserts that the numbers published in the Notice are not rules since they are limited in time to one specific batching cycle, and to specific geographical areas. It is, therefore, necessary to initially resolve whether this Notice, and specifically the numbers contained therein, are "rules" which are invalid since they have not been formally adopted as such.

In Department of Commerce v. Matthews Corporation, 358 So.2d 256 (Fla. 1st DCA 1978), the Court rejected a Section 120.56 challenge which had been brought against certain wage rate guidelines of the Department of Commerce since they had both temporal and geographical limitations, and were, therefore, not statements of general applicability. Similarly, the need numbers which are challenged herein apply only to one batching cycle and only for the specific geographical areas set forth in the Notice. In this case, the challenged determination of "no need" applies only to District IX, which includes Martin County, in January 1991. Thus, it would appear that the geographic and temporal limitations standard established by the Court in Matthews are present in this case.

However, Petitioner seeks to distinguish Matthews from the facts in this case by relying on Balsam v. Department of Health and Rehabilitative Services,

452 So.2d 976 (Fla. 1st DCA 1984). In Balsam, the agency imposed a moratorium on receipt of CON applications, and thereby deviated from, or suspended a formally promulgated rule. Although the moratorium was of limited duration, the Court characterized the effect of the moratorium as pervasive and consistent, since it was consistently applied to all applications while in effect, and, therefore, held it was an invalid rule. Balsam, supra at 978.

In the case at bar, the Respondent has not deviated or suspended any formally adopted rule by publication of this Notice, but has simply informed potentially interested persons of the product or result of calculations which it has performed pursuant to need criteria set forth in formally adopted rules.

The Respondent has applied, not suspended or deviated from, the need formula established by rule, and mathematically calculated the need for open heart programs in January 1991.

The numbers published in said Notice have no consistent or pervasive effect in their own right, nor do they purport, in and of themselves, to create certain rights, adversely affect others, or require compliance. State, Department of Administration v. Harvey, 356 So.2d 323 (Fla. 1st DCA 1978); Hill v. School Board of Leon County, 351 So.2d 732 (Fla. 1st DCA 1977). This is so because, at best, the effect of these numbers on the Petitioner is indirect, speculative, and inconclusive, since need is only one of the criteria which an applicant for a CON must satisfy. See Section 381.705, Florida Statutes. Even if there is no mathematical need, a CON may still be issued if, upon a balancing of all criteria, an applicant has established its entitlement to a CON, and conversely, just because there is a mathematical need does not mean that a CON must be issued to any applicant unless that applicant establishes its entitlement under

a balancing of all the statutory and rule criteria. Department of Health and Rehabilitative Services v. Johnson & Johnson, 447 So.2d 361 (Fla. 1st DCA 1984); Humana, Inc. v. Department of Health and Rehabilitative Services, 469 So.2d 889 (Fla. 1st DCA 1985). In fact, the weight given to each criteria, including need, is not fixed, but varies depending upon the facts of each case. North Ridge General Hospital, Inc. 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). As has been recently recognized by the First District Court of Appeal, an agency statement or provision which has at most an indirect effect upon a party does not have to be promulgated as a rule. Department of Transportation v. Blackhawk Quarry Co. of Florida, Inc., 528 So.2d 447, 450 (Fla. 1st DCA 1988).

The need numbers contained in the Respondent's Notice are the communication of the result of the Respondent's calculations, pursuant to its need rule methodology, and if those calculations are factually in error, they may be challenged in a Section 120.57 proceeding. Indeed, the Notice itself establishes a point of entry for that very purpose, and Petitioner has availed itself of this proper avenue to dispute the factual accuracy of these numbers in Case Number 89-1649. Allegations about the improper application of a need formula set forth in a formally adopted rule, do not transform a Section 120.57 proceeding, disputing the allegedly erroneous result of those calculations, into a Section 120.56 rule challenge, or transform those allegedly erroneous results into rules which should be formally promulgated.

The numbers contained in the Notice which is challenged by the Petitioner do not constitute "rules" because they have both temporal and geographical limitation, and their effect on the Petitioner is indirect, speculative and inconclusive. While the moratorium in Balsam had a direct and consistent effect on all potential CON applicants, the published numbers herein are simply one of several criteria against which the Respondent reviews CON applications, and the factual accuracy of the Respondent's determination of those numbers is itself subject to challenge in a Section 120.57 proceeding. See Consolidated Cases Numbered 89-1649 & 89-1650.

It should be noted that the Petitioner also asserts that the Respondent's alleged policy regarding administrative review of its fixed need determinations is invalid since that policy constitutes a rule which has not been formally adopted. See paragraphs 4 and 12(3) of the Petition. The Respondent's Motion to Dismiss addressed only Petitioner's challenge to its mathematical calculations, as expressed in the numbers published in the Notice. Therefore, neither the Respondent nor the Intervenor, JFK Medical Center, Inc., in its Response have presented any basis or argument in support of dismissal of this distinct aspect of the Petitioner's challenge.

Accordingly, based upon the authorities cited above, it is ORDERED THAT:

1. Case Number 89-1451RU is hereby partially DISMISSED, insofar as it challenges the Respondent's Notice, and the numbers contained therein, since these are not "rules" subject to review under Section 120.56, Florida Statutes, and because the factual accuracy of those numbers is properly presented in Petitioner's Section 120.57 proceeding, Case Number 89-1649;

2. Paragraphs 6, 9, 10, 11, and 12(2) of the Petition filed herein are STRICKEN, since they present the issue which has been dismissed, and are, therefore, irrelevant to the remaining issue in this case; and

   
   

3. Pursuant to the Order of Abeyance previously entered herein, this case shall remain in ABEYANCE until November 27, 1989, or until such time sooner as the parties determine that this matter is ready to be set for final hearing.

DONE AND ORDERED this 23rd day of August, 1989, in Tallahassee, Florida.

COPIES FURNISHED:

Byron B. Mathews, Jr., Esquire McDERMOTT, WILL & EMERY

700 Brickell Avenue

Miami, FL 33131-2802

David Watkins, Esquire

P. O. Box 6507 Tallahassee, FL 32314-6507

Lesley Mendelson, Esquire Ft. Knox Executive Center 2727 Mahan Drive

Tallahassee, FL 32308

Robert A. Weiss, Esquire The Perkins House

118 N. Gadsden St. Tallahassee, FL 32301

Thomas D. Watry, Esquire 1200 Carnegie Building

133 Carnegie Way Atlanta, GA 30303

Michael J. Cherniga, Esquire

101 East College Avenue Tallahassee, FL 32301

DONALD D. CONN

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 23rd day of August, 1989.

William B. Wiley, Esquire Darrell White, Esquire

600 First Florida Bank Building Tallahassee, FL 32301

NOTICE OF RIGHT TO JUDICIAL REVIEW

A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER OF PARTIAL DISMISSAL MAY BE ENTITLED TO JUDICIAL REVIEW PURSUANT TO SECTION 120.68, FLORIDA STATUTES. REVIEW PROCEEDINGS ARE GOVERNED BY THE FLORIDA RULES OF APPELLATE PROCEDURE. SUCH PROCEEDINGS ARE COMMENCED BY THE FILING OF ONE COPY OF A NOTICE OF APPEAL WITH THE CLERK OF THE DIVISION OF ADMINISTRATIVE HEARINGS, AND A SECOND COPY, ACCOMPANIED BY FILING FEES PRESCRIBED BY LAW, WITH THE CLERK OF THE DISTRICT COURT OF APPEAL, FIRST DISTRICT, OR WITH THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE THE PARTY RESIDES. THE NOTICE OF APPEAL MUST BE FILED WITHIN THIRTY DAYS OF THE RENDITION OF THE ORDER TO BE REVIEWED.

Docket for Case No: 89-001451RU

Orders for Case No: 89-001451RU