STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

MTR-SEFLA and MTR-CENFLA, )

)

Petitioners, )

)

vs. ) CASE NO. 90-0362

)

DEPARTMENT OF HEALTH AND )

REHABILITATIVE SERVICES, )

)

Respondent. )

)

RECOMMENDED ORDER OF DISMISSAL

Respondent's motion for dismissal came on for hearing in Tallahassee, Florida before Robert T. Benton, II, Hearing Officer of the Division of Administrative Hearings, on March 16, 1990.

APPEARANCES

For Petitioners: Donna H. Stinson, Esquire

MOYLE, FLANIGAN, KATZ FITZGERALD & SHEEHAN, P.A.

The Perkins House, Suite 100

118 North Gadsden Street Tallahassee, FL 32301

For Respondent: Lesley Mendelson, Esquire

Fort Knox Executive Center 2727 Mahan Drive

Tallahassee, FL 32308 STATEMENT OF THE ISSUE

Whether a purveyor of medical services or equipment has the requisite standing, or a sufficiently substantial interest, to seek exemption from certificate of need review for hospitals with whom it might contract, under whose auspices and on whose grounds patients might ultimately receive services?

PRELIMINARY STATEMENT

Because respondent Department of Health and Rehabilitative Services (HRS) has filed a motion to dismiss, all allegations in petitioners' joint petition for formal administrative hearing are assumed true, for purposes of deciding the motion. Excerpts from the petition for formal administrative hearing comprise the following, assumed

FINDINGS OF FACT

1. Petitioners are registered limited partnerships, organized approximately two years age to acquire and operate mobile gallstone lithotripters.

   
   

2. [E]ach intend[s] to purchase a mobile gallstone (biliary) lithotripter, and to transport such equipment to various hospitals throughout the state, to provide lithotripsy on an outpatient basis. The equipment would be in a van, parked on the premises of such hospitals. Fees would be charged directly to patients, and the hospitals would have no capital investment in the equipment. The lithotripter appears to meet the definition of "major medical equipment", under s. 381.702(16), Florida Statutes.

   
   

3. On April 21, 1989, HRS published a notice in the Florida Administrative Weekly, that, effective April 13, 1989, acquisition of major medical equipment by a health care facility was subject to CON review, whether for inpatients or outpatients. Petitioners are not health care facilities, but HRS has interpreted "acquisition" to mean "use", even where no ownership or expenditure is involved.

   
   

4. On October 13, 1989, petitioners, through undersigned counsel, requested that the policy be waived, based on an affidavit [from one hospital] indicating that negotiations had been pending prior to April 13, 1989, on the understanding that no CON was necessary.

   
   

5. By letter dated November 29, 1989, HRS rejected petitioner's request, and determined that each of the 26 hospitals desiring to enter into an agreement with petitioners would have to file an application for a CON. It is this determination which is contested by petitioners.

   
   

6. The relief requested is a determination that petitioners are authorized to purchase and operate a biliary lithotripter as described above, without the necessity of CON applications on behalf of all the hosp[it]als.

   
   

   CONCLUSIONS OF LAW

   
   

7. Since HRS transmitted the petition for formal administrative hearing to the Division of Administrative Hearings, in accordance with Section 120.57, Florida Statutes (1989), the "division has jurisdiction over the formal proceeding," Section 120.57(1)(b)3., Florida Statutes (1989), if the petition is sufficient to initiate a formal proceeding.

   
   

8. Only persons whose "substantial interests" are to be determined are authorized to invoke the Administrative Procedure Act's sometimes cumbersome and expensive formal administrative procedures. The courts have defined "substantial interest" to mean substantial interest of a kind protected by the statute or rule under which an agency proposes to act. ASI, Inc. v. Public Service Commission, 334 So.2d 594 (Fla. 1976); Agrico Chemical Co. vs. Department of Environmental Regulation, 406 So.2d 478 (2d DCA 1981) rev. den. sub nom. Freeport Sulphur Co. v. Agrico Chemical Co., 415 So.2d 1359 and Sulphur Termina1s Co. v. Agrico Chemical Co., 415 So.2d 1361 (Fla. 1982). Not only must a party plead and prove that agency action threatens injury in fact of sufficient immediacy, Boca Raton Mausoleum, Inc. v. State of Florida, Department of Banking and Finance, 511 So.2d 1060 (Fla. 1st DCA 1987), but, in order to be entitled to a formal administrative hearing, a party must also plead adverse impact of a type or nature that the pertinent substantive law is intended to protect against. Florida Society of Opthalmology v. State Board of Optometry,

   532 So.2d 1279 (Fla. 1st DCA 1988); Village Park Mobile Home Ass'n Inc. v. State Department of Business Regulation, Division of Florida Land Sales, Condominiums, and Mobile Homes, 506 So.2d 426 (Fla. 1st DCA 1987); Agrico Chemical Co. v. Department of Environmental Regulation, 406 So.2d 478 (2d DCA 1981) rev. den. sub nom. Freeport Sulphur Co. v. Agrico Chemical Co., 415 So.2d 1359 and Sulphur Terminals Co. v. Agrico Chemical Co., 415 So.2d 1361 (Fla. 1982).

   
   

9. Here petitioners have pleaded that discussions have taken place with hospitals with respect to the use of equipment which petitioners intend to purchase. The petition does not plead that any purchase has occurred or that agreement with even a single hospital to furnish biliary lithotripsy services has been reached. If and when petitioners purchase gallstone lithotripters, if and when third party hospitals contract with petitioners, HRS may act against any hospital contracting without a certificate of need. Both the necessity for petitioners themselves to take additional steps, see Department of Offender Rehabilitation v. Jerry, 353 So.2d 1230 (Fla. 1st DCA 1978), and the necessity for third parties other than the agency to act render the injury in fact of which petitioners complain speculative and of insufficient immediacy. Boca Raton Mausoleum, Inc. v. State of Florida, Department of Banking and Finance,

   511 So.2d 1060 (Fla. 1st DCA 1987); Village Park Mobile Home Association, Inc.

   v. State Department of Business Regulation, Division of Florida Land Sales, Condominiums, and Mobile Homes, 506 So.2d 426 (Fla. 1st DCA 1987).

   
   

10. Nor have petitioners, who have pleaded that they are not health care facilities, pleaded the existence of a substantial interest of a kind or nature the certificate of need statutes and rules are intended to protect. At the hearing on HRS' motion to dismiss, HRS' counsel conceded petitioners' right to offer biliary lithotripsy services without obtaining a certificate of need, as long as they do so on their own, or in conjunction with physicians in private practice or otherwise independently of the health care providers HRS regulates under the certificate of need law, Section 381.701 et. seq., Florida Statutes (1989). Petitioners are invoking rights to which third parties, the hospitals with whom they hope to contract, are allegedly entitled. Much as manufacturers of medical equipment fall outside the purview of the certificate of need laws, so petitioners are beyond the reach of the law's "regulatory statutory purpose." Boca Raton Mausoleum, Inc. v. State of Florida, Department of Banking and Finance, 511 So.2d 1060, 1065 (Fla. 1st DCA 1987).

    
    

11. Economic impact alone is not enough. Agrico Chemical Co. v. Department of Environmental Regulation, 406 So.2d 478 (2d DCA 1981) rev. den. sub nom. Freeport Sulphur Co. v. Agrico Chemical Co., 415 So.2d 1359 and Sulphur Terminals Co. v. Agrico Chemical Co., 415 So.2d 1361 (Fla. 1982). Quoting with approval, the Boca Raton Mausoleum court described as the "general rule in Florida," 511 So.2d at 1064, the following:

[I]n licensing or permitting proceedings a claim of standing by third parties based solely upon economic interest is not sufficient unless the permitting or licensing statute itself contemplates consideration of such interests.

Florida Medical Association v. Department of Professional Regulation, 426 So.2d 1112, 1118 (Fla. 1st DCA 1983). To the same effect, see State Board of Optometry v. Florida Society of Opthalmology, 538 So.2d 878 (Fla. 1st DCA

1988)(reh. den. 1989); and Shared Services, Inc. v. Department of Health and Rehabilitative Services, 426 So.2d 56 (Fla. 1st DCA 1983). The general rule applies here.

RECOMMENDATION

It is, accordingly, RECOMMENDED:

That HRS enter a final order dismissing the petition for formal administrative hearing.

DONE and ENTERED this 23rd day of March, 1990, in Tallahassee, Florida.

ROBERT T. BENTON, II

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, FL 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 23rd day of March, 1990.

COPIES FURNISHED:

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

Tallahassee, FL 32308

Donna H. Stinson, Esquire MOYLE, FLANIGAN, KATZ

FITZGERALD & SHEEHAN, P.A.

The Perkins House - Suite 100

118 North Gadsden Street Tallahassee, FL 32301

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

Tallahassee, FL 32399-0700

John Miller, General Counsel Department of Health and Rehabilitative Services

1323 Winewood Boulevard

Tallahassee, FL 32399-0700

Docket for Case No: 90-000362

Orders for Case No: 90-000362