STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DR. JOHN T. MACDONALD FOUNDATION,) d/b/a DOCTORS' HOSPITAL OF CORAL ) GABLES, BAPTIST HOSPITAL OF ) MIAMI, INC., HEALTHSOUTH DOCTORS') HOSPITAL, INC., and SOUTH MIAMI ) HOSPITAL, INC., )

)

Petitioners, )

) CASE NOS. 91-6390RX

vs. ) 92-3435RX

) 92-3442RX

DEPARTMENT OF HEALTH AND ) 92-3511RX REHABILITATIVE SERVICES, )

)

Respondent, )

and )

) SOUTH DADE HEALTH CARE GROUP, ) LTD., d/b/a DEERING HOSPITAL, ) f/k/a CORAL REEF HOSPITAL, )

)

Intervenor. )

)

FINAL ORDER

Pursuant to notice, a formal hearing was conducted in these consolidated cases at Tallahassee, Florida, beginning on June 11, 1992, before Michael M. Parrish, a duly designated Hearing Officer of the Division of Administrative Hearings. Appearances for the parties at the hearing were as follows:

APPEARANCES

For Petitioner: W. David Watkins, Esquire

Doctors' Hospital Oertel, Hoffman, Fernandez & Cole, P.A.

2700 Blairstone Road, Suite C Post Office Box 6507 Tallahassee, Florida 32314-6507

For Petitioner: Jay Adams, Esquire Baptist Hospital Jay Adams, P.A.

418 East Virginia Street Tallahassee, Florida 32301

For Petitioner: Jean Laramore, Esquire South Miami 7007 McBride Pointe

Hospital Tallahassee, Florida 32312

For Respondent: Lesley Mendelson, Esquire AHCA Senior Attorney

Agency for Health Care Administration 2727 Mahan Drive

Tallahassee, Florida 32308

For Intervenor: Robert D. Newell, Jr., Esquire Deering Hospital Newell & Stahl, P.A.

817 North Gadsden Street Tallahassee, Florida 32303

STATEMENT OF THE ISSUES

The basic issues in these consolidated cases concern whether Rule 10- 5.032, Florida Administrative Code, is an invalid exercise of delegated legislative authority. The validity of the rule has been challenged on both procedural and substantive grounds.

PRELIMINARY STATEMENT

South Dade Health Care Group, Ltd., d/b/a Deering Hospital (hereinafter, "Deering") applied to the Department of Health and Rehabilitative Services ("DHRS") for a certificate of need to initiate inpatient cardiac catheterization services. 1/ This file was assigned CON No. 6664. DHRS made an initial agency determination to approve the application and a petition for formal administrative hearing to contest that decision was filed by South Miami Hospital, Inc. ("South Miami"). That proceeding was assigned Case No. 91-5723 at the Division of Administrative Hearings. Petitions to Intervene were filed on behalf of the Dr. John T. MacDonald Foundation d/b/a Doctor's Hospital of Coral Gables ("Doctor's") and Baptist Hospital of Miami, Inc. ("Baptist"), and those petitions were granted. Petitions challenging the validity of Rule 10-5.032, Florida Administrative Code, in all of its configurations, were filed at various times by South Miami, Doctor's, and Baptist. These were assigned Case Numbers 91-6390RX; 92-3435RX; 92-3442RX and 92-3511RX. The rule challenge petitions were consolidated with the certificate of need proceeding for the formal hearing in all five cases. Pursuant to an order by the Hearing Officer, and upon due notice to all parties, the final hearing in the five consolidated cases was conducted on June 11, 1992, through June 25, 1992. During the course of the final hearing all parties presented testimony and offered exhibits. 2/

Thereafter, on July 27, 1992, the transcript of the final hearing was filed with the Hearing Officer. The deadline for the submission of the parties proposed recommended orders and proposed final orders was extended to September 21, 1992. Timely proposed final orders containing proposed findings of fact and proposed conclusions of law were filed on behalf of all parties. The parties' proposals have been carefully considered during the preparation of this Final Order. Specific rulings on all proposed findings of fact submitted by all parties are contained in the appendix hereto.

FINDINGS OF FACT

1. South Miami is an acute care hospital located in Dade County. South Miami has a open cardiac catheterization program which means any physician within the community can apply for privileges, and, if granted, perform cardiac catheterizations at South Miami. Until recently, it was a closed program.

2. Doctors' Hospital is an acute care hospital located in Coral Gables, Florida. Doctors' has had a cardiac catheterization program since December of 1986, and is authorized to perform diagnostic catheterization on both inpatients and outpatients.

   
   

3. Baptist is a 500 bed full service hospital located in Dade County. Baptist has a cardiac catheterization program serving both inpatients and outpatients. Approximately 2,000 cardiac catheterizations are performed at Baptist each year.

   
   

4. Deering is a 260 bed hospital in Miami, Florida. The agency has noticed its intent to grant Deering a CON to initiate a cardiac catheterization program.

   
   

5. The Agency for Health Care Administration ("AHCA") is designated as the single state agency to issue, revoke, or deny certificates of need and to issue, revoke, or deny exemptions from CON review in accordance with the district plans, the statewide health plan, and present and future federal and state statutes.

   
   

6. In 1987, the certificate of need statute was amended to deregulate all outpatient services. At the same time, the capital expenditure cap was raised from $500,000 to $1 million, and the meaning of "major medical equipment" was redefined to include only equipment which has been approved by the United States Food and Drug Administration for less than three years for general usage.

   
   

7. These changes had a major impact on the ability of health care providers to acquire and replace equipment. They could now acquire equipment virtually at will, with the Legislature only expressing a limited interest in controlling expensive emerging technologies. This legislative expression was a major policy change with respect to planning for the distribution of health care resources.

   
   

8. Prior to these statutory changes, all cardiac catheterization services had been treated as inpatient institutional health services requiring a certificate of need. With the deregulation of outpatient services, without exception, outpatient cardiac catheterization laboratories were deregulated by the statutory changes.

   
   

9. With cardiac catheterization equipment being totally deregulated, and the capital expenditure threshold raised, inpatient cardiac catheterization providers could now expand their catheterization facilities and completely replace their equipment without a certificate of need.

   
   

10. For these reasons, the then existing cardiac catheterization rule could not be applied because the policy constraints articulated in it were no longer recognizable by the underlying statewide policy expressed in the amended CON statute. The rule then in effect controlled the expansion of existing laboratories in many cases because the necessary equipment for expansion exceeded the then existing capital expenditure threshold. Furthermore, that rule simply did not contemplate the development of unregulated outpatient cardiac catheterization services.

    
    

11. These facts led AHCA to conclude that they could no longer control the capacity of existing providers to offer cardiac catheterization services. The rule in existence at that time was believed to be inoperable because it was based upon the assumption that an inventory of laboratories could be established and predicted for future horizons. Under the statutory changes, this assumption

    was believed to be no longer valid because the number of laboratories was subject to change without constraint at any given time.

    
    

12. Initially, the rule amendment process began with internal discussions. Next, a work group was convened to discuss these specific issues. Next, various possible need methodologies were modeled using a variety of assumptions. An updated literature search was undertaken and the comments of the work group were considered.

    
    

13. Subsequently, a rule was developed and circulated for internal review at AHCA. Finally, in April of 1988, the proposed amendment was published in the Florida Administrative Weekly. Administrative challenges were brought against the rule. Based upon concerns of the challengers, changes were made to the rule.

    
    

14. The rule, with the changes, was filed for adoption with the Secretary of State on July 18, 1988. It became effective, according to the certification of the Secretary of State, on August 7, 1988, and remained in effect until November of 1991.

    
    

15. On July 29, 1988, The changes were published in the Florida Administrative Weekly. Within 21 days of the Notice of Change publication in the Florida Administrative Weekly on July 29, 1988, but after the rule became effective, several challenges were launched against the Notice of Change. These challenges purported to be Section 120.54 challenges to proposed amendments.

    
    

16. A final order was issued on June 30, 1989, on the challenges to the changes in the 1988 rule amendments. See Florida Medical Center, et al. v. Dept. of Health and Rehabilitative Services, 11 FALR 3904 (June 30, 1989). In the closing paragraphs of the Final Order in the FMC case, the Hearing Officer ordered the following:

    
    

    1. That the amendments to Rule 10- 5.011(1)(e),

       F.A.C., published by the Department of Health and Rehabilitative Services on July 29, 1988,

       with the exception of the amendments to paragraph 2(h), paragraph 3(c)III, and paragraph 6(a) and the amendment regarding the definition of "inpatient visit", are an invalid exercise of delegated legislative authority, because they were adopted by the Department without adhering to the proper procedures for adoption delineated in Section 120.54, Florida Statutes.

    2. That should the Department seek to proceed with the other revisions to the rule previously published on July 29, 1988, it must afford interested parties an opportunity to comment

       on the merits of those proposed revisions in the manner provided for in Section 120.54, Florida Statutes, with a new point of entry.

       
       

17. An appeal of the Final Order was taken by AHCA. On April 9, 1991, the District Court of Appeals upheld the final order of the Hearing Officer, holding that, as to those changes which AHCA was without authority to make, it must either withdraw the changes or reinstitute the rulemaking process.

18. AHCA worked closely with its attorneys and with the Joint Administrative Procedures Committee to come to agreement on the interpretation of the appellate court decision and on the procedure to follow to comply with the court's decision.

    
    

19. On July 5, 1991, AHCA published its interpretation of the rule resulting from the Final Order affirmed by the District Court of Appeals, by withdrawing the portions of the rule which had been invalidated. A Section

    120.54 challenge was mounted against this publication by South Miami Hospital and others, but the challenges were later voluntarily dismissed.

    
    

20. On August 9, 1991, AHCA published the amendments it proposed to adopt to replace those which had been withdrawn. This publication was not challenged. These amendments were filed for adoption with the Secretary of State on October 22, 1991, and became effective November 11, 1991.

    
    

21. The current version of the challenged rule, Rule 10- 5.032, Florida Administrative Code, reads as follows, in pertinent part: 3/

    
    

    1. Departmental Intent. This rule amendment implements the provision of section 381.706 (1)(c), F.S., which provides that a certificate of need shall not be required for an expenditure to provide an outpatient service. This rule defines the requirements for the establishment of inpatient cardiac catheterization services, including minimum requirements for staffing, equipment, and a need methodology for cardiac catheterization programs. A certificate of

       need for the establishment of inpatient cardiac catheterization services shall not normally be approved unless the applicant meets all relevant statutory criteria, including the standards and need determination criteria set forth in this rule. A cardiac catheterization program which is established and utilized for the purpose of serving outpatients exclusively is not regulated under this rule. A cardiac catheterization program which provides services to inpatients, regardless of the reason for their admission,

       including but not limited to coronary angioplasty, valvuloplasty, or ablation of intracardiac

       bypass tracts, or pediatric cardiac catheterization, requires a certificate of

       need. Hospitals operating more than one hospital facility under the same hospital license in the same district, shall obtain a separate certificate of need for the establishment of a cardiac catheterization program in each health care facility.

    2. Definitions.

       1. Cardiac Catheterization. Cardiac catheterization is defined as a medical procedure requiring the passage of a catheter into one

          or more cardiac chambers of the left and right

          heart, with or without coronary arteriograms, for the purpose of diagnosing congenital or acquired cardiovascular diseases, or for determining measurement of blood pressure flow.

          Cardiac catheterization also includes the selective catheterization of the coronary ostia with injection of contrast medium into the coronary arteries.

       2. Coronary Angioplasty. Coronary angioplasty is defined as a hospital inpatient procedure requiring the dilation of narrowed segments of

          the coronary vessels, via a balloon-tipped catheter.

       3. Catheterization Program. A cardiac catheterization program is defined as an institutional health service which is provided by or on behalf of a health care facility and which consists of one or more laboratories which comprise a room or suite of rooms, and has

          the equipment and staff required to perform cardiac catheterization serving inpatients and outpatients. A cardiac catheterization program approved for angioplasty services, or other types of therapeutic cardiac procedures shall have the additional necessary equipment and staff to perform angioplasty procedures.

       4. Approved Program. A proposed cardiac catheterization and angioplasty program, not operational as defined by this rule, for which a certificate of need, a letter of intent to grant a certificate of need, or a final order granting a certificate of need was issued, consistent with the provisions of 10- 5.008 (2)(b), Florida Administrative Code, on or before the most recent published deadline for agency initial decisions prior to publication

          of the fixed need pool, as specified in 10-5.008 (1)(1), Florida Administrative Code.

       5. Cardiac Catheterization Annual Program Volume. The cardiac catheterization annual program volume equals the total number of inpatient and outpatient admissions to the cardiac catheterization program, for the purpose of cardiac catheterization or angioplasty, for the 12-month period specified in paragraph (8)(c). A single admission is equivalent to one patient visit to the cardiac catheterization program. Each patient visit will be counted in determining the actual program volume regardless of whether the patient is an inpatient or outpatient at the facility performing the procedure, or has been admitted as an inpatient or outpatient at another facility.

       6. Inpatient. An inpatient is defined as a person who has been admitted to a hospital for bed occupancy for purpose of receiving inpatient hospital services. A person is considered an

          inpatient if he was formally admitted as an inpatient with the expectation that he would remain at least overnight and occupy a bed, even though it later develops that he can be discharged or that he is transferred to another hospital and does not actually use a hospital bed overnight. An inpatient of a hospital cannot be considered an outpatient of that or any other hospital at the same time.

       7. Outpatient. An outpatient is defined as a person who receives cardiac catheterization in a health care facility and does not meet the definition of inpatient in paragraph (e) [sic].

       8. Service Planning Area. The service planning area for a cardiac catheterization program is the applicable HRS district unless cardiac catheterization subdistricts have been defined by the respective local health council

          and promulgated into rule by the department. . . .

       9. Operational Program. A new cardiac catheterization and angioplasty program approved by the department that has performed at least one inpatient or outpatient cardiac catheterization as of 3 months prior to the beginning date of the quarter of the publication of the fixed need pool; or, in the case of programs which performed only outpatient cardiac catheterization prior to departmental approval, a program that has performed at least one inpatient cardiac catheterization as of 3 months prior to the beginning date of the quarter of the publication of the fixed need pool.

    3. Scope of Service.

       1. Each cardiac catheterization program shall be capable of providing immediate endocardiac catheter pacemaking in cases of cardiac arrest, and pressure recording for monitoring and to evaluate valvular disease, or heart failure. Applicants for cardiac catheterization programs shall document the manner in which they will meet this requirement.

       2. A range of non-invasive cardiac or circulatory diagnostic services must be available within the health care facility itself, including:

          1. Hematology studies or coagulation studies;

          2. Electrocardiography;

          3. Chest x-ray;

          4. Blood gas studies; and

          5. Clinical pathology studies and blood chemistry analysis.

       3. At a minimum a cardiac catheterization program shall include:

       1. A special procedure x-ray room;

       2. A film storage and darkroom for proper processing of films;

       3. X-ray equipment with the capability in cineangiocardiography, or equipment with similar capabilities;

       4. An image intensifier;

       5. An automatic injector;

       6. A diagnostic x-ray examination table for special procedures;

       7. An electrocardiograph;

       8. A blood gas analyzer;

       9. A multichannel polygraph; and

       10. Emergency equipment including but not limited to a temporary pacemaker unit with catheters, ventilatory assistance devices, and a DC defibrillator.

    4. Service Accessibility.

       1. Travel Standard. An adult inpatient cardiac catheterization program shall be available within a maximum automobile travel time of 1 hour, under average travel

          conditions, for at least 90 percent of a service planning area's population provided that the cardiac catheterization program can meet other applicable statutory and related rule

          criteria.

       2. Hours of Operation. Every cardiac catheterization program shall have the capability of rapid mobilization of the study team within 30 minutes for emergency procedures 24 hours a day, 7 days a week. Applicants for new cardiac catheterization programs shall document the manner in which they will meet this requirement.

       3. Underserved Population Groups. Applicants for a cardiac catheterization program shall indicate the projected number of medically indigent and Medicaid patients to be served annually. Applicants shall indicate their past provision of health care services to medically indigent and Medicaid patients.

    5. Service Quality.

       1. Accreditation. Any health care facility providing inpatient catheterization only, or inpatient and outpatient cardiac catheterization, or angioplasty, must be fully accredited by

          the Joint Commission on Accreditation of Health Care Organizations (JCAHO) for special care units, or be accredited by the American Osteopathic Association.

       2. Availability of Health Personnel. Any applicant proposing to establish a cardiac catheterization program must document that adequate numbers of properly trained personnel will be available. At a minimum, a team involved in cardiac catheterization consists of a physician, one nurse, and one or more

       technicians. An applicant for a new cardiac catheterization program shall document that the following staff are available:

       1. A program director, board-certified or board- eligible in internal medicine, or radiology

          with subspecialty training in cardiology or cardiovascular, radiology; . . .

       2. A physician, board-certified or board- eligible in cardiology, radiology, or with specialized training in cardiac catheterization and angiographic techniques who will perform the examination;

       3. Support staff, specially trained in critical care of cardiac patients, with a knowledge of cardiovascular medication and an understanding of catheterization and angiographic equipment;

       4. Support staff, highly skilled in conventional radiographic techniques and angiographic principles, knowledgeable in every aspect of catheterization and angiographic instrumentation, with a thorough knowledge of the anatomy and physiology of the circulatory system;

       5. Support staff for patient observation, handling blood samples and performing blood gas evaluation calculations;

       6. Support staff for monitoring physiologic data and alerting the physician of any changes;

       7. Support staff to perform systematic tests and routine maintenance on cardiac catheterization equipment, who must be available immediately in the event of equipment failure during a procedure;

       8. Support staff trained in photographic processing and in the operation of automatic processors used for both sheet and cine film; and

       9. A Medical Review Committee which reviews medical invasive procedures such as endoscopy and cardiac catheterization.

    6. Coordination of Services.

       1. Cardiac catheterization programs proposed in a facility not performing open heart surgery must submit a written protocol as part of their certificate of need application for the transfer of emergency patients to a hospital providing open heart surgery, which is within

          30 minutes travel time by emergency vehicle under average travel conditions.

       2. Cardiac catheterization programs which include the provision of coronary angioplasty, valvuloplasty, or ablation of intracardiac bypass tracts must be located within a hospital which also provides open heart surgery.

       * * *

    7. Service Cost. Cost data for cardiac catheterization programs, among similar institutions, shall be comparable when patient mix, cost accounting methods, labor market differences and other extenuating factors are taken into account.

    8. Need Determination. In order to assure patient safety and staff efficiency and to achieve maximum economic use of existing resources, the following criteria shall be considered in the approval of certificate of need applications for new adult cardiac catheterization programs.

       1. The minimum annual projected net program volume need for the establishment of a new adult cardiac catheterization program shall be at or exceed an annual program volume of 300 admissions for the service planning area.

       2. Applicants shall demonstrate that they will be able to reach an annual program volume of 300 admissions within 2 years after the program becomes operational.

       3. Need Determination. A new adult cardiac catheterization program may be approved if the difference between the projected program volume and the number of adult cardiac catheterizations performed in the service planning area during the 12 months ending 3 months prior to the beginning date of the quarter of the publication of the fixed need pool, minus the number of approved adult programs times 300, is at or exceeds a program volume of 300 for the applicable service planning area. This need formula is expressed as follows:

          NN = PCCPV - ACCPV - APP

          Where:

          NN is the 12-month net adult program volume need in the service planning area projected

          2 years into the future for the respective planning horizon. Net need projections are published by the department as a fixed need pool twice a year. The planning horizon for applications submitted between January 1 and June 30 shall be July of the year 2 years subsequent to the year the application is submitted. The planning horizon for applications submitted between July 1 and December 31 shall be January of the year

          2 years subsequent to the year which follows the year the application is submitted.

          PCCPV is the projected adult cardiac catheterization program volume which equals the actual adult cardiac catheterization program volume (ACCPV) rate per thousand adult population 15 years and over for the

          12 months ending 3 months prior to the

          beginning date of the quarter of the publication

          of the fixed need pool, multiplied by the projected adult population 15 years of age and over 2 years into the future for the respective planning horizon. The population projections shall be based on the most recent population projections available from the Executive Office of the Governor which are available to the department 3 weeks prior to the fixed need pool publication.

          ACCPV equals the actual adult cardiac catheterization program volume for the 12 months ending 3 months prior to the beginning date of the quarter of the publication of the fixed need pool.

          APP is the projected program volume for approved adult programs. The projected program volume for each approved program shall be 300 admissions.

       4. Irrespective of the net need calculated under paragraph (c), no additional cardiac catheterization program shall normally be granted unless ACCPV divided by the number of operational programs for the service

          planning area is at or exceeds a program volume of 300 patient admissions.

          * * *

          (g) Actual inpatient and outpatient migration from one service planning area to another shall be considered in the review of Certificate of Need applications.

    9. Decisions on certificate of need applications for the expansion of existing programs shall be made on the basis of the applicant's justification for the level of the proposed capital expenditure and the utilization of existing laboratories in the facility. The approval of an additional

    laboratory(ies) in a facility with an operational or approved inpatient program shall not reduce the net program need as calculated according

    to the formula contained in paragraph (8)(c).

    
    

22. Briefly summarized, the current rule projects a number of anticipated admissions to cardiac catheterization programs in the horizon year by multiplying the current use rate (number of admissions per thousand adult population) times the projected population. If the difference between the current volume and the projected volume is greater than 300, a new program may be awarded, so long as all of the existing programs, plus the proposed program, are projected to perform an average of 300 admissions each. An approved program is assigned a value of 300 for purposes of determining the average.

    
    

23. The rule takes into consideration the demographic characteristics of the population by establishing a use rate for cardiac catheterization services in a given service area. The use rate identifies the number of individuals per one hundred thousand who used the service in a defined recent historical period. If the demographics of an area cause the service to be used at a greater or lesser rate than the State as a whole, that fact will be revealed in the use

    rate. In the same way, the use rate takes into account the health status of the individuals seeking services in the service area because a deviation from normal health status will typically result in a higher or lower use rate than the State as a whole. Since the use rate is based on place of access to the service it is reflective of district-wide gross service use patterns. The rule need methodology does not take into account differences in service use patterns as between numbers of inpatient and numbers of outpatient cardiac catheterization procedures, nor does it take into consideration differences in service use patterns as between number of procedures performed in cardiac catheterization programs in facilities performing open heart surgery and numbers of procedures performed in cardiac catheterization programs in facilities not performing open heart surgery.

    
    

24. An example of relevant service use patterns that are not taken into account by the rule methodology is the significantly higher utilization of cardiac catheterization laboratories located in facilities that also offer open heart surgical back-up. Cardiac catheterization laboratories in facilities that do not offer open heart surgical back-up receive only seven percent of the inpatient admissions from the MDC-5 patient pool, compared to thirty-eight percent in cardiac catheterization laboratories with open heart surgery back-up in the same facility. Similar differences in service use patterns are reflected at Tab "D" of SMH Exhibit 10, which shows that there were a total of 9,362 inpatient admissions in the laboratories with open heart surgical back-up, compared with only 553 total inpatient admissions in cardiac catheterization laboratories without open heart surgical back-up.

    
    

25. The rule addresses quality of care standards at paragraph (5), headed "Service Quality." Within that section, applicants must document accreditation for special care units, availability of adequate numbers of specified properly trained personnel, and medical review procedures. Paragraph (6) of the rule, entitled "Coordination of Services", also establishes quality standards by requiring a written protocol for the transfer of emergency patients to a hospital providing open heart surgery by providing that only hospitals authorized to perform open heart surgery can perform angioplasty, and providing that pediatric cardiac catheterization can only be performed in hospitals performing pediatric open heart surgery. Paragraph (8) of the rule, which contains the various considerations in determining need, also attempts to address quality of care considerations. The extent to which such considerations are adequately treated is addressed further below.

    
    

26. Minimum cost efficiency standards are addressed in the need methodology at subparagraphs (8)(a) and (8)(b) of the rule where it requires that applicants must demonstrate that they will be able to reach an annual program volume of 300 admissions within two years after the program becomes operational and net need must equal a minimum of 300 admissions before a new adult program may be established. The extent to which these standards are adequate is addressed further below.

    
    

27. Trends in total usage are taken into account by the rule in that the use rate is updated every six months. If a service area is experiencing a significant increase, that trend will be reflected in the updated use rate which is used to project need. But, as noted above, the rule methodology does not take into account certain usage trends related to type of patient or type of facility.

    
    

28. The rule contains a geographic access standard at subparagraph (4)(a) where it provides that adult inpatient cardiac catheterization shall be

    available within a maximum automobile travel time of 1 hour, under average travel conditions, for at least 90 percent of a service planning area's population.

    
    

29. The rule addresses market economics in several ways. First, by utilizing the number of admissions to the service area programs, second by projecting population into a future horizon, third, by subtracting the existing volume of providers and fourth by prohibiting, generally, the addition of a new program unless the average patient volume within the district is at least 300. Through the use of this data, the rule looks at current market conditions, and purports to protect current market share while projecting future need. The extent to which the rule is adequate in this regard is addressed further below.

    
    

30. The rule does not take into consideration the number of individual catheterization laboratories, rather it considers the number of cardiac catheterization programs. The difference is that an individual hospital will have only one program, but it may have more than one laboratory in each program.

    
    

31. Because of the ability of existing providers to expand to add new laboratories without certificate of need approval in most cases, it has become difficult for AHCA to establish and maintain an inventory of existing laboratories for the purpose of projecting need. This difficulty caused AHCA to reject any methodology based upon the number of existing laboratories because AHCA felt there was no way the number of existing cardiac catheterization laboratories could be predicted in the horizon year. AHCA does have the ability to control the growth of programs, however, and, therefore, can establish a reliable inventory of programs and predict their number in the horizon year. The agency's thinking in this regard overlooks the obvious fact that programs are, by definition, comprised of one or more cardiac catheterization laboratories and that existing programs can in most cases continue to add laboratories to their program without going through certificate of need review. Such being the case, the ability to regulate and reliably predict the number of future programs does not in any way enhance the ability to predict the number of future laboratories. Further, because programs are comprised of one or more laboratories, one can reach useful conclusions regarding such things as the efficiency or capacity of existing programs only by considering the number of existing laboratories within each of the existing programs.

    
    

32. The extent of usage of any individual laboratory cannot be predicted in advance with certainty because it depends on many variables. This uncertainty is supported by the Florida data which demonstrates that laboratory admissions vary greatly from a very low volume after several years to volumes of 1800 to 2000. But because programs, by definition, are comprised of one or more laboratories, it is equally difficult, for the very same reasons, to predict the extent of future usage of programs. Difficult and uncertain as it may be to do so, any effort to predict future need for new cardiac catheterization services must take into account the capacity of the existing laboratories that make up the existing programs.

    
    

33. The rule takes into account the recent usage volume of existing providers by subtracting existing volume of catheterizations performed from projected volume, and by protecting an average of 300 admissions to all inpatient programs, and a minimum of 300 for all approved programs. The rule does not, however, address the capacity of existing cardiac catheterization programs or the capacity of existing cardiac catheterization laboratories.

34. The pre-1988 cardiac catheterization rule used a different formula entirely to predict need. As a minimum threshold requirement, it utilized an average of 600 procedures per lab. The National Guidelines For Health Planning 4/ upon which the previous standard of 600 procedures was based include the following provisions:

    
    

    Sec. 121.208 Cardiac catheterization.

    1. Standard. (1) There should be a minimum of 300 cardiac catheterizations, of which at least 200 should be intracardiac or coronary artery catheterizations, performed annually in any adult cardiac catheterization unit within three years after initiation.

       * * *

       1. There should be no new cardiac catheterization unit opened in any facility not performing open heart surgery.

       2. There should be no additional adult cardiac catheterization unit opened unless the number of studies per year in each existing unit in the health service area(s) is greater than

       500. . . .

    2. Discussion. The modern cardiac catheterization unit requires a highly skilled staff and expensive equipment. Safety and efficacy of laboratory performance requires

    a case load of adequate size to maintain the skill and efficiency of the staff. In addition, the underutilized unit represents a less efficient use of an expensive resource and frequently reflects unnecessary duplication, Based on recommendations from the Inter-Society Commission on Heart Disease Resources, the Department believes that a minimum level of 300 catheterizations per year is indicated to achieve economic use

    of resources. Several State health planning agencies, such as New Jersey, suggested a higher minimum level and the Department will be considering whether a higher level should be established in the future. The Department has also determined the existing units should be performing more than 500 cardiac catheterizations or 250 pediatric cardiac catheterizations before a new unit is opened. The 500 level is based on an average of two catheterizations a day, a rate that is in the Department's judgement readily achievable in most institutions providing these services

    and that will foster more effective uses of current resources prior to the development of additional resources. More than 600 procedures are performed annually in some institutions.

    Pediatric cardiac catheterizations require special facilities and support services.

    Lower target numbers are presented in these cases because of the special conditions and

    needs of children. The established levels are consistent with the recommendations of the Section on Cardiology of the American Academy of Pediatrics and the Inter-Society Commission on Heart Disease Resources. The patient studied in the cardiac catheterization unit is frequently recommended for open heart

    surgery. While acceptable inter-institutional referral patterns exist in some areas, cardiac catheterization units should optimally be located within a facility in which cardiac surgery is performed.

    
    

35. Other guidelines regarding the utilization and establishment of new cardiac catheterization laboratories appear in the 1983 Report of Inter-Society Commission for Heart Disease Resources. Page 898A of the Inter-Society Report includes the following:

    
    

    Although the rate of development of new cardiac catheterization laboratories has declined in recent years, there is concern that the performance of many laboratories is less than optimal. This represents a duplication of resources that may seriously compromise quality and safety of studies and increase cost of care. Study of costs of each laboratory on a per-procedure basis does not adequately characterize the total costs and/or needs of a region.

    
    

    A footnote to the above quoted language notes the following:

    
    

    Results of a recent survey suggest that many available laboratories are underutilized. Data indicate that 40 percent performed fewer than

    300 catheterization studies per year in the

    350 hospitals surveyed. Fifty-five percent of 310 hospitals performing open heart surgery did fewer than 200 operations per year.

    
    

36. Additional relevant comments at pages 898A-899A of the Inter-Society Report include the following:

    
    

    There is also a compelling economic reason for high utilization of facilities (fig. 1). The cost of equipping and supporting laboratories is extraordinarily high.

    Equipment life is relatively short and must be amortized within 5 - 7 years and be included in the cost of the laboratory.

    If case loads are low, there will be an inadequate depreciation fund for new and replacement equipment.

    ***

    Laboratories performing adult studies should maintain a minimal case load of 300 per year

    to justify the financial outlay for the laboratory and personnel and to keep the skills of the personnel, both physician and non-physician, up to date. (Emphasis added)

    ***

    Laboratories supporting an active coronary surgical program should have a case load

    of approximately nine procedures a week, or

    450 cases per year. In many hospitals, economic operation of the laboratory will require this level of use. (Emphasis in original)

    
    

37. Figure 1 at page 898A of the Inter-Society Report illustrates the equipment amortization cost per examination and clearly shows that the cost per examination decreases as the number of examinations per year increases. The illustration shows that this decrease continues at least to the point of 1,000 examinations per year. Examples derived from Figure 1 are as follows:

    
    

    Examinations per year Amortized equipment cost each exam

    200	Approximately $575.00
    300	Approximately $400.00
    400	Approximately $350.00
    600	Approximately $275.00
    1000	Approximately $250.00

    
    

38. Also, the ACC/AHA Guidelines for Cardiac Catheterization and Cardiac Catheterization Laboratories published in 1991 by the American College of Cardiology/American Heart Association Ad Hoc Task Force On Cardiac Catheterization include the following at page 1167:

    
    

    For optimum laboratory performance and cost- effectiveness, an adequate caseload is required for the staff to maintain their skills and efficiency. The laboratory should be used

    only for cardiac catheterization procedures; use as a general or multi-purpose radiology room is no longer acceptable. If catheterizations are not performed on a daily basis, then the laboratory should

    not continue to exist as a cardiac catheterization laboratory. Laboratories for adult studies should maintain a minimum caseload of 300 per year.

    
    

39. AHCA modeled several working drafts of the rule using different minimum standards. The standard of 300 was settled on because, according to the agency's interpretation of the Intersociety Commission guidelines, a cost efficient program can operate at the 300 level. Cost efficiency is a major goal of the certificate of need program. Since the agency believed the goal could be achieved at 300, and given the statutory changes which prompted the rule changes, it was felt by the agency that a higher number would be unduly restrictive. The agency's decision to use 300 as the threshold number of procedures is an unexplained deviation from the earlier 600-procedure standard, an unexplained departure from the National Guidelines For Health Planning, and an unexplained departure from other published guidelines recognized as authoritative. 5/

40. Unlike open heart, which does contain a provision providing a minimum threshold at which all existing programs must be operating, the agency felt such a provision was not appropriate for cardiac catheterization. Although the literature regarding cardiac catheterization generally supports the notion that a laboratory should perform at least 300 procedures per year to maintain proficiency and enhance quality, and most health planners agree that 300 procedures is aa appropriate minimum level to maintain proficiency and quality, because there did not appear to be any empirical evidence of quality differences above and below the 300 level, the agency felt that requiring all existing laboratories to be operating at the 300 level was not warranted. The literature also contains proficiency and quality guidelines for minimum numbers of procedures to be performed by physicians.

    
    

41. The use of the number 300 as the threshold average number of procedures to approve additional programs results in the unnecessary duplication of services when the existing cardiac catheterization laboratories are operating below their capacity or below their practical utilization level. This has an obvious adverse effect on the existing laboratories.

    
    

42. An essential ingredient of any functional need determination methodology is a method for identifying unmet need. In order to function rationally, the methodology must not only identify a reasonable estimate of future need, but must also identify a reasonable estimate of the future capacity of existing providers to meet that need. The subject rule fails to address the future capacity of existing providers, because in the normal course of events the capacity of an existing program, even a program comprised of a single laboratory, will be much greater than 300 procedures per year.

    
    

43. As a general rule, the practical capacity of a cardiac catheterization laboratory is in the range of 1000 to 1500 procedures per year. 6/ Up to the point of practical capacity, there is a direct, but diminishing, relationship between increased numbers of procedures and increased cost efficiency. 7/ Cardiac catheterization laboratories can be operated very efficiently at a level of 80 or 85 percent of capacity.

    
    

44. The failure of the subject rule to consider the future capacity of existing providers in calculating future need has an adverse effect upon the ability to accurately predict future unmet need and also has a potential for adverse effect upon the quality of care offered by the existing providers. The rule authorizes the approval of a new inpatient cardiac catheterization program even though many of the existing programs may be operating substantially below their capacity. The addition of new programs under such circumstances has the adverse effect of tending to reduce utilization of existing facilities that are already functioning well below capacity.

    
    

    CONCLUSIONS OF LAW

    
    

45. The Division of Administrative Hearings has jurisdiction over the subject matter of and the parties to this proceeding. Sections 120.56, and 120.57(1), Florida Statutes.

    
    

46. The Petitioners in these cases have attempted to challenge both the current version of the subject rule, as well as the versions of the rule as it existed from August of 1988 to November of 1991. There is no authority in Section 120.56 to challenge rules which are no longer in effect; i.e., rules which are no longer existing rules. Therefore, the portions of the rule

    challenge petitions that purport to challenge earlier versions of the rule will be dismissed as being outside the scope of challenges authorized by Section 120.56, Florida Statutes. 8/

    
    

47. Section 120.52(8), Florida Statutes, contains the following definition:

    
    

    1. "Invalid exercise of delegated legislative authority" means action which goes beyond

       the powers, functions, and duties delegated by the Legislature. A proposed or existing rule is an invalid exercise of delegated legislative authority if any one or more of the following apply:

       1. The agency has materially failed to follow the applicable rulemaking procedures set forth in s. 120.54;

       2. The agency has exceeded its grant of rulemaking authority, citation to which is required by s. 120.54(7);

       3. The rule enlarges, modifies, or contravenes the specific provisions of law implemented, citation to which is required by s. 120.54(7);

       4. The rule is vague, fails to establish adequate standards for agency decisions, or vests unbridled discretion in the agency; or

       5. The rule is arbitrary or capricious.

    
    

48. The rule challenges include the assertion that the subject rule is invalid under Section 120.52(8)(a), Florida Statutes, on the grounds that the agency "has materially failed to follow the applicable rulemaking procedures set forth in s. 120.54." The Petitioners' argument regarding the procedural invalidity of the challenged rule is, essentially, that the agency never properly adopted the 1988 amendments and, therefore, the 1988 amendments never became effective. In support of this argument the Petitioner's contend that, because the challenge to the 1988 amendments to the rule was a challenge brought under Section 120.54, Florida Statutes, the agency's purported adoption of the 1988 rule amendments on July 18, 1988, was ineffective inasmuch as a proposed rule cannot properly be adopted prior to the disposition of a Section 120.54 challenge. In further support of their argument, the Petitioners note that after the Hearing Officer's decision, and after the appellate court decision affirming the Hearing Officer's decision, ACHA never purported to file all of the 1988 amendments for adoption, but only deleted the portions found invalid by the Hearing Officer and added new language to fill in the gaps left by the deletions.

    
    

49. The first flaw in the Petitioners' procedural argument is that it overlooks the fact that at the time the 1988 rule amendments were filed for adoption, there was no pending challenge to the proposed amendments. Accordingly, there was no procedural error in filing the proposed rules for adoption at that time. The second flaw in the argument is that the proposed rules filed for adoption on July 18, 1988, had already become effective by operation of law before the so-called Section 120.54 challenges were filed following the July 29, 1988, publication of the notice of changes. In the normal course of events, effective rules, which are also existing rules, may only be challenged pursuant to Section 120.56, Florida Statutes.

50. The third, and perhaps most significant, flaw in the Petitioner's procedural argument lies in the fact that the 1988 rule challenge to the changes noted in the July 29, 1988, notice of changes was not a true Section 120.54 rule challenge, because there is nothing in Section 120.54, Florida Statutes, which provides for a rule challenge after the rule has been filed for adoption and has become effective, even where there are defects in the rule adoption process. Considerations of due process and notions of fundamental fairness provided the basis for the late- filed challenge to the 1988 changes; not any language in Section 120.54, Florida Statutes. The Hearing Officer's decision to allow Section 120.54, Florida Statutes, to be used as a vehicle to address the merits of the challenges to the changes published on July 29, 1988, resulted in somewhat of a procedural conundrum. In the course of affirming the Hearing Officer's decision, the appellate court glossed over the procedural conundrum, leaving the agency with a rather enigmatic rulemaking riddle. Given the novelty of the situation, the agency's rule amendment activities following the appellate court's decision appear to be as much as could reasonably be expected. Those amendment activities appear to be consistent with the specific language of the appellate court decision and appear to have cured the procedural irregularities that led to the appellate court decision. The subject rule in its present form appears to be procedurally sufficient.

    
    

51. The petitions in these cases also assert that the subject rule provisions are invalid by reason of being arbitrary and capricious in several respects. The courts have recognized on any number of occasions that where agency rulemaking is challenged as being arbitrary and capricious, the challenger bears a heavy burden. In Dravo Basic Materials Company, Inc., v. State, Dept. of Transportation, 17 FLW D1673 (Fla. 2d DCA July 8, 1992), the court noted:

    
    

    When a proposed rule is challenged before a hearing officer, it is the role of the officer to determine whether the rule is arbitrary or capricious. See Sec. 120.56(1), Fla. Stat. (1989); Sec. 120.52(8)(e), Fla. Stat. (1989).

    This is usually a fact-intensive determination. A proposed rule is "arbitrary" only if it is "not supported by fact or logic." Agrico,

    365 So.2d at 763. It is "capricious" if it is taken "without thought or reason." Id.

    The party challenging the rule must prove its invalidity by a preponderance of the evidence. Id.

    
    

52. And in a footnote to the foregoing (See footnote 3 at 17 FLW D1674), the Dravo court further explained:

    
    

    Indeed, Agrico even suggests that an administrative decision is not arbitrary unless it is "despotic." 365 So.2d 763. Webster's New World Dictionary suggests that an arbitrary decision is one that is "whimsical." Webster's New World Dictionary (V. Neufeldt 3d College ed. 1988). Likewise, "capricious" is defined in Agrico as "irrational." Such definitions add color and flavor to our traditionally dry legal vocabulary, but do not assist an objective

    legal analysis. If an administrative decision is justifiable under any analysis that a reasonable person would use to reach a decision of similar importance, it would seem that the decision is neither arbitrary nor capricious.

    Cf. Canakaris v. Canakaris, 382 So.2d 1197, 1203 (Fla. 1980)("The trial court's discretionary power is subject only to the test of reasonableness, but that test requires a determination of whether there is logic and justification.") (Emphasis supplied.)

    
    

53. Where, as here, proposed rulemaking is challenged as being arbitrary and capricious, the question is not whether the agency has made the best choice, or even necessarily whether the agency has made a correct choice, but only whether the agency has made a reasonable choice. 9/ For reasons explained below, portions of the challenged rule fail to meet the reasonableness standards summarized in Dravo, supra, and are therefore arbitrary and capricious.

    
    

54. The use of the term "operational programs" at paragraph (8)(d) of the rule is unreasonable, and therefore arbitrary and capricious, because it treats all cardiac catheterization programs the same without regard to the number of laboratories each program is comprised of. It is illogical to assume, as the use of the term "operational programs" does, that all cardiac catheterization programs can operate efficiently and appropriately at the same usage volume. The appropriate usage level (as well as the capacity) of any cardiac catheterization program is a factor of the number of laboratories that comprise that program. The appropriate usage level (and capacity) of a cardiac catheterization program comprised of four laboratories will inevitably be approximately four times as large as that of a single-laboratory program and approximately twice as large as that of a two-laboratory program. Yet the subject rule language operates to save the same pool of 300 admissions for a

    single-laboratory program that it saves for a program with any greater number of laboratories. This produces illogical results. These illogical results can be avoided only by use of a methodology that takes into account the number of existing and approved laboratories. Because the results are illogical, and thus arbitrary and capricious, this portion of the rule is invalid.

    
    

55. The use of the phrase "a program volume of 300 patient admissions" at paragraph (8)(d) of the rule is unreasonable because it is inconsistent with the National Guidelines For Health Planning, inconsistent with other authoritative guidelines, and bears no rational relationship to the actual capacity of cardiac catheterization laboratories. As previously noted, cardiac catheterization laboratories have a capacity in the range of 1000 to 1500 procedures per year. They can be operated very efficiently at 80 or 85 percent of their capacity.

    Any rule methodology that is attempting to avoid unnecessary duplication of services and is attempting to promote efficient use of existing services should contain a utilization threshold that bears some rational relationship to the practical capacity of the existing services. The differences of opinion regarding the practical capacity of cardiac catheterization laboratories affords the agency a certain range of discretion in choosing the threshold number, but that discretionary range does not extend down to 300. At a very minimum, the threshold should be an average of 500 procedures per laboratory per year in order to be arguably consistent with the National Guidelines For Health Planning. 10/ The evidence in these cases suggests that the threshold figure should be somewhat greater than an average of 500 procedures per laboratory per year. Whatever the appropriate threshold figure may be, it is clearly not 300.

    The use of the threshold of "a program volume of 300 patient admissions" at paragraph (8)(d) of the rule produces illogical results that are contrary to the goals of the certificate of need program. Because of these results, the rule operates in an arbitrary and capricious manner and this portion of the rule is invalid.

    
    

56. The petitions in these case also challenge the validity of a portion of paragraph (9) of the subject rule on the grounds that it is arbitrary and capricious and that it is inconsistent with statutory provisions requiring the agency to consider the availability of like and existing health care services. See Section 381.705(1)(b), Florida Statutes. The challenged portion of paragraph (9) reads: "The approval of an additional laboratory(ies) in a facility with an operational or approved inpatient program shall not reduce the net program need as calculated according to the formula contained in paragraph (8)(c)." The quoted language of paragraph (9) has the effect of ignoring the existence of any new laboratories added to existing facilities. For reasons discussed above, it is arbitrary and capricious for a need methodology to ignore the existence of existing facilities. The quoted language also requires the agency to take action in conflict with the requirements of Section 381.705(1))b), Florida Statutes. For both reasons, the quoted language of paragraph (9) of the rule is invalid.

    
    

57. The petitions in these cases also challenge the rule for failure to be in compliance with the requirements of Section 381.704(3), Florida Statutes, which requires the agency to

. . . establish, by rule, uniform need methodologies for health services and health facilities. In developing uniform need methodologies, the department shall, at a minimum, consider the demographic characteristics of the population, the health status of the population, service use patterns, standards and trends, geographic accessibility, and market economics.

With the exception of the portions of the rule found above to be invalid, upon consideration of all of the evidence, the rule appears to be in substantial compliance with the requirements of Section 381.704(3), Florida Statutes.

Although it might be an improvement to the rule if its numerical need formula could factor in the demonstrated differences in usage levels as between cardiac catheterization programs in facilities with open heart surgery and programs in facilities without open heart surgery, any shortcoming in this regard appears to be taken care of by the language of paragraph (8)(b) of the rule. Accordingly, the assertion that the rule is in violation of Section 381.704(3), Florida Statutes, will be dismissed.

On the basis of all of the foregoing, it is ORDERED:

1. That the challenges to the versions of Rule 10-5.032, Florida Administrative Code, prior to the current version as amended effective November 11, 1991, are dismissed because there is no provision in Section 120.56, Florida Statutes, authorizing challenges to the validity of former rules.

   
   

2. That the challenges to Rule 10-5.032, Florida Administrative Code, based on assertions of procedural irregularities in the rulemaking adoption

   process are dismissed because the rulemaking process appears to have been procedurally sufficient.

   
   

3. That the challenges to Rule 10-5.032, Florida Administrative Code, based on asserted conflict with Section 381.704(3), Florida Statutes, are hereby dismissed.

   
   

4. That the following portions of Rule 10-5.032, Florida Administrative Code, are an invalid exercise of delegated legislative authority for the reasons stated above:

   
   

   1. the use of the term "operational programs" at paragraph (8)(d),

   2. the use of the phrase "a program volume

      of 300 patient admissions" at paragraph (8)(d), and

   3. the last sentence of paragraph (9).

      
      

5. That, with the exception of the portions of the rule described in the immediately preceding paragraph, Rule 10-5.032, Florida Administrative Code, has not been shown to be an invalid exercise of delegated legislative authority, and the challenges to other portions of the rule are hereby dismissed.

DONE AND ORDERED this 1st day of April, 1994, at Tallahassee, Leon County, Florida.

MICHAEL M. PARRISH, 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 1st day of April, 1994.

ENDNOTES

1/ Since the submission of the certificate of need application which generated these rule challenge cases, the administration of the certificate of need program has been reassigned from the Department of Health and Rehabilitative Services to the Agency for Health Care Administration ("AHCA"). DHRS took a number of the actions related to the rulemaking that is at issue in these rule challenge cases as well as in the handling of the certificate of need application that underlies these cases before AHCA assumed its successor role. For convenience, and hopefully to minimize confusion, throughout this order both agencies will be referred to as AHCA or as "the agency."

2/ Witness lists and exhibit lists are contained in the voluminous transcript of the final hearing.

3/ Portions of the rule that deal specifically with pediatric cardiac catheterization have been omitted because they are not challenged in these cases

and because the omitted portions are not necessary to an understanding of the issues raised in these cases.

4/ The National Guidelines For Health Planning were published in the Federal Register by the Department of Health, Education, and Welfare on March 28, 1978.

5/ It was believed by the agency that programs would act in a cost efficient manner and not expand until the number of admissions to the program warranted the additional expense. The basis for this belief is not adequately explained in the record. If health care facilities could be relied upon not to expand services until the number of admissions warranted the additional expense, there would be no need for a certificate of need program.

6/ Opinions as to the practical capacity of cardiac catheterization laboratories range from about 900 procedures per year to about 2000 procedures per year, but most opinions are in the 1000 to 1500 range.

7/ This relationship is illustrated by Figure 1 at page 898A of the 1983 Report of Inter-Society Commission for Heart Disease Resources. This relationship between usage and cost efficiency is also what one would expect on the basis of plain logic.

8/ In some limited circumstances the courts have permitted challenges to rules that have since been amended, but this case does not fit within such circumstances. To the extent the Petitioners in these cases seek to challenge the earlier version of the rule on the basis that it was used to calculate the fixed need pool applied in the related certificate of need case, that basis for challenge is moot because none of these Petitioners made a timely challenge to the fixed need pool determination.

9/ To similar effect, see the many cases cited in the proposed final order submitted by Deering and AHCA.

10/ See paragraph (a)(4) of Section 121.208 of the National Guidelines For Health Planning.

APPENDIX TO FINAL ORDER IN CASE NUMBERS

91-6390RX, 92-3435RX, 92-3442RX, and 92-3511RX

The following are my specific rulings on all proposed findings of fact submitted by all parties.

Findings submitted by Deering Hospital and AHCA:

Paragraphs 1 and 2: Covered in preliminary statement.

Paragraphs 3 through 19: Accepted in whole or in substance, with some minor editorial details corrected and some portions summarized or condensed.

Paragraph 20: First sentence accepted. Second sentence rejected as oversimplification.

Paragraphs 21 through 37: Accepted in substance, although many portions have been summarized or condensed and some editorial details have been modified.

Paragraph 38: First sentence accepted. Remainder rejected as subordinate and unnecessary details and as speculation.

Paragraph 39: Rejected as an incorrect conclusion; actual usage is difficult to predict, but usage and capacity are different things.

Paragraph 40: Accepted in substance.

Paragraph 41: Rejected as constituting a conclusion not warranted by the evidence.

Paragraphs 42 and 43: Rejected as subordinate and unnecessary details.

Paragraph 44: Accepted in substance, but with different emphasis as to the significance of the Guidelines.

Paragraphs 45 and 46: Rejected as subordinate and unnecessary details. Paragraph 47: Accepted in substance.

Paragraphs 48 through 51: Rejected as subordinate and unnecessary details or as irrelevant to issues that need to be decided in this case.

Paragraph 52: Accepted in substance.

Paragraphs 53 and 54: Rejected as subordinate and unnecessary details or as irrelevant to issues that need to be decided in this case.

Findings submitted by South Miami Hospital:

The rulings which follow address the proposed findings of fact that appear at pages 13 through 28 of South Miami Hospital's proposed final and recommended order. The additional proposed findings beginning at page 43 of South Miami Hospital's proposal are addressed in the Recommended Order in the related CON case.

Paragraph 1: First two sentences accepted in substance. The remained of this paragraph is rejected as irrelevant in view of disposition of other issues.

Paragraphs 2 through 4: Rejected as consisting of argument, statements of position, and/or subordinate and unnecessary details.

Paragraph 5: Adopted findings addressed elsewhere. Paragraph 6: Rejected as argument.

Paragraph 7: Accepted in substance. Paragraph 8: Rejected as argument.

Paragraph 9: Rejected as statement of other party's position.

Paragraph 10: Rejected as argument or proposed conclusions of law, rather than proposed findings of fact.

Paragraph 11: Rejected as statement of position.

Paragraphs 12 through 16: Rejected as constituting subordinate and unnecessary details, or summaries or quotations of testimony, rather than proposed findings of fact.

Paragraph 17: Accepted in substance.

Paragraph 18: Rejected as constituting quotation of testimony, rather than proposed findings of fact, and as being subordinate and unnecessary details.

Paragraph 19: Rejected as either subordinate and unnecessary details or as irrelevant to the issue of the rule validity. (This proposed finding may have some relevance to the issues in the related CON case.)

Paragraphs 20 and 21: Accepted in substance.

Paragraphs 22 and 23: Rejected as constituting primarily argument or conclusions of law, rather than proposed findings of fact.

Paragraph 24: Rejected as summary of testimony rather than proposed findings of fact, and as, in any event, as constituting primarily conclusions of law.

Paragraphs 25 and 26: Accepted in substance.

Paragraphs 27 and 28: (No paragraphs with these numbers.)

Paragraph 29: First sentence rejected as summary of testimony. The remainder is rejected as contrary to the greater weight of the persuasive evidence.

Paragraph 30: First sentence rejected as primarily a conclusion of law.

The remainder of this paragraph is accepted in substance.

Paragraph 31: Accepted in substance with subordinate and unnecessary details omitted.

Paragraph 32: Rejected as constituting a combination of conclusions of law and summaries of testimony, rather than proposed findings of fact.

Paragraph 33: Rejected as constituting a combination of argument and summary of testimony, rather than proposed findings of fact. (The ultimate proposition advanced by this paragraph has been accepted, but not in the form presented in this paragraph.)

Paragraph 34: Rejected as consisting primarily of argument and conclusions of law.

Paragraph 35: Accepted in substance with subordinate and unnecessary details omitted.

Second Paragraph 34: Rejected as repetitive and unnecessary.

Second Paragraph 35: Rejected as irrelevant to the rule challenge issues. Paragraphs 36 and 37: (No paragraphs with these numbers.)

Paragraph 38: Rejected as conclusion of law , rather than proposed finding of fact.

Findings submitted by Baptist Hospital and Doctors' Hospital Paragraphs 1 and 2: Covered in preliminary statement.

Paragraph 3: Accepted in substance.

Paragraphs 4 and 5: Accepted in substance, but with different interpretation of the effect of the Florida Medical Center case.

Paragraph 6: Accepted in substance, but with a different interpretation of the effect of the subject agency action.

Paragraph 7: Accepted in substance.

Paragraphs 8, 9, and 10: Rejected as constituting argument or conclusions of law, rather than proposed findings of fact.

Paragraph 11: Adopted findings addressed elsewhere.

Paragraphs 12 and thereafter: These paragraphs all relate to the issues in the related CON proceeding and are addressed in the Recommended Order in that case.

COPIES FURNISHED:

W. David Watkins, Esquire Oertel, Hoffman, Fernand

& Cole, P.A.

2700 Blairstone Road, Suite C Post Office Box 6507 Tallahassee, Florida 32314-6507

Jay Adams, Esquire Jay Adams, P.A.

418 East Virginia Street Tallahassee, Florida 32301

Jean Laramore, Esquire 7007 McBride Pointe

Tallahassee, Florida 32312

Lesley Mendelson, Esquire Senior Attorney

Agency for Health Care Administration 2727 Mahan Drive

Tallahassee, Florida 32308

Robert D. Newell, Jr., Esquire Newell & Stahl, P.A.

817 North Gadsden Street Tallahassee, Florida 32303

Douglas M. Cook, Director

Agency for Health Care Administration 2727 Mahan Drive

Tallahassee, Florida 32308

Harold D. Lewis, Esquire General Counsel

The Atrium, Suite 301

325 John Knox Road Tallahassee, Florida 32303

Sam Power, Agency Clerk

Agency for Health Care Administration The Atrium, Suite 301

325 John Knox Road Tallahassee, Florida 32303

Liz Cloud, Chief

Bureau of Administrative Code The Elliot Building Tallahassee, Florida 32399-0250

Carroll Webb, Executive Director Administrative Procedures Committee Holland Building, Room 120 Tallahassee, Florida 32399-1300

NOTICE OF RIGHT TO JUDICIAL REVIEW

A party who is adversely affected by this Final Order is 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 filing one copy of a Notice of Appeal with the agency clerk of the Division of Administrative Hearings and a second copy, accompanied by filing fees prescribed by law, with 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 30 days of rendition of the order to be reviewed.

Docket for Case No: 91-006390RX

Orders for Case No: 91-006390RX