STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

ST. MARY'S HOSPITAL, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 92-5675

)

AGENCY FOR HEALTH CARE )

ADMINISTRATION, )

)

Respondent, )

)

and )

)

MARTIN MEMORIAL HOSPITAL ) ASSOCIATION, INC. d/b/a MARTIN ) MEMORIAL MEDICAL CENTER, JFK ) MEDICAL CENTER, INC., and PALM ) BEACH GARDENS COMMUNITY HOSPITAL, ) INC. d/b/a PALM BEACH GARDENS ) MEMORIAL CENTER, )

)

Intervenors. )

)

SUMMARY RECOMMENDED ORDER OF DISMISSAL

Issue: Whether St. Mary's Hospital, Inc., has established a factual record upon which a determination may be made, as a matter of law, that the fixed need pool published on August 7, 1992, for adult open heart surgery in District IX is in error.

APPEARANCES

For Petitioner, W. David Watkins, Attorney at Law St. Mary's Oertel, Hoffman, Fernandez & Hospital, Inc.: Cole, P.A.

2700 Blair Stone Road Tallahassee, Florida 32301

For Respondent, Lesley Mendelson, Attorney at Law Agency for Agency for Health Care Administration Health Care 2727 Mahan Drive

Administration: Tallahassee, Florida 32308

For Intervenor, Byron B. Matthews Jr., Attorney at Law Martin Memorial 201 South Biscayne Boulevard Association, Suite 2200

Inc., d/b/a Miami, Florida 33131 Martin Memorial

Medical Center:

For Intervenor, Robert A. Weiss, Attorney at Law JFK Medical John M. Knight, Attorney at Law Center: Parker, Hudson, Rainer & Dobbs

The Perkins House

118 N. Gadsden Street Tallahassee, Florida 32301

For Intervenor, Gerald M. Cohen, Attorney at Law Palm Beach Steel, Hector & Davis

Gardens Medical 4000 S.E. Financial Center Center, Inc. Miami, Florida 33131-2398 d/b/a Palm Beach

Gardens Memorial Center:

PRELIMINARY STATEMENT

On August 7, 1992, the Agency for Health Care Administration ("AHCA") published a fixed need pool of zero for additional open heart surgery programs in Department of Health and Rehabilitative Services ("HRS") District IX. See, Volume 18, Number 37, Florida Administrative Weekly.

By letter dated August 14, 1992, and hand delivered within ten (10) days of the fixed need pool publication, St. Mary's Hospital, Inc. ("St. Mary's") notified AHCA of possible errors in the publication. AHCA declined to adjust the fixed need projection and, on August 28, 1992, St. Mary's timely filed its petition to challenge the projection.

At an evidentiary hearing held on December 10, 1992, St. Mary's introduced five documents into evidence:

1. the November 23, 1992 deposition of Julia Bower Brown,

2. Treasure Coast Health Council, General Hospital Utilization Reports for January and December 1991,

3. Florida Administrative Code Rule 10-5.033,

4. the Prehearing Stipulation of the Respondent and Intervenors, and

5. St. Mary's Unilateral Prehearing Stipulation.

St. Mary's Exhibits 1, 2, 4 and 5 were received into evidence, and official recognition was given to Exhibit 3.

At the conclusion of St. Mary's case-in-chief, Respondent and Intervenors moved for a Summary Recommended Order of Dismissal of St. Mary's petition.

Respondent and Intervenors filed proposed findings of fact and conclusions of law in support of the motion on December 15, 1992. St. Mary's filed a response on December 17, 1992.

FINDINGS OF FACT

1. St. Mary's Hospital, Inc. ("St. Mary's"), is a certificate of need ("CON") applicant for an adult open heart surgery program in Department of Health and Rehabilitative Services ("HRS"), District IX.

2. The Agency for Health Care Administration ("AHCA") is the state agency responsible for the administration of CON laws.

   
   

3. Intervenor, Martin Memorial Hospital Association, Inc., d/b/a Martin Memorial Medical Center ("Martin Memorial") has standing to intervene as a CON applicant for an open heart surgery program in HRS District IX.

   
   

4. Intervenors, JFK Medical Center, Inc., ("JFK") and Palm Beach Gardens Community Hospital, Inc., d/b/a Palm Beach Gardens Medical Center ("Palm Beach Gardens") have standing to intervene as existing providers of open heart surgery services in HRS District IX.

   
   

5. AHCA published a net need projection for zero additional adult open heart surgery programs in HRS District IX, with the following notice:

   
   

   Any person who identifies any error in the fixed need pool numbers must advise the agency of the error within ten (10) days of publication of the number. If the agency concurs in the error, the fixed need pool number will be adjusted prior to or during

   the grace period for this cycle. Failure to notify the agency of the error during this ten day time period will result in no adjustment to the fixed need pool number for this cycle and a waiver of the person's right to raise the error at subsequent proceedings.

   
   

   See, Volume 18, Number 32, Florida Admiministrative Weekly, at page 4501 (August 7, 1992).

   
   

6. By letter dated August 14, 1992, St. Mary's notified AHCA that it believed an error had been made in the fixed need pool projection for adult open heart surgery programs in HRS District IX. This letter was hand delivered to AHCA on August 14, 1992, within the ten days required by the fixed need pool publication.

   
   

7. All of the parties to this proceeding agree with St. Mary's that the numeric need formula in Rule 10-5.033(7), Florida Administrative Code (subsequently, renumbered as Rule 59C-1.033(7), showed a need for one additional adult open heart surgery program in District IX, except that AHCA determined that the provisions of subsection 7(a)2. were not met.

   
   

8. St. Mary's letter also asserted that there was evidence that all existing adult open heart surgery providers performed in excess of 350 adult open heart surgery operations during the applicable base period calendar year 1991.

   
   

9. The minimum of 350 operations in each existing program is an additional prerequisite to the publication of need for a new open heart surgery program in subsection 7(a)2. of Rule 59C-1.033, which the parties refer to as a "default" provision. The default provision is invoked in this case because JFK reported fewer than 350 operations. The subsection provides that a new adult open heart surgery program will not normally be approved if:

   One or more of the operational adult open heart surgery programs in the district that were operational for at least 12 months as of

   6 months prior to the beginning date of the quarter of the publication of the fixed need pool performed less than 350 adult open heart surgery operations during the 12 months ending

   6 months prior to the beginning date of the quarter of the publication of the fixed need pool.

   
   

   (Emphasis added).

   
   

10. In its letter of August 14, 1992, St. Mary's stated that:

    
    

    According to the information provided by JFK to the local health council JFK performed 347 adult open heart surgery operations during the applicable base period (calendar year 1991).

    Notwithstanding the data reported by JFK to the local health council, data obtained from the Health Care Cost Containment Board for the same 12 month period reflects a total of 356 adult open heart surgery discharges from JFK.

    
    

11. All parties agree that for calendar year 1991, JFK Medical Center, Inc. ("JFK"), reported a total of 356 discharges within DRG's 104 through 108 to Florida's Health Care Cost Containment Board and, for the same period of time, JFK reported 347 adult open heart surgery operations to the Treasure Coast Health Council, Inc.

    
    

12. Based on the data provided by JFK to the HCCB, St. Mary's requests that AHCA enter a final order finding that there is a need for one additional open heart surgery program in District IX in the September, 1992 review cycle.

    
    

13. The determinative factual issue, in this proceeding, is whether the term "discharge" is equivalent to the term "operation" and, if it is, should the HCCB data be accepted as more reliable than the Health Council data.

    
    

14. The term "open heart surgery operation" is defined by Rule 59C- 1.033(2)(g), Florida Administrative Code, to mean:

    
    

    Surgery assisted by a heart-lung by-pass machine that is used to treat conditions such as congenital heart defects, heart and coronary artery diseases, including replacement of heart valves, cardiac vascularization, and cardiac trauma. One open heart surgery operation equals one patient admission to the operating room. Open heart surgery operations are classified under the following diagnostic related groups (DRGs): DRGs 104, 105, 106, 107, 108, and 110.

    
    

    (Emphasis added).

15. The definition of "open heart surgery operation" was also considered in Humhosco, Inc. v. Department of Health and Rehabilitative Services, 14 FALR

    245 (DOAH 1991). The hearing officer found that:

    
    

    [D]iagnostic related groups, or "DRGs," are a health service classification system used by the Medicare System. The existing rule does not include the reference to DRG classifications. Some confusion had been expressed by applicants as to whether certain organ transplant operations which utilized a bypass machine during the operation should be reported as open heart operations or as organ transplantation operations. The amendment was intended to clarify that only when the operation utilizes the bypass machine and falls within one of the enumerated categories should it be considered an open heart surgery operation. The inclusion of the listed DRGs was meant to clarify the existing definition by limiting the DRG categories within which open heart surgery services may be classified.

    There is no dispute that the primary factor in defining an open heart surgery procedure is the use of a heart-lung machine. Florida Hospital argued that the proposed definition is ambiguous and vague because not all procedures which fit into the listed DRG categories necessarily involve open heart surgery. Florida Hospital's fear that the new language would seem to indicate that each procedure falling into the listed DRGs qualifies as an open heart surgery operation is unfounded. While the provision could have been written in a simpler and clearer manner, the definition adequately conveys the intent that the use of a heart-lung bypass machine is an essential element to classify an operation as open-heart surgery.

    
    

    Humhosco, supra, at 255. (Emphasis added).

    
    

    CONCLUSIONS OF LAW

    
    

16. The Division of Administrative Hearings has jurisdiction over the parties to and the subject matter of this proceeding pursuant to Section 120.57 and 408.039, Florida Statutes.

    
    

17. St. Mary's argues, in effect, that procedures in the DRG's listed in the rule definition are presumptively open heart surgery operations and, therefore, the agency has the burden of proving that the discharges were not operations. Otherwise, St. Mary's asserts, the agency has failed to support the accuracy of its fixed need pool projection. It is clear, however, from the Humhosco decision that a discharge in the specified DRG's is not an operation, and is not even the primary factor in determining what procedures are open heart surgery operations.

18. In addition, Humhosco supports a conclusion that the number of discharges in the DRG's listed in the rule will be larger than the actual number of operations performed, because the latter will be subset of the former, given the additional "primary factor," the use of the heart-lung by-pass machine.

    
    

19. The evidence supports a conclusion that there is no inherent inconsistency in JFK reports of more discharges to the HCCB than operations reported to the Health Council. There is no legal basis to conclude that discharges are equivalent to operations, and there is no factual basis in this record to determine that JFK's report of 347 adult open heart surgery operations is in error.

    
    

20. Consequently, there is no basis for a determination that the August 7, 1992 fixed need pool publication for HRS District IX is in error.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency for Health Care Administration enter a final

order determining that the fixed need pool publication, dated August 7, 1992, for Department of Health and Rehabilitative Services District IX for the July 1994 planning horizon is accurate.

DONE and ENTERED this 22nd day of December, 1992, at Tallahassee, Florida.

ELEANOR M. HUNTER

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 22nd day of December, 1992.

APPENDIX

Both parties have submitted Proposed Recommended Orders. The following constitutes my rulings on the proposed findings of fact submitted by the parties.

The Petitioner's Proposed Findings of Fact

Proposed Finding Paragraph Number in the Findings of Fact of Fact Number in the Recommended Order Where Accepted or

Reason for Rejection.

1. Accepted in Findings of Fact 5 and 6.

2. Subordinate to Findings of Fact 13.

3. Accepted in Findings of Fact 11,

   conclusion rejected in Findings of Fact 13-15.

4. Accepted in Findings of Fact 15, conclusion rejected in Conclusions of Law 18-19.

5. Rejected in Conclusions of Law 17-19.

6. Rejected in Findings of Fact 13-15.

7. Accepted in Conclusions of Law 1.

8. Accepted in Findings of Fact 7 and 9.

9. Accepted in Findings of Fact 7 and 9.

10. Accepted, in part, and rejected, in part in Findings of Fact 10 and 11.

11. Rejected in Findings of Fact 11 and 13-15.

The Respondent's Proposed Findings of Fact

Proposed Finding Paragraph Number in the Findings of Fact of Fact Number in the Recommended Order Where Accepted or

Reason for Rejection.

1. Accepted in Findings of Fact 5.

2. Accepted in Findings of Fact 5.

3. Accepted in Findings of Fact 6.

4. Preliminary Statement

5. Accepted in Preliminary Statement.

6. Accepted in Preliminary Statement.

7. Accepted in Preliminary Statement.

8. Accepted in Preliminary Statement.

9. Accepted in Preliminary Statement.

10. Accepted in Findings of Fact 7 and 9.

11. Accepted in Findings of Fact 10 and 11.

12. Accepted in relevant part in Findings of Fact 4.

13. Subordinate to Findings of Fact 9 and 11.

14. Subordinate to Findings of Fact 7.

15. Subordinate to Findings of Fact 12.

16. Subordinate to Findings of Fact 12.

17. Subordinate to Findings of Fact 12.

18. Subordinate to Finding of Fact 11.

19. Accepted in Conclusions of Law 17.

20. Accepted in Findings of Fact 13-15.

21. Accepted in Findings of Fact 13-15.

COPIES FURNISHED:

W. David Watkins, Esquire Oertel, Hoffman, Fernandez

& Cole, P.A.

2700 Blair Stone Road Tallahassee, Florida 32301

Lesley Mendelson, Esquire

Agency for Health Care Administration 2727 Mahan Drive

Tallahassee, Florida 32308

Byron B. Mathews, Jr., Esquire

201 S. Biscayne Boulevard Suite 2200

Miami, Florida 33131

Gerald M. Cohen, P.A. Steel Hector & Davis

4000 Southeast Financial Center Miami, Florida 33131-2398

Robert A. Weiss, Esquire John M. Knight, Esquire

Parker, Hudson, Rainer & Dobbs The Perkins House

118 N. Gadsden Street Tallahassee, Florida 32301

Sam Power, Agency Clerk

Agency for Health Care Administration The Atrium, Suite 301

325 John Knox Road Tallahassee, Florida 32303

Harold D. Lewis, General Counsel Agency for Health Care Administration The Atrium, Suite 301

325 John Knox Road Tallahassee, Florida 32303

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions to this Recommended Order. All agencies allow each party at least 10 days in which to submit written exceptions. Some agencies allow a larger period within which to submit written exceptions. You should contact the agency that will issue the final order in this case concerning agency rules on the deadline for filing exceptions to this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the final order in this case.

Docket for Case No: 92-005675CON

Orders for Case No: 92-005675CON