STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

MARTIN MEMORIAL MEDICAL CENTER, INC., )

)

Petitioner, )

vs. )

) AGENCY FOR HEALTH CARE ADMINISTRATION, )

)

Respondent. ) CASE NO. 94-2917RU

) HCA HEALTH SERVICES OF FLORIDA, INC., ) d/b/a HCA MEDICAL CENTER OF PORT ST. ) LUCIE, )

)

Intervenor. )

)

FINAL ORDER

This case was heard by Eleanor M. Hunter, Hearing Officer of the Division of Administrative Hearings, in Tallahassee, Florida, on September 26, 1994.

APPEARANCES

For Petitioner, Byron B. Mathews, Jr. Martin Memorial Attorney At Law

Medical Center, Miami Center, 22nd Floor Inc.: 201 South Biscayne Boulevard

Miami, Florida 33131

For Respondent, Richard A. Patterson Agency for Attorney At Law

Health Care Agency for Health Care Administration Administration: The Atrium Building, Suite 325

325 John Knox Road

Tallahassee, Florida 32303-4131

For Intervenor,

HCA Health Jeffrey Frehn Services of Attorney At Law

Florida, d/b/a RADEY HINKLE THOMAS & MCARTHUR

HCA Medical 101 North Monroe Street, Suite 1000 Center of Port Post Office Drawer 11307

St. Lucie: Tallahassee, Florida 32302

PRELIMINARY STATEMENT

Martin Memorial Medical Center, Inc. ("Martin Memorial") challenged the preliminary issuance of certificate of need ("CON") No. 7241 to establish adult inpatient cardiac catheterization ("cath") services at HCA Services of Florida, Inc., d/b/a HCA Medical Center of Port Saint Lucie ("HCA Medical Center"). In their Joint Prehearing Stipulation of September 2, 1994, the parties agreed that

HCA Medical Center's entitlement to the CON depends solely on whether there is a numeric need for an additional adult inpatient cardiac cath program in Agency For Health Care Administration ("AHCA") District 9. AHCA published its numeric need determination on February 5, 1993, and its preliminary decision on July 23, 1993. The petition in the CON case was filed, pursuant to subsection 120.57(1), Florida Statutes, on August 25, 1993.

Martin Memorial also challenged, as an unpromulgated rule, AHCA's requirement that notice of any errors in a numeric need publication must be given to AHCA within ten (10) days of the date of the publication and any challenges filed within thirty (30) days. The petition challenging the unpromulgated rule was filed on May 26, 1994, with a Motion to Consolidate the rule case with the CON case. The Motion To Consolidate, was denied initially, for the reasons given in an AHCA Response in Opposition to the Motion To Consolidate, but subsequently reconsidered and granted upon the filing of the parties' Joint Motion For Consolidation.

In August 1994, AHCA published the ten day notice/thirty day challenge requirement as a proposed rule. The rule was filed with the Secretary of State on September 22, 1994, to become effective 20 days later. The initial petition in the unpromulgated rule case cited Section 120.56 as the basis for jurisdiction. At the final hearing on the consolidated cases, Martin Memorial was allowed to amend its petition in the unpromulgated rule case to include Section 120.535 as a basis for jurisdiction.

At the request of Martin Memorial or by joint motions of the parties, hearings scheduled for November 1993, March 1994, May 1994, August 1994, and earlier in September 1994, were cancelled and rescheduled. At the September 26, 1994 hearing, HCA Medical Center and AHCA renewed their Motion to Dismiss, which is the subject of this Order.

Martin Memorial filed a Response to Joint Motion For Summary Recommended Order on October 26, 1994, with various depositions. A Reply was filed by AHCA and HCA Medical Center on November 7, 1994.

ISSUE

Whether the petition in Case No. 94-2917RU, filed pursuant to Section 120.535, Florida Statutes, to challenge an unpromulgated rule, should be dismissed because the agency adopted the same statement as a rule during the pending litigation.

FINDINGS OF FACT

1. The agency for Health Care Administration ("AHCA") published a numeric need for one additional adult inpatient cardiac catheterization ("cath") program in AHCA District 9. The notice was given in the February 5, 1993 issue of the Florida Administrative Weekly.

   
   

2. The fixed numeric need publication included the following statement:

   
   

   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 of this cycle and a waiver of the person's right to raise the error at subsequent

   proceedings. Any other adjustments will be made in the first cycle subsequent to the identifica-

   tion of the error including those errors identified through administrative hearings or final judicial review.

   
   

   Any person whose substantial interest is affected by this action and who timely advised the agency of any error in the action has right to request an administrative hearing pursuant to Section 120.57, Florida Statutes. . . . All requests for hearings must be filed with the agency clerk within 30 days of this publication or the right to a hearing is waived.

   
   

3. On July 23, 1993, AHCA published its intent to award certificate of need ("CON") No. 7241 for the establishment of a District 9 adult inpatient cardiac cath program to HCA Services of Florida, Inc., d/b/a HCA Medical Center of Port St. Lucie ("HCA Medical Center").

   
   

4. Martin Memorial Medical Center, Inc. ("Martin Memorial") filed, on August 11, 1993, a challenge to the proposed issuance of CON 7241 to HCA Medical Center.

   
   

5. In February 1994, AHCA and HCA Medical Center filed a Joint Motion For Summary Recommended Order seeking dismissal of Martin Memorial's petition in the CON case for challenging solely and untimely the fixed need pool. In a Memorandum in Opposition to the Joint Motion, Martin Memorial claimed that its Petition was not just a challenge to the fixed need pool, but was also based on the substantial adverse impact to Martin Memorial as a result of the approval of the CON to HCA Medical Center. The Joint Motion For Summary Recommended Order was denied in April 1994.

   
   

6. On May 26, 1994, Martin Memorial filed a petition seeking a determination of the validity of the unpromulgated rule statement which requires that AHCA be given notice of errors in a fixed need pool within 10 days of publication and that administrative challenges are waived if not filed within 30 days. The CON challenge and the unpromulgated rule challenge were ultimately consolidated.

   
   

7. On August 12, 1994, AHCA published the 10 day notice/30 day challenge requirements as a proposed rule, and filed it with the Secretary of State on September 22, 1994. No challenge was filed to the proposed rule.

   
   

8. In a Proposed Joint Prehearing Stipulation for the 120.56 rule case (DOAH Case No. 94-2917), Martin Memorial contended that the statement is a rule as defined in subsection 120.52(16), Florida Statutes, and that the adoption of the rule by AHCA is an admission that it was practical and feasible to do so earlier in its five years of continuous use. AHCA and HCA Medical Center filed a separate Notice of Partial Adoption of Martin Memorial's Proposed Joint Prehearing Stipulation disagreeing with the contention that the statement has been utilized by the Agency in its fixed need pool publications since 1989.

9. AHCA and HCA Medical Center also disagreed with the following disputed issues of fact and law, because Martin Memorial raised issues inconsistent with its petition for the first time in the proposed Prehearing Stipulation:

   
   

   1. If [the statement is a "rule"], did the Agency commence rulemaking proceedings as soon as feasible and practicable?

   2. May the Agency rely upon the statement in the disposition of its official duties prior to October 12, 1994, the effective date of the Amendment to Rule 59C-1.008 which now adopts this Agency statement as rule?

      
      

10. In their Prehearing Stipulation and at the final hearing, all parties agreed that the statement challenged by the initial petition in this case, has now been adopted as a rule. AHCA and HCA Medical Center renewed their motion for dismissal.

    
    

11. The relief requested is, however, no longer available. In the Sigma case, the Hearing Officer concluded that the publication of the unpromulgated rule as a proposed rule negates any possible relief under section 120.535. Once the rulemaking process began, the agency could not be required to discontinue reliance on the unpromulgated rule, under subsection 120.535(5).

    
    

    CONCLUSIONS OF LAW

    
    

12. The Division of Administrative Hearings has jurisdiction pursuant to Subsection 120.535, Florida Statutes.

    
    

13. In Health Quest Corporation v. DHRS, et al., 11 FALR 5427, DOAH Case No. 89-2623R (F.O. 10/4/89), the department's rule prohibiting retroactive changes in fixed need pools was challenged as exceeding, therefore constituting an invalid exercise of, delegated legislative authority. Using the explanation of procedures in the Department's CON manual, which allowed corrections in the fixed need pool in time to publish the changes before CON applications are due, the Hearing Officer found that the policy of not otherwise correcting errors was a permissible, valid interpretation of the statute. In Health Quest, the Hearing Officer also noted that the statement of 10 days for notice/30 days for challenge was a further refinement of agency policy which the department had begun to include in fixed need pool publication notices. The statement was not challenged in Health Quest.

    
    

14. In Health Quest, jurisdiction was based on Section 120.56, but that case concerned an existing rule. After March 1992, however, section 120.56 is not available to challenge an unpromulgated rule. Section 120.535 is the appropriate basis for challenges to unpromulgated rules. Sigma International, Inc. v. State, 16 FALR 4836, DOAH Case No. 92-6070RU (F.O. 10/15/92).

    
    

15. Martin Memorial's argument that its petition was and should be treated as a Section 120.535 petition by DOAH, was accepted based on the language in the petition, including the relief requested.

Based on the foregoing Findings of Fact and Conclusions of Law, it is ORDERED that Martin Memorial's petition filed pursuant to Section 120.535,

Florida Statutes, is DENIED.

DONE AND ENTERED this 4th day of January, 1995, in Tallahassee, Leon County, 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 4th day of January, 1995.

APPENDIX TO FINAL ORDER, CASE NO. 94-2917RU

The parties did not file proposed findings of fact and, therefore, no rulings can be made, as required by Section 120.59(2), Florida Statutes.

COPIES FURNISHED:

Byron B. Mathews, Jr., Esquire Michael J. Weber, Esquire

201 South Biscayne Boulevard Suite 2200

Miami, Florida 33131

Richard A. Patterson, Esquire Senior Attorney

Agency for Health Care Administration

325 John Knox Road, Suite 301 Tallahassee, Florida 32303-4131

John Radey, Esquire Elizabeth McArthur, Esquire Jeffrey L. Frehn, Esquire

101 North Monroe Street, Suite 1000 Tallahassee, Florida 32302

R. S. Power, Agency Clerk

Agency for Health Care Administration Atrium Building, Suite 301

325 John Knox Road Tallahassee, Florida 32303

Harold D. Lewis, Esquire The Atrium, Suite 301

325 John Knox Road Tallahassee, Florida 32303

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: 94-002917RU

Orders for Case No: 94-002917RU