Findings Of Fact On July 18, 1983, Petitioner, under its former corporate name, Deltona General Hospital, Inc., filed, pursuant to Rule 10-5.08, Florida Administrative Code, a letter advising DHRS of its intention to file an application for a certificate of need to construct and operate a 100-bed acute-care hospital in Volusia County. The letter identifies the nature and scope of the project, the project location and the date upon which the application is to be filed. On July 18, 1983, Petitioner advised the Health Planning Council of Northeast Florida of its intention to file an application for a certificate of need to construct and operate a 100-bed acute-care hospital in Volusia County. Oral notice was provided by Western Union Mailgram on July 18, 1983. Written confirmation of the mailgram was received by the Health Planning Council of Northeast Florida on July 20, 1983. On July 18, 1983, Halifax Hospital Medical Center filed a competing letter of intent to establish a 100-bed acute-care general hospital in Volusia County. On August 15, 1983, both Petitioner and Halifax Hospital Medical Center filed applications for a certificate of need to construct a 100-bed acute-care hospital in Volusia County. On or about September 9, 1983, Petitioner was advised in a letter from Thomas F. Porter, Supervisor, Medical Facility Consultants, DHRS, that its August 15 application would not be reviewed in the August 15 acute-care batching cycle. DHRS rejected the application due to Petitioner's failure to file a written letter of intent with the local health council on or before July 18, 1983, predicting its decision on Rule 10-5.08(1)(b), Florida Administrative Code. The application of Halifax Hospital Medical Center will be reviewed by DHRS in the August 15, 1983, batching cycle. Committee Substitute for House Bill 700, effective July 1, 1983, and codified into law at Chapter 83-244, Laws of Florida, amended Section 381.494(5), Florida Statutes, to require DHRS to "provide a mechanism by which providers may enter a batching cycle to compete with all letters of intent filed." DHRS has not, as of this date, developed a mechanism in compliance with this statutory amendment. In 1982, Rule 10-5.08, Florida Administrative Code, provided, in pertinent part: In order that applications per- taining to similar types of services, facilities, or equipment affecting the same health service area may be considered in relation to each other for purposes of competitive review, letters of intent and applications shall be submitted to the appropriate HSA in the Department pursuant to dates prescribed and application schedules (attachments 1-9) developed under the following conditions: * * * (e) In cases where a letter of intent was filed within five working days of the letter of intent deadline, a grace period of ten days from the deadline date for receipt of letters of intent shall be established to pro- vide an opportunity for a competing applicant to file a letter of intent. As amended on March 31, 1982, Rule 10-5.08(1)(b) provides, in pertinent part: At least 30 days prior to the filing of an application, a letter of intent respecting the development of a pro- posal must be actually received by the local health council and by the Department . . . because letters of intent give applicants a right of entry into the Certificate of Need process, failure to file a timely letter of intent and to have it actually received by the Department and by the local health council at least 30 days prior to the filing of an application will prevent the Department from accepting an applica- tion. Failure to timely file a letter of intent or to timely file an appli- cation will cause a delay in a Certifi- cate of Need project until the next available review cycle. Section 381.494(5), Florida Statutes, is cited in the Florida Administrative Code as the specific authority for Rule 10-5.08. In addition, Section 381.494(5), Florida Statutes, is cited as the law implemented by Rule 10-5.08. During the 1983 Legislative Session, a number of groups and individuals recommended that Section 381.494(5), Florida Statutes, be amended to include a grace period provision. Both DHRS and the Florida Hospital Association supported the requested legislative amendment. The 1983 Legislature in fact amended Section 381.494(5), Florida Statutes, to require the Department to provide a "mechanism" by which providers may enter a batching cycle to compete with all letters of intent filed. Chapter 83-244, Laws of Florida. The amended statute became effective July 1, 1983. DHRS has yet to initiate formal rule-making proceedings under Chapter 120, Florida Statutes, to amend the challenged rule. The amount of time required to develop and adopt an amended version of Rule 10-5.08, Florida Administrative Code, is uncertain. Section 381.494(5), as amended, does not specifically require that DHRS promulgate or amend the challenged rule. The statute directs DHRS to provide a "mechanism" by which providers may enter a batching cycle to compete with all letters of intent filed. The filing of a letter of intent with the local health councils serves an informational purpose. The letter of intent process gives notice to the community at large as to what particular applications may be submitted during the various batching cycles. The filing of a letter of intent does not trigger any review process at the local level. The local health council does not participate in project review during the certificate of need process. The purpose of the letter of intent is simply to put other institutions or interested individuals in the area on notice of the potential for filing of an application at a later date. The Halifax Hospital Medical Center certificate of need application is being reviewed in the August 15 batching cycle without reference to any other applications. If Petitioner's application is accepted, it will be reviewed competitively with the Halifax application.
The Issue Whether the Petitioner must reimburse the Respondent for Medicaid overpayments as set out in the Final Agency Audit Report ("FAAR") dated May 8, 2003.
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing and on the entire record of this proceeding, the following findings of fact are made: At all times material to this proceeding, AHCA has been the state agency charged with responsibility for overseeing the Florida Medicaid system, including the recovery of overpayments to Medicaid providers. § 409.913, Fla. Stat. (1996-2000).1 Dr. Lee was an authorized Medicaid provider during the Audit Period, having been issued provider number 377123700. Dr. Lee had valid Medicaid Provider Agreements with AHCA during the Audit Period. Pursuant to her Medicaid provider agreement, Dr. Lee agreed to: (1) retain for five years complete and accurate medical records "that fully justify and disclose the extent of the services rendered and billings made under the Medicaid program"; (2) bill Medicaid only for services or goods that are medically necessary; and (3) "abide by the Florida Administrative Code, Florida Statutes, policies, procedures, manuals of the Florida Medicaid Program and Federal laws and regulations." AHCA audited the Medicaid claims Dr. Lee submitted for certain specified procedures during the Audit Period. After AHCA issued its Preliminary Agency Audit Report on September 6, 2000, Dr. Lee provided AHCA additional documentation, which was reviewed and which resulted in the issuance of a FAAR dated May 8, 2003, which included an adjustment of the overpayment claimed by AHCA from $131,177.64 to $129,148.49 for services provided between January 1, 1996, and January 9, 1998.2 As a result of adjustments made after issuance of the FAAR on May 8, 2003, AHCA now seeks to recover from Dr. Lee $109,439.77. Dr. Lee is an osteopathic physician who is board- certified in internal medicine by the American Academy of Internal Medicine; three years ago, she earned a sub-specialty in HIV/AIDS medicine from the American Academy of HIV Medicine. During the Audit Period, Dr. Lee specialized in HIV/AIDS, with 85 to 90 percent of her practice devoted to the treatment of patients diagnosed with HIV/AIDS. At the times material to this proceeding, Dr. Lee's offices were located in Ft. Lauderdale, Florida. Joseph W. Shands, M.D., conducted the peer review of the documentation provided by Dr. Lee for purposes of the audit conducted by AHCA. Dr. Shands first reviewed documentation provided by Dr. Lee in 1999; he reviewed additional documentation provided by Dr. Lee subsequent to his deposition in October 2003. Dr. Shands graduated from medical school in 1956, trained in internal medicine, and worked as a microbiologist for approximately 15 years. He served as Chief of Infectious Diseases at the University of Florida for 23 years and also treated patients through the Alachua County Public Health Department and Shands Hospital at the University of Florida. Dr. Shands' practice was devoted almost entirely to the treatment of patients diagnosed with HIV/AIDS. Dr. Shands treated virtually all of the HIV/AIDS patients in Alachua County and the surrounding counties. The area from which Dr. Shands drew his patients is primarily rural, and he has treated approximately 1,000 HIV/AIDS patients. Dr. Shands retired from the practice of medicine in May 2002. For three years prior to his retirement, Dr. Shands practiced medicine part-time. The Medicaid payments sought to be recovered by AHCA for services deemed by Dr. Shands to be medically unnecessary relate primarily to Dr. Lee's use of intravenous immunoglobulin ("IVIG") in the treatment of Patients #4, #5, #6, #7, #9, #13, #15, #16, #21, and #24. All of these patients had been diagnosed with HIV/AIDS prior to the Audit Period, and Dr. Lee prescribed IVIG for these patients based on her diagnoses of either deficiency of humoral immunity ("DHI"), which carries the diagnosis code 279.09, or demyelinating neuropathy, which carries the diagnosis code 357.0. DHI IVIG consists of immunoglobulin precipitated out of human blood and reconstituted for intravenous infusion. IVIG is administered to persons who have low antibodies in an attempt to boost the antibodies in their systems to fight certain diseases, including DHI. There are two immune systems at work in the human body, humoral immunity that is provided by antibodies and cell- mediated immunity that is provided through cells, such as CD4 and CD8 cells. The infusion of IVIG is not covered as a treatment for HIV/AIDS under Florida's Medicaid program because HIV/AIDS compromises a person's cell-mediated immunity by infecting and killing CD4 cells. The use of IVIG to treat properly diagnosed and documented cases of DHI is considered medically necessary and is covered by Florida's Medicaid program. When a person has DHI, the body's antibody-producing cells do not differentiate properly, and the body produces fewer antibodies. As a result, the total level of immunoglobulin, or the level of one or more of the five subclasses of immunoglobulin, is depressed. The infusion of IVIG raises the level of immunoglobulins in the body. A person suffering from DHI must have a history of chronic, severe sinopulmonary infections3 that have persisted over a long period of time and that are so serious that pulmonary function becomes insufficient and death would result without treatment. Even though a person's medical history and symptoms are relevant to a diagnosis of DHI, a confirmed diagnosis of DHI requires documentation of a deficiency in the total level of immunoglobulin in the body or a deficiency in at least one of the five subclasses of immunoglobulin, which are known as IgG, IgM, IgA, IgF, and IgD. Such a deficiency is established by a blood test that measures the total immunoglobulin level in the body, as well as the level of immunoglobulin in the five subclasses. This test was available during the Audit Period and was covered by Florida's Medicaid program. Dr. Lee diagnosed DHI in her patients by relying solely on her training, experience, and diagnostic abilities as a physician. She considered the patient's history of recurring sinopulmonary infections, the results of previous treatment with IVIG, and the status of the patient's CD4 cells as shown by a blood test.4 She did not order tests for any of her patients to determine the level of their total immunoglobulin or the level of the five subclasses of immunoglobulin because she believed that the tests were too expensive. In diagnosing sinusitis, Dr. Lee considered the patient's symptoms and the results of her physical examinations of a patient. Symptoms of sinus congestion, facial pain, and nasal drip do not, however, support a diagnosis of sinusitis; a diagnosis of acute, chronic sinusitis requires that the patient have a chronically stuffy nose with purulent drainage, sinus tenderness, and, perhaps, a high fever. If a patient exhibits these symptoms, the diagnosis could be confirmed with an X-ray of the sinuses, although the test that most accurately established the presence of sinusitis during the Audit Period was a CT scan of the sinuses. In addition, even an appropriate diagnosis of acute, chronic sinusitis does not support a diagnosis of DHI. Acute, chronic sinusitis must be accompanied by severe, chronic pulmonary infections such as frequent episodes of bronchitis, the presence of sputum containing puss, fevers, and occasional episodes of pneumonia. In reviewing Dr. Lee's medical records to evaluate the medical necessity for IVIG treatments for patients diagnosed by Dr. Lee with DHI, Dr. Shands looked first at the patient's symptoms and the results of a physical examination that would show the presence of acute, chronic sinopulmonary infections; he then looked for the results of laboratory tests that would confirm that the patient had a deficiency in total immunoglobulin or a deficiency in one or more of the five subclasses of immunoglobulin. Demyelinating neuropathy Demyelinating neuropathy is a neurological condition in which the peripheral nerves fail to conduct electrical pulses in a normal fashion due to the deterioration or loss of the myelin sheath surrounding the peripheral nerves. General neuropathy, that is, a disruption in the peripheral nervous system, does not respond to IVIG; but neuropathy which involves demyelination, or the loss of the myelin sheath, improves with IVIG treatments, and the use of IVIG to treat properly diagnosed and documented cases of DHI is considered medically necessary and is covered by Florida's Medicaid program. Demyelinating neuropathy is characterized by ascending motor weakness and decreased reflexes. There are several types of neuropathy in addition to demyelinating neuropathy, including sensory neuropathy, which does not respond to treatment with IVIG, and Guillain-Barre, a rare autoimmune neuropathy producing paralysis that starts in the feet and moves up the body, which does respond to treatment with IVIG. Back pain or pain in the legs does not, of itself, support a diagnosis of demyelinating neuropathy, and the neuropathy must be severe in order to support a diagnosis of demyelinating neuropathy. Medical necessity for IVIG treatments Patient #4 Dr. Lee submitted claims to Medicaid for IVIG infusions received by Patient #4 for DHI on September 24, 1997. As a result of the audit, AHCA denied Dr. Lee's Medicaid claims for the IVIG treatment. At the times material to this proceeding, Patient #4 was a 38-year-old man suffering from HIV/AIDS. The medical records provided by Dr. Lee's office cover the period from May 20, 1997, to September 25, 1997, and show that Patient #4's first visit to Dr. Lee's office during the Audit Period was a scheduled visit on May 20, 1997. Although Dr. Lee stated in the medical records of this visit that Patient #4 "denie[d] any recent fevers. Pt state[d] sinus congestion cleared up on Friday - therefore, he didn't need to take Biaxin," Dr. Lee noted in the record that Patient #4 was "complaining once again of sinus congestion, fevers, cough with yellow sputum." The record of the examination of Patient #4's nose indicates "nasal mucosa moist, errythematous [sic], edematous turbinates"5; the record of the examination of Patient #4's lungs indicates "breath sounds are clear to auscultation bilaterally, no rales or rhonchi." In addition to Patient #4's diagnosis of HIV/AIDS, Dr. Lee diagnosed Patient #4 on May 20, 1997, as having acute sinusitis, chronic sinusitis, and DHI, and she noted that "[t]his patient needs IVIG. Sinus infections resolved with increased immunoglobulins by infusion when given in past. Insurance however, refuses to supply this med to the patient. Will continue to treat infections on a PRN basis." Dr. Lee prescribed Rocephin and Biaxin, two antibiotics, for Patient #4 on May 20, 1997. There is no indication in the record of the May 20, 1997, visit that Patient #4 had any pulmonary infection, and there is nothing in the medical records provided to support the notation that IVIG treatments had resolved previous sinus infections. At his scheduled office visit on June 12, 1997, Patient #4 reported sinus congestion and nasal scabbing; Dr. Lee's physical examination of Patient #4's nose again revealed that his "nasal mucosa [were] moist, [with] errythematous [sic], edematous turbinates." The examination of the lungs again did not reveal any abnormalities. On June 17, 1997, Patient #4 visited Dr. Lee's office for a sick visit, reporting "general malaise with diarrhea, night sweats, productive cough." The examination of the nose and lungs did not reveal any abnormalities. On June 26, 1997, Patient #4 visited Dr. Lee's office and complained of boils under both arms. Dr. Lee's physical examination of Patient #4's nose revealed moist nasal mucosa, with erythematous, edematous turbinates; the examination of the lungs again revealed no abnormalities. Patient #4 next visited Dr. Lee's office on September 15, 1997, for a sick visit. Among other complaints, Patient #4 reported that he "is still suffering with chronic sinusitis with increase noted this past week of congestion and post nasal drip. Also noted to be small amount of bleeding from nose." Among the symptoms noted for Patient #4 were "sinus congestion severe, increase in nasal discharge, epistaxis occasionally. . . . Denies fevers or chills." The report of Dr. Lee's physical examination of Patient #4's nose indicated "nasal mucosa moist, extremely errythematous [sic], edematous turbinates, increased nasal discharge, tenacious and greenish"; the examination of the lungs again revealed no abnormalities. Dr. Lee noted on the record of Patient #4's September 15, 1997, office visit that she would "schedule for IVIG monthly." Patient #4 visited Dr. Lee's office on September 24 and 25, 1997, for the infusion of IVIG, but Dr. Lee submitted a Medicaid claim for the IVIG infusion only for September 24, 1997. The diagnoses noted for these visits were DHI and HIV/AIDS. There is no indication in any of the Comparative Laboratory Test Results provided by Dr. Lee's office for Patient #4 that tests were done to measure the level of Patient #4's total immunoglobulin or the level of any of the subclasses of immunoglobulin. The medical records provided by Dr. Lee for Patient #4 do not support Dr. Lee's diagnosis that Patient #4 suffered from DHI. Although the medical records substantiate that Patient #4 had recurrent sinus infections, there was no evidence establishing that Patient #4 had bronchitis or any pulmonary infections; rather, Patient #4's lungs were clear at each of the documented visits to Dr. Lee's office. Dr. Lee testified that she had seen Patient #4 prior to the time covered by the Audit Period and that his history included chronic, recurrent sinus infections and chronic bronchitis. Dr. Lee did not provide documentation of Patient #4's history in the medical records provided by her office, and her testimony is not sufficient, standing alone, to establish that Patient #4 suffered from the severe, chronic sinopulmonary infections necessary to support a diagnosis of DHI. The medical records provided by Dr. Lee fail to support her diagnosis of DHI and, therefore, fail to establish that the infusion of IVIG was medically necessary. The claim submitted to Medicaid for the IVIG infusion given on September 24, 1997, should be denied. Patient #5 Dr. Lee submitted claims to Medicaid for IVIG infusions received by Patient #5 for demyelinating neuropathy and DHI on April 17, 1997, April 18, 1997, and June 11, 1997. As a result of the audit, AHCA denied Dr. Lee's Medicaid claims for these three IVIG infusions. At the times material to this proceeding, Patient #5 was a 31-year-old man suffering from HIV/AIDS. The medical records provided by Dr. Lee cover the period from February 19, 1997, to June 11, 1997, and show that Patient #5's first visit to her office during the Audit Period was a post-hospitalization visit on April 14, 1997. The medical records provided by Dr. Lee do not support a diagnosis of DHI. Patient #5 visited Dr. Lee's office for examination on April 14, 1997, and June 3, 1997. Patient #5 did not complain at either of these visits of a sinopulmonary infection, and the results of the physical examinations of Patient #5's nose and lungs performed during these visits did not reveal any abnormalities: The reports of the examinations of Patient #5's nose indicated that "nasal mucosa moist, normal turbinates," and the reports of the examinations of Patient #5's lungs indicated that "breath sounds are clear to auscultation bilaterally, no rales or rhonchi." In addition, the only dates on which a diagnosis of DHI appeared in Dr. Lee's medical records for Patient #5 were April 17, April 18, and June 11, 1997, the dates on which Patient #5 received infusions of IVIG. The medical records provided by Dr. Lee also fail to support a diagnosis of demyelinating neuropathy. Dr. Mayur Maniar performed a lower extremity nerve conduction study on February 19, 1997, almost two months before Patient #5's first reported visit to Dr. Lee. Dr. Maniar's report contains the following: "IMPRESSION: This is mildly abnormal nerve conduction study of lower extremities, which demonstrates mild sensorimotor, predominately demyelinating type of peripheral neuropathy in lower extremities. Please correlate clinically." The medical records provided by Dr. Lee do not include anything to indicate that a neurological study of Patient #5 was performed. There is no indication in the medical records provided by Dr. Lee documenting Patient #5's April 14, 1997, office visit that Patient #5 complained of weakness in his extremities, and no weakness was noted in Dr. Lee's physical examination performed by Dr. Lee during that office visit. The next two office visits, on April 17, 1997, and on April 18, 1997, were exclusively for the infusion of IVIG. Patient #5 reported at his scheduled office visit on June 3, 1997, that, among other things, that he was experiencing "fatigue, generalized weakness and 'tingling' over all body." Dr. Lee noted that Patient #5's "[n]europathy persists, slight short term improvement with rehab. Will receive second dose of IVIG this month." Patient #5's next visit to Dr. Lee's office, on June 11, 1997, was exclusively for the infusion of IVIG. The medical records she provided to AHCA do not support Dr. Lee's testimony that Patient #5 had "severe profound neuropathy with weakness," and her testimony, standing alone, is not sufficient to establish that Patient #5 suffered from the severe demyelinating neuropathy that responds to IVIG treatment. The medical records provided by Dr. Lee establish only that Patient #5 suffered from mild demyelinating neuropathy. The records, therefore, fail to establish that the infusion of IVIG was medically necessary, and the claims to Medicaid for the IVIG infusions given on April 17 and 18, 1997, and June 11, 1997, should be denied. Patient #6 Dr. Lee submitted claims to Medicaid for IVIG infusions received by Patient #6 for DHI on January 20 and 21, 1997; February 24 and 25, 1997; March 24 and 25, 1997; and April 22 and 23, 1997. As a result of the audit, AHCA denied Dr. Lee's Medicaid claims for these eight IVIG infusions. Dr. Lee's first contact with Patient #6 was on June 5, 1996, when she was asked by another physician to consult as a HIV/AIDS specialist. There is nothing in the record of this consultation to support Dr. Lee's contention that Patient #6 suffered from chronic, recurrent sinusitis and had been previously treated with IVIG. Rather, Dr. Lee noted in the record of the June 5, 1996, consultation that "the patient has had essentially no medical care. He moved from Tennessee in December and had been doing well until then." There is also nothing in the medical records provided by Dr. Lee to confirm that Patient #6 had previously been treated for chronic sinusitis. Patient #6 saw Dr. Lee in her office for a scheduled visit on January 13, 1997. Patient #6 did not complain of sinus or pulmonary problems; the report of Dr. Lee's physical examination of Patient #6's nose and lungs did not reveal any abnormalities. Dr. Lee's diagnoses for the January 13, 1997, office visit did not include DHI or chronic sinusitis. Patient #6 was treated with IVIG on January 20, 1997, with diagnoses that included DHI; Patient #6 was treated with IVIG on January 21, 1997, and the diagnoses for that visit included DHI and both chronic and acute sinusitis. Patient #6 visited Dr. Lee's office on January 27, 1997, with complaints of, among other things, "sinus, nose bleed," and the complaint that "sinus congestion persists." Dr. Lee's physical examination of Patient #6's nose and lungs did not reveal any abnormalities. The diagnoses for the January 27, 1997, office visit included DHI and both chronic and acute sinusitis. Dr. Lee wrote in the record of Patient #6's January 27, 1997, office visit that she would "continue IVIG monthly." Patient #6 visited Dr. Lee's office on February 6, 1997, but the medical records for that visit do not indicate that Patient #6 complained of sinus or pulmonary problems. Dr. Lee's physical examination did not include an examination of Patient #6's nose, but her examination of his lungs did not show any abnormalities. On February 24, 1997, Patient #6 visited Dr. Lee's office for both a physician visit and the infusion of IVIG. Patient #6 complained of "some sinus congestion," and Dr. Lee's physical examination of Patient #6's nose revealed moist nasal mucosa, with erythematous, edematous turbinates. Dr. Lee's physical examination of the lungs did not show any abnormalities. In addition to the physician visit with Dr. Lee, Patient #6 was treated with IVIG on February 24, 1997, with diagnoses that included DHI and chronic sinusitis; Patient #6 was also treated with IVIG on February 25, 1997, with diagnoses that included DHI and chronic sinusitis. Patient #6's next visit to her office was on March 24, 1997, and was solely for infusion of IVIG, with diagnoses that included DHI. On March 25, 1997, Patient #6 visited Dr. Lee's office for a physician visit and for the second infusion of IVIG for the month. Patient #6 reported that his "sinuses [were] better 'already' since IVIG." Dr. Lee's physical examination of Patient #6's nose on March 25, 1997, indicated that he had moist nasal mucosa, with "slightly edematous turbinates"; the examination of Patient #6's lungs did not show any abnormalities. Patient #6 visited Dr. Lee's office on April 1, 11, and 17, 1997. Patient #6 did not complain of any problems with his sinuses or lungs, and no examination was done of Patient #6's nose or lungs on April 1, 1997. Dr. Lee's physical examination of Patient #6's lungs on April 11, 1997, did not reveal any abnormalities; there is no record that Dr. Lee examined Patient #6's nose during the April 11, 1997, office visit. Dr. Lee's physical examination of Patient #6's nose and lungs on April 17, 1997, did not reveal any abnormalities. Patient #6 next visited Dr. Lee's office on April 21, 1997, solely to receive an infusion of IVIG. The nurse was unable to obtain access to Patient #6's vein, and he returned to the office on April 22, 1997, for a physician visit and for the infusion of IVIG. Patient #6 did not complain of any sinopulmonary problems on April 22, 1997, and Dr. Lee's physical examination of Patient #6's nose and lungs did not reveal any abnormalities. IVIG was administered on April 22, 1997, and the following note was included in the record of the April 22, 1997, visit: "IVIG for chronic sinusitis and decreased humoral immunity." Patient #6 returned to Dr. Lee's office on April 23, 1997, solely for the infusion of IVIG. There is no indication in any of the Comparative Laboratory Test Results provided by Dr. Lee's office for Patient #6 that tests were done to measure the level of Patient #6's total immunoglobulin or the level of any of the subclasses of immunoglobulin. The medical records provided by Dr. Lee's office for Patient #6 do not support her diagnosis of DHI. A diagnosis of DHI requires severe, chronic sinopulmonary infections, together with a deficiency in total immunoglobulins or in a subset of immunoglobulins. Dr. Lee did not test Patient #6's total immunoglobulin level or the level of any of the five subclasses of immunoglobulin, and he complained of sinus problems at only two office visits, on January 27, 1997, six days after he received IVIG, and on February 24, 1997, when he complained of "some sinus congestion."6 Additionally, there is nothing in the medical records provided by Dr. Lee to support her testimony that Patient #6's history prior to her treatment of him included chronic recurrent signs of sinus infection or that previous treatment with IVIG had improved his sinus infections. The medical records provided by Dr. Lee, therefore, fail to establish that the infusion of IVIG was medically necessary. The claims to Medicaid for the IVIG infusions given on January 20 and 21, 1997; February 24 and 25, 1997; March 24 and 25, 1997; and April 22 and 23, 1997, should be denied. Patient #7 Dr. Lee submitted claims to Medicaid for IVIG infusions received by Patient #7 for DHI on August 5 and 6, 1997; September 2 and 3, 1997; September 30 and October 1, 1997; and January 8 and 9, 1998. As a result of the audit, AHCA denied the Medicaid claims for these eight IVIG infusions. At the times material to this proceeding, Patient #7 was a 43-year-old man diagnosed with HIV/AIDS. According to the medical records provided by Dr. Lee's office, Patient #7's first office visit of the Audit Period was July 22, 1997. Patient #7 complained of "some cough, but is smoking more." Dr. Lee's physical examination of Patient #7's nose revealed moist nasal mucosa, with "pale, errythematous [sic] turbinates"; the examination of the lungs revealed no abnormalities. Patient #7 next visited Dr. Lee's office on August 4, 1997, when he complained of worsening sinus congestion but denied having fevers. Dr. Lee's physical examination of Patient #7's nose revealed moist nasal mucosa, with erythematous, edematous turbinates; the physical examination of his lungs revealed no abnormalities. Dr. Lee noted in the medical record that she would "start IVIG monthly," and she included diagnoses of chronic sinusitis and DHI. Dr. Lee's office did not provide any medical records documenting Patient #7's August 5, 1997, office visit or the IVIG treatment for which she claimed payment from Medicaid. Patient #7 visited Dr. Lee's office on August 6, 1997, solely for an IVIG infusion. Patient #7's next visits to Dr. Lee's office were on September 2 and 3, 1997. On September 2, 1997, Patient #7 visited Dr. Lee's office for a physician office visit and the infusion of IVIG. Patient #7 reported that his "sinuses are better"; that he was "using saline nasal spray with good results"; and that he had no fevers. Dr. Lee's examination of Patient #7's nose and lungs did not reveal any abnormalities. Dr. Lee's diagnoses included chronic sinusitis and DHI. On September 3, 1997, the only service was the infusion of IVIG, and DHI was among the diagnoses noted in the medical records. Patient #7 next visited Dr. Lee's office on September 30, 1997, to receive an infusion of IVIG, and he was also examined by Dr. Lee. Patient #7 reported "great improvement in sinus congestion since start of IVIG"; Patient #7 denied having any fevers or headaches. Dr. Lee's physical examination of Patient #7's nose and lungs did not reveal any abnormalities, and her diagnoses included DHI and acute sinusitis. Patient #7 returned to Dr. Lee's office on October 1, 1997, solely for the infusion of IVIG; no diagnosis was included in the medical record of this visit. Patient #7 visited Dr. Lee's office on October 28, 1997, for a scheduled visit. He was to receive an infusion of IVIG, but this was not possible, according to Dr. Lee's notes, because of a shortage of the drug. Patient #7 reported "increased sinus congestion for past week." Dr. Lee's physical examination of Patient #7's nose revealed erythematous turbinates; the physical examination of his lungs revealed no abnormalities. Patient #7's next visit to Dr. Lee's office was a follow-up visit on November 11, 1997. Patient #7 reported no major complaints, and Dr. Lee's physical examination of his nose and lungs did not reveal any abnormalities. Neither sinusitis nor DHI was included among the diagnoses. Patient #7 also visited Dr. Lee's office on November 25, 1997, for infusion of "W/B complex." On December 9, 1997, Patient #7 visited Dr. Lee's office for a scheduled visit. He did not complain of sinus problems and denied having any fevers. Dr. Lee's physical examination of his nose and lungs did not reveal any abnormalities. On December 11 and 12, 1997, Patient #7 received only IVIG infusions at Dr. Lee's office; the diagnoses included DHI and chronic and acute sinusitis. Patient #7 also visited Dr. Lee's office on January 8, 1998, solely to receive an infusion of IVIG; the diagnoses for this visit included DHI and chronic and acute sinusitis. On January 9, 1998, Patient #7 visited Dr. Lee's office for a physician's visit and for the infusion of IVIG. The medical records reflect that Patient #7 had been hospitalized on December 23, 1997, "after an acute anterior wall mi[ocardial infarction]" and that he had developed chest pain after increasing his dosage of Zyban. Patient #7 voiced no complaints about his sinuses or lungs during this visit, and Dr. Lee's physical examination of Patient #7's nose and lungs did not reveal any abnormalities. IVIG was infused on January 9, 1998, and the diagnoses included DHI. Dr. Lee also provided medical records documenting Patient #7's office visits prior to the Audit Period to support her diagnosis of DHI: In December 1994, Patient #7 was diagnosed with sinusitis and severe bronchitis, though he denied having fevers; in June 1995, Patient #7 reported no complaints; in September 1995, Patient #7 reported that he had severe pain in his feet and hands, that a physical examination revealed that his "nasal mucosa [was] errythematous [sic], [and] slightly edematous" and that his lungs were clear; in November 1995, Patient #7 reported nasal discharge, and Dr. Lee noted that Patient #7 had chronic sinusitis "resolving with Becanase AQ spray"; in December 1995, Patient #7 reported intermittent sinus congestion but no fevers, and Dr. Lee noted that he had "[c]hronic sinusitis treated with Vancanase." There is no indication in any of the Comparative Laboratory Test Results provided by Dr. Lee's office for Patient #7 that tests were done to measure the level of Patient #7's total immunoglobulin or the level of any of the subclasses of immunoglobulin. Dr. Lee's testimony that she diagnosed Patient #7 with DHI because of his recurrent, chronic sinusitis is not supported by the information in Patient #7's medical records. First, the medical records for office visits and treatments during the Audit Period establish that Patient #7 complained only a few times of sinus congestion that responded well to other, traditional, treatments both before and after Dr. Lee began treating Patient #7 with IVIG infusions. Furthermore, except for the reported bronchitis in December 1994, there is no indication in the medical records that Patient #7 complained of or suffered from any pulmonary infections; all of the physical examinations of Patient #7's lungs done both before and during the Audit Period revealed no abnormalities. Finally, Dr. Lee testified that she based her diagnosis of DHI partly on Patient #7's complaints of headaches, but the only mention of headaches in the medical records is in the record of Patient #7's September 30, 1997, office visit, in which he denied having headaches. The medical records provided by Dr. Lee's office fail to support Dr. Lee's diagnosis of DHI and, therefore, fail to establish that the treatment of Patient #7 with IVIG infusions was medically necessary. The claims to Medicaid for the IVIG infusions given on August 5 and 6, 1997; September 2 and 3, 1997; September 30 and October 1, 1997; and January 8 and 9, 1998, should be denied. Patient #9 Dr. Lee submitted claims to Medicaid for IVIG infusions received by Patient #9 for DHI on July 16 and 17, 1996; August 14 and 15, 1996; September 16 and 17, 1996; October 10 and 11, 1996; November 6 and 7, 1996; December 4 and 5, 1996; December 26 and 27, 1996; January 16 and 17, 1997; February 10 and 12, 1997; March 10 and 11, 1997; April 7, 1997; June 10 and 11, 1997; July 10 and 11, 1997; September 18 and 19, 1997; and January 7 and 8, 1998.7 As a result of the audit, AHCA denied the Medicaid claims for these 29 IVIG infusions. At the times material to this proceeding, Patient #9 was a 30-year-old man who had been HIV positive since 1984. Dr. Lee first saw Patient #9 on May 1, 1996. In the record of Patient #9's May 1, 1996, office visit, Dr. Lee noted that he had a recent history of fungal pneumonia, which resulted from a deficiency in his cell-mediated immunity caused by HIV/AIDS. Patient #9 reported that he was experiencing some shortness of breath with a cough but no sputum, a recurrent sore throat, and chest congestion. Dr. Lee's physical examination of Patient #9's nose and lungs did not reveal any abnormalities, and Patient #9's history, as noted by Dr. Lee, did not include recurrent sinusitis or recurrent pulmonary infections. Dr. Lee diagnosed Patient #9 on May 1, 1996, with HIV/AIDS, gastritis, hypogonadism, weight loss, vitamin B12 deficiency, and fatigue. Patient #9's next office visit was on July 3, 1996, at which time Patient #9 complained of chest congestion with an unproductive cough. Dr. Lee's diagnoses at this office visit were HIV/AIDS and fever. Patient #9's next office visit was on July 15, 1996, at which time he complained of having had a fever above 100 degrees, a cough with blood in the phlegm, and increased sinus drainage. Dr. Lee's physical examination of Patient #9's nose revealed moist nasal mucosa, with erythematous, edematous turbinates; Dr. Lee's physical examination of Patient #9's lungs revealed a scattered respiratory wheeze, but no rales or rhonchi. Dr. Lee diagnosed Patient #9 with bronchitis and chronic sinusitis, and she stated in her treatment plan that she would "start IVIG Q [each] month as soon as possible." Patient #9 visited Dr. Lee's office on July 16 and 17, 1996, solely to receive infusions of IVIG. The diagnoses for these office visits included DHI, bronchitis, and chronic sinusitis. Patient #9 visited Dr. Lee's office on July 18, 1996, complaining of diarrhea, a persistent cough, and a sore throat but no sinus congestion or pulmonary problems. Dr. Lee's physical examination of Patient #9's lungs revealed "slight rhonchi left lung fields. Slight expiratory wheeze"; there is no indication that Patient #9's nose was examined. Dr. Lee saw Patient #9 for a routine office visit on August 1, 1996. Patient #9 reported that he felt fine and had had no fevers. Dr. Lee's physical examination of Patient #9's nose revealed erythematous, edematous turbinates; the examination of his lungs did not reveal any abnormalities. Dr. Lee noted in the medical records of this office visit that Patient #9 needed a full dose of IVIG in 2 weeks for sinusitis. Patient #9 received only infusions of IVIG at the office visits on August 14 and 15, 1996. At his office visit on August 29, 1996, Patient #9 reported no physical complaints, and Dr. Lee's physical examination of his nose and lungs did not reveal any abnormalities. Patient #9 received only infusions of IVIG during the office visits on September 16 and 17, 1996. Dr. Lee examined Patient #9 on September 24, 1996, as a follow-up to surgery to place a port in his chest. He complained of a cough with white sputum, but Dr. Lee's physical examination of Patient #9's nose and lungs did not reveal any abnormalities. Dr. Lee examined Patient #9 at his October 8, 1996, monthly office visit, and her physical examination of his nose and lungs did not reveal any abnormalities. Nonetheless, Dr. Lee noted that she would continue IVIG monthly. Patient #9 received infusions of IVIG at office visits on October 10 and 11, 1996. On October 29, 1996, Dr. Lee saw Patient #9 at her office for a sick visit and a post-hospital visit. Patient #9 complained of congestion and fevers. Dr. Lee's physical examination of Patient #9's nose revealed moist nasal mucosa, with erythematous turbinates; the physical examination of his lungs did not reveal any abnormalities, although an occasional expiratory wheeze was noted. Dr. Lee's diagnoses included chronic sinusitis and acute sinusitis. Patient #9 returned to Dr. Lee's office on November 6 and 7, 1996, solely to receive infusions of IVIG. Dr. Lee examined Patient #9 on November 19, 1996, and there were no abnormalities of the nose and the lungs noted. Patient #9 was treated with an IVIG and Vitamin C infusions on December 4, 1996; he received no other service. The next office visit documented by the medical records provided by Dr. Lee's office was on July 11, 1997, when Patient #9 visited Dr. Lee's office solely for the infusion of IVIG. Patient #9 also visited Dr. Lee's office on August 14, 1997, for a sick visit, when he reported that he was feeling well but was concerned about his quality of life. Dr. Lee's physical examination of Patient #9's nose and lungs did not reveal any abnormalities. Dr. Lee appended the following note to the record of the office visit of August 14, 1997: "Schedule IVIG as soon as possible in light of worsening bleeding gums and rectal bleeding." Patient #9 visited Dr. Lee's office on August 18 and 19, 1997, and on September 18 and 19, 1997, to receive infusions of IVIG. Dr. Lee also saw Patient #9 on September 19, 1997, when Patient #9 reported that he was feeling fairly well, with no fevers or cough. Dr. Lee's physical examination of Patient #9's nose and lungs did not reveal any abnormalities. On September 30, 1997, Patient #9 visited Dr. Lee's office to have a molluscum removed from his face. Patient #9 reported that he was feeling well, with no fevers. Dr. Lee's physical examination of Patient #9's nose and lungs did not reveal any abnormalities. On October 6, 1997, Patient #9 visited Dr. Lee's office for a sick visit. He complained of fever with nasal and chest congestion, sinus congestion for the previous two days, and sneezing clear fluid. Dr. Lee's physical examination of Patient #9's nose revealed moist nasal mucosa, with erythematous turbinates; the physical examination of the lungs did not reveal any abnormalities. Dr. Lee's diagnoses did not include DHI or sinusitis but only HIV/AIDS and "URI." Patient #9 visited Dr. Lee's office on October 16 and 17, 1997, solely for the infusion of IVIG, and the diagnoses for these visits include DHI and chronic and acute sinusitis. Patient #9 visited Dr. Lee's office on October 31, 1997, for a scheduled visit. He reported feeling well, with no fevers; Dr. Lee's physical examination of Patient #9's nose and lungs did not reveal any abnormalities. Patient #9 visited Dr. Lee's office on December 15, 1997, for a doctor's visit and for the infusion of IVIG. Patient #9 reported a tight feeling in his chest with a sore throat and a dry cough for the previous six days. Dr. Lee's physical examination of Patient #9's nose and lungs did not reveal any abnormalities. Patient #9 visited Dr. Lee's office on December 30, 1997, for a "laboratory review." He complained of joint and muscle aches and burning on urination. Dr. Lee's physical examination of Patient #9's nose and lungs did not reveal any abnormalities. Patient #9 visited Dr. Lee's office on January 7 and 8, 1998, for the infusion of IVIG. Dr. Lee also examined Patient #9 on January 8, 1998, at which time he reported that he was feeling fairly well but had esophageal pain. Dr. Lee's physical examination of Patient #9's nose and lungs did not reveal any abnormalities. There is no indication in any of the Comparative Laboratory Test Results provided by Dr. Lee's office for Patient #9 that tests were done to measure the level of Patient #9's total immunoglobulin or the level of any of the subclasses of immunoglobulin. The medical records provided by Dr. Lee do not support her testimony that she prescribed IVIG for Patient #9 because of recurrent sinusitis and bronchitis. Dr. Lee formulated the plan to treat Patient #9 with monthly infusions of IVIG on July 15, 1996, at the time of his third office visit. At that visit, Dr. Lee observed that Patient #9 had a productive cough with flecks of blood and increased sinus drainage, but there is nothing in the records of his May 1, 1996, or July 3, 1996, office visits to indicate that he had sinusitis or bronchitis or anything more than one episode of fungal pneumonia unrelated to DHI. Most of Dr. Lee's physical examinations revealed no abnormalities in Patient #9's nose and lungs, and, contrary to Dr. Lee's testimony, there is nothing in Patient #9's medical records to establish that Patient #9 had a history of recurrent purulent drainage, bloody nose, congestion, or bronchitis. Rather, the medical records for Patient #9 indicate that he was in the advanced stage of AIDS at the time of his first visit to Dr. Lee and that he suffered from numerous infections related to a deficiency of cell-mediated immunity; that he complained of congestion periodically and had a non-productive cough from time to time; that he occasionally had erythematous, edematous nasal turbinates; and that, at a few office visits, Dr. Lee's physical examinations revealed an occasional respiratory wheeze in the lungs. These symptoms are not sufficient to support a diagnosis of DHI, and, therefore, the medical records provided by Dr. Lee's office fail to establish that the infusion of IVIG was medically necessary.8 The claims to Medicaid for the IVIG infusions given on July 16 and 17, 1996; August 14 and 15, 1996; September 16 and 17, 1996; October 10 and 11, 1996; November 6 and 7, 1996; December 4, 1996; June 11, 1997; July 11, 1997; September 18 and 19, 1997; and January 7 and 8, 1998, should be denied because the treatments were not medically necessary. Dr. Lee also submitted claims to Medicaid for infusions of IVIG that purportedly were done on December 5, 1996; December 26 and 27, 1996; January 16 and 17, 1997; February 10 and 12, 1997; April 7, 1997; June 10, 1997; and July 10, 1997. Dr. Lee's office did not provide any medical records to document that IVIG was infused on these dates. Accordingly, Dr. Lee is not entitled to payment for the infusion of IVIG on these dates because of this lack of documentation.9 Patient #13 Dr. Lee submitted claims to Medicaid for IVIG infusions received by Patient #13 for DHI on August 22 and 23, 1996; September 16 and 17, 1996; October 28 and 29, 1996; November 26 and 27, 1996; January 6 and 7, 1997; February 6 and 7, 1997; March 14, 1997; April 8 and 11, 1997; May 12 and 15, 1997; June 10, 1997; July 8 and 9, 1997; August 12 and 13, 1997; and September 10, 1997.10 As a result of the audit, AHCA denied the Medicaid claims for these 23 IVIG infusions. At the times material to this proceeding, Patient #13 was a 39-year-old man who had been diagnosed with HIV/AIDS. The medical records provided by Dr. Lee's office show that Dr. Lee first examined Patient #13 during an office visit on July 26, 1996, when Patient #13 complained of severe fatigue and mild headaches. Dr. Lee's physical examination of Patient #13's nose and lungs did not reveal any abnormalities. Not including the office visits during which Patient #13 received only infusions of IVIG, Patient #13 visited Dr. Lee's office and was examined on August 2 and 20, 1996; September 5 and 24, 1996; October 1 and 24, 1996; November 12, 19, and 26, 1996; December 9, 1996; January 24 and 27, 1997; February 6, 11, and 25, 1997; March 25, 1997; April 15 and 29, 1997; May 20, 1997; June 3 and 24, 1997; July 22, 28, and 31, 1997; August 14 and 18, 1997; September 15 and 29, 1997; October 13, 1997; and November 6 and 20, 1997. On September 24, 1996, Patient #13 complained of headaches, fullness in his ears, and a cough with yellow sputum. On November 12, 1996, Patient #13 complained of an increase in post-nasal drip. On November 26, 1996, Patient #13 reported that he had a cold, with no fever or chills. On February 6, 1997, Patient #13 advised Dr. Lee that he was going to an ear, nose, and throat specialist for hearing tests. On February 25, 1997, Patient #13 reported that he had "sinus symptoms" before his monthly IVIG infusion that were resolved after the second infusion. On July 28 1997, Patient #13 was diagnosed and treated for an infection around the port inserted into his chest; he was also treated on July 31, 1997, and on August 14 and 18, 1997, for the chest-port infection, and the chest port was flushed on September 29, 1997. Dr. Lee's physical examinations of Patient #13's nose on September 24, 1996, and on November 26, 1996, revealed moist nasal mucosa with erythematous turbinates; the physical examinations of Patient #13's lungs on these dates did not reveal any abnormalities. Dr. Lee's physical examinations of Patient #13's nose and lungs conducted at all of the other office visits revealed no abnormalities. There is no indication in any of the Comparative Laboratory Test Results provided by Dr. Lee's office for Patient #13 that tests were done to measure the level of Patient #13's total immunoglobulin or the level of any of the subclasses of immunoglobulin. The medical records provided by Dr. Lee's office do not support her diagnosis that Patient #13 suffered from DHI. None of Dr. Lee's examinations of Patient #13's lungs indicated that that she found any abnormalities, and her physical examinations of Patient #13's nose revealed no abnormalities except on September 24, 1996, and on November 11, 1996, when Dr. Lee found that Patient #13 had erythematous turbinates. Although the medical records do establish that Patient #13 had recurrent infections and extremely low T-cell levels, a diagnosis of DHI must be supported by severe, chronic sinopulmonary infections and low levels of total immunoglobulin or of any of the five subclasses of immunoglobulins. The symptoms and complaints reported by Dr. Lee are not sufficient to support Dr. Lee's diagnosis that Patient #13 suffered from DHI, and, therefore, the medical records provided by Dr. Lee's office fail to establish that the infusion of IVIG was medically necessary. The claims to Medicaid for the IVIG infusions given on August 22 and 23, 1996; September 16 and 17, 1996; October 28 and 29, 1996; November 26 and 27, 1996; January 6 and 7, 1997; February 6 and 7, 1997; March 14, 1997; April 8 and 11, 1997; May 12 and 15, 1997; June 10, 1997; July 8 and 9, 1997; August 12 and 13, 1997; and September 10, 1997, should be denied. The records provided to AHCA include a claim that was submitted to Medicaid for an infusion of IVIG that was purportedly done on June 9, 1997. Dr. Lee's office did not provide any medical records to document that Patient #13 received an infusion of IVIG on this date, and, accordingly, Dr. Lee is not entitled to payment for an infusion of IVIG on June 9, 1997. Patient #15 According to the medical records provided by her office, Dr. Lee treated Patient #15 with IVIG for DHI on February 27 and 28, 1997. As a result of the audit, AHCA denied the Medicaid claims for these 2 IVIG infusions. At the times material to this proceeding, Patient #15 was a 39-year-old female who had been HIV positive since 1991. The medical records provided by Dr. Lee's office establish that Dr. Lee examined Patient #15 once, on January 7, 1997. At that visit, Patient #15 complained of headaches associated with sinus congestion and shortness of breath, which were relieved with nasal steroids. Patient #15 denied that she had fevers, a cough, or sputum production. Dr. Lee's physical examination of Patient #15's nose revealed moist nasal mucosa, with erythematous, edematous turbinates. Dr. Lee's physical examination of Patient #15's lungs revealed no abnormalities. Patient #15 provided Dr. Lee with a history at the January 7, 1997, office visit that included chronic "sinusitis with headaches," but there is no documentation to support this history. Dr. Lee did not include a diagnosis of DHI, but she did recommend treatment for Patient #15 with IVIG "for chronic sinusitis and DHI." Dr. Lee submitted claims to Medicaid for the treatment of Patient #15 with infusions of IVIG on February 27 and 28, 1997, but Dr. Lee's office did not produce any medical records to establish that Patient #15 actually received the infusions. Accordingly, Dr. Lee is not entitled to payment for the infusions of IVIG on these dates. Patient #16 Dr. Lee submitted claims to Medicaid for IVIG infusions received by Patient #16 for DHI on September 3 and 4, 1996; October 2 and 3, 1996; November 4 and 5, 1996; December 9 and 10, 1996; January 7, 1997; February 10 and 11, 1997; and March 17, 1997.11. As a result of the audit, AHCA denied the Medicaid claims for these 12 IVIG infusions. At the times material to this proceeding, Patient #16 was a 35-year-old male who had been HIV positive since 1989. According to notes made by Dr. Lee, she first saw Patient #16 in February 1995, and the first office visit documented by the medical records provided by Dr. Lee's office was on February 9, 1995, which is not within the Audit Period. In the record of that visit, Dr. Lee noted no past history of sinopulmonary infections, and her physical examination of Patient #16's nose and lungs revealed no abnormalities.12 At an office visit on November 27, 1995, Patient #16 complained of "cough, greenish sputum, increased congestion in the sinus region and sinus headaches," but he reported only a low-grade fever. Dr. Lee's physical examination of Patient #16's nose revealed that his nasal mucosa were moist but extremely erythematous and edematous and that there was a "slight increase in nasal discharge"; Dr. Lee's physical examination of Patient #16's lungs revealed that the "[l]ung sounds are clear to auscultation with some scattered faint rhonchi." Sinusitis was included among Dr. Lee's diagnoses, and she prescribed the antibiotic Biaxin, to be taken for 10 days. Patient #16 visited Dr. Lee's office on December 12, 1995. He complained of increased nasal discharge that was clear, and Dr. Lee's physical examination of Patient #16's nose revealed erythematous nasal mucosa, with a "slight increase in post nasal discharge which is clear." Dr. Lee's physical examination of Patient #16's lungs revealed no abnormalities. Dr. Lee's diagnoses included "[m]ild sinusitis, noninfective. Probably allergic rhinitis," and she prescribed Claritin D. Patient #16 visited Dr. Lee's office on January 8, 1996, which is the first documented office visit of the Audit Period. Although Patient #16 did not complain of sinus problems, Dr. Lee's physical examination of Patient #16's nose revealed erythematous nasal mucosa; the physical examination of Patient #16's lungs revealed that they were "clear to auscultation." An X-ray taken on January 9, 1996, indicated that Patient #16's lungs were clear, and a CT scan of Patient #16's head taken the same day was normal. At an office visit on January 15, 1996, Patient #16 complained of a clogged feeling in his ears and increased sinus congestion. Dr. Lee's physical examination of Patient #16's nose revealed that the "[n]asal mucosa is erythematous with edematous turbinates"; the lungs were "clear to auscultation." Dr. Lee's diagnoses on January 8, 1996, did not include sinusitis, but the diagnoses on January 15, 1996, included chronic sinusitis. Dr. Lee examined Patient #16 on February 26, 1996, and on March 18, 1996. Patient #16 did not complain of any sinopulmonary problems at these office visits, and Dr. Lee's physical examination of Patient #16's nose and lungs revealed no abnormalities. On April 19, 1996, Dr. Lee completed a form in which she identified Patient #16's diagnoses as including chronic sinusitis, reported that his medical history included chronic sinusitis and DHI, and indicated that Patient #16's treatment included IVIG "once a month." Patient #16 received infusions of IVIG at Dr. Lee's office on June 11 and 12, 1996, but Patient #16 furnished the IVIG, and Dr. Lee did not submit claims to Medicaid for these infusions. Patient #16 visited Dr. Lee's office on June 17, 1996, and reported that his sinuses were "less bothersome" since IVIG treatments had been "restarted." Dr. Lee's physical examination of Patient #16's nose and lungs revealed no abnormalities; Dr. Lee's diagnoses did not include sinusitis or DHI. Patient #16 received infusions of IVIG at Dr. Lee's office on July 8 and 9, 1996, and on August 5 and 6, 1996, but Dr. Lee did not submit claims to Medicaid for these infusions. Dr. Lee also examined Patient #16 on August 6, 1996, and he complained of a sore throat and fever but no cough. Dr. Lee's physical examination of Patient #16's nose and lungs revealed no abnormalities. Patient #16 received infusions of IVIG at Dr. Lee's office on September 3 and 4, 1996. During the September 3, 1996, office visit, Dr. Lee also examined Patient #16. Patient #16 had no complaints about his sinuses, and the report of a chest X-ray taken that day revealed that Patient #16's lungs and pleural spaces were clear. Dr. Lee's physical examination of Patient #16's nose and lungs revealed no abnormalities. At office visits on September 9 and 24, 1996, Patient #16 had no complaints about his sinuses, and Dr. Lee's physical examinations of Patient #16's nose and lungs revealed no abnormalities. Dr. Lee noted in the treatment plan developed September 24, 1996, that she would "continue IVIG monthly for chronic sinus complaints." Patient #16 received infusions of IVIG at Dr. Lee's office on October 2 and 3, 1996; November 4 and 5, 1996; and December 9 and 10, 1996. Dr. Lee examined Patient #16's nose and lungs on October 3, 1996; November 8, 1996, November 22, 1996; and December 10, 1996. Even though Patient #16 did not complain of sinus problems during the November 22, 1996, office visit, Dr. Lee noted that she would continue to treat Patient #16 with IVIG monthly, but Dr. Lee did not include in the diagnoses for that visit a diagnosis of sinusitis or of DHI. The physical examinations performed by Dr. Lee on all but one of these office visits revealed no abnormalities. During the December 10, 1996, office visit, Patient #16 complained of some increase in sinus pressure with ringing in his ears; Dr. Lee's physical examination revealed that Patient #16's nose had "moist nasal mucosa with erythematous turbinates" and increased nasal discharge that was yellowish- green in color. Dr. Lee's physical examination of his lungs revealed no abnormalities. Dr. Lee submitted claims to Medicaid for IVIG infusions given to Patient #16 on January 7, 1997; February 10 and 11, 1997; and March 17, 1997. Dr. Lee also examined Patient #16 on January 7, 1997, January 20, 1997; February 3, 1997; February 11, 1997; and March 13, 1997. Dr. Lee's physical examination of Patient #16's nose on January 7, 1997, moist nasal mucosa, with erythematous, edematous turbinates, and Dr. Lee's physical examination of Patient #16's lungs during that office visit revealed no abnormalities. On January 20, 1997, Patient #16 reported continued "sinusitis," and Dr. Lee's physical examination of Patient #16's nose on January 20, 1997, revealed that moist nasal mucosa, but with only slightly erythematous turbinates; Dr. Lee's physical examination of Patient #16's lungs on January 20, 1997, revealed no abnormalities. Dr. Lee's physical examinations of Patient #16's nose and lungs on February 3 and 11, 1997, and on March 13, 1997, revealed no abnormalities. Dr. Lee continued to see Patient #16 after March 17, 1997, the date of the last IVIG infusion for which Dr. Lee submitted a claim to Medicaid. On April 3, 1997, Dr. Lee's physical examination of Patient #16's nose revealed moist nasal mucosa, with erythematous turbinates and a large amount of whitish nasal discharge; Dr. Lee's physical examination of Patient #16's lungs revealed no abnormalities. Dr. Lee noted in the medical record of an office visit by Patient #16 on May 1, 1997, that Patient #16's sinus congestion had improved "with IVIG and Claritin D"; Dr. Lee's physical examination of Patient #16's nose and lungs revealed no abnormalities. Dr. Lee noted in the medical record of an office visit by Patient #16 on June 17, 1997, that Patient #16 continued to have sinus drainage, but she attributed this to an error by the pharmacy in giving Patient #16 Claritin Plain rather than Claritin D, resulting in Patient #16's not having taken a decongestant for the previous few weeks. Even so, Dr. Lee's physical examination of Patient #16's nose and lungs revealed no abnormalities. Patient #16 complained of sinus congestion during office visits to Dr. Lee on June 30, 1997; July 15, 1997; and August 12, 1997. The medical record for the August 12, 1997, office visit reflects that Patient #16 reported that his sinus congestion was worsening and that he had had a cough with yellowish sputum for the previous week; Dr. Lee's physical examination of Patient #16 on August 12, 1997, revealed that Patient #16 had moist nasal mucosa, with erythematous, edematous turbinates, and that the breath sounds in Patient #16's lungs were "mildly rhonchorous to auscultation bilaterally, no rales, occasional expiratory wheeze." Patient #16 reported no sinus problems at his visit to Dr. Lee's office on August 29, 1997, and Dr. Lee's physical examination of his nose and lungs revealed no abnormalities. There is no indication in any of the Comparative Laboratory Test Results provided by Dr. Lee's office for Patient #16 that tests were done to measure the level of Patient #16's total immunoglobulin or the level of any of the subclasses of immunoglobulin. The medical records provided by Dr. Lee's office do not support her diagnosis that Patient #16 suffered from DHI. Although Patient #16 routinely complained of sinus congestion from his first documented visit to Dr. Lee on February 9, 1995, through the last documented visit on August 29, 1997, Dr. Lee's medical records contained a diagnosis of acute sinusitis only six times during the Audit Period, on November 4 and 5, 1996, when Patient #16 was not examined but only received infusions of IVIG at Dr. Lee's office; on December 10, 1996, when Patient #16 reported sinus pressure, and Dr. Lee observed a yellowish-green nasal discharge; on March 17, 1997, when Patient #16 was not examined but only received an infusion of IVIG at Dr. Lee's office; on April 3, 1997, when Dr. Lee observed a large amount of whitish nasal discharge; and on August 12, 1997, when Patient #16 reported a cough with yellowish-green sputum. Dr. Lee's notes reflect, however, that Patient #16's sinus congestion was improved when he took a decongestant. Even if these instances of sinusitis could be termed severe and recurrent, there is no evidence in the medical records provided by Dr. Lee's office that Patient #16 suffered from severe, recurrent pulmonary infections. In fact, Dr. Lee's physical examinations of Patient #16's lungs revealed abnormalities only on August 12, 1997, when she observed an occasional expiratory wheeze and mildly rhonchorous breath sounds. Dr. Lee's medical records fail to establish that Patient #16 suffered from the severe, chronic sinopulmonary infections necessary to support a diagnosis of DHI or to establish that Patient #16 had the low levels of total immunoglobulin or of any of the five subclasses of immunoglobulin that are also necessary to support a diagnosis of DHI. Therefore, the medical records provided by Dr. Lee's office fail to establish that the infusion of IVIG was medically necessary, and the claims to Medicaid for the IVIG infusions given on September 3 and 4, 1996; October 2 and 3, 1996; November 4 and 5, 1996; December 9 and 10, 1996; January 7, 1997; February 10 and 11, 1997; and March 17, 1997, should be denied. Patient #21 Dr. Lee submitted claims to Medicaid for IVIG infusions received by Patient #21 for DHI on February 11 and 12, 1997; March 17 and 18, 1997; and April 16, 1997.13 As a result of the audit, AHCA denied the Medicaid claims for these five IVIG infusions. At the times material to this proceeding, Patient #21 was a 38-year-old male who reported that he had contracted HIV in the 1970's. The medical records provided by Dr. Lee's office contain the Progress Report of an emergency visit to Patient #21 on April 29, 1996, by Dr. Allan J. Stein. Dr. Stein noted in the Progress Report that he had first seen Patient #21 on July 7, 1995, and then at a follow-up visit on July 17, 1995, but that he had not seen Patient #21 again until the April 29 1996, visit. Patient #21 reported to Dr. Stein on April 29, 1996, that he had had seven or eight episodes of bronchitis between August and November 1995, while he was living in Tampa, Florida; that he had not received regular medical care while living in Tampa; and that he had been treated for bronchitis with multiple courses of Zithromax prescribed at a hospital emergency room in Tampa. Patient #21 also reported to Dr. Stein that he had been treated by a "Dr. Elbert" in Tampa and had been diagnosed with pneumonia four times between January and April 1996, which was treated each time with various antibiotics. Patient #21 also reported to Dr. Stein that he had never had a bronchoscopy and that he smoked at least one pack of cigarettes per day. The physical examination of Patient #21's nose and lungs performed by Dr. Stein on April 19, 1996, did not reveal any abnormalities. Dr. Stein recommended that Patient #21 arrange to be seen by Dr. Lee because her office was closer to Patient #21's residence than Dr. Stein's, and Dr. Stein ordered a chest X-ray. The report of a chest X-ray signed by Stephen Edelstein, M.D., on July 29, 1996, indicated that Patient #21's lungs were clear and that his chest was normal. Dr. Lee conducted a 23-hour observation of Patient #21 at Pompano Beach Medical Center August 5, 1996, and Dr. Lee noted in the report of that observation that Patient #21 had been "complaining intermittently for the past month of shortness of breath, fevers and chills, [and] sinus congestion." Patient #21 also reported to Dr. Lee on August 5, 1996, that he had chronic bronchitis that usually occurred in the spring and summer of each year. Dr. Lee's physical examination of Patient #21 revealed that he had "tender sinuses in the frontal and bilateral maxillary sinuses," and her physical examination of Patient #21's lungs indicated that they were "[c]lear to auscultation with slightly prolonged expiratory phase. No rhonchi, rales or wheezes." Dr. Lee's diagnoses included "[a]cute severe sinusitis versus bronchitis."14 Patient #21's medical records also include an incomplete report of a consultation with Peter Namnum, M.D., on August 20, 1996,15 in which Dr. Namnum stated that Patient #21 had been ill for the previous six weeks, reporting sweats, fever, chills, and hot flashes, with a cough productive of green sputum and about a tablespoon of blood each day. Dr. Namnum noted that Patient #21 was admitted to Pompano Beach Medical Center about two weeks prior to the consultation and was treated with "broad spectrum intravenous antibiotics" but showed no improvement. Dr. Namnum also reported that Dr. Lee had treated Patient #21 with multiple courses of outpatient antibiotics but that Patient #21 had not responded. Patient #21's first documented visit to Dr. Lee's office was on December 6, 1996, at which time Patient #21 reported symptoms of a cold, with a cough, stuffy head, and congestion but no fever. Dr. Lee's physical examination of Patient #21's nose and lungs revealed no abnormalities. Dr. Lee's diagnoses included "allergic rhinitis." Patient #21 next visited Dr. Lee's office on January 3, 1997, complaining of an ear infection. Dr. Lee observed some congestion in Patient #21's ears, but Dr. Lee's physical examination of Patient #21's nose and lungs revealed no abnormalities. Dr. Lee's diagnoses, however, included chronic sinusitis and allergic rhinitis. Dr. Lee changed Patient #21's prescription from Claritin to Claritin D. On January 21, 1997, Patient #21 visited Dr. Lee's office and reported that he had had a fever of 102 degrees, chills, sweats, nausea, vomiting, a productive cough with green sputum, and wheezes on inspiration and expiration. Patient #21's temperature at the time of the office visit was recorded as 95.8 degrees. Dr. Lee's physical examination of Patient #21's nose revealed no abnormalities, but the physical examination of Patient #21's lungs revealed "scattered wheezes and rhonchi, no rales." Dr. Lee prescribed Rocephin, and her diagnoses included bronchitis, acute sinusitis, and allergic rhinitis. Patient #21 received an infusion of IVIG at Dr. Lee's office on February 11, 1997, at which time he was distraught, complaining of pain "everywhere," and demanding pain medication. Dr. Lee's physical examination of Patient #21 revealed no abnormalities, although the diagnoses for the February 11, 1997, visit included DHI and chronic sinusitis. Patient #21 also received an infusion of IVIG on February 12, 1997, at which time he reported to Dr. Lee that he felt relief after his first dose of IVIG; no physical examination was done during this visit. The diagnoses for the February 12, 1997, visit included DHI, chronic sinusitis, and acute sinusitis. Patient #21 was infused with IVIG at Dr. Lee's office on March 17 and 18, 1997, and on April 16, 1997. The diagnoses for each visit included acute sinusitis, chronic sinusitis, and DHI. There is, however, no record that Dr. Lee performed any examinations of Patient #21 on those dates. Patient #21's last documented office visit was on August 12, 1997. He reported the "usual summer bronchitis" and a cough with clear sputum. Dr. Lee's physical examination of Patient #21's nose revealed moist nasal mucosa, with erythematous, edematous turbinates; the physical examination of Patient #21's lungs revealed no abnormalities. Patient #21 received an infusion of IVIG on August 12, 1997, and the diagnoses included DHI, bronchitis, acute sinusitis, and chronic sinusitis, and Dr. Lee noted that she would continue IVIG monthly. There is no indication in any of the Comparative Laboratory Test Results provided by Dr. Lee's office for Patient #21 that tests were done to measure the level of Patient #21's total immunoglobulin or the level of any of the subclasses of immunoglobulin. Dr. Stein noted that Patient #21's "past medical problems" included negative CMV and toxoid IgG titers, but this was not confirmed by any laboratory tests ordered by Dr. Lee at or about the time she commenced infusion of IVIG. The medical records do not support Dr. Lee's diagnosis that Patient #21 suffered from DHI because there is no documentation of severe, recurrent sinopulmonary infections and low levels of total immunoglobulin or of one of the five subclasses of immunoglobulin. Although Patient #21 reported a history of bronchitis and pneumonia and complained routinely of a cough, the chest X-ray done in July 1996 revealed that his lungs were clear, and abnormalities in Patient #21's lungs were noted on only two occasions, on August 5, 1996, and on January 21, 1997, when wheezing was noted. On August 12, 1997, when Patient #21 reported a cough and his "usual" summer bronchitis, Dr. Lee's physical examination of Patient #21's lungs revealed no abnormalities. Even if the two instances in which Dr. Lee found abnormalities in Patient #21's lungs could be considered indicative of severe, recurrent pulmonary infections, the medical records fail to establish that Patient #21 suffered from severe, chronic sinusitis. The physical examinations done by Dr. Lee establish only that, on August 5, 1996, Patient #21 had tender sinuses and that, on August 12, 1997, four months after the last documentation of an infusion of IVIG, Patient #21 had erythematous, edematous turbinates. The medical records of Patient #21's January 21, 1997, office visit, which took place only a few weeks before the first infusion of IVIG, do not reflect that Patient #21 complained of sinus congestion, and Dr. Lee's physical examination of Patient #21's nose done at that office visit revealed no abnormalities. The medical records provided by Dr. Lee's office, therefore, fail to establish that the infusion of IVIG was medically necessary, and the claims to Medicaid for the IVIG infusions given on February 11 and 12, 1997; March 17 and 18, 1997; and April 16, 1997, should be denied. Patient #24 Dr. Lee submitted claims to Medicaid for IVIG infusions received by Patient #24 on January 9 and 10, 1997; February 6 and 7, 1997; March 6 and 7, 1997; April 7 and 8, 1997; June 16 and 17, 1997; July 14 and 15, 1997; August 11 and 12, 1997; September 8 and 9, 1997; and January 6 and 7, 1998, for DHI and demyelinating neuropathy.16 As a result of the audit, AHCA denied the Medicaid claims for these 18 IVIG infusions. At the times material to this proceeding, Patient #24 was a 32-year-old male who reported that he had been HIV positive since March 1989. Patient #24's first documented office visit to Dr. Lee was on October 7, 1996. Demyelinating neuropathy On October 7, 1996, Dr. Lee noted that Patient #24 complained of "pain c/o neuropathy bilaterally in lower and upper extremities," and she determined that Patient #24 had "moderately severe peripheral neuropathy," with occasional joint pain.17 Dr. Lee's physical examination of Patient #24 revealed that his reflexes were "equal bilaterally upper and lower extremities" and that his "motor/strength" was "4/5 throughout." Dr. Lee did not include neuropathy (diagnosis code 355.9) or demyelinating neuropathy (diagnosis code 357.0) as diagnoses for the October 7, 1996, office visit. Dr. Lee's medical records for Patient #24 include diagnoses of neuropathy for seven office visits between February 11, 1997, and November 21, 1997; for each of the diagnoses, Dr. Lee included the diagnosis code for neuropathy, "355.9," rather than the diagnosis code for demyelinating neuropathy, "357.0." On February 11, 1997, Patient #24 complained of "tingling and numbness in lower extremities that sometimes extends upwards; Dr. Lee noted "neuropathy persists, tolerable." There is no indication in the medical records of Patient #24's April 14, 1997, office visit that he complained of or exhibited symptoms of neuropathy or that Dr. Lee's physical examination of Patient #24 revealed any indication of neuropathy. On July 7, 1997, during a scheduled visit, Patient #24 reported "infrequent episodes of generalized muscle twitching with a feeling of weakness and feeling as though he were going to pass out." The symptoms Patient #24 described included "intermittent episodes of twitching, shaking 'inside'. Feet continue to hurt intermittently." Dr. Lee noted that Patient #24 was to continue to receive IVIG monthly. On September 2, 1997, Patient #24 reported that he had "moderately severe episodes of neuropathy in hands and feet" and that he felt "quite well" except for occasional "pain and persistent neuropathy." At Patient #24's scheduled office visit on October 14, 1997, Dr. Lee noted: "Neuropathy severe, slightly improved since start of IVIG . . . However, sometimes feels as if his feet are 'dead.'" Patient #24 received an infusion of IVIG at Dr. Lee's office on November 3, 1997; Dr. Lee did not examine Patient #24 during this office visit.18 At Patient #24's scheduled office visit on November 21, 1997, he reported "no major complaints," and Dr. Lee noted that he had "only minimal discomfort from neuropathy." Dr. Lee stated that she "would continue IVIG when available." Dr. Lee first diagnosed Patient #24 with demyelinating neuropathy at Patient #24's office visit on January 6, 1998, when Patient #24 received an infusion of IVIG and was examined by Dr. Lee. Dr. Lee did not note in the record of this office visit any complaints or symptoms of demyelinating neuropathy or neuropathy. The diagnosis of demyelinating neuropathy was also included in the diagnoses for Patient #24's January 7, 1998, office visit, but the only service he received on this date was the infusion of IVIG. There is no indication in the medical records provided by Dr. Lee's office that a nerve conduction study and a neurological study were conducted to confirm Dr. Lee's diagnosis that Patient #24 suffered from general neuropathy or demyelinating neuropathy. And, even if Dr. Lee's diagnosis of neuropathy were supported in the medical records, the treatment of peripheral neuropathy by infusions of IVIG is not medically necessary. General neuropathy involving the disruption in the peripheral nervous system does not respond to IVIG. Only neuropathy that involves the loss of or damage to the myelin sheath around the nerves, or demyelinating neuropathy, improves with IVIG treatments. Dr. Lee stated in the medical records of her first visit with Patient #24 that he exhibited the symptoms of "moderately severe peripheral neuropathy," and, without a nerve conduction study and neurological evaluation to confirm a diagnosis of demyelinating neuropathy, there is no medical necessity for Patient #24's IVIG treatments for neuropathy. DHI Patient #24 did not report any complaints or symptoms of sinusitis or pulmonary infection at his first office visit to Dr. Lee on October 7, 1996. He denied fevers, headaches, chest pain, and shortness of breath, although he did report "occasional cough, wheezing, dyspnea, and slight sputum production." Dr. Lee noted that Patient #24's history included chronic "environmental allergies." Dr. Lee's physical examination of Patient #24's nose revealed no abnormalities, and Dr. Lee's physical examination of Patient #24' lungs revealed that they were "clear to auscultation." Dr. Lee included "allergic rhinitis" as one of the diagnoses for the October 7, 1996, office visit. Dr. Lee examined Patient #24 on December 31, 1996, at a scheduled office visit. Patient #24 complained of "severe sinus congestion, worse over past few weeks," but he denied any sputum production. Dr. Lee's physical examination of Patient #24's nose revealed moist nasal mucosa, with "extremely" erythematous, edematous turbinates; the physical examination of Patient #24's lungs revealed no abnormalities. Dr. Lee included among the diagnoses for the December 31, 1996, office visit chronic sinusitis and DHI, and she noted that she would "start monthly IVIG for treatment of chronic sinusitis and decreased humoral immunity." Patient #24 received his first infusions of IVIG on January 9 and 19, 1997; Dr. Lee did not examine Patient #24 during either of these office visits. Patient #24's next office visits were on February 6 and 7, 1997, during which he only received infusions of IVIG. The diagnoses for February 6, 1997, included DHI and acute sinusitis; the diagnoses for February 7, 1997, included DHI. Patient #24 saw Dr. Lee for a scheduled office visit on February 11, 1997, when Dr. Lee noted that Patient #24's "sinus symptoms [were] improved." Dr. Lee's physical examination of Patient #24's nose and lungs revealed no abnormalities. Dr. Lee included DHI and chronic sinusitis among the diagnoses for the February 7, 1997, office visit. Patient #24 received infusions of IVIG at Dr. Lee's office on March 6 and 7, 1997. Dr. Lee did not examine Patient #24 during these visits, but chronic sinusitis and DHI were included among the diagnoses. Dr. Lee examined Patient #24 during an office visit on March 11, 1997, when he complained of neuropathy and diarrhea. There is no indication in the records of this office visit that Patient #24 complained of or had symptoms of sinusitis or pulmonary infection, and Dr. Lee's physical examination of Patient #24's nose and lungs revealed no abnormalities. Patient #24 received infusions of IVIG at Dr. Lee's office on April 7 and 8, 1997. Dr. Lee did not examine Patient #24 during these office visits. Dr. Lee did, however, examine Patient #24 during an office visit on April 14, 1997, and she noted that Patient #24 complained of cold symptoms affecting mainly his chest but denied that he had a fever with the cold. Dr. Lee also noted that Patient #24 "does continue to smoke cigarettes." Dr. Lee's physical examination of Patient #24's nose revealed moist nasal mucosa, with erythematous, edematous turbinates; the physical examination of Patient #24's lungs revealed no abnormalities. Dr. Lee included DHI and allergic rhinitis among the diagnoses for this office visit. Patient #24 visited Dr. Lee's office on May 2, 1997, complaining of a body rash that began after he swam in the ocean. Dr. Lee's physical examination of Patient #24's nose and lungs revealed no abnormalities, and the diagnoses for this office visit included dermatitis and muscle spasm. Patient #24 received infusions of IVIG during office visits on May 5 and 6, 1997. Dr. Lee did not examine Patient #24 during either of these office visits, but he reported on May 5, 1997, that his rash had worsened. The diagnoses for the May 5 and 6, 1997, office visits included DHI and DHI, acute sinusitis, and chronic sinusitis, respectively. Dr. Lee examined Patient #24 on May 8, 1997, when he visited her office for a sick visit and follow-up. Patient #24 reported that the body rash was worsening and that he had slight shortness of breath and a slight cough. Dr. Lee's physical examination of Patient #24's lungs revealed no abnormalities, and Dr. Lee's diagnoses did not include DHI. Patient #24 visited Dr. Lee's office again on May 13, 1997, for treatment of the rash, which Dr. Lee reported was worsening, with lesions appearing in Patient #24's nose and ears. Dr. Lee's physical examination of Patient #24's nose revealed moist nasal mucosa, with "ulcerations bilateral nares"; Dr. Lee's physical examination of Patient #24's lungs revealed no abnormalities. At another office visit on May 21, 1997, Dr. Lee's physical examination revealed no abnormalities. Patient #24 visited Dr. Lee's office for a scheduled visit on June 9, 1997. Dr. Lee noted that Patient #24's rash was almost totally resolved and that he had a "mild cough due to smoking." Dr. Lee's physical examination of Patient #24's nose and lungs revealed no abnormalities. Nonetheless, Dr. Lee included among her diagnoses for the June 9, 1997, office visit DHI and chronic sinusitis. Patient #24 visited Dr. Lee's office on June 16 and 17, 1997, for infusions of IVIG. He was not examined during these office visits. On July 7, 1997, Dr. Lee examined Patient #24 at a scheduled visit. Patient #24's symptoms were related to neuropathy, and Dr. Lee's physical examination of Patient #24's nose and lungs revealed no abnormalities. Patient #24 received infusions of IVIG at Dr. Lee's office on July 14 and 15, 1997, but Dr. Lee did not examine him. The diagnoses for these office visits included acute sinusitis, chronic sinusitis, and DHI. At an office visit on August 4, 1997, Patient #24 complained that he was feeling "stuffy in his head." Dr. Lee noted that his sinus congestion was "slightly worse" and that his roommate had a cold. Dr. Lee's physical examination of Patient #24's nose revealed moist nasal mucosa, with erythematous turbinates; the physical examination of Patient #24's lungs revealed no abnormalities. Dr. Lee's diagnoses included chronic sinusitis and allergic rhinitis. Patient #24 received infusions of IVIG on August 11 and 12, 1997, but was not examined by Dr. Lee. At the office visit on September 2, 1997, Patient #24 reported "pain and persistent neuropathy." Dr. Lee's physical examination of Patient #24's nose and lungs revealed no abnormalities. Patient #24 received infusions of IVIG on September 8 and 9, 1997, with diagnoses of DHI and chronic sinusitis. At an office visit on September 16, 1997, Patient #24 reported "severe fatigue since last IVIG." Dr. Lee's physical examination of Patient #24's nose and lungs revealed no abnormalities. At the scheduled office visit on October 14, 1997, Patient #24 complained of "severe neuropathy." Dr. Lee's physical examination of Patient #24's nose and lungs revealed no abnormalities.19 At an office visit on November 11, 1997, Dr. Lee observed that Patient #24 was "feeling fairly well." Dr. Lee's physical examination of Patient #24's nose and lungs revealed no abnormalities, and she noted that she would "continue IVIG when available." On December 10, 1997, Patient #24 received an infusion of IVIG at Dr. Lee's office but was not examined by Dr. Lee.20 Patient #24 reported that he had a "cough, chest tightness, chills and sweats." The medical records of the office visit include the notation that Patient #24's "lungs [are] clear to auscultation." Dr. Lee notified Patient #24 through her nurse that he should increase his dosage of Bactrim, an antibiotic. Dr. Lee examined Patient #24 on December 11, 1997, at which time Patient #24 received his second infusion of IVIG for the month.21 Dr. Lee noted that Patient #24's "symptoms of shortness of breath slightly improved after increase in Bactrim. Denies fevers or chills. Cough resolving." Dr. Lee's physical examination of Patient #24's nose and lungs revealed no abnormalities, and she included "pneumocystis carinii" in her diagnoses. Dr. Lee noted that "since probable PCP, will start Mephron BID for 3 weeks and will follow closely." At a follow- up visit on December 16, 1997, Dr. Lee noted that Patient #24 was feeling better "since start of Mephron high dose" and had very little cough, though he still had some shortness of breath "on extreme exertion." Dr. Lee's physical examination of Patient #24's nose and lungs revealed no abnormalities. Patient #24 visited Dr. Lee's office on January 6, 1998, for an infusion of IVIG and for a physician visit.22 Patient #24's symptoms included "some slight shortness of breath," but he denied having fevers or a cough. Dr. Lee's physical examination of Patient #24's nose and lungs revealed no abnormalities. There is no indication in the Comparative Laboratory Test Results provided by Dr. Lee's office for Patient #24 that tests were done to measure the level of Patient #24's total immunoglobulin or the level of any of the subclasses of immunoglobulin. The medical records provided by Dr. Lee's office do not support her diagnosis that Patient #24 suffered from DHI because the records do not establish that Patient #24 had the severe, recurrent sinopulmonary infections and low level of total immunoglobulin or one of the five subclasses of immunoglobulin essential to such a diagnosis. Dr. Lee first diagnosed Patient #24 with chronic sinusitis and DHI, and decided to start him on IVIG, at his second office visit on December 31, 1996, when Patient #24 had symptoms of severe sinus congestion. Patient #24 also had symptoms of sinus congestion on August 4, 1997. The reports of Dr. Lee's physical examinations of Patient #24's nose at the December 1996 and August 1997 office visits revealed that Patient #24 had erythematous, edematous turbinates, but her physical examinations of Patient #24's nose and lungs revealed no abnormalities relating to congestion or sinusitis.23 The medical records do not, therefore, establish that Patient #24 had the severe, recurrent sinopulmonary infections that are indicative of DHI. The medical records provided by Dr. Lee's office, therefore, fail to support Dr. Lee's diagnoses of demyelinating neuropathy and DHI, and, therefore, they fail to establish that the infusion of IVIG was medically necessary. Accordingly, the claims to Medicaid for the IVIG infusions given on January 9 and 10, 1997; February 6 and 7, 1997; March 6 and 7, 1997; April 7 and 8, 1997; June 16 and 17, 1997; July 14 and 15, 1997; August 11 and 12, 1997; September 8 and 9, 1997; and January 6 and 7, 1998, should be denied.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency for Health Care Administration enter a final order requiring Marah J. Lee to repay the principal sum of $109,439.77. DONE AND ENTERED this 9th day of December, 2004, in Tallahassee, Leon County, Florida. S PATRICIA HART MALONO Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 9th day of December, 2004.
The Issue Whether Respondent violated Subsections 458.331(1)(d), 458.331(1)(n), and 458.331(1)(t), Florida Statutes, and, if so, what discipline should be imposed.
Findings Of Fact Hammesfahr is a licensed physician in the State of Florida, having been issued Florida License ME 52212 on February 8, 1988. He is board-certified in neurology and pain management. Hammesfahr's office is located in Clearwater, Florida, where he maintains a practice treating patients who have had strokes. A stroke is a blockage of an artery in the brain that causes damage to the brain. As a result of the stroke certain cells within the brain will die, and the victim will develop a multitude of deficits, including paralysis, loss of vision, sensory loss, and memory problems. Between 1998 and 2000, Hammesfahr advertised his treatment for stroke patients and included the following statements in some of his advertisements: Using advanced technology, Dr. Hammesfahr has developed a sophisticated method to help restore blood flow to the damaged areas of the brain after a stroke. With increased blood flow to these areas, the brain can heal. Dr. Hammesfahr is the first physician to treat and successfully reverse the effects of stroke using vasodilators. These advertisements have appeared in Florida and in airline magazines, which travel throughout the country. In some of his advertisements, Hammesfahr indicated that based on an evaluation of the first 67 patients who went through the therapy 82 percent had major improvement, 11.9 percent had minor improvement, and 6 percent had no improvement. He further indicated that the study showing these results was peer-reviewed. Generally, Hammesfahr's treatment protocol is based on the concept of dilating blood vessels in the brain to optimize neurological function and neurological recovery. He uses vasodilator medications to dilate blood vessels in the brain and to increase blood flow into the brain. Various methods are used to monitor the therapy and improvement, including ultrasound, physical examinations, neuropsychological and physical therapy testing, EEG, transcranial Doppler, and blood pressure monitoring. Medications used to dilate the blood vessels include ACE inhibitors, calcium channel blockers, nitrates, alpha and beta blockers, and sympatholytics. After a stroke has occurred, brain cells in the center of the stroke are destroyed and cannot be revived. The area next to the stroke center is called the penumbra and consists of brain cells that are damaged and might recover. Hammesfahr does not claim that his treatment protocol can restore the brain cells that have been destroyed. He does claim that by using his protocol there may be some recovery in the damaged areas, where the blood vessels have restricted and narrowed. The medications dilate the vessels and increase the blood flow to the damaged areas. The recovery of a stroke patient consists of three phases: acute, subacute, and chronic. The acute phase occurs from the onset of the stroke to the next few days or weeks thereafter. The subacute phase starts at the end of the acute phase and lasts for approximately six weeks to three months. However, in certain cases it might last as long as 18 months. The chronic phase is the last phase, which commences at the end of the subacute phase and lasts for an indefinite period. Hammesfahr usually treats stroke patients who are in the chronic phase, but has also treated patients in the other phases of stroke recovery. When a patient contacts Hammesfahr concerning his stroke treatment, the patient will be sent a new patient package, which describes the phases of treatment, contains articles written by Hammesfahr concerning his treatment, and includes a fee schedule. Hammesfahr has different treatment plans from which the patient may choose to participate. The costs for the treatment vary according to the plan; the longer the patient is seen in Clearwater by Hammesfahr, the more costly the treatment. The average patient seen by Hammesfahr opts for the three-week plan. If a patient decides that he wants to be treated by Hammesfahr, the patient is required to see his primary care physician, provide the physician with the articles contained in the new patient package, and obtain his medical records from the physician. The primary care physician is to perform certain tests on the patient and give a medical clearance for the patient to travel to Clearwater, Florida, for treatment by Hammesfahr. The patient is also sent a package of materials, which includes a medical history form to be filled out by the patient and brought to Hammesfahr when the patient comes to Clearwater for treatment. When the patient initially presents for treatment at Clearwater, the patient is given an explanation of the treatment by Hammesfahr and his staff. Patients are advised that there are no guarantees that the treatment will be successful. An intake is performed to make sure that the needed forms are properly completed, including a history of the patient to determine that the patient's primary care physician has given the patient a clearance to come to Hammesfahr for treatment, and to review the medical records of the patient. A physical examination is performed on the patient. The patient is given a schedule for the time that the patient will be in treatment in Clearwater, and Hammesfahr's staff reviews the schedule with the patient. Tests are performed on the patient in Hammesfahr's office such as the transcranial Doppler ultrasound to generally determine the blood velocity. The patient is sent to Diane Hartley, a physical therapist, for testing of gross motor function, and to Dr. Alexander Gimon for neuropsychological testing. The tests given by Ms. Hartley and Dr. Gimon are standardized tests, for which the patient normally pays additional fees. The initial tests by Ms. Hartley and Dr. Gimon are given to form a baseline for a comparison with later test results. Those patients who are three-week patients will also have examinations by Ms. Hartley and Dr. Gimon at the end of their treatment period. The test results are compared with the test results taken at the beginning of the treatment period. The patient receives an orientation session in which the patient is informed of the responsibilities that the patient has during the course of treatment. Such responsibilities include taking blood pressure measurements at prescribed times of the day, charting the results of the blood pressure test, and seeing and providing the patient's primary care physician with the blood pressure readings. The patient must drink eight glasses of water a day, unless the patient has a heart disease, and must avoid certain types of foods that are vasoconstrictors. Once the patient completes the treatment at Hammesfahr's office, the primary care physician will take over the medical management of the patient's treatment. Hammesfahr's office will confer with the patient's primary care physician after the patient leaves Hammesfahr's office to discuss the monitoring of the patient and the altering of the patient's medication. One week after returning from treatment in Clearwater with Hammesfahr, the patient must see his primary care physician. In October 1999, a friend of M.T. mailed M.T. one of Hammesfahr's advertisements. As result of receiving the advertisement, M.T. contacted Hammesfahr's clinic and sought treatment from him for a stroke which she suffered in May 1999. Hammesfahr sent M.T. an information package and a videotape. The package contained articles written by Hammesfahr, a description of the different programs available, and a price list for the programs. M.T. decided that she would try a three-day program for $3,000. There was a dispute as to exactly which program M.T. received when she went to Clearwater. The only two programs which Hammesfahr listed as costing $3,000 were the Executive Stroke Prevention Program and the One-Week Evaluation and Treatment Program. The Executive Stroke Prevention Program was described as follows: This is a three (3) day program in which patients will undergo CAT scan and MRI at our facility, state of the art computerized EEG, and transcranial ultrasound to look at the blood vessels of the brain. They will undergo a comprehensive medical review and family review, as well as recommendations for lowering one's chances of a stroke or to treat if there has been a stroke in the past. This program is not covered by insurance. The One-Week Evaluation and Treatment Program was described as follows: This program is designed for those who want to start the stroke program and have the program advanced to a level which makes it significantly easier for the family physicians at home and neurologists to continue the program safely and rapidly. The first days [sic] involved in the initial evaluation, as well as any testing such as EEG and ultrasound testing, if necessary, and CT scans and MRIs as well as blood tests, followed by days two through five being involved in the initiation of medical treatment in that either treating the previous stroke or preventing future strokes. Recommendations are then made to the family physician or neurologists for caring through on this program. There was an additional three-day program, Initial Evaluation and Treatment, which listed for $2,000 and provided the following: This is a three (3) day consultation and evaluation with recommendations for treatment. This program is designed for patients who are interested in treatment of their stroke by their family physicians at home. A comprehensive evaluation will be made by our physicians as well as treatment recommendations. This evaluation will include review of CAT scans or MRIs and blood tests, and when appropriate, computerized EEG testing, neuropsychological testing, and ultrasound evaluations. The program is approximately three days. Prior to traveling to Hammesfahr's clinic, M.T. was directed by Hammesfahr to obtain medical tests from her primary care physician, which she did. The tests included a CT scan of the brain, a CMP, liver profile, CBC with different platelets, Westergren's sed rate, EEG, CVA, and EKG. She was also required to take and write down her blood pressure two times a day for a week before going to Hammesfahr's clinic. M.T. also filled out a medical history form and a system review checklist prior to her visit to Hammesfahr. In a letter dated February 12, 2000, to M.T. on Hammesfahr's letterhead, his office staff described the treatment that M.T. would receive as follows: Your first visits with us will be quite long. So, plan accordingly. On your first day, you will have a consultation with the doctor. The second day you will have diagnostic testing in our office, and an appointment with Dr. Gimon for a neuro- psychological evaluation and Diane Hartley for a physical therapy evaluation. Both of these doctors will be calling you to set up these appointments. The neuro-psychological testing will help us to evaluate any memory changes. You will probably see Dr. Gimon again towards the end of your treatment. On Tuesdays and Thursdays there is an orientation session outlining what we will be doing here in the office and [sic] explaining our treatment program will be given out. Each new patient must attend one of these sessions. Every day thereafter, your visit will be at least two (2) hours long. As you know, our treatment consists of sessions in this office each day Monday through Friday for the duration of your therapy. Please note: No warranties or guarantees can be made regarding the time, the degree, or the duration of improvement with this therapy. On February 20, 2000, M.T. signed a Waiver for Use of Medications, which stated: I am, or my caregiver is, aware that I have had a neurological disease and have failed to respond to other types of medications used in the conservative management of my condition. . . . Options available to me at this time are those now used at the Florida Neurological Institute. I am aware that the medications used in this therapy are medications that have FDA approval. However, I am also aware that the FDA has not approved these medications in the doses and number of medications used here at the Institute. I am aware that Dr. Hammesfahr has published many articles on his therapy. I am aware of the fact that, during the past two years, the Institute has treated many patients with similar conditions and that most have had at least some improvement in the symptoms associated with their problem. I have, and my caregiver has, been counseled regarding this theory under which this therapy is being promulgated. Upon arrival at the Florida Neurological Institute, I and my caregiver, will see and listen to the videotapes available regarding this therapy. I have, or my caregiver has, read this waiver and understands its contents. I am, and my caregiver is, aware that there is no indicated use for this therapy now. I have had all questions I may have concerning the use of these medications answered, I agree to undergo the use of these medications as outlined in the material presented to me. As stated above, I am fully aware of the fact that this therapy probably will not be covered by my insurance, but I wish to continue with this therapy as outlined to me in my training and information sessions. I also understand that no physician, or any other person in this office, can make any guarantees of success from this therapy. (Emphasis in the original) On February 28, 2000, M.T., accompanied by her husband, presented to Hammesfahr's clinic in Clearwater, Florida, for treatment. On her first day at the clinic, she received an orientation. She was required to pay $3,000 for her treatment. A staff member at Hammesfahr's clinic took M.T.'s blood pressure and directed M.T. to take her own blood pressure readings thereafter. On the second day of treatment, February 29, 2000, M.T. was sent to Dr. Alexander Gimon, a neuropsychologist, for a 30-minute evaluation. A staff member of Hammesfahr's clinic gave M.T. a transcranial Doppler, a carotid artery ultrasound, and an electrocardiogram. A Physician's Office Visit History and Physical Examination Form was filled out with a date of "2-28-00" struck through at the top of the form and the date of "2-29-00" placed next to it. At the end of the form appeared a physician's statement signed by Hammesfahr and dated February 22, 2000, a week before M.T. presented for treatment, stating that he had "examined this patient, reviewed his/her history, and consulted with him/her and the caregiver regarding the treatment planned here at Florida Neurological Institute." An Objective (Physical Examination) form was filled out, again with the date of "2-28-00" struck through at the top of the form and the date "2-29-00" placed next to it. The form does not indicate who performed the physical examination. The form does indicate that M.T.'s blood pressure and pulse readings were taken. M.T. met with Hammesfahr, who observed her gait and told her that he would send her back home and would work with her physicians. He did not prescribe any medications at that time and did not give M.T. any medications during her treatment at his clinic. On March 1, 2000, M.T. was supposed to meet with the physical therapist, Diane Hartley, for evaluation at 8:00 a.m. When she arrived at Ms. Hartley's facility, no one was there to let M.T. in the building. When M.T. went into the facility, she did not like the looks of the building, describing it as "shoddy looking." She decided that she did not want to stay for an evaluation and left. The fee Hammesfahr charged M.T. included the fees for Dr. Gimon and Ms. Hartley. On March 1, 2000, M.T. and her husband returned home with the understanding that Hammesfahr would be contacting her doctors in Alabama to arrange for the administering of the medications. M.T. was told to make an appointment with her primary care physician for the week after she returned from Clearwater. Hammesfahr first communicated with M.T.'s physicians by letter, dated April 5, 2000, asking them to administer the vasodilators and magnesium sulfate I.V.'s. M.T.'s physicians in Alabama refused to administer the medications. M.T. did not take the vasodilators, which Hammesfahr wanted her physicians to administer; nevertheless, M.T. improved. Based on the rate schedule presented to M.T. for Hammesfahr's various treatment programs, she should have received either the Executive Stroke Prevention Program or the One-Week Evaluation and Treatment Program. Hammesfahr was adamant that M.T. did not sign up for the Executive Stroke Prevention Program, and the evidence established that she did not receive this program. M.T. was given an itinerary that indicated that she would be treated by Hammesfahr for a week; however the evidence established that she did not receive the treatment that was supposed to be given in the One-Week Evaluation and Treatment Program, which promised that the initiation of medical treatment would be done on days two through five. Hammesfahr did not administer any medications or prescribe any medications for M.T. during her stay in Clearwater. The evidence does show that M.T. received the three-day Initial Evaluation and Treatment Program, for which she should have been charged only $2,000. Hammesfahr presented the expert testimony of Dr. Jacob Green, who is a board-certified neurologist, practicing in Jacksonville, Florida. He has been practicing for over 35 years. Dr. Green has written papers on the use of transcranial Doppler, and he is experienced in the treatment of acute and chronic stroke patients. Dr. Green is familiar with the protocol and procedure utilized by Hammesfahr in treating stroke patients. He has read articles written by Hammesfahr, reviewed patients' records, and spent a day in Hammesfahr's office observing Hammesfahr's practice and treatment protocol which is at issue in this case. While he was at Hammesfahr's clinic, Dr. Green observed Hammesfahr treat patients, reviewed medical records of patients when they first came to Hammesfahr for treatment, and compared the findings in those records to his observations of the patients' abilities. Dr. Green discussed the treatment and protocol with Hammesfahr. Based on his deposition testimony, Dr. Green had a good understanding of the treatment and protocol used by Hammesfahr for stroke patients. Dr. Green described the standard of care for a stroke patient as "to do good by the patient, do no harm." According to Dr. Green, Hammesfahr's care and treatment and protocol complied with the standard of care. Hammesfahr presented the expert testimony of Dr. William Scott Russell, Jr., a retired neurologist with 33 years of experience. In his practice, he had treated thousands of stroke patients. Dr. Russell retired in October 1998. Dr. Russell had first-hand knowledge of the protocol used by Hammesfahr when he treated Dr. Russell for an acute stroke. Prior to Dr. Russell's being treated by Hammesfahr, Dr. Russell had reviewed a paper written by Hammesfahr concerning Hammesfahr's treatment protocol for stroke victims using vasodilators. Dr. Russell considered the treatment protocol espoused by Hammesfahr to not be below the standard of care as of 1998. In 1996, Dr. Russell experienced a stroke. When he awoke one morning, he was confused. He went to work and had difficulty with his abilities to speak and write. Dr. Russell realized that he was experiencing a stroke and had a technician in his office run an EEG. He had peer-reviewed some of Hammesfahr's papers prior to his stroke and was impressed with Hammesfahr's work. So, he contacted Hammesfahr and presented at Hammesfahr's clinic for treatment the day he experienced the stroke. Hammesfahr performed a transcranial Doppler on Dr. Russell and administered nitroglycerine to dilate Dr. Russell's blood vessels. Ten minutes after the nitroglycerine was administered, Dr. Russell's symptoms disappeared. Within a reasonable degree of medical probability, the cause of his recovery was the use of the nitroglycerine. Nitrates are used for acute stroke patients when the patient has an extremely high blood pressure. The nitrates lower the blood pressure and are given intravenously so that the medication can be discontinued immediately if the blood pressure should fall too low. There was no evidence presented to determine whether at the time that Hammesfahr administered nitroglycerine to Dr. Russell that Dr. Russell's blood pressure was high. At the time of the final hearing, Dr. Russell felt that he had total recovery from the stroke deficits. He has reduced his intake of medications prescribed by Hammesfahr and has not had a return of the deficits. The Department presented the testimony of four expert witnesses concerning the standard of care for treatment of stroke victims: Dr. Harold Charles Friend, Dr. Steven Novella, Dr. David F. Scales, and Dr. Thomas Hoffman. Dr. Hoffman has been practicing neurology in Melbourne, Florida, since 1982. Approximately five to ten percent of his patients have had a stroke or a cerebral vascular disease. He has read some of Hammesfahr's advertisements and viewed Hammesfahr's article on Hammesfahr's Internet web site. Dr. Hoffman understands Hammesfahr's protocol to be the use of medications to increase the cerebral blood flow and the use of the transcranial Doppler to direct the medication treatment by measuring the cerebral blood flow. Dr. Hoffman does not agree that the use of vasodilators increases the blood flow to the brain. There is a loss of cerebral autoregulation when a stroke occurs. According to Dr. Hoffman, the use of vasodilators can decrease the blood flow to the brain and worsen neurological functioning in acute stroke patients. It is the opinion of Dr. Hoffman that Hammesfahr's treatment of stroke patients falls below the standard of care for acute, subacute, and chronic stroke patients. Dr. Steven Novella is a neurologist and an assistant professor at Yale University. He received his medical license in Connecticut in 1993 and obtained his board certification in neurology in 1998. He treats stroke patients and is familiar with the appropriate treatment for stroke patients. Dr. Novella understands that the treatment for stroke patients which Hammesfahr advocates is the administration of vasodilators to expand blood vessels which have an insufficient blood supply due to constriction. He disagrees with Hammesfahr's theory, espousing that the blood vessels in the area of the brain that is not receiving enough blood flow will dilate as far as they can go and that the blood vessels will not respond to the vasodilators because the blood vessels are already maximally dilated. Dr. Novella is of the opinion that vasodilators may be used for stroke patients to reduce the risk of another stroke when the patient is hypertensive, but that the vasodilators should not be used as a method of reversing deficits caused by stroke. Dr. Harold Charles Friend is a board-certified neurologist, who has been practicing neurology for 26 years. He practices in Boca Raton, Florida. Approximately five to eight percent of his practice is dedicated to treating stroke patients. He is currently treating in excess of 500 stroke patients. Dr. Friend has reviewed the charts of two patients of Hammesfahr, an article written by Hammesfahr, some of Hammesfahr's advertisements, some newspaper articles, and an article authored by Hammesfahr, which appeared on an Internet site. Dr. Friend also saw a patient in his office that had previously been treated by Hammesfahr. Based on the information from these sources, Dr. Friend incorrectly understood that Hammesfahr's methodology was to basically lower the blood pressure of his patients in an attempt to restore dead cells. He also concluded that the patients seen by Hammesfahr were also receiving physical therapy at the time of treatment. Dr. Friend opined that Hammesfahr's treatment of chronic stroke victims did not comport with the standard of care recognized in the medical community. He further concluded that given the medications that Hammesfahr administers to his patients, that one would expect some adverse effects or no effect on the patients. The only mention in the record of a patient's being harmed by Hammesfahr's treatment was by Dr. Friend. Dr. Friend reviewed a medical chart of a patient who had worsened after treatment by Hammesfahr and had to go to another physician, Dr. Nassar Elmansoury, to correct the problem. The patient had been prescribed Accupril, ten milligrams four times a day, and nitroglycerine cream. Both medications are vasodilators. When the patient presented to Dr. Elmansoury, the patient was feeling worse and experiencing chest pain, dizziness, and disequilibrium. Dr. Elmansoury eliminated the nitroglycerine cream and reduced the amount of Accupril. Within two weeks, the patient was improved. Dr. David F. Scales is a board-certified neurologist, who has been practicing for 34 years. He currently practices in the Jacksonville, Florida, area at the Jacksonville Neurological Clinic. About 50 percent of his in-patient practice consists of stroke patients. Stroke patients comprise about 20 to 25 percent of the entire practice. Dr. Scales has reviewed the medical records of two of Hammesfahr's patients, articles written by Hammesfahr, literature provided by Hammesfahr to his patients, and Hammesfahr's Internet web site. Dr. Scales understands Hammesfahr's theory to be that vasodilators are administered to dilate the blood vessels in the brain so that more blood flows through the penumbra, reactivating neurons that were in a suspended state of activation. He does not agree with Hammesfahr's theory because the blood vessels in the penumbra would be dilated to the maximum and the medications would dilate blood vessels in other parts of the body, which would in turn take away or steal the blood flow from the blood vessels in the penumbra. After reviewing the medical records of two of Hammesfahr's patients, M.T. and M.S., Dr. Scales was of the opinion that the treatment provided by Hammesfahr did not meet the standard of care for the treatment of stroke patients. Having considered the testimony of the experts presented by the parties, it is determined that the standard of care for the treatment of stroke patients varies according to the stage, type, and severity of the stroke. In the acute stage, the patient is admitted to the hospital. A medical history is taken and a physical exam is given, followed by appropriate laboratory and imaging studies to determine the site and cause of the stroke. For patients seen within three hours of the onset of the stroke, certain intravenous medications may be given in an attempt to break up the blood clot. For patients seen beyond the three-hour point, the treatment is maintenance of their blood pressure, monitoring of their vital signs, and treating any complications that may occur such as pneumonia and urinary tract infections. Patients may be given blood thinners to improve the flow of the blood, and medication to increase the blood pressure in the event the blood pressure is too low. Patients with severe hypertension, generally a blood pressure over 220 systolic or 120 diastolic, are given medications to lower their blood pressure. Patients with asymptomatic hypertension are treated judiciously during their hospital stay with anti-hypertensive medications, and the blood pressure is gradually lowered. The standard of care for subacute stroke patients is a continuation of the treatment given in the acute phase. Patients will be started on rehabilitation therapy, which may include speech, occupational, and physical therapy. The standard of care for chronic stroke patients, whom the physician is seeing for the first time, would be to take a history to determine what happened, review the medical records and any imaging studies that may have been done, and review the treatment they have had. The physician should assess the patients' risk factors for stroke such as hypertension, hyperlipidemia, diabetes, and smoking and manage those factors aggressively. Treatment with antiplatelets such as aspirin or an anticoagulation medication might be indicated. An assessment of their neurological functional abilities should be done to determine whether aids, braces, further therapy, or home care could be beneficial. Based upon the evidence presented, the treatment advocated by Hammesfahr is not within the generally accepted standard of care. However, the evidence is not clear and convincing that the treatment used by Hammesfahr is harmful to his patients. There is literature in the medical community that vasodilators can be used in the treatment of stroke as a measure to prevent future strokes. There is evidence that in over 200 patients seen by Hammesfahr that a large percentage improved after being treated by Hammesfahr. Dr. Gimon tested a group of 168 stroke patients seen at Hammesfahr's clinic during the period of November 1999 to May 2000 and another group of 163 stroke patients seen during October 2000 through February 2001. The same battery of tests was administered to both groups. Dr. Gimon evaluated these patients on nine separate neurological evaluations that are standard instruments recognized in neuropsychology. The tests measured identified areas of brain function, including verbal, visual, visual motor, and conceptual thinking. Both groups of patients were tested prior to the treatment by Hammesfahr. The patients were tested again approximately 18 to 21 days after they began treatment at Hammesfahr's clinic. The test results showed that many patients showed improvements in the areas tested. The improvements noted were measured as to a statistical difference so that the findings could not be attributable to testing error. Some patients showed no improvement in all areas. The test results revealed that there was no neuropsychological deterioration of the patients tested. Diane Hartley tested two groups of Hammesfahr's patients, who were treated at his clinic during the period of January to December 2000. Her tests were designed to measure functional motor improvement from a gross motor standpoint. She performed tests on the patients prior to their beginning treatment with Hammesfahr and again approximately two and one half to three weeks after the patients had begun treatment. Of the 242 patients tested by Ms. Hartley, 221 patients demonstrated improvement in one or more of the areas tested and 21 patients showed no improvement. Of the patients tested, ten received physical therapy from Ms. Hartley while they were being treated by Hammesfahr. These ten patients demonstrated a significant amount of improvement, which Ms. Hartley could not attribute solely to the physical therapy they received. The evidence establishes that Hammesfahr informed his patients by the use of videos, orientation sessions, literature, and a web site on the Internet of the nature of the therapy and did not guarantee that the patients would improve as a result of the treatment. Patients were able to make an informed decision on whether to try Hammesfahr' treatment.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered finding that Hammesfahr did not violate Subsections 458.331(1)(d) and 458.331(1)(t), Florida Statutes; finding that Hammesfahr did violate Subsection 458.331(1)(n), Florida Statutes; placing Hammesfahr on probation for six months; and imposing a $2,000 administrative fine. DONE AND ENTERED this 20th day of November, 2002, in Tallahassee, Leon County, Florida. _____ SUSAN B. KIRKLAND Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 20th day of November, 2002.
Findings Of Fact In its 1969 legislative session, the Florida Legislature enacted Section 409.266, Florida Statutes, entitled "Medical Assistance for the Needy," providing the original state legislative basis and authority for Florida's entry into the Medicaid program. Section 409.266(2), Florida Statutes, as enacted, authorized the Florida Department of Social Services or any other department that the Governor might designate to: Enter into such agreement with other state agencies or any agency of the federal government and accept such duties with respect to social welfare or public aid as may be necessary to implement the provisions of subsection (1) and to qualify for federal aid including compliance with provisions of Public Law 86-778 and the "Social Security Amendments of 1965" [estab- lishing Title XIX of the Social Security Act] Section 409.266(3), Florida Statutes, as enacted, stated that: The Department is authorized and directed to prepare and operate a program and budget in order to implement and comply with the provisions of public law 86-778 and the "Social Security Amendments of 1965." No provisions of Florida law other than Section 409.266, Florida Statutes, as enacted, authorized any agency to perform any function specifically to implement the Medicaid program. The State of Florida formally commenced participation in the Medicaid program effective January 1, 1970. At all times pertinent to this controversy, respondent, Florida Department of Health and Rehabilitative Services or its predecessor agencies (referred to as "HRS"), has been and continues to be the "State Agency" identified in 42 U.S.C. Section 1396a(a)(5), and charged under Section 409.266, Florida Statutes, as amended, with the formulation of a State Plan for Medical Assistance ("State Plan"), 42 U.S.C. Section 1396a, and with the ongoing responsibility for the administration of the Medicaid program in the State of Florida. Since Florida's entry into the Medicaid program in 1970, HRS has been authorized essentially to "[e]nter into such agreements with appropriate agents, other State agencies, or any agency of the Federal Government and accept such duties in respect to social welfare or public aid as may be necessary or needed to implement the provisions of Title XIX of the Social Security Act pertaining to medical assistance." Section 409.266(2)(a), Fla. Stat., as amended. HRS has never been authorized to enter into any agreements, accept any duties, or perform any functions with respect to the Medicaid program that are in contravention of or not authorized by Title XIX of the Social Security Act and implementing federal regulations and requirements. As a prerequisite for Florida's entry into the Medicaid program, HRS prepared and filed with the United States Department of Health, Education, and Welfare ("HEW") a State Plan, pursuant to Title XIX of the Social Security Act, and pursuant to its delegated legislative authority set forth in Section 409.266(2)(a), Florida Statutes. (In May, 1980, HEW was redesignated the United States Department of Health and Human Services, but for purposes of this action both shall be referred to as HEW.) C.W. Hollingsworth was the HRS official who had the responsibility for supervising the preparation, the filing, and for obtaining the approval of HEW of Florida's initial State Plan. Florida's initial State Plan was approved by HEW effective January 1, 1970. At the time that Florida received approval of its initial State Plan, Title XIX of the Social Security Act required state plans to provide for the payment of the reasonable cost of inpatient hospital services. At the time that Florida received approval of its initial State Plan, HEW regulations governing reimbursement for inpatient hospital services under Medicaid required the State Plan to provide for reimbursement of Medicaid inpatient hospital services furnished by those hospitals also participating in the Medicare program, applying the same standards, cost reimbursement principles, and methods of cost apportionment used in computing reimbursement to such hospitals under Medicare. 45 C.F.R. Section 250.30(a), and (b), 34 Fed. Reg. 1244 (January 25, 1969). At the time that Florida entered the Medicaid program, Medicare cost reimbursement principles in effect governing reimbursement for the cost of inpatient hospital services required payment of a participating hospital's actual and reasonable costs of providing such services to Medicare beneficiaries, and, moreover, that such payment be made on the basis of the hospital's current costs rather than upon the costs of a prior period or upon a fixed negotiated rate. 42 U.S.C. Section 1395x(v)(1)(A); 20 C.F.R. Sections 405.451(c)(2), 405.402(a) [later renumbered 42 C.F.R. Section 405.451(c)(2) and Section 405.402(a)]. Such Medicare principles and standards also provided for interim payments to be made to the hospital during its fiscal year. At the conclusions of the subject fiscal year, the hospital was required to file a cost report wherein the hospital included all of its costs of providing covered inpatient services to Medicare beneficiaries. A settlement or "retroactive adjustment" process then was required to reconcile the amount of interim payments received by the hospital during the fiscal period with its allowable costs incurred during that period. If the hospital had been overpaid during the year, it was required to refund the amount of that overpayment to the Medicare program. Conversely, if the hospital had been underpaid during the year, the Medicare program was required to make an additional payment to the hospital, retroactively, in the amount of the underpayment. 20 C.F.R. Sections 405.402(b)(2), 405.451(b)(2). Essentially the same Medicare principles and standards governing reimbursement of inpatient hospital services described in the two preceding paragraphs have been in effect at all times pertinent to this controversy. 42 C.F.R. Section 405.401, et seq. Florida's approved State Plan as of January 1, 1970, governing reimbursement of inpatient hospital services under the Medicaid program, committed HRS to reimburse hospitals that also participated in the Medicare program for their reasonable costs of providing inpatient hospital services to Medicaid patients, applying Medicare cost reimbursement principles and standards. The only versions of Florida's State Plan provisions that have been approved by HEW and that have governed HRS's reimbursement of inpatient hospital services prior to July 1, 1981, each commit HRS to reimburse hospitals that also participated in the Medicare program for their reasonable costs of providing inpatient hospital services to Medicaid patients, applying Medicare cost reimbursement principles and standards. Attached as an appendix to the recommended order is the form agreement drafted with the supervision of C.W. Hollingsworth, which has been in use from January 1, 1970, until July 1, 1981. From the inception of the Florida Medicaid program, and as a prerequisite for participation therein, a hospital has been required to execute a copy of the form agreement. A hospital may not participate in the Medicaid program without having executed such an agreement, nor may it propose any amendments thereto. The intent and effect of the form agreement is to require HRS to reimburse hospitals that also participated in the Medicare program for their reasonable costs of providing inpatient hospital services to Medicaid patients, applying Medicare cost reimbursement principles and standards. The form agreement requires HRS to compute a percentage allowance in lieu of the retroactive adjustments ("percentage allowances") in determining the rates that hospitals will be paid for providing inpatient hospital services to Medicaid patients. The form agreement requires HRS to compute a new percentage allowance each year based on hospital cost trends. The meanings of the terms "allowance in lieu of retroactive adjustments" in all pertinent state plans and "percentage allowance for the year in lieu of retroactive payment adjustment" contained in the form agreement are identical. In drafting the form agreement HRS intended that the "percentage allowance for the year in lieu of retroactive payment adjustment" be set at a level sufficient to ensure that hospitals participating in the Medicaid program would be reimbursed their "reasonable costs" of providing inpatient hospital services to Medicaid patients, applying Medicare cost reimbursement principles and standards. At all times pertinent to this controversy, participating hospitals, like petitioner, have been reimbursed by HRS for inpatient hospital services provided to Medicaid patients in the following manner: Within ninety (90) days following the close of its fiscal year, the partici- pating hospital files a Form 2551 or 2552 Annual Statement of Reimbursable Costs, as applicable, with both Blue Cross of Florida, Inc., the major fiscal intermediary respon- sible for the administration of Part A of the federal Medicare program in the State of Florida, and with HRS. This document, also referred to as a "cost report" details various hospital and financial statistical data relating to the patient care activities engaged in by the hospital during the sub- ject fiscal period. Upon receipt of the participating hospital's cost report for a fiscal period, HRS makes an initial determination based upon Medicare cost reimbursement principles and standards of the hospital's total allow- able inpatient costs, charges, and total patient days during the subject fiscal period, and then determines an inpatient per diem reimbursement rate for the period. To the inpatient per diem reimburse- ment rate is then added a percentage allow- ance in lieu of making any further retroactive corrective adjustments in reimbursement which might have been due the hospital applicable to the reporting period. The adjusted inpa- tient per diem reimbursement rate is applied prospectively, and remains in effect until further adjustments in the rate are required. If HRS determines that total inpa- tient Medicaid reimbursement to a partici- pating hospital during a fiscal period exceeds the hospital's allowable and rea- sonable costs of rendering such covered inpatient services applying Medicare cost reimbursement principles and standards, then the hospital is required to remit to HRS the amount of such overpayment. If, however, HRS determines that the total inpatient Medicaid reimbursement received by a participating hospital is less than the hospital's actual and reason- able costs of rendering such covered inpa- tient services to Medicaid patients during the period applying Medicare cost reimburse- ment principles and standards, no further retroactive corrective adjustments are made; provided, however, that should an overpayment occur in a fiscal period, it may be offset and applied retroactively against an under- payment to the participating hospital which occurred during the next preceding fiscal period only. HRS has used the following "percentage allowances" in determining Medicaid reimbursement rates for inpatient hospital services: a. January 1, 1970 - June 30, 1972 . . . 12 percent July 1, 1972 - approximately March 30, 1976 . . . . . . . . . . 9 percent Approximately March 31, 1976 - June 30, 1981 . . . . . . . . . . . 6 percent Since at least January 1, 1976, HRS has not recomputed the "percentage allowance" on an annual basis. Since at least January 1, 1976, HRS has not based the "percentage allowance" that it has applied in determining Medicaid inpatient hospital reimbursement rates upon hospital cost trends. HRS has used no technical methodology based upon hospital cost trends to develop any of the "percentage allowances." At least since January 1, 1974, HRS's "percentage allowances" have been less than the corresponding average annual increases in the costs incurred by Florida hospitals of providing inpatient hospital services. Prior to March 30, 1976, all of HRS's published regulations addressing reimbursement of participating hospitals for their costs of providing inpatient hospital services to Medicaid patients required HRS to reimburse such hospitals in accordance with Medicare cost reimbursement principles and standards. In certain internal documents, Petitioner's Exhibits P-44 and P-12, HRS states that the average costs of providing inpatient hospital services in the State of Florida rose at least 18 percent during calendar year 1975. In November, 1975, the Secretary of HRS was informed by HRS officials that HRS faced a projected budgetary deficit for its fiscal year ended June 30, 1976. A decision memorandum presented options to the HRS Secretary for reducing the projected deficit. Among such options presented to and approved by the HRS Secretary was to reduce the "percentage allowance" from 9 percent to 6 percent. The reduction of the "percentage allowance" by HRS from 9 percent to 6 percent was effected in response to HRS's projected deficit, and was not based upon an analysis of hospital cost trends. HRS incorporated the 6 percent "percentage allowance" into its administrative rules which were published on March 30, 1976. In response to objections raised by the Florida Hospital Association to the reduction in the percentage allowance by HRS from 9 percent to 6 percent, HRS officials reexamined that reduction. During HRS's reexamination of its previous "percentage allowance" reduction, HRS was aware of and acknowledged the fact that Florida hospital costs were increasing at an average annual rate in excess of both the earlier 9 percent and the resulting 6 percent "percentage allowance." In a memorandum dated September 13, 1976, from HRS official Charles Hall to the Secretary of HRS, Petitioner's Exhibit P-45, Charles Hall informed the Secretary that the methods and standards then used by HRS to reimburse participating hospitals for their costs of providing inpatient hospital services to Medicaid patients was out of compliance with federal requirements. Charles Hall further informed the Secretary that the reason HRS had not theretofore been cited by HEW for noncompliance was the manner in which the Florida State Plan had been drafted, i.e., that the State Plan required HRS to reimburse hospitals under Medicaid for the reasonable costs that they would have been reimbursed applying Medicare cost reimbursement principles and standards. In a letter dated September 20, 1976, Petitioner's Exhibit P-31, HEW informed HRS that HEW had received a complaint from the Florida Hospital Association that the methods HRS was actually using to reimburse hospitals for the costs of providing inpatient hospital services to Medicaid patients were in violation of Federal Regulation 45 C.F.R. Section 250.30(a). A proposed amendment to Florida's State Plan submitted by HRS to HEW in November, 1976, Petitioner's Exhibit P-49, if approved, would have allowed HRS to reimburse hospitals for the cost of providing inpatient hospital services to Medicaid patients under methods differing from Medicare cost reimbursement principles and standards (an "alternative plan"). "Alternative plans" have been permitted under applicable federal regulations since October 21, 1974. A state participating in the Medicaid program may elect to establish an "alternative plan, but may not implement such "alternative plan" without the prior written approval of HEW. Florida has not had in effect an "alternative plan" of reimbursing participating hospitals for their costs of providing inpatient hospital services to Medicaid patients that was formally approved by HEW at any time prior to July 1, 1981. By letter dated January 7, 1977, Petitioner's Exhibit P-32, HEW notified HRS that it had formally cited HRS for noncompliance with federal regulations governing reimbursement of inpatient hospital services under Medicaid. HRS acknowledged their noncompliance and between November, 1976, and October 30, 1977, HRS attempted to revise its proposed "alternative plan" on at least two occasions in an attempt to obtain HEW approval. In October, 1977, HRS withdrew its proposed "alternative plan" then pending with HEW. HRS then contracted with an outside consultant, Alexander Grant & Company, to assist in the formulation of a new "alternative plan" proposal. In January, 1978, Alexander Grant & Company delivered its draft of an "alternative plan" to HRS. In October, 1978, HRS submitted a draft "alternative plan" to HEW for review and comment, and HEW expected HRS to submit a formal "alternative plan" proposal to HEW for its approval by November 1, 1978. HRS did not submit the formal "alternative plan" proposal to HEW until August 12, 1980. In a letter dated February 21, 1979, from Richard Morris, HEW Regional Medicaid Director, Region IV, to United States Senator Richard Stone of Florida, Mr. Morris advised Senator Stone: For more than two years the Florida Medicaid Program has not met Federal Requirements for inpatient hospital services reimbursement. Their payment methodology under-reimburses certain hospitals year after year. The pros- pective interim per diem rate paid by Florida to hospitals includes a percentage allowance to cover increased costs during the forthcom- ing year that is consistently less than increased costs in some hospitals. If the payments are less than costs, the difference is not reimbursed. This results in underpay- ments. We have worked closely with Florida to develop an acceptable alternative system that would meet Federal requirements. To date, Florida has not implemented such a system despite having received informal HEW agreement on a draft plan developed more than a year ago. It is our understanding that this alternative plan is not a high priority item at this time. We will continue to work with HRS staff to secure Florida compliance re- garding this requirement. Petitioner's Exhibit P-46. Since August 12, 1980, HRS has submitted to HEW for its approval at least four more versions of an "alternative plan." Petitioner's Exhibits P-120, P-121, P-123, and P-152. Each of these versions was approved by the Secretary of HRS, and HRS believes each to comply with applicable Florida law. Mr. Erwin Bodo, Ph.D., was and is the HRS official responsible for the development and drafting of Exhibits P-120, P-121, P-123, and P-152. In June, 1981, HEW approved an "alternative plan" for the State of Florida (Exhibit P-152), and such "alternative plan" was implemented effective July 1, 1981. Until July 1, 1981, HRS continued to use the 6 percent "percentage allowance" to compute inpatient hospital reimbursement under Medicaid. Even after its repeal, Rule 10C-7.39(6), Florida Administrative Code, is applied by respondent in calculating reimbursement for Medicaid services provided between March 30, 1976, and July 1, 1981. From November 20, 1976, until July 1, 1981--the period in which HRS was attempting to secure HEW approval for an alternative plan--HRS was aware that the costs of inpatient hospital se vices were increasing at an average annual rate in excess of the 6 percent "percentage allowance." From September 1, 1976, through July 1, 1981, HRS has been out of compliance with its a proved State Plan provisions, and HEW regulations governing reimbursement for inpatient hospital services under Medicaid because HRS's methods for reimbursing hospitals for the cost of providing those services to Medicaid patients have resulted in a substantial number of hospitals-- including petitioner--being reimbursed at a lower rate than the hospitals would have been reimbursed applying Medicare cost reimbursement principles and standards. Since the quarter ending December 31, 1976, until July 1, 1981, HEW has formally cited HRS as being in contravention of its approved State Plan provisions, and HEW (now HHS) regulations, governing reimbursement for inpatient hospital services under Medicaid because HRS's methods for reimbursing hospitals for the cost of providing those services to Medicaid patients have resulted in a substantial number of hospitals--including petitioner--being reimbursed at a lower rate than the hospitals would have been reimbursed applying Medicare cost reimbursement principles and standards. PAN AMERICAN HOSPITAL CORPORATION Petitioner, Pan American Hospital Corporation, is a not-for-profit corporation, duly organized and existing under the laws of the State of Florida. Petitioner is a tax-exempt organization as determined by the Internal Revenue Service pursuant to Section 501(c)(3) of the Internal Revenue Code of 1954, as amended. At all times pertinent to this controversy, petitioner has operated and continues to operate a duly licensed 146-bed, short-term acute care general hospital, located at 5959 Northwest Seventh Street, Miami, Florida 33126. At all times pertinent to this controversy, petitioner has been and continues to be a duly certified provider of inpatient hospital services, eligible to participate in the Florida Medicaid program since January 27, 1974. The appendix to this recommended order is a true and correct copy of the "Participation Agreement" entered into between petitioner and HRS, whereunder, inter alia, petitioner became eligible to receive payment from HRS for covered inpatient hospital services provided to Medicaid patients. At all times pertinent to this controversy, petitioner has been a certified "provider of services" participating in the Medicare program. During the fiscal periods in dispute in this action, petitioner did provide covered inpatient hospital services to Medicaid patients, and became eligible for payment by HRS of its reasonable costs of providing such services, determined in accordance with Medicare cost reimbursement principles and standards. With respect to each of the fiscal periods in dispute in this action, petitioner timely filed all cost reports and other financial data with HRS or its contracting agents, including Blue Cross of Florida, Inc., to enable HRS to determine petitioner's reasonable costs of providing covered inpatient hospital services to Medicaid patients. During each of the fiscal periods in dispute in this action, to reimburse petitioner for its reasonable costs of providing covered inpatient hospital services to Medicaid patients, determined in accordance with applicable Medicare cost reimbursement principles and standards. Such costs incurred by petitioner were reasonable, necessary, related to patient care, and less than customary charges within the meaning of those Medicare principles and standards. With respect to each of the fiscal periods in dispute, HRS and/or its contracting agent, Blue Cross of Florida, Inc., reviewed and audited the cost reports filed by petitioner, and as a result of such review and audits set or adjusted, as applicable, the Medicaid inpatient per diem reimbursement rate at which petitioner would be paid during the next succeeding fiscal period or until that rate was again adjusted. On May 3, 1976, a Notice of Program Reimbursement was issued to petitioner applicable to its fiscal year ended March 31, 1975, and setting forth the audited amount of petitioner's reasonable costs of providing covered inpatient hospital services to Medicaid patients during such period and the amount of interim Medicaid payments made to petitioner by HRS during the period in respect to those services. During its fiscal year ended March 31, 1975, petitioner received $86,469 less than its reasonable costs of providing covered inpatient hospital services to Medicaid patients, and no retroactive corrective adjustment has been made in connection with such underpayment. On February 14, 1979, a Notice of Program Reimbursement was issued to petitioner applicable to its fiscal year ended March 31, 1976, and setting forth the audited amount of petitioner's reasonable costs of providing covered inpatient hospital services to Medicaid patients during such period and the amount of interim Medicaid payments made to petitioner by HRS during the period with respect to those services. During its fiscal year ended March 31, 1976, petitioner received $199,328 less than its reasonable costs of providing covered inpatient hospital services to Medicaid patients, and no retroactive corrective adjustment has been made in connection with such underpayment. On September 29, 1978, a Notice of Program Reimbursement was issued to petitioner applicable to its fiscal year ended March 31, 1977, and setting forth the audited amount of petitioner's reasonable costs of providing covered inpatient hospital services to Medicaid patients during such period and the amount of interim Medicaid payments made to petitioner by HRS during the period with respect to those services. During its fiscal year ended March 31, 1977, petitioner received $6,083 less than its reasonable costs of providing covered inpatient hospital services to Medicaid patients, and no retroactive corrective adjustment has been made in connection with such underpayment. On March 13, 1980, a Notice of Program Reimbursement was issued to petitioner applicable to its fiscal year ended March 31, 1978, and setting forth the audited amount of petitioner's reasonable costs of providing covered inpatient hospital services to Medicaid patients during such period and the amount of interim Medicaid payments made to petitioner by HRS during the period with respect to those services. During its fiscal year ended March 31, 1978, petitioner received $178,506 less than its reasonable costs of providing covered inpatient hospital services to Medicaid patients, and no retroactive corrective adjustment has been made in connection with such underpayment. On June 30, 1981, a Notice of Program Reimbursement was issued to petitioner applicable to its fiscal year ended March 31, 1979, and setting forth the audited amount of petitioner's reasonable costs of providing covered inpatient hospital services to Medicaid patients during such period and the amount of interim Medicaid payments made to petitioner by HRS during the period with respect to those services. During its fiscal year ended March 31, 1979, petitioner received $302,347 less than its reasonable costs of providing covered inpatient hospital services to Medicaid patients, and no retroactive corrective adjustment has been made in connection with such underpayment. On or about June 30, 1981, the audit of petitioner's Medicaid cost report for the period ending March 31, 1980, was concluded. A formal Notice of Program Reimbursement had not been issued at the time of the hearing. MOTION TO DISMISS DENIED Respondent contends that these proceedings should be summarily concluded "for failure to join an indispensable party," viz., the Federal Government, because it "is Respondent's intention, should any liability result from this action, to make a claim for federal financial participation as to approximately fifty-nine percent of such liability . . . [See generally] 42 U.S.C. Section 1320b-2(a)(2)." Motion to Dismiss, p. 2. This contention must fail for several reasons. Neither the Division of Administrative Hearings nor the Department of Health and Rehabilitative Services has the power or means to bring an unwilling party into a proceeding instituted pursuant to Section 120.57, Florida Statutes (1979). At most, "the presiding officer may, upon motion of a party, or upon his own initiative enter an order requiring that the absent person be notified of the proceeding and be given an opportunity to be joined as a party of record." Rule 28-5.107, Florida Administrative Code. There exists no administrative writ for joining a non-petitioning party in a substantial interest proceeding in the way judicial process can join a party within a court's jurisdiction in a pending judicial proceeding. The two cases respondent cites in support of its motion, Bannon v. Trammell, 118 So. 167 (Fla. 1928), and Heisler v. Florida Mortgage Title and Bonding Co., 142 So.2d 242 (Fla. 1932), are inapposite, because both cases involve judicial, not administrative proceedings. HRS does not really seek joinder of the United States Department of Health and Human Services; instead, HRS argues that the petition should be dismissed and the controversy relegated to federal court because it "believes that the Secretary [of the United States Department of Health and Human Services] will not succumb voluntarily to the jurisdiction of the Division of Administrative Hearings." 2/ Motion to Dismiss, p. 3. Participation by the Department of Health and Human Services in the present proceedings would have been welcomed, as the Hearing Officer indicated at the prehearing conference, but neither the Department itself nor either of the parties requested such participation. In any event, petitioner is seeking additional reimbursement from respondent HRS, not from any federal agency. Medicaid providers like petitioner do not receive any funds directly from the Department of Health and Human Services. Since "[t]he contracts involved are clearly between the hospitals and [H]RS [, n]o third party requirement appears," Montana Deaconess Hospital v. Department of Social and Rehabilitation Services, 538 P.2d 1021, 1024 (Mont. 1975), and the Department of Health and Human Services is not an indispensable party to administrative proceedings arising out of contracts between HRS and Medicaid providers. HRS protests that it might find itself making additional reimbursement to petitioner, yet be deprived of the federal component of such expenditures. See 42 U.S.C. Section 1396b. This prospect is an unlikely one in view of the fact that the Department of Health, Education, and Welfare has repeatedly cited HRS for noncompliance because of under-reimbursements to Medicaid providers. If the Federal Government fails to contribute to any additional reimbursement, it would not be for want of a forum in which HRS could present its claim. There are administrative mechanisms within the Department of Health and Human Services, including its Grant Appeals Board. See 42 U.S.C. Section 1116(d). After exhaustion of administrative remedies, HRS would have access to the courts, if necessary. See Georgia v. Califano, 446 F. Supp. 404 (N.D. Ga. 1977). There is no danger that HRS will be deprived of an opportunity to litigate any question about federal contribution because the United States Department of Health and Human Services is not a party to the present proceedings. MOTION FOR PARTIAL SUMMARY JUDGMENT Petitioner's motion for partial summary judgment was amended ore tenus at the final hearing to delete "and FYE March 31, 1981," on page 1 of the motion, after leave to amend was granted, without objection by respondent. As a technical matter, the motion is a misnomer, since substantial interest proceedings before the Division of Administrative Hearings eventuate in recommended orders, not judgments. But, petitioner's contention that there is no genuine issue as to any material fact is well founded. The parties have so stipulated. (T. 70; Mr. Weiss's letter of November 12, 1981.) At the time the petition was filed, the parties contemplated numerous factual disputes which, however, had all been resolved by the time of final hearing through the commendable efforts of counsel. In the absence of a disputed issue of material fact, the Administrative Procedure Act provides for informal proceedings pursuant to Section 120.57(2), Florida Statutes (1979), "[u]nless otherwise agreed." Section 120.57, Florida Statutes (1979). On December 7, 1981, the parties filed their Stipulation and Agreement to proceed pursuant to Section 120.57(1), Florida Statutes (1979), notwithstanding the absence of any factual dispute. DISPUTE COGNIZABLE In the present case, as in Graham Contracting, Inc. v. Department of General Services, 363 So.2d 810 (Fla. 1st DCA 1978), there "can be no doubt that the Department's contract . . . calls for agency action which potentially affects . . . substantial interests," 363 So.2d at 812, of the petitioning contractor. Cf. Solar Energy Control, Inc. v. State Department of Health and Rehabilitative Services, 377 So.2d 746 (Fla 1st DCA 1979) (reh. den. 1980) (disappointed bidder substantially affected). See Section 120.52(10)(a), Florida Statutes (1979). In Graham Contracting, Inc. v. Department of General Services, 363 So.2d 810 (Fla. 1st DCA 1978), the petitioner sought "additional money and construction time under its contract," 363 So.2d at 813, with a state agency. The court found "no difficulty . . . with sovereign immunity," 363 So.2d at 813, and held that a contractor with a state agency could invoke the Administrative Procedure Act in order to enforce its contract, even though the contract purported to establish another method for settling the contract dispute. A clause in the contract at issue in the Graham Contracting case contemplated agency action outside the parameters of Chapter 120, Florida Statutes, in resolving certain disputes under the contract. In contrast, each of the successive contracts on which petitioner predicates its claim in the present case contains the following provision: "The hospital agrees to comply with the rules, policies, and procedures required by [HRS's] Division of Family Services for this program." Among the rules thus incorporated by reference into the contracts between petitioner and respondent is Rule 10C-7.35, Florida Administrative Code, which provides: An official representative of a facility participating in Medicaid, . . . or . . . representative, may appeal Medicaid Program policy, procedure, or administrative rulings whenever the provider feels there has been an unfair, illegal or inappropriate action by the Department affecting them or their facility. (1) Provider Appeals The Administrative Procedures [sic] Act, Chapter 120 F.S., provides for provider appeals and hearings, which are conducted by the Division of Administrative Hearings in the Department of Administration. The spe- cific rule relative to the appeal and hearing process is Chapter 28-3 [sic] of the Florida Administrative Rules. . . Since, by reference to Rule 10C-7.35, Florida Administrative Code, the contract in the present case incorporates Chapter 120, Florida Statutes, the applicability of the Administrative Procedure Act is even clearer here than in the Graham Contracting case. THE MERITS The parties have stipulated that petitioner has been reimbursed by respondent less than its reasonable costs of providing covered inpatient hospital services over the time period in question. Under-reimbursement of this kind is not authorized by Section 409.266, Florida Statutes, which incorporates the federal statutory requirement that hospitals which, like petitioner, provide Medicaid services be reimbursed by respondent for reasonable costs incurred, in accordance with an approved State Plan, and not some lesser amount. 42 U.S.C. Section 1396a(a)(13)(B), Pub. L. 89-97, Section 121(a) redesignated 42 U.S.C. Section 1396a(a)(13)(D), Pub. L. 90-248, Section 224(a). All Florida "State Plan provisions . . . approved by HEW and . . . govern[ing] HRS's reimbursement of inpatient hospital services prior to July 1, 1981, commit HRS to reimburse hospitals [like petitioner] that also participated in the Medicare program for their reasonable costs of providing inpatient hospital services to Medicaid patients, applying Medicare cost reimbursement principles and standards." Prehearing Stipulation, Paragraph 19. The record is clear. Respondent consistently reimbursed petitioner less than its reasonable costs of providing inpatient hospital services in order to cut its own expenses and in doing so jeopardized the entire Medicaid program. This cannot be condoned, even though respondent acted under color of law, viz., Rule 10C-7.39(6), Florida Administrative Code [now repealed and declared invalid; see Pan American Hospital Corporation v. Department of Health and Rehabilitative Services, No. 81-1480R (DOAH; December 4, 1981)], and even though a lack of money or, at least, an apparent shortage was the reason for respondent's parsimony. The question remains, however, whether this dereliction on respondent's part should inure to the benefit of petitioner; and the answer turns on the construction of the agreement between the parties attached as an appendix to this order. Petitioner argues cogently that public policy has clearly been enunciated by statute to be full reimbursement for costs reasonably incurred by Medicaid providers in furnishing covered services. There can be no clearer expression of public policy than a statute duly enacted; and the reasons behind the full reimbursement policy are themselves compelling: to deal fairly with the providers, not only for fairness sake, but also to assure their participation in the program, and to remove any temptation to give indigent patients substandard care, inter alia. But, there is surely an overriding public policy requiring that a contractor with state government who voluntarily agrees to forego a claim against the public fisc be held to that agreement in administrative proceedings like these. The form agreement between petitioner and respondent, which they renewed annually, states: "It is understood that reimbursement will be made on the basis of an interim payment plan in the form of a per diem cost rate, plus a percentage allowance for the year in lieu of retroactive payment adjustment. However, . . . in the event the hospital did not receive its audited reasonable costs in the year prior to the current year then the hospital may deduct from the refund the prior year deficiency." (Emphasis supplied.) The agreement thus contemplated under-reimbursement and specified the method for recoupment, if there was to be any. Any "retroactive payment adjustment," as the result of administrative proceedings or otherwise, is specifically ruled out. Elsewhere in the parties' agreement is found this language: [T]he fiscal responsibility of [respondent's] Division of Family Services is subjected [sic] to the appropriation and availability of funds to the Medicaid program . . . by the state legislature every year." The terms of the agreement make clear that under-reimbursement is not in itself a breach. Respondent's failure to compute annually a "new percentage . . . based on hospital cost trends" was attributable to a shortage of funds; and the agreement provided that respondent's "fiscal responsibility" was subject to just such a shortage. In sum, provisions of the agreement petitioner voluntarily entered into with respondent operate in much the same way as a liquidated damages clause and preclude the relief petitioner seeks. Petitioner's invocation of the parol evidence rule is unavailing. Even if the stipulated facts outside the four corners of the form agreement are looked to, the course of dealing between these parties buttresses the construction outlined above. The fact that respondent may have settled a case it litigated against another hospital in some other way, as asserted by petitioner, is technically irrelevant.
Recommendation Upon consideration of the foregoing, it is RECOMMENDED: That respondent deny the prayer of the petitioner for additional reimbursement. DONE AND ENTERED this 10th day of December, 1981, in Tallahassee, Florida. ROBERT T. BENTON II Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 10th day of December, 1981.
The Issue Kindred Hospitals East, LLC (Kindred) filed CON Application 9831 with the Agency for Health Care (AHCA or the "Agency"). The application seeks the establishment of a 60-bed Long Term Care Hospital (an "LTCH") in Volusia County, AHCA Health Care Planning District 4. The Agency preliminarily denied the application. Kindred has challenged the denial. The issue in this case is whether the application should be approved.
Findings Of Fact The Parties Kindred, the operator of 22 LTCHs, is a wholly-owned subsidiary of Kindred Healthcare, Inc. Through its subsidiaries, Kindred Healthcare, Inc., operates 75 LTCHs nationwide, seven of which are in Florida. Of the seven Florida facilities, Kindred operates six. If CON Application 9831 is approved and the proposed facility becomes operational, therefore, Kindred will become the operator of 23 LTCHs, seven of which are in Florida. The Agency is the state agency responsible for administration of the Certificate of Need program. See § 408.031, Fla. Stat., et seq. Kindred North Florida and District 4 Kindred currently operates a 40-bed freestanding LTCH in Clay County ("Kindred North Florida"). Although in Clay County, Kindred North Florida is considered by Kindred to be in the area of Jacksonville or Duval County, a center of population greater than Clay County's. Kindred proposes to build and operate the project subject to CON Application 9831 in Volusia County, approximately 80 miles south of Kindred North Florida. Volusia County is one of seven counties that comprise District 4, a health service planning district established by the Health Facility and Services Development Act. In addition to Volusia, Clay, and Duval Counties, the other counties that make up District 4 are Baker, Nassau, St. Johns, and Flagler. Stipulated Facts The parties have stipulated to the following facts: Kindred's CON application complies with statutory and rule application content, submission, filing fee and review process requirements; and the Agency's review complied with review process requirements. Kindred has the ability to provide a quality LTCH program. Kindred has the necessary resources, including health personnel, management personnel, and funds for capital and operating expenditures, for project accomplishment and operation. Kindred's project is likely to be financially feasible. Kindred's proposed costs and methods of construction are reasonable. There are no disputes regarding Kindred's proposed provision of services to Medicaid patients and the medically indigent. The statutory criterion relating to nursing home beds is not applicable. Kindred complied with the letter of intent requirements found in AHCA rules. AHCA did not at the time of review, and currently does not, calculate a fixed need pool for LTCH beds. Amended Stipulation, at pp. 4-6. LTCH Services The length of stay in the typical acute care hospital (a "short-term hospital") for most patients is three to five days. Some hospital patients, however, are in need of acute care services on a long-term basis ("LTCH services"), that is, much longer than the average lengths of stay for most patients. Patients in need of LTCH services often have lengths of stay in the hospital that exceed the typical three-to-five day stay in a short-term hospital by 20 to 22 days or more. Some patients who exceed the usual short-term lengths of stay by similar lengths are not appropriate for LTCH services. Their stays are regarded more as custodial in nature. Those in need of LTCH services, whose stays are not custodial, however, are generally better served in an LTCH than in a short- term hospital. Patients appropriate for LTCH services represent a small but discrete sub-set of all inpatients. They are differentiated from other hospital patients in that, by definition, they have multiple co-morbidities that require concurrent treatment. Patients appropriate for LTCH services tend to be elderly, frail, and medically complex and are usually regarded as catastrophically ill. Some LTCH patients, however, are not elderly. These younger LTCH patients are often victims of trauma. Whatever the age of LTCH patients, they are typically medically unstable for their entire hospital stay. Because of their status as medically unstable, complex and seriously ill, they require extensive nursing care and daily physician oversight. Very often their care involves some sort of technologically advanced support such as a ventilator. Case Mix and Patient Acuity A "case mix index" for a hospital is a measure of its average resource consumption. Resource consumption can be viewed as a surrogate measure of complexity and severity of illness. The case mix index of Kindred hospitals is high compared to the entire LTCH industry and, as would be expected, is higher than the average case mix index for short-term hospitals. A way to further refine the variation of patients' acuity within a diagnostic related group (DRG) is through the APRDRG system. Not routinely used in hospitals, it is a tool of health services research. The system assigns not only a DRG but a severity of illness as well on a scale of one (minor severity) to four (extreme severity.) Applying the system to Kindred's database as well as to federal data confirms that the distribution of severe and extremely severe cases is skewed toward LTCH patients. This confirmation is consistent with empirical observation that patients in LTCHs are sicker on average than those in general hospitals. A third measure of patient acuity routinely used in Kindred hospitals is an APACHE score. It was described by Dr. Muldoon in his deposition testimony in the following way: [A]n APACHE score . . . is a combination of physiologic derangement and concurrent illnesses. While not universally applied to the LTAC [sic] population, it is a routine measurement in Kindred Hospitals. Using that indicator, we find that the average Kindred patient has an APACHE III score of about 45, whereas the average critical care patient in all of short-term acute care has a score about two-and-a-half points higher. This further supports the observation that LTACs [sic] in the Kindred portfolio treat a severely ill population only a few points, on the APACHE measure, below that of critical care units across the country. (Kindred Ex. 2, p. 15). The comparisons of acuity levels between LTCHs in general and short-term hospitals or Kindred LTCHs and short-term hospitals, while they show that the Kindred LTCH population is at a higher acuity level than patients in short-term hospitals, do not prove that Kindred LTCH patients are all appropriate for LTCH services. The Agency does not by rule define the level of acuity for admission of a patient to an LTCH. Nor has it done so by order. Information on acuity level of patients in short- term hospitals is not available through the AHCA's health statistics data base. That acuity levels are higher for Kindred's LTCHs than short-term hospitals does not necessarily mean that all patients admitted to Kindred hospitals are appropriate LTCH patients. One of the bases Kindred advances for why LTCH beds are not available in the district, despite low occupancy rates of Specialty Hospital of Jacksonville (Specialty or "Specialty Jacksonville") for the last several years (see paragraph 36, below), is that Specialty lowers utilization of its beds by restricting admission to patients of higher acuity than threshold LTCH acuity. The assertion does not prove that LTCH beds are unavailable in District 4. Rather, it begs a series of questions: does Specialty refuse patients with LTCH-appropriate acuity levels, does Kindred admit some patients whose acuity level would allow them to be served appropriately in an alternative post-acute care setting, or is the answer a combination of both? Districts Without LTCHs: Restricted Choice In those health care planning districts that do not have LTCHs, hospital patients in need of long-term acute care typically have little choice but to stay in the short-term hospital. The short-term hospital is usually dissatisfied with such an arrangement and short-term hospital staff, oriented toward stabilizing and treating the patient on a short-term basis, may lose interest in the patient after the patient exceeds the average length of stay associated with the patient's diagnosis. The patient can opt to transfer to an LTCH a long distance from home or to be treated in a setting that is less than appropriate for their level of acuity such as a skilled nursing unit of a nursing home. Neither option presents much appeal to the patient in need of LTCH services or the patient's family. Transfer to a distant LTCH is difficult and inconvenient for the patient's family. Consequently, such a transfer creates a hardship for the patient in need of family visits. Such a transfer also presents the possibility of one of two less-than-optimal results: the family loses contact with the loved one or family members have to relocate to the area of the LTCH. Re-location frequently entails significant hardship. Opting for a nursing home in the family's locality is not adequate for a patient in need of LTCH services. With the intensive nursing and daily physician oversight LTCH services entail, a skilled nursing unit in a nursing home is not an adequate setting. Its medical services, quite simply, are not of adequate intensity to the true potential LTCH patient. This difference is but one of several between LTCHs and other providers. Differences between LTCHs and Other Providers Short-term hospitals and LTCHs do not have the same purpose. The gap is widening between the two. Over the last 20 years, short-term hospitals have evolved into setting that stabilize patients, diagnose, and develop treatment plans. Most admissions to the medical ward of a short-term hospital are through the emergency room where patients are so acute and so unstable that emergency care is required. In their role as diagnostic centers, short-term hospitals provide imaging and laboratory services and then develop a treatment plan based on the diagnostic work-up performed. Short-term hospitals have moved away from the function of carrying out a treatment plan. This is borne out by lengths of stay in short-term hospitals growing shorter over the last 20 years. Lengths of stay now average three to five days. As a result, short-term hospitals have limited capability to provide a prolonged treatment plan for patients with multiple co-morbidities. In contrast, LTCHs do not hold themselves out to be diagnostic or stabilization centers. LTCH have developed expertise in caring for the small subset of patients that require a prolonged treatment plan. A multi-disciplinary physician-based care plan is provided in LTCHs that is not provided in short-term hospitals or other post-acute settings. If there is no LTCH readily available to provide a hospital-level discharge, then the short-term hospital must either keep the patient or discharge the patient to a setting that is less than appropriate for the patients needs. If the hospital keeps the patient, it is often not staffed to give the patient the amount of therapeutic rehabilitation required. The patient is not stable enough to transfer to a comprehensive medical rehabilitation facility. The patient that qualifies for an LTCH has a very different set of needs from many patients in the intensive care unit and/or medical-surgical (med-surg) beds in a short-term hospital. A very low percentage of all med-surg patients are appropriate for LTCH services. Placing these patients in an LTCH preserves the resources of short-term hospitals and encourages their financial health, which are outcomes driven by Medicare Prospective Payment System (PPS) that provides incentives to discharge patients from short-term hospitals as quickly as possible. Skilled nursing facilities (SNFs) and LTCHs are different both in intent and execution. Stable patients who require minimum medical intervention, whose primary needs are nursing and who are unlikely to become unstable, are appropriate for SNFs. Conversely, LTCHs are appropriate when daily medical intervention is required. Access to diagnostics, laboratory, radiology and pharmacy services make LTCHs better able to respond to changes in conditions and care plans than SNFs. Comprehensive medical rehabilitation hospitals (CMRs) and LTCHs are distinctly different. Geared for patients with primarily neurologic or musculoskeletal orthopedic issues, the CMR care model is based on physical rather than internal medicine that requires a minimum of three hours per day of physical therapy. Internists, therefore, are required to oversee LTCHs rather than other types of medical doctors. While rehabilitation is a concurrent component of an LTCH, patients appropriate for an LTCH bed, because of their medical conditions, cannot tolerate the three hours per day of therapy per patient conducted at a CMR. A CMR may be an appropriate facility after a stay in an LTCH when the patient has improved to the point where typical CMR therapy can be tolerated. Home health care is no substitute for LTCH care needed by patients appropriate for admission to an LTCH. By definition, LTCH patients meet criteria for inpatient hospitalization. Home health care is designed for patients who are stable and have limited medical needs that can be administered by nurses or families that visit or are in the patient's home. In sharp contrast, LTCH patients require many hours a day of nursing, respiratory, and other therapies under the direct care of a physician. On the basis of regulation alone, short-term hospitals can provide LTCH-type care. Generally, however, they do not. Because of Medicare's PPS, short-term hospitals have evolved into centers of stabilization and diagnosis, where care plans are initiated but not carried out fully. With such an orientation, short-term hospital staff often cannot sustain the focus and interest in a patient whose length of stay greatly exceeds the average length of stay for patients with the same diagnosis. Case studies bear out that when patients who are not progressing in a short-term hospital are transferred to LTCHs, where a multi-disciplinary approach replaces the diagnostic focus, the patients improve in both medical and physical well- being. In short, in the health care continuum, LTCH care constitutes a component dedicated to catastrophically ill and medically complex patients in need of acute care services that exceed by a considerable amount the average length of stay of those patients in a short-term hospital. Typically medically unstable for the entire time of stay in the short-term hospital, these patients require extensive nursing care with daily physician oversight usually accompanied by some type of technologically advanced support. Federal Government Recognition of LTCHs The federal government recognizes the distinct place occupied by LTCHs in the continuum of care based on the high level of LTCH patient acuity. The PPS of the federal government treats LTCH care as a discrete form of care. LTCH care therefore has its own system of DRGs and case mix reimbursement that provides Medicare payments at rates different from what PPS provides for other traditional post-acute care providers. Medicare and the PPS System The federal definition of a "long term care hospital" is a hospital whose average length of stay for Medicare patients is greater than 25 days. The 25-day length of stay requirement only applies to Medicare patients, not to non-Medicare, such as commercial patients; some of Kindred's LTCHs have a substantial number of commercial pay patients where the average length of stay is not 25 days. The federal government clearly identifies LTCHs as hospitals, separate from SNFs, CMR hospitals, and short-term hospitals. The very earliest LTCHs were primarily chronic care hospitals, but over the past 20 years the LTCH has evolved into a place where people are cared for who require an extended stay in a hospital, not a SNF or CMR facility, and who will benefit from extra therapeutic care, nursing, and equipment that is more orientated toward therapy than the stabilization and diagnosis of acute conditions provided by short-term hospitals. The basic concept of the Medicare PPS is the classification of patients into DRGs based on the services they need and the expenditures the hospital will make to care for the patient. The federal government analyzes these patients by group and identifies what the average cost is for each kind of patient. The classification of the patient by DRG determines the amount the Medicare program will pay the hospital for caring for that patient. As an example, if a patient comes to a short- term hospital and, based on diagnosis and intensity, is classified in DRG 13, there is a certain payment rate attached to that DRG, and that payment rate will be different from a DRG 14 or 15. The weights determine whether a hospital is paid more or less than the average for a certain type of patient. PPS was designed for Medicare patients, but payers other than Medicare including Medicaid, commercial insurance, and managed care, now also reimburse hospital providers and SNF providers as some function of the PPS. Each sector of the health care industry has a some what different payment system. DRGs were first developed for short-term hospitals, and there are hundreds of DRGs used to determine reimbursement. Not designed to measure acuity and tied to the amount of Medicare reimbursement, DRGs relate to resource utilization. The difference between reimbursement for an LTCH and a short-term hospital has to do with the average rate, which is a figure that varies somewhat from market to market based on labor costs, and the weight which is attached to each of the DRGs. The rate times the weight determines the reimbursement. When a patient is in a short-term hospital much longer than a few days past the average length of stay that the federal government has established for that DRG, financial loss for the hospital mounts. The federal government recognized that problem. It has developed a system using an "outlier" reimbursement, an add-on to the normal DRG payment for a patient who stays for an unusually long time. But, the outlier payment is calculated to recover only 80 percent of what the federal government estimates to be the hospital's true costs. In response to the PPS system, short-term hospitals have to manage their patients very closely. If a patient falls into the outlier category and is going to be hospitalized substantially longer than the average, short-term hospitals can lose a significant amount of money, so short-term hospitals are constantly searching for discharge options for their patients. Every day of utilization that a short-term hospital can save benefits the short-term hospital financially; as a result, hospitals invest significant effort into developing case management, utilization review, and clinical management departments. Effective October 1, 2002, the Centers for Medicare and Medicaid Services (CMS) implemented categories of payment designed specifically for LTCHs, the "LTC-DRG." The LTC-DRG is a sign of the recognition by CMS and the federal government of the differences between short-term hospitals and LTCHs when it comes to patient population, costs of care, resources consumed by the patients and health care delivery. Existing LTCHs in District 4 There are currently two licensed LTCHs operating in District 4: Kindred's Green Cove Springs facility ("Kindred North Florida") in Clay County and Specialty's Jacksonville facility in Duval County. Kindred North Florida is approximately 80 miles (and a 1.5 hour drive) from Daytona Beach where Kindred intends to locate its proposed Volusia County facility. Specialty Jacksonville is within 85 miles of Kindred's proposed facility. The LTCH occupancy and utilization rates for District 4 is below 70 percent. Kindred North Florida is a 40-bed LTCH. Specialty Jacksonville is a 107-bed LTCH. Specialty Jacksonville has an occupancy rate that has been consistently below 60 percent. The most recently available data shows an occupancy rate for Specialty of 56 percent. In recent years, it has been even lower. Kindred North Florida has been operating near or above optimal occupancy. Specialty has not. Beds are available within the district. CON Application Process Kindred submitted CON Application 9831 in the first CON Application Review Cycle of 2005. Kindred was the only applicant for an LTCH CON in District 4 for the batching cycle. The Agency evaluated the application and reported the evaluation in a State Agency Action Report (SAAR) issued on June 1, 2005. The SAAR recommended denial of Kindred's application. A basis for the denial of Kindred's application is summed up in the "Need" section of the SAAR: The applicant intends to focus on the provision of complex LTCH services (many requiring ventilator/pulmonary services) and contends patients remain in less appropriate settings in District 4. It maintains that Volusia County is an appropriate service area for this project due to the travel distance to a current LTCH. Although support letters state that many patients would have benefited from LTCH services, the disposition of these patients is not known and access problems to LTCH services was not shown. The applicant did not demonstrate that area residents are unable to access needed care or that care currently being provided is inappropriate. The applicant's need analysis did not solely consider high acuity patients that are LTCH appropriate that could not be more appropriately treated in lower cost long- term care facilities such as nursing homes and rehabilitation hospitals. As stated earlier, CMS announced that it plans to make changes in its reimbursement to LTCHs this fall with other updates planned for October 1, 2005. The applicant stated opposition when another LTCH proposed to establish a hospital in this area indicating that its Clay County facility would be adversely impacted and that the establishment of a third LTCH in District 4 would be a duplication of services. AHCA Ex. 1, p. 28. On June 1, 2005, AHCA adopted the SAAR's recommendation that Kindred's application be denied. Kindred timely challenged the denial of its application and its petition was referred to DOAH for formal administrative proceedings. Post-stipulation Issues The parties have resolved a number of potential issues by way of the Amended Stipulation. The remaining issues relate to need, access and competition. LTCH Need Methodology and AHCA's Concerns The Agency has not adopted a need methodology for LTCH services. Consequently, it does not publish fixed need pools for LTCHs. In response to a rise in LTCH application over the last several years, the Agency has consistently voiced concerns about identification of the patients that appropriately comprise the LTCH patient population. Because of a lack of specific data from applicants with regard to the composition of LTCH patient populations, AHCA is not convinced that there is not an overlap between the LTCH patient populations and the population of patients served in other healthcare settings. In the absence of data identifying the LTCH patient population, AHCA has reached the conclusion that there are other options available to those patients targeted by the LTCH applicant, depending on such matters as physician preference. In denying Kindred's application, AHCA relied in part on reports issued to Congress annually by the Medicare Payment Advisory Committee (MedPAC), that discuss the placement of Medicare patients in appropriate post-acute settings. The June 2004 MedPAC report (MedPAC Report) states the following about LTCHs: Using qualitative and quantitative methods, we find that LTCHs' role is to provide post- acute care to a small number of medically complex patients. We also find that the supply of LTCHs is a strong predictor of their use and that acute hospitals and skilled nursing facilities are the principal alternatives to LTCHs. We find that, in general, LTCH patients cost Medicare more than similar patients using alternative settings but that if LTCH care is targeted to patients of the highest severity, the cost is comparable. AHCA Ex. 9, p. 121 (emphasis supplied.) The MedPAC Report, therefore, concludes that LTCHs should "be defined by facility and patient criteria that ensure that patients admitted to these facilities are medically complex and have a good chance of improvement." Id. There is some gross administrative data to support the hypothesis that SNFs are a substitute for LTCHs; the data is limited, however, for drawing such a conclusion definitively. This is because of the wide variation of patient conditions that may be represented by a single DRG. Dr. Muldoon explained this in his deposition with the example of DRG-475, which groups patients who were on life support for 96 hours: [P]atients . . . under DRG-475 . . . may be discharged in conditions that vary greatly, ranging from an alert, talking patient, no longer on life support, to a patient who is not on life support making no progress. There is no[] administrative data that describes patients at the time of their discharge and therefore the MedPAC analysis was just unable, from a pure data point of view, to determine why some of those patients went to a higher versus lower level of care. Kindred Ex. 2, pgs. 24-25. While the conclusion that there is overlap is suspect, so is the conclusion that there is no significant overlap. The data is insufficient to conclude that there are only an insignificant number of LTCH patients who are not appropriate for treatment in another post-acute care setting. The data is insufficient to make one judgment or another. The SAAR also concludes, based on a letter from the MedPAC Chairman, that LTCH patients cost Medicare more on average than patients in other settings. This conclusion was also critically analyzed by Dr. Muldoon: [The comment] is based on an analysis that is unable to differentiate patients within a DRG based on their severity at the time of discharge. The limitation on the DRG is that it is designed to describe the patient's need at the time of admission rather than discharge. So there is no way to tell whether someone is in good shape or poor shape at the time of discharge. So lumping them together and then observing how much they cost, depending on their site of care, is a very rough cut. Kindred Ex. 2, pgs. 27-28. In contrast, for patients at the extreme of severity and complexity there is a trend for lower cost of care for patients whose care included long-term acute care. Again, however, that the very sickest patients may be treated at a cost in an LTCH comparable to the cost in the short-term hospital does not demonstrate that there are patients who would be admitted to an LTCH at an acuity level not appropriate for an LTCH. This latter category of patients, if it exists, would be treated less expensively in a short-term hospital or a non-LTCH post-acute care setting. Need Demonstration: the Applicant's Responsibility The Agency analyzes LTCH applications on a district basis1 but it does not provide a specific formula or methodology by rule for determining need for LTCH beds as it does with some other types of beds and health care services. Consequently, AHCA does not publish a fixed need pool for LTCH beds. Nor did AHCA provide Kindred with any policy upon which to determine need for LTCH beds. Florida Administrative Code Rule 59C- 1.008(2)(e) (the "Rule"), therefore, applies to Kindred's application: . . . If an agency need methodology does not exist for the proposed project: The Agency will provide to the applicant, if one exists, any policy upon which to determine need for the proposed beds or service. The applicant is not precluded from using other methodologies to compare and contrast with the agency policy. If not agency policy exist, the applicant will be responsible for demonstrating need through a needs assessment methodology which must include, at a minimum, consideration of the following topics, except when they are inconsistent with the applicable statutory and rule criteria: Population demographics and dynamics; Availability, utilization and quality of like services in the district, subdistrict or both; Medical treatment trends; and Market conditions. Application of the Rule Population Demographics and Dynamics In assessing an area's population and demographics for the purpose of evaluating LTCH need, special attention is paid to the elderly population. The bulk of LTCH patients are patients over the age of 65 and on Medicare. Elderly patients in need of LTCH services do not heal as quickly as younger patients, are more difficult to wean from a ventilator, and do not improve through rehabilitation as quickly so that they can be discharged from the hospital setting. There are more than 100,000 "seniors," those 65 and over, in Volusia County. Seniors account for more than 20 percent of the county's population; the national average is between 12 and 13 percent. Volusia County was projected to have a senior population of 485,000 out of a total county population of 1.8 million as of January 1, 2005. According to AHCA population data, over the next five years Volusia's elderly population is expected to grow by another 10 percent. Volusia also accounts for a disproportionate share of all of the seniors in District 4. Its senior population is almost 40 percent of the senior population in the district. Availability, Utilization and Quality of Like Services In evaluating the availability, utilization and quality of like services under the rule, Kindred points out that there are a significant number of short-term hospitals in Volusia County and a relatively large senior population but no LTCH in the county. The LTCHs to which Volusia County residents have access are either in Orlando or the two other LTCHs in District 4: Kindred North Florida and Specialty Jacksonville. Access for Volusia County residents or patients in short-term hospitals in Volusia County was described at hearing by Clarence Joseph Wurdock, Director of Market Planning at Kindred Health Care: Both of these distances [to Orlando and the Jacksonville area] are very substantial. Orlando is more than an hour away, drive time, and then the Jacksonville hospitals [Kindred North Florida and Specialty] are 70 to 80 miles away. * * * So as far as access goes, it's not that Volusia County does not have access. The question is whether it's reasonable access for the majority of people who would benefit from the services that we offer. And given the distances involved, it would be very hard to argue that the typical potential long-term hospital patient of Volusia County really has access. Yes, we do get patients at our hospital in Green Cove Springs [Kindred North Florida], a few of them do go to Jacksonville Specialty and some of them go to Orlando, but generally, our understanding is that these patients tend to be the most acute, the patients who really need this type of care so much that they're willing -- they or their families are willing to go great distances for their care. On the other hand, the majority of long-term hospital potential patients, patient who would benefit from our services, who are still spending a fair amount of time in the short-term hospitals, those patients are at that point where they're not willing, they or their families are not willing to go that far, so consequently they're remaining in the short-term hospital. So there's an access problem. Tr. 70-71 (emphasis supplied). Of the two "Jacksonville area" LTCHs, Kindred North Florida has been operating around 90 percent occupancy; Specialty, licensed for 107 beds, according to most recently available data at 56 percent and for some time at various levels all below 60 percent. As Kindred concedes, reasonableness of access is a judgment call. See Kindred's Proposed Recommended Order, p. 20. Contrary to Kindred's present claim of "no reasonable access," Kindred North Florida indicated two years before the hearing that Volusia County patients had access in the District to LTCH services. See paragraphs 69 and 70, below. Relevant data has not changed in the two years between Kindred North Florida's statement and the final hearing in this case. A map in Kindred's CON application identifies the location of five short-term hospitals in Volusia County. The two largest (Halifax Medical Center and Florida Hospital-Ormond) are within two to five miles of Kindred's proposed location. Kindred's CON application contained letters of support from the CEOs of Halifax Community Health Systems and Florida Hospital Deland. Both hospital CEOs strongly support Kindred's application as a source of continued inpatient care for their medically complex patients. There were a number of letters of support in the application from Volusia physicians who have referred patients to Kindred North Florida in the past, and are familiar with Kindred's services and abilities. Medical Trends As to medical trends, as found earlier, LTCHs are recognized as a legitimate part of the health care continuum by the federal government. Medicare's PPS provides reimbursement for LTCHs under their own discrete set of DRGs so that reimbursement rates are different for LTCHs from short-term hospitals. LTCHs supplement acute care following the short-term hospital stay and they are complementary to SNFs and other post- acute care providers. The trend is for LTCHs to be increasingly used to meet the needs of patients in other settings who for a variety of reasons are better served in LTCHs. Market Conditions Market conditions do not favor the application. The occupancy rate overall in the District indicates that beds are available. Of the two "Jacksonville area" LTCHs, Specialty has had an occupancy rate below 60 percent. According to "data over the past few years . . . [it has] been operating at that level for some period of time."2 (Tr. 73). It is reasonable to assume that Volusia County patients in need of LTCH services and their families, no matter how inconvenient or what hardship may be entailed, will seek admission to the existing LTCHs in the District or to Orange County facilities if LTCH services are truly needed and valued. Other changes in the market that have occurred in the last several years also diminish Kindred's case. Besides approval to Kindred-North Florida to add another 20 beds at its facility in Clay County, additional beds can now be added by existing LTCH facilities at will. These include both the Kindred-North Florida facility and the Specialty facility. Kindred's claim of favorable market conditions is undercut, moreover, by recent objections to two other District 4 LTCH applications on the basis that there was no need in District 4, and the implication, if not direct statement, that there is no access problems for Volusia County residents in need of LTCH services. In a letter on Kindred Healthcare letterhead, dated April 12, 2004, Mr. Wurdock wrote: On behalf of Kindred Hospital North Florida, this letter is submitted in opposition to the Certificate of Need application (action number 9752) filed by Select Specialty Hospital - Duval, Inc. to establish a long- term acute care hospital of up to 40 beds at Shands-Jacksonville Medical Center. Kindred Hospital North Florida has consistently provided high quality long-term acute care in District 4 for many years. Approval of an application for an additional long term hospital in District 4 will have a significantly adverse impact on the future of Kindred Hospital North Florida and will result in a wasteful duplication of services in District 4. In January of 2004, the Agency for Health Care Administration (AHCA) granted Kindred Hospital North Florida a Certificate of Need to add 20 beds, increasing our total offering to 80 beds and enhancing our capacity to serve the residents of District 4. Including this bed increase, the long- term acute care occupancy of District 4 is approximately 59 percent. Utilizing existing providers is the most cost- effective option for the district, thus eliminating any duplication of services and minimizing additional start-up costs. The occupancies of existing providers in the district clearly indicate there is not a need for an additional long-term acute care hospital in District 4. AHCA Ex. 4, page 1 (emphasis supplied). Less than six months earlier, Mr. Simpson in a letter dated October 31, 2003, on Kindred Hospital North Florida letterhead, objected to a Volusia County LTCH CON application: On behalf of Kindred Hospital North Florida, I submit this letter in opposition to the Certificate of Need application (action number 9706) filed by SemperCare of Volusia, Inc. to establish a long-term acute care hospital of up to 50 beds at Florida Hospital Oceanside. Kindred Hospital North Florida has been providing high-quality long-term acute care in District 4, including many patients in Volusia Count, for the past nine years. Approval of an application for an additional hospital in District 4 will have a significant adverse impact on the future of Kindred Hospital North Florida and will result in a wasteful duplication of services in District 4. In December 2002, the Agency for Health Care Administration (AHCA) granted Kindred Hospital North Florida with preliminary approval to add 20 beds, increasing our total offering to 80 beds and enhancing our capacity to serve the residents of District 4. Including this bed increase, the long- term acute care occupancy of District 4 would be approximately 59 percent (Kindred Hospital North Florida: 68 percent and Specialty Hospital Jacksonville: 52 percent - Florida Hospital Bed Service Utilization by District, July 2003). Utilizing the existing providers is the most cost effective option for the district, thus eliminating any duplication of services and minimizing additional start-up costs that are ultimately passed on to the consumer. The occupancies of existing providers in the district clearly indicate there is not a need for an additional long-term acute care hospital in District 4. Kindred Hospital North Florida has a strong working relationship with hospitals in Volusia County. In 2002, approximately 26 percent of our patients were referred from hospitals in Volusia County. AHCA Ex. 5 (emphasis supplied). The evidence, as a whole, in this proceeding supports the claims made by Kindred North Florida in the two letters. Data has not changed significantly, moreover, since the letters were written. By way of explanation of its earlier position, Kindred pointed out that at the time of the submission of the letter opposing the establishment of a Volusia County LTCH, neither it nor Kindred North Florida had conducted a detailed need analysis for Volusia County. A need analysis conducted subsequent to the statement of opposition to a Volusia County LTCH is presented in the CON application in this proceeding. It includes Kindred's need methodology. Kindred's Need Methodology The need methodology employed by Kindred is a variation of commonly used and accepted methodologies3 in the LTCH industry for determining need in a proposed service area. In this case the proposed service area is Volusia County. The methodology provides a multi-step process. It begins with the examination of AHCA discharge data for short- term hospitals. Kindred began the process in this case, therefore, with identification of short term hospital patients in Volusia County and limited this population to Florida citizens. The methodology incorporates two assumptions: one, that patients will require five days to transfer from the short term hospital after the geometric mean of the length of stay (GMLOS) for the patient's DRG and that the patient will be in the LTCH for at least 10 days. The result of the assumptions in Kindred's calculation in this case is that the potential pool of Volusia County LTCH patients "had to have exceeded their [GMLOS] by more than two weeks." Tr. 88. Application of the assumptions to AHCA's database, therefore, arrived at a population "that could reasonably be expected to be long-term hospital admissions." Tr. 88. For that population, a population that exceeded the GMLOS by more than two weeks, the Kindred summed up the number of days the population spent in the hospital in excess of the GMLOS plus five days as required by the methodology. This sum equaled potential LTCH days. This grand total of days was divided by the number of days in a year, 365, as called for by the methodology. The calculation for the twelve month period ending in March of 2004 yielded an average daily census of 40.8. The methodology further considered Volusia County patients receiving services at Kindred North Florida. When they were added into the calculation, the average daily census of potential LTCH patients from Volusia County increased to 47.2. The methodology includes the impact of future population growth at an 8.2 percent rate. This yielded an additional average daily census of 3.9 so that the potential average daily census increased to 51.1. As a final step, the methodology assumes operation of a new LTCH at an 85 percent occupancy rate. Application of this assumption yielded a bed need in Volusia County of 60 beds. The methodology assumes that 100 percent of the eligible pool of potential LTCH patients are going to be referred to an LTCH. Kindred concedes that the actual referral rate is likely to be less than 100 percent and certainly so in the beginning. Kindred's application, therefore, provides a ramp up period. Kindred believes furthermore that the less than 100 percent referral rate is offset by patients that do not come from acute care hospitals. Application of the methodology in this case is flawed. It is also not applicable legally to this CON case. The methodology is flawed in this case first because it does not account for beds available elsewhere in the District. Kindred postulated that Specialty's sub-60 percent occupancy rates are due to Specialty's decision to limit utilization of the number of beds far below the licensed capacity for beds. This assertion by Kindred is rejected as unsupported by adequate proof. See endnote 2, below. The methodology, moreover, determines need generated solely by and within Volusia County, one county in District 4, a multi-county district. Consistent with the CON Law, AHCA approaches LTCH need on a district-wide basis. Methodologies for LTCH bed need on a county basis in a multi-county district have been held by AHCA to be invalid to legally establish need for CON purposes. See Select Specialty Hospital-Marion, Inc. vs Agency for Health Care Administration, Case No. 04-0444CON (DOAH October 31, 2005, AHCA December 21, 2005). Competition Kindred concedes that "[h]aving an LTCH in Volusia County would not foster competition in the traditional sense." Kindred's Proposed Recommended Order, p. 33. The Agency did not intend to give considerations of competition much weight in this proceeding.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Agency for Health Care Administration deny CON application No. 9831 filed by Kindred Hospitals East, LLC. DONE AND ENTERED this 20th day of January, 2006, in Tallahassee, Leon County, Florida. S DAVID M. MALONEY Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 20th day of January, 2006.
The Issue Should Respondent be disciplined for practicing beyond the scope of his license or by accepting and performing professional responsibilities which he knows or has reason to know that he is not competent to perform? See Section 460.413(1)(t), Florida Statutes, formerly Section 460.413(1)(u), Florida Statutes.
Findings Of Fact Petitioner is charged with regulating the practice of chiropractic pursuant to Sections 20.165, 20.42, Florida Statutes and Chapters 455 and 460, Florida Statutes. Respondent is a Florida licensed chiropratic physician. His license number is No. CH-0001538. He was issued that license on September 21, 1968. Respondent practices chiropratic at the McCall Chiropractic Clinic located at 811 Grace Avenue in Panama City, Florida. Respondent is not licensed as an osteopathic or allopathic physician as recognized by the Florida Board of Osteopathic Physicians or the Board of Medicine respectively. In 1992 Respondent sent Micheal Smith, D.C., a chiropractic physician practicing in Panama City, Florida, information described as an invitation for Dr. Smith to join Respondent in clinical research "designed to test the effectiveness of Scalar E.M. Technology upon AIDS-CANCER opportunistic organisms falling within the meaning of chapter 460.403(3)(a)(b)(c)(e), and Rule 21D-1702, Florida Statutes." The correspondence went on to describe some details about the research. In particular, Respondent stated that "preliminary field data suggest that Scalar E.M. TENS Technology is effective in 47 pathological conditions including AIDS-Cancer disease." The correspondence also set forth information concerning patients who wished to contribute to the research by making financial contributions to the "Allaganey Occupational Development Foundation, 22 Floor Pacific First Center, 1425th Avenue, Seattle, Washington 98101-2333". Respondent provided Dr. Smith a sheet on the McCall Chiropractic Clinic letterhead related to purported medical research at Stanford University in 1988 studying "the Biological Interactions with the Scalar Energy Cellular Mechanisms of Action" in response to weak ELF ectromagnetic (EM) radiation and the claimed results. That sheet describes how the McCall Chiropractic Clinic would be "conducting private research into the effectiveness of Scalar E.M. Technology upon the following conditions, for a two-year period of time." Arthritis Arm Pains Angina Pectoras Arethemia Asthma Allergies Bacterial Infection of the Lung Carple Tunnel Syndrome Cancer of the: Bone, Brain, Bladder, Bowell, Lungs, Liver, AIDS Colon Polyps Cholitis Candidia Albicans Deafness Diabetes Neuropathy Emphysemia Eckcemia Ear Infection Epstine Barr Infection Exothalmic Goider Feavers Fungus of the skin Fibrosis of the Lung Gout High Blood Pressure Herniated disc Herpes B infection Hemrroids Hardening of the arteries Herpes of the Genitals Hypertrophy of the Prostate Inflimation of the joints Nectniuria Kendidia Albicans Leg Pains Multipleschlerosis Musculardistrohy Neuropathy Nose bleads Premenstral Syndrome Paracititis of digestive track Phlebitis Sinus Infection Tumors of the Eye Varicose Veines Warts Leupus Erethematosis Parkinsons Disease Dr. Smith was also provided with a copy of an advertisement which stated: ATTENTION: Aids - Cancer Patients Dr. Curtis J. McCall, Jr. Chiropractor Research program utilizing scalar tens antineoplastic technology is available through the provisions of Chapter 460.403(3)(a)(b)(c)(e) Rule 21D-1702 Florida Statutes. Patients suffering with Aids - Cancer disease who would like to participate in the research program should call 769-1708 for an appointment or come by the office: 811 Grace Ave., P.C., Fla. 32401 In the 1993 yellow pages for the Panama City, Florida, telephone book, Respondent placed an advertisement to this effect: MCCALL CHIROPRACTIC CLINIC PEOPLE HAVE TRUSTED THE HANDS OF DR. McCALL SINCE 1968 -- TENS AIDS -- CANCER THERAPY -- 811 Grace Av Panama Cy 769-1708 In the July 8, 1993 advertising service in the "Thrifty Nickel" circulated in Panama City, Florida, Respondent placed the following advertisement: NOTICE: The McCall Chiropractic Clinic has on display a 1953 classified federal document that discloses successful treatment for cancer. Patient response indicates this technology is effective in the treatment of 47 conditions. This technology is available through the provisions or Chapter 460- 1403(3), (a), (b), (c), (e). Rule 210-1702 Florida Statutes. Phone 769-1708 for appointment, 811 Grace Avenue, Panama City, Florida 32401. F24 On July 19, 1993, Respondent, on stationary from McCall Chiropractic Clinic, wrote to TCRS, Inc., in Tallahassee, Florida, asking that company to place McCall Chiropractic Clinic on its list of AIDS/Cancer Therapeutic Center listings for national referrals. That correspondence gave a brief description of the service that Respondent intended to provide. It indicated that the therapy to be provided would cost the patient $18.00 per 20 minutes. Through Respondent's activities that have been described, Respondent directly held himself out to the public as having the ability to treat persons with AIDS. In furtherance of his intentions, Respondent developed a treatment protocol consisting of approximately 55 weeks of treatment to be monitored initially by Respondent at his chiropractic facility. That protocol required the patient to receive TENS therapy for two hours each day. The TENS device is designed to deliver transcutaneous electrical nerve stimulation. Its principal chiropractic use is for pain control. However, Respondent, in his intended care, contemplated that the device would stimulate "T-Cells" in combatting AIDS. In the protocol, Respondent also required monthly blood tests to monitor the patient's "T-Cell" counts. The protocol required the patient to be free from all other drugs, in particular, the AIDS treatment medication "AZT". Under the protocol, the patient was required to receive a weekly injection of a compound identified as "chondriana", in amounts determined by Respondent. Finally, the patient was to ingest a compound identified by Respondent as "life crystals". On or about February 4, 1994, Respondent began to care for the patient C.L. That care ended on September 29, 1994. In this arrangement Respondent and C.L. had a chiropractic physician-patient relationship. Patient C.L. died on August 18, 1995. Respondent made a diagnosis, proposed a course of treatment and directly treated C.L. for AIDS. In this treatment Respondent maintained a patient record for C.L. In an effort to secure reimbursement for the services provided to C.L., Respondent prepared insurance claim forms, affixing a diagnosis of AIDS to the claim forms and had C.L. assign benefits to the Respondent from the insurance policy. In this connection Respondent had C.L. execute a sworn statement describing the services received from Respondent. It was Respondent's expectation that the claim forms would be honored by the insurance carrier and that Respondent would be paid for the services rendered to C.L. With one exception, Respondent's billings to the insurance carrier for C.L.'s visits to Respondent's office were all for the treatment of AIDS. An investigation was instituted by the State of Florida, Department of Business and Professional Regulation/ Agency for Health Care Administration to ascertain whether Respondent was offering patient treatment for AIDS. James Cooksey, an investigator with the regulator, performed that investigation in conjunction with Tom Willoughby, investigator for the Bay County, Florida, Sheriff's Office. James Cooksey is an insurance fraud/medical malpractice investigator. To conduct the investigation Mr. Cooksey assumed the fictitious name James Stark. The reason for assuming the name was to present James Stark as a patient suffering from AIDS. In furtherance of the investigation Mr. Cooksey went to the Tallahassee Memorial Regional Medical Center and obtained a fictitious positive AIDS test in the name James Stark. On May 16, 1994, Mr. Cooksey initiated contact with Respondent. The investigator traveled from Tallahassee to Panama City. When he reached Panama City he called Respondent and told Respondent that he needed to come and talk to him. Respondent invited Mr. Cooksey to come by that afternoon. On May 16, 1994, Mr. Cooksey met with Respondent at Respondent's office. At that meeting Mr. Cooksey told Respondent that the investigator understood that Respondent could possibly cure AIDS. Mr. Cooksey further stated that he had seen something in a newspaper article that Respondent was treating AIDS patients and explained to Respondent that Mr. Cooksey had contracted AIDS and was interested in being cured. Mr. Cooksey provided Respondent with the results of the fictitious blood test. When Mr. Cooksey presented to Respondent he did not complain of any condition other than AIDS. Respondent did not physically examine Mr. Cooksey. Respondent explained to Mr. Cooksey about the nature of Respondent's treatment in which the TENS unit, also known as a Rife machine, chondriana and life crystals would be used. To demonstrate the treatment Respondent took Mr. Cooksey into a room in the back of his office, a treatment room, and had Mr. Cooksey take his shoes and socks off and place his feet on a metal pad associated with the TENS unit. When the unit as turned on Mr. Cooksey could feel tingling inside his feet. On this occasion Respondent told Mr. Cooksey that, he, Mr. Cooksey could get injections of chondriana and then the machine would be turned on and Cooksey would receive stimulation to fight the infection associated with AIDS. Respondent told Mr. Cooksey that the initial treatments for AIDS would have to be done at his office where Respondent would monitor the investigator. Respondent indicated that a nurse would come to the office and give the injections of chondriana and that Mr. Cooksey would be monitored concerning those injections until Mr. Cooksey's "system built up a little". Mr. Cooksey understood that he was to receive those injections and use the TENS unit and was not to take other forms of medication during the treatment. Respondent gave Mr. Cooksey a card with the name of a blood test that would need to be obtained and the results reported to Respondent. Mr. Cooksey was responsible for paying for the blood test. Respondent told Mr. Cooksey that the life crystals were to be taken in orally as a drink and they were described as being part of the AIDS treatment. On this date Respondent gave the investigator an estimate of the costs of this treatment, constituted of $2,000 for the TENS unit and $2,925 for chondriana and life crystals. Subsequent to that date Respondent called Mr. Cooksey and left a message on Cooksey's telephone. Respondent also wrote the investigator on May 23, 1994, providing the investigator more information concerning Respondent's treatment for AIDS. The investigator then went to the state attorney's office in Panama City and informed the state attorney of the nature of the administrative investigation and the belief that the activities by Respondent might constitute a criminal law violation. The state attorney represented to the investigator that he concurred. The state attorney then had Mr. Cooksey contact the Bay County Sheriff's office. Following that contact Mr. Cooksey took up a joint investigation between Mr. Cooksey and Bay County Sheriff's investigator Tom Willoughby. On October 18, 1994, Mr. Cooksey placed a call to Respondent and told the Respondent that he was in Panama City and would like to come by and meet with the Respondent and that he would be accompanied by a friend who might be able to "come up" with the money that was required to purchase the chondriana and life crystals and TENS unit. The part of the friend was to be played by Officer Willoughby. Mr. Cooksey and Officer Willoughby then went to Respondent's office where Respondent again explained the nature of the AIDS treatment. Officer Willoughby asked the Respondent questions concerning the nature of the treatment and how much the treatment would cost. Respondent explained that the treatment involved injections of the chondriana, drinking the life crystals and using the TENS machine for two hours a day to treat James Stark for AIDS. At the October 18, 1994 meeting between the investigators and Respondent, Respondent stated that a nurse practitioner with whom he was friends would administer the chondriana and that activity would be monitored by Respondent in Respondent's office. Officer Willoughby asked Respondent if there would be side affects to the injections. Respondent indicated that there would be sweating and that Respondent would monitor Mr. Cooksey for whatever period of time would be necessary for the side affects to subside. The investigators watched a video tape explaining the treatment for AIDS which Respondent intended to employ. The injections of chondriana would be given monthly. Respondent indicated to the investigators that he would instruct Mr. Cooksey on how many of the life crystals to take. Respondent told the investigators that the cost of the TENS unit was $2,000.00 and that the unit would be used to spread the impulses through out the body. Respondent indicated to the investigators that the nature of the treatment would form new T-cells to replace T-cells containing the AIDS virus or which were cancerous. Respondent had stated in Officer Willoughby's presence that the TENS unit cost $500.00 to produce. Respondent and the two investigators then went to a local health food store, known as the Olive Leaf, to ascertain the amount of money needed to pay for chondriana which the health food store would provide. There, the attendant at the store indicated that he could arrange to provide the chondriana and life crystals for a price approximating $2,800.00. After leaving the health food store the investigators told the Respondent that they would come back with the necessary money on October 21, 1994. The investigators returned to Respondent's office on October 21, 1994, after obtaining warrants to search the office and arrest the Respondent. Before Respondent was arrested and the search made, the investigators asked Respondent to again explain the nature of the treatment that would be provided to Mr. Cooksey and paid Respondent $1,700.00 for the TENS unit from funds belonging to the Bay County Sheriff's Office. Respondent gave the investigators a receipt for the $1,700.00 payment. Respondent was then arrested for practicing medicine without a license. On one occasion Respondent explained to the investigators that the procedures that were used to treat Mr. Cooksey for AIDS were not condoned by the FDA, but that it was working in other places where it had been tried and that three patients treated in another location had gained remission from the AIDS. Based on the proof, it is found that Respondent diagnosed Mr. Cooksey as having AIDS and developed a course of treatment for that condition. Paul Doering, M.S., is a registered pharmacist in the State of Florida. He is also licensed as a consultant pharmacist in the State of Florida. He is a Distinguished Service Professor of Pharmacy Practice at the University of Florida. He is accepted as an expert pharmacist. Mr. Doering established that the drug AZT is an antiviral drug designed to address the HIV virus associated with AIDS. Mr. Doering established that AIDS is an acronym for acquired immuno- deficiency syndrome, "a disease that affects the immune system caused by a virus or different types of viruses which attack the immune system in the body rendering the body unable to effectively mount an immune response when it comes into contact with certain types of infectious organisms." Mr. Doering established that drugs are divided into two basic groups, one group which is sold without prescription and the other group requiring a doctor's prescription. The latter category of drugs are known as Federal Legend Drugs. Mr. Doering established that there is no reference to a medication known as "chondriana" in any directory of medications which he was familiar with. As he established, chondriana does not constitute a food because foods are not generally injected into the human body. Mr. Doering established that chondriana has not been approved to be used as a drug in the United States, nor is it an experimental drug, based upon his research of sources that list drugs or experimental drugs. Marianne Gengenbach, D.C., is licensed to practice chiropractic in Florida and is an expert in chiropractic practice. She established that chiropractors are limited to using proprietary drugs, and then only where the chiropractor has passed a specific exam and obtains a proprietary drug license. Proprietary drugs are "over the counter drugs" not prescription drugs. Absent such as a license to prescribe proprietary drugs chiropractors may only make recommendations, educate patients and prescribe nutritional supplements. Dr. Gengenbach established that Respondent had diagnosed C.L. for AIDS and had treated C.L. for that condition. The treatment was directly related to the condition AIDS, and Dr. Gengenbach established that the treatment was outside the accepted standard of care for chiropractic and exceeded the scope of authorized practice from the view point of a practitioner. As Dr. Gengenbach established, Respondent also exceeded the proper scope of practice in caring for C.L. by recommending that C.L. discontinue the AZT therapy. Those same perceptions were held for treatment of Mr. Cooksey and are accepted. Dr. Gengenbach established that Respondent proposed a course of treatment for Mr. Cooksey related to the condition AIDS, without reference to any other complaints by the patient. As a consequence the course of treatment which Respondent planned for Mr. Cooksey was directed solely to the HIV infection as established by Dr. Gengenbach. Dr. Gengenbach established that the use of the chondriana and life crystals was intended to treat Mr. Cooksey for AIDS. Dr. Gengenbach established that even should the substances chondriana and life crystals be considered food or nutritional supplements, there proposed use for Mr. Cooksey would not meet the prevailing standard of care for chiropractic, in that they would be employed for the treatment of AIDS. Respondent intended that the chondriana and life crystals be used in the cure, treatment, therapy and prevention of AIDS in C.L. and Mr. Cooksey. Respondent intended that those substances affect the structure and function of the bodies of those patients. In proposing and carrying out the treatment that has been described directed to AIDS, Respondent did so mindful that chiropractic physicians in Florida are prohibited from directly treating the AIDS condition. Respondent's treatment of C.L. and proposed treatment of Mr. Cooksey violated the standards of practice acceptable to a reasonably prudent chiropractic physician under similar conditions and circumstances and exceeded the scope of his chiropractic license. In the past Respondent has been disciplined by the Board of Chiropractic on three separate occasions. Two of those cases involve the receipt of a reprimand and in the third case Respondent's license was suspended and he was required to pay an administrative fine. Respondent was also required to cease and desist the activities described in these facts based upon action taken by the Board of Medicine, which was persuaded that Respondent was engaging in the treatment of AIDS without benefit of a medical license.
Recommendation Based upon the facts found and the conclusions of law reached, given the severity of the offense and the danger posed to the public, it is, RECOMMENDED: That a final order be entered which revokes Respondent's license to practice chiropractic medicine in Florida. DONE and ENTERED this 21st day of November, 1995, in Tallahassee, Florida. CHARLES C. ADAMS, 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 21st day of November, 1995. APPENDIX CASE NO. 95-2881 The following discussion is given concerning the proposed findings of fact of the parties: Petitioner's Facts: Paragraphs 1 through 4 are subordinate to facts found. Paragraphs 5 and 6 constitute conclusions of law. Paragraphs 7 through 13 are subordinate to facts found. Paragraph 14 is not necessary to the resolution of the dispute. Paragraphs 15 through 35 are subordinate to facts found. Paragraphs 36 through 40 are conclusions of law. Paragraph 41 is subordinate to facts found. Paragraphs 42 and 43 are conclusions of law. Paragraphs 44 through 51 are subordinate to facts found. Respondent's Facts: Paragraphs 1 through 5 constitute legal argument as reported at pages 2 through 5. The proposed facts 1-3 found at pages 15 and 16, Paragraph 1 is contrary to facts found. Paragraph 2 is rejected as a discussion of activities of the Probable Cause Panel, not a proper subject for consideration. Paragraph 3 constitutes a conclusion of law. COPIES FURNISHED: Jon M. Pellett, Esquire Medical Quality Assurance-Allied Health Agency For Health Care Administration 1940 North Monroe Street, Suite 60 Tallahassee, FL 32399-0792 Curtis J. McCall, D.C. 514 North Bonita Avenue Panama City, FL 32401 Diane Orcutt, Executive Director Agency For Health Care Administration Board of Chiropractors 1940 North Monroe Street Tallahassee, FL 32399-0792 Jerome W. Hoffman, General Counsel Agency For Health Care Administration 2727 Mahan Drive Tallahassee, FL 32308
The Issue Whether, under Section 381.494-381.499, Florida Statutes, Humana, Inc., d/b/a Kendall Community Hospital, is entitled to a Certificate of Need to construct a 150-bed acute care hospital in the west Kendall area of south Dade County, Florida.
Findings Of Fact HUMANA is an investor-owned, multi-institutional hospital system which owns and operates more than 90 hospitals, most of which are medical/surgical facilities. (DHRS Ex.1, p.10). HUMANA applied for a Certificate of Need from DHRS to construct a 150- bed acute care community hospital in the west Kendall area of south Dade County, Florida. The specific area to be served is bounded on Miller Drive to the north, southwest 177th Avenue to the west, Coral Reef Drive to the south, and Calloway Road to the east. The proposed 150-bed hospital includes 100 medical/surgical beds, 20 pediatric beds, 20 Level II obstetric beds, 10 intensive care/critical beds, and a Level II nursery in conjunction with the obstetric unit. (TR 277). The proposal includes a 24-hour, physician-staffed emergency room and a "dedicated" outpatient surgery department, with separate recovery room. Surgery suites are specifically designed and reserved only for outpatient surgery, thereby facilitating outpatient scheduling and efficient operations. (TR 279). The outpatient surgery unit is intended to reduce the costs of health care by providing a cost-effective alternative modality of health care delivery. (TR 278). Finally, the proposal contemplates a full-body CT Scanner, digital radiography and general state-of-the-art ancillary equipment. (TR 278). If built, it would be the westernmost hospital in south Dade County. It is a "community" hospital, designed to provide hospital care to the rapidly growing population of the west Kendall area, but not serve as a major referral center for patients living elsewhere. (DHRS Ex. 1, pp. 32-34; TR 250, 280). The local health planning agency, then the Health Systems Agency ("HSA") of South Florida, Inc., 1/ reviewed HUMANA's application for a Certificate of Need, along with four other similar applications, and recommended that all five be denied because of asserted inconsistency with the HSA's Health System Plan. ("HSP") 2/ (DHRS Ex. 1, TR 77). The applications were then submitted to DHRS, the single state agency empowered to issue or deny Certificates of Need. 381.493(3)(a) and 381.494(8), Fla.Stat. (Supp. 1982). DHRS reviewed the HSA recommendation, conducted its own evaluation, and then denied all five applications, including HUMANA's. DHRS concluded: None of the five proposed projects are in compliance with the adopted Goals, Criteria, Standards and Policies of the Health Systems Agency of South Florida, as stated in the Health Systems Plan (HSP) and Annual Implementation Plan (AIP). A need to add acute care hospital beds to Dade County does not exist at the present time. The proposed projects would add to excess capacity and underutilization of hospital beds that now exist in Dade County. There are only five hospitals in Dade County that are at the recommended occupancy level of 80 percent based on licensed beds (none of which are located in South Dade), and the number of beds per 1000 population. The primary alternative would be not to construct any of the proposed projects. While all of the proposed projects represent some degree of financial feasibility, none are felt to be cost effective because increased bed capacity would result in costs and revenue higher than those projected for existing "High Cost" hospitals in 1984 as determined by the Hospital Cost Containment Board. (DHRS Ex. 1, p. 404) Thereafter, HUMANA timely instituted Section 120.57(1) proceedings challenging DHRS's denial; HUMANA's standing to do so is uncontested. HUMANA's position, maintained throughout, is that its proposed 150-bed hospital satisfies every legal criterion for the issuance of the applied-for Certificate of Need. Intervenor Baptist Hospital Intervenor BAPTIST HOSPITAL will be substantially affected if HUMANA is granted a Certificate of Need. BAPTIST is a fully licensed and accredited 513- bed, general acute care hospital located within HUMANA's proposed service area, at 8900 North Kendall Drive, Miami, Florida. (STIP-para. 8). If the proposed hospital is built, it would significantly and adversely affect the patient census and revenues of BAPTIST HOSPITAL. (TR 16, VOL 4). In 1982, BAPTIST drew 36.7 percent of its patients from HUMANA's proposed service area. (TR 15, 16, VOL 4). Fifty percent of the residents of the proposed service area (who were admitted to hospitals in Dade County) were admitted to BAPTIST HOSPITAL. (TR-440). It is estimated that BAPTIST would lose 15,047 patient days to the new HUMANA hospital and would experience significant adverse economic impacts. (TR 88-89, VOL 5). The proposed hospital would also adversely impact BAPTIST's ability to hire and retain nursing and technical personnel. BAPTIST has experienced difficulty in hiring and retaining these personnel. (TR 18, 60-73, VOL 4). Historically, the opening of a new hospital has adversely affected the hiring and retention of such personnel in nearby hospitals. (TR 72-73, VOL 4). Here, approximately 84 percent of BAPTIST's nurses live near HUMANA's proposed cite, thus increasing the likelihood that BAPTIST will be adversely affected in this manner. (TR 135, VOL 5). BAPTIST opposes the issuance of a Certificate of Need for HUMANA's proposed hospital, and supports DHRS's initial denial. Intervenor American Hospital Similarly, intervenor AMERICAN HOSPITAL would be significantly affected if the proposed HUMANA hospital is built. AMERICAN is a fully licensed and accredited 513-bed, general acute care hospital located and operated within HUMANA's proposed service area, at 11750 Bird Road, Miami, Florida, (STIP-para 8). AMERICAN currently draws 41 percent of its patients from HUMANA's proposed service area. The proposed hospital will cause AMERICAN to lose an estimated 5,300 patient days. (TR 76, VOL 5). This translates into an approximate loss of $4.1 million in potential revenues, based upon HUMANA's achieving a 75 percent occupancy rate and 41,000 patient days. (TR 75-76, VOL 5). Such a revenue loss may result in higher costs, which in the health care system, are normally translated into higher patient charges. (TR 86, VOL 5) HUMANA's proposed hospital would also aggravate AMERICAN's continuing shortage in nursing personnel. (Currently AMERICAN has approximately 50 full- time registered nurse vacancies.) (TR 134, VOL 5). It is reasonable to expect that HUMANA will hire a significant number of its nurses away from nearby hospitals. Over a six-month period, HUMANA's four existing hospitals in south Florida hired 112 registered nurses, 32.1 percent of whom were hired away from other hospitals in the area. (TR 783). AMERICAN, likewise, opposes the issuance of a Certificate of Need to HUMANA, and supports DHRS's initial denial. II. STATUTORY CRITERIA FOR CERTIFICATES OF NEED Section 381.494(6)(c) and (d), Florida Statutes (Supp. 1982), prescribes standards for evaluating applications for Certificates of Need. Those standards pertinent to HUMANA's application include: The need for the health care facilities and services . . . being proposed in relation to the applicable district plan, annual implementation plan, and state health plan adopted pursuant to Title XV of the Public Health Service Act, except in emergency circumstances which pose a threat to the public health. The availability, quality of care, efficiency, appropriateness, accessibility, extent of utilization, and adequacy of like and existing health care services . . . in the applicant's health service area. 7. The availability of resources, including health manpower, management personnel, and funds for capital and operating expenditures, for project accomplishment and operation; the effects the project will have on clinical needs of health professional training programs in the service area; the extent to which the services will be accessible to schools for health professions in the service area for training purposes if such services are available in a limited number of facilities; the availability of alternative uses of such resources for the provision of other health services; and the extent to which the proposed services will be accessible to all residents of the service area. 11. The probable impact of the proposed project on the costs of providing health services proposed by the applicant, upon consideration of factors including, but not limited to, the effects of competition on the supply of health services being proposed and the improvements or innovations in the financing and delivery of health services which foster competition and service to promote quality assurance and cost-effectiveness. In considering HUMANA's application, specific consideration must also be given to whether: . . .less costly, more efficient, or more appropriate alternatives to such inpatient services are . . . available and the development of such alternatives has been studied and found not practicable. . . . existing inpatient facilities providing inpatient services similar to those proposed are being used in an appropriate and efficient manner. . . . alternatives to new construction, for example, modernization or sharing arrangements, have been considered and have been implemented to the maximum extent practicable. . . . patients will experience serious problems in obtaining inpatient care of the type proposed, in the absence of the proposed new service. 381.494(6)(d) Fla.Stat. (Supp. 1982). The controversy here is whether in 1988 (using a five-year planning horizon) there will be a need for HUMANA's proposed 150-bed hospital in the west Kendall area of south Dade County. DHRS, BAPTIST, and AMERICAN say that there will be no need: that existing hospitals serving the area have excess capacity and are underutilized--and that this condition will persist through 1988. HUMANA contends otherwise. As the applicant for a license, the burden of proving entitlement rests squarely upon HUMANA. 3/ The most accurate and reliable method for determining bed-need in this case, the historical demand-based method, requires the following: (1) identify planning area boundaries; (2) from historical population data, project population for the planning area using the five-year horizon for hospital services; (3) calculate a hospital use rate or the rate at which patients in the service area have used hospitals in terms of patient days per thousand; (4) project patient days by multiplying the use rate times the area population, and divide by 365 to yield a projected bed need; (5) compare projected bed-need with the licensed bed capacity of area hospitals and, using an appropriate occupancy standard, determine whether there will be an excess or shortage of hospital beds in the proposed planning area. (TR 55, VOL 5). Selecting a Health Planning Area The first step in determining whether a new hospital will be needed is selection of the appropriate health planning area. In 1982, the now-defunct HSA of South Florida adopted a Regionalization Plan for south Florida dividing HSA IX, a region, into five districts. (AM Ex. 4). Although not specifically mentioning hospitals, this plan implies that hospital bed-need determinations should be made on a district basis. The Kendall area, extending east and west, generally is denominated as "District D," and is, in turn, subdivided into three subdistricts. "D-1" encompasses Coral Gables and South Miami; "D-2" and "D-3" include Weschester, Kendall, Killian, and the west central Dade areas, the boundaries of which are U.S. 1 and the Palmetto Expressway on the east, Coral Reef Drive and Eureka Drive on the south, conservation area on the west, and the East-West Expressway, and Tamiami Trail on the north. (HU Ex. 4). HUMANA chose "D-2" and "D-3" as the appropriate health care planning area for determining need for its proposed hospital. District "D," however, is a more appropriate and reasonable area to use in determining need for the proposed HUMANA hospital. (TR 203, 258; 145-146, VOL 4; 56-57, VOL 5). The entire area of District "D" may be traversed, by car, in approximately 30 minutes, the roads are adequate, and there are numerous hospitals in the district which are easily accessible to its residents. (TR 57-58, 66, 77-78, VOL 5). Hospitals located in one part of District "D" are readily accessible to patients who reside in other areas of the District. HUMANA's bed-need analysis fails to adequately take into account hospitals within "D-1" or which are outside the District but are readily accessible (within 30-minutes driving time) to the majority of residents in "D- 2" and "D-3." (TR 145-146, VOL 4). Existing hospitals which are readily accessible to residents of a proposed service area cannot be reasonably excluded merely because they are located outside a theoretical boundary line. (TR 145- 146, VOL 4). A health planning area should be the area where most of the residents seek health care. (TR 615; 78-79, VOL. 5). Hence, a proposed health planning area should be tested against the actual hospital use of its residents and the accessibility of existing hospitals to those residents. The residents of District "D" travel freely within District "D" in seeking hospital care. South Florida Hospital Association Utilization and Patient Origin Program ("HUPOP") data show that approximately 60 percent of the patients residing in subdistricts "D-2" and "D-3" seek inpatient hospital care elsewhere. (TR 72, VOL 5; 616; AM Ex. 7 p. 19). 4/ There is a corresponding inflow of residents from outside "D- 2" and "D-3" who seek hospital care within "D-2" and "D-3". (TR 72, VOL 5). In comparison, approximately 70 percent of the residents of District "D" seek hospital care within the boundaries of the District and--of all the districts within the region-- District "D" has the highest percentage of residents who seek in-district hospital care. (TR 72-73, 79, VOL 5; AM Ex. 7, p. 19). In actual practice, then, the residents of District "D" heed the District boundaries but largely disregard subdistrict "D-2" and "D-3" boundaries. The residents of "D-2" and "D-3" have ready access to numerous hospitals providing a broad range of medical services. (TR 78, VOL 5). BAPTIST is a large general hospital with tertiary, secondary, and primary care services. With the exceptions of a burn center and a Level III neotology unit, virtually all health care services are provided. BAPTIST, AMERICAN, Coral Reef, South Miami, and Larkin hospitals provide health care services to residents of "D-2" and "D-3," within a 20-minute travel time. (BH Ex. 10, p. 1-13-19; BH Ex. 5 and 7). The few specialized services not available at these hospitals are provided at Jackson Memorial Hospital, within a 30-minute travel time. (BH Ex. 10, p. 1- 13). Accessibility of Existing Acute Care Hospitals Section 381.494(6)(c)(2), Florida Statutes (Supp. 1982), requires examination of the accessibility of existing health care facilities providing similar services to the same health service. The generally accepted standard for determining accessibility, found appropriate here, is whether general hospital beds are available to the service area's population within 30-minutes travel time by automobile, under average traffic conditions and for non- emergency purposes. This standard is used by HSAs and DHRS is used by federal health care planners, and is widely used by professional health care planners. (DHRS Ex. 1; BH Ex. 10, p. 1-10-13; TR 90, 123, 144, 166, 193; 85, 133-134, VOL 4; 58, 77, VOL 5). Applying this standard, seven hospitals are reasonably accessible to residents of HUMANA's proposed service area: AMERICAN, BAPTIST, Coral Reef Hospital, South Miami Hospital, Larkin Hospital, Doctors' Hospital, and Jackson Memorial Hospital. District "D" contains eleven hospitals, with a total of 2,882 licensed beds. (AM 3, p. 41; 4, p. D-3). Moreover, five of these, AMERICAN, BAPTIST, Coral Reef, Larkin, and South Miami, are even closer, within 20-minutes average travel time. (BH 5, p. 11). There is no evidence that the residents of "D-2/D-3", or District "D," as a whole, have any difficulty using or gaining access to these hospitals. Beds are available. The five hospitals closest to HUMANA's proposed service area, AMERICAN, BAPTIST, Coral Reef, South Miami, and Larkin, have a total of 1,825 licensed beds, 326 of which are not in service; of the 1,499 beds in service, 109 are not used. So there are 435 licensed beds, within 20-minutes of "D-2/D-3," not in service or not in use due to lack of demand. (BH Ex.10, p. I- 26, 5, 7, 10, p. I-26-28). Occupancy Standard for Determining Need The generally accepted occupancy standard for hospitals, used in deciding if additional beds are needed, is the 80 percent average annual occupancy rate. This standard is included in the 1981 Florida State Health Plan, is used by DHRS and HSAs, and is widely used by professional health care planners. Its use is appropriate here. (AM 135, VOL 2; TR 90-91; 95-97, 118, 132, 140, 165, 172, 313, 469; 141, VOL 4). In application, it means that additional hospitals should not be built until existing hospitals providing acceptable care to the proposed service area are operating at or above an 80 percent occupancy rate--the level at which hospitals, generally, operate most efficiently. In 1982, none of the eleven hospitals in District "D" met the 80 percent occupancy standard. (DHRS Ex. 1, AM Ex. 3, p. 7). In 1981, the five hospitals closest to HUMANA's proposed site had an average annual occupancy rate of 60.9 percent. (BH Ex. 10, p. I-24). Moreover, this excess is sufficient to meet the future health care needs of residents of "D-2/D-3" and District "D," as a whole. BAPTIST and AMERICAN will not achieve 80 percent occupancy until after 1988; AMERICAN is projected to have an occupancy of only 63.61 percent in 1990. (AM Ex. 3, p. 8; BH Ex. 10, p. 10, I-24). Availability of Resources to Build and Support Proposed Hospital Section 381.494(6)(c)(7) also requires consideration of whether there will be available adequate resources to support a new hospital, including manpower and financial resources. The evidence establishes, without contradiction, that HUMANA has sufficient funds to construct and operate its proposed hospital. The projected cost of the hospital, including equipment, is $29,175,500--70 percent to be funded by debt, the remainder by equity funds. HUMANA has, on hand, approximately $225 million in cash and cash equivalents. (TR 709, HU Ex. 2). The design of the proposed hospital will be based on HUMANA's "prototype" 150-bed facility, developed from years of experience in hospital design construction, and operation. The design is efficient and economical, and will permit a 50-bed expansion without further construction. (TR 714-716, 720, 719, HU Ex. 9). The parties agree that HUMANA has the ability to enlist or employ sufficient physicians and management personnel to staff the proposed hospital. (STIP, para. 3). HUMANA also has the ability to hire and retain an adequate nursing and technical staff. It recruits such personnel, routinely, on a national basis and transfers employees within its hospital system. Moreover, it has a mobile nurse corps, a group of nurses which are available on an as-needed basis, to help staff its south Florida hospitals during peak winter months. Historically, HUMANA has successfully recruited and retained nurses in its south Florida hospitals. (TR 772, 776-777, 781-782, 801-802, VOL 4). Projected Population of Service Area As already mentioned, under the preferred demand-based bed-need methodology, population is projected over a five-year planning horizon, for hospital facilities. This is because an increase in a service area's population will generate a need for more beds. The population of the Kendall area of south Dade County has been growing rapidly, and is expected to continue to do so through 1990. This population is younger than the population of Dade County or HSA IX, as a whole. The population projections for District "D" (the appropriate health planning area for the proposed hospital) by age groups are: District D 1987 1990 Under 15 92,301 96,506 15 to 64 357,567 327,652 65 and over 52,188 55,822 TOTAL (AM 3; TR 59-61, VOL 5; 488 VOL 3) 502,056 529,980 I. Hospital Use Rate Under the demand-based methodology, found acceptable here, once the planning area is designated and the population projected over a five-year planning horizon, a hospital "use rate" is calculated. The "use rate" is the rate at which people use hospitals, expressed in terms of the number of patient days per thousand residents residing in the health service area. This rate can be derived using various factors. Those factors most appropriate for use in this case are "age" and "service-specific" uses. (TR 66 VOL 5; 497-498 VOL 3). "Age-specific" use rates, reflecting historic hospital use rates by age group, are applied to the projected population to determine total patient days. This factor takes into account the fact that people 65 or older utilize hospitals at a rate three to four times that of people under 65. This is particularly significant here since the Kendall area population is younger than the population of Dade County, HSA IX, or the state, as a whole. (TR 58-59, VOL 5; AM 3, p. 12). In 1981, the age-specific use rate for HSA IX reflects a use rate of 1,524.6 patient days per thousand population. (AM 3, p. 63). "Service-specific" use rates are derived from historical use of particular hospital services, such as psychiatry, obstetrics, pediatrics, and medical-surgical. (AM 3, pp. 14-15, 70-72). The 1981 service-specific use rate, covering all services, for HSA IX was 1,524.6 patient days per thousand--a figure equal to the age-specific use rate. (AM 3, p. 14-15, 71). J. Calculation of Future Bed Need for District "D" In 1982, there were 2,882 licensed non-federal beds in District "D." Taking into account an 80 percent occupancy rate, and applying the HSA age- specific use rate to the projected population of District "D" yields a need for only 2,282 beds per day in 1987, and 2,419 beds per day in 1990. Hence, there will be an excess of 600 beds in District "D" in 1987; 554 in 1988; and 463 in 1990. (AM 3, p. 41, 69; TR 63, VOL 5). Similarly, applying the HSA IX service- specific use rate to the projected District "D" population results in a bed excess of 232 beds in 1987 and 87 in 1990. (AM 3, p. 74). Significantly, these projected bed excesses are, if anything, understated. This is because the HSA IX hospital use rate was utilized. Hospital use is greater in HSA IX, with its older population, than in District "D," where the population is younger and less likely to be hospitalized. (TR 61-62, VOL 5). HUMANA, in its analysis, applied age and service-specific use rates to the projected population of "D-2/D-3," concluding that there would be a need for 238 additional beds in 1988. This conclusion, however, is unconvincing since "D-2/D-3" is unduly restrictive and the 235 unused beds of South Miami and Larkin Hospitals, both located in "D-1," are not fully considered. (DHRS 1, p. 370; AM 3, p. 18). (Both hospitals are within a 20-minute average travel time from selected points in "D-2/D-3.") (TR 544, VOL 3; 612, VOL 4). By failing to properly account for empty beds at nearby hospitals, and by unreasonably limiting its planning area, HUMANA overstates the need for additional hospital beds in District "D." Moreover, even assuming the propriety of "D-2/ D-3," HUMANA failed to properly take into account the 260 beds of Coral Reef Hospital, a "D-2" hospital. If Coral Reef Hospital beds are correctly included within "D-2/D-3," HUMANA's projected bed-need decreases from 238 to 129 beds in 1988. (TR 80, VOL 5). Finally, Thomas W. Schultz, HUMANA's health care planning expert, admitted that a figure of 1,038 patient days per thousand patients would be "useful" in establishing bed-need for "D-2/D-3." (TR 501, VOL 3). Applying that use rate, and correctly including Coral Reef Hospital, results in a projected "D-2/D-3" need of 36 additional beds in 1988. (TR 83-84, VOL 5). HUMANA does not propose to construct a 36-bed hospital and such a hospital has not been shown to be feasible.
Recommendation Based on the foregoing, it is RECOMMENDED: That HUMANA's application for a Certificate of Need to construct a hospital in the west Kendall area of Dade County, Florida, be denied. DONE and ENTERED this 25th day of May, 1983, in Tallahassee, Florida. R. L. CALEEN, JR. Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 25th day of May 1983.
