The Issue Whether the Palm Beach Health Department (Respondent) committed an unlawful employment practice by failing to reasonably accommodate the alleged disabilities of DeLores Boatwright (Petitioner). Whether Respondent committed an unlawful employment practice by discriminating against Petitioner based on Petitioner’s age.
Findings Of Fact At all times pertinent to this proceeding, Respondent has been an agency of the State of Florida pursuant to section 20.43, Florida Statutes, and an employer within the meaning of section 760.02(7), Florida Statutes (2012). Petitioner was employed by Respondent between January 3, 2002, and January 31, 2013. On January 31, 2013, Respondent terminated Petitioner’s employment for cause. Petitioner worked as an HIV counselor, which required her to provide both pre-test and post-test counseling to clients interested in HIV testing. Counseling performed by Petitioner involved her sitting in an office setting with the door closed to discuss with clients risks for contracting HIV and methods to reduce those risks. HIV counseling sessions are typically conducted face to face. There was a dispute in the record as to how much computer input is necessary while conducting a counseling session. The greater weight of the credible evidence established that any notes would typically be taken by hand and that any computer input would typically be made after the counseling session had been completed. Counseling sessions typically lasted approximately 15 to 20 minutes. Due to privacy and HIPPA considerations, counseling sessions were conducted in a private office with the door closed. Petitioner was directly supervised by Robert Scott from 2005 until December 2011. In October 2009, Petitioner was rear-ended in a car accident while working. This accident prompted a workers’ compensation claim. Petitioner advised Mr. Scott that she had hurt her neck, upper back, and right shoulder. Initially, Petitioner had work restrictions of no lifting, no driving for the job, and no bending. As of October 27, 2009, Petitioner’s work restrictions were lifted, and no other work restrictions were placed on Petitioner. On January 28, 2010, Petitioner was referred to Dr. Edward Chung, an orthopedic specialist. Dr. Chung placed no work restrictions on Petitioner. On February 3, 2010, Dr. Chung determined Petitioner had reached maximum medical improvement and gave her an impairment rating of zero percent. During the remainder of her employment, Petitioner had no on-going impairment rating or work restrictions as a result of her automobile accident. Petitioner worked at the West Palm Beach Health Center, which is Respondent’s primary care medical clinic. This clinic, located on 45th Street in West Palm Beach, is generally known as the 45th Street Clinic. The majority of the rooms in the 45th Street Clinic are examination rooms with an examination table, a small sink, and a small desk for use by the nurse or doctor. The 45th Street Clinic has a limited number of consultation rooms, which are typically small interior offices with a desk that separates the counselor and client with counter space behind or to the side of the counselor for computer work. For a year and a half between 2004 and 2005, Petitioner conducted her counseling sessions in Room 104 of the 45th Street Clinic. Room 104 is a relatively small office with no windows. At the end of 2005, Petitioner’s office assignment changed to Room 102, which is also an interior office with no windows. This move was at Petitioner’s request when the room became available due to the retirement of a colleague. Room 102 is slightly larger than Room 104. Petitioner remained in Room 102 until the beginning of 2010. While she was assigned Room 102 and Room 104, Petitioner kept her door closed, even when she was not seeing clients. This practice was problematic because other staff members were unable to determine when Petitioner was available to counsel patients. Mr. Scott discussed with Petitioner on numerous occasions the need for her to keep her office door open when she was not with a client. Petitioner informed Mr. Scott that she kept the door closed because of a sinus problem that felt better when the door was closed. Petitioner never provided medical documentation of her alleged sinus problem, and there was no credible explanation why keeping her office door closed would improve a sinus condition. In early 2010, Petitioner’s room assignment was changed from Room 102 to Room 107. This reassignment was necessary because Respondent needed to make Room 102 available for another, legitimate business use. Room 107 was an exterior office with a window. Its furniture was in an “L” shape attached to a wall. The office contained a desk and a counter for a computer. During counseling sessions, the counselor and client would sit face-to-face on opposite sides of the desk. The computer was to the counselor’s side, which required the counselor to turn or swivel her chair away from the client to access the computer. In December 2010, Petitioner complained to Mr. Scott that the furniture arrangement in her office was causing her neck and back pain. Petitioner attributed that pain to turning to access her computer or turning to talk to a client while on the computer. In response to Petitioner’s complaint of pain, Mr. Scott requested that Michial Swank, Respondent’s risk manager, perform an ergonomic evaluation of the furniture in Room 107. Such an evaluation is a service that requires no medical documentation and is offered by Risk Management to any employee. Mr. Swank determined that if the furniture could be reconfigured, it should be so that Petitioner did not have to twist to look from a client to the computer or vice versa. Mr. Swank provided his assessment to Respondent’s General Services Department to determine whether the furniture could be reconfigured. Respondent’s General Services Department determined the furniture could not be reconfigured because it was modular furniture custom-made for the office and bolted together. Around March 2011, Dr. Cook, the director of the 45th Street Clinic, proposed that Petitioner change rooms with another HIV counselor located in Room 104. Mr. Swank performed an ergonomic assessment on Room 104 and determined the furniture and computer location to be ergonomically correct for counseling a patient while on the computer. Respondent offered Petitioner the option of moving from Room 107 into Room 104, but she refused that offer and opted to remain in Room 107. Petitioner cited her sinus problems as the reason she did not want to move back to Room 104. Despite her decision to remain in Room 107, Petitioner attempted to persuade Helen Bonner, a nurse, to switch offices with her. This attempt was without the knowledge or permission of Mr. Scott or any other administrator. Ms. Bonner’s room was set up for clinical use for patients with seizure disorders. When Yankick Gribikoff, the nursing supervisor, heard of Petitioner’s effort to have Ms. Bonner swap offices, Ms. Gribicoff immediately squelched the idea. Ms. Bonner’s office had specialized equipment, including specialized telephone equipment and refrigerators. Ms. Gribicoff had valid reasons to end Petitioner’s efforts to swap rooms with Ms. Bonner. In the fall of 2011, two of Respondent’s clinics were closed due to budgetary constraints. Certain personnel were moved from those closed clinics into the 45th Street Clinic. At that time, Rooms 104 and 107 were the only two rooms in the 45th Street Clinic available for HIV counseling. It became necessary to use Room 107 for both HIV and STD (sexually transmitted disease) counseling. Because of its location and proximity to other services, Respondent had a valid reason to select Room 107 over Room 104 as the room for HIV and STD counseling. While Petitioner had had some training in STD counseling, she had difficulty with that type of counseling. An expert in STD counseling was among the personnel being moved from one of the closed clinics to the 45th Street Clinic. Respondent had a valid reason to select the expert to occupy Room 107. Respondent reassigned Petitioner to Room 104. Petitioner agreed to the reassignment and moved into Room 104 on October 3, 2011. Petitioner kept the door to her office closed even when she was not counseling clients. In early November 2011, Mr. Scott received a complaint about the physical condition of Room 104 from someone who used that office while Petitioner was away. The complaint centered on the room’s lack of cleanliness. On November 18, 2011, Mr. Scott met with Petitioner to discuss certain concerns he had. It was during that meeting that Petitioner told Mr. Scott, for the first time, that she was claustrophobic in Room 104. Petitioner referred to Room 104 as being a “closet” and stated that she could not stay in that room. Petitioner brought to Mr. Scott a doctor’s note dated November 23, 2011, that reflected that Petitioner was experiencing claustrophobic symptoms and could not stay in a small, closed space for 15 to 20 minutes. Upon receiving the doctor’s note, Mr. Scott notified Human Resources of the doctor’s note. Arrangements were made to provide Petitioner a larger room in another clinic. Due to the merger of the two closed clinics with the 45th Street Clinic, no room at the 45th Street Clinic, other than Room 104, was available for Petitioner’s use as an HIV counselor. A larger office was found in the Lantana Clinic. The targeted Lantana office was being used by another HIV counselor. To accommodate Petitioner, Respondent arranged to have the Lantana counselor transferred to the 45th Street Clinic and Petitioner transferred to the Lantana Clinic. Petitioner was advised of this change in location and agreed to move around December 18, 2011. She never advised or stated she could not drive to the Lantana Clinic. Petitioner called in sick on December 18, the day she was scheduled to move to the Lantana Clinic. On December 19, 2011, Petitioner reported for work at the 45th Street Clinic instead of the Lantana Clinic. Petitioner stayed at work at the 45th Street Clinic for a few hours, but left because she was not feeling well. On December 19, 2011, Petitioner suffered a stroke1/ and went on medical leave. In May 2012, Petitioner told Mr. Scott that she was ready to return to work. For legitimate business reasons, the Lantana Clinic office was no longer available. Jacqueline Lester is the equal opportunity manager for the Florida Department of Health. Ms. Lester reviews requests for reasonable accommodations with the authority to approve or reject a request. Ms. Lester first became aware of Petitioner as a result of Petitioner’s accommodation request dated December 15, 2011. Petitioner asked to stay at the 45th Street Clinic in a larger office with a furniture arrangement not requiring her to turn her neck. That request was not processed because Petitioner soon thereafter went on medical leave for an extended period. On June 19, 2012, a second request for accommodation was received from Petitioner. In this request, Petitioner asked for a reasonably-sized office, which Petitioner described as being at least 10’ x 10’, with a window. She also asked that the office be within close distance to her home in Palm Beach Gardens due to her inability to drive or sit for “any great length of time.” Petitioner also requested that she start back to work on a part-time basis. Petitioner’s request included notes from two doctors. This medical documentation did not state that Petitioner could not drive due to a neck and back disability. After reviewing the request and medical documentation, Ms. Lester, whose office is in Tallahassee, talked with Respondent’s personnel in Palm Beach County. Ms. Lester decided to accommodate Petitioner’s request. The accommodation was an office located in Respondent’s clinic in Delray Beach. The office was 10’ x 10’ with a window. Although the Delray Beach Clinic was a substantial commute from Petitioner’s home in Palm Beach Gardens, the accommodation included permission for Petitioner to stop as needed while traveling to work without being penalized for late arrival at work.2/ The accommodation also provided that Petitioner could return to full-time schedule at the Delray Beach Clinic “upon release from her medical providers.” Petitioner refused the offer of the office at the Delray Beach Clinic. On January 31, 2013, Respondent terminated Petitioner’s employment for cause based on Petitioner’s refusal to return to work. Petitioner presented no meaningful evidence that Respondent discriminated against her based on age or because of her perceived disabilities. Petitioner filed her Complaint of Discrimination with the FCHR on September 5, 2012. FCHR issued its “Notice of Determination: No Cause” and “Determination: No Cause” on May 21, 2013. Petitioner filed her Petition for Relief on June 12, 2013.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Commission on Human Relations enter a final order adopting the Findings of Fact and Conclusions of Law contained in this Recommended Order. It is further RECOMMENDED that the final order dismiss the Petition for Relief with prejudice. DONE AND ENTERED this 1st day of August, 2014, in Tallahassee, Leon County, Florida. S CLAUDE B. ARRINGTON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 1st day of August, 2014.
The Issue Whether CON 8241, Palm Beach Regional's application to convert its 200 bed acute care hospital to a 60 bed long-term care hospital should be granted or denied?
Findings Of Fact The Parties The applicant in this case is The Hospital Corporation of Lake Worth d/b/a Palm Beach Regional Hospital. A subsidiary of Columbia Hospital Corporation, ("Columbia,") Palm Beach Regional is a licensed general acute care hospital with 200 beds located in Palm Beach County, AHCA District 9. Palm Beach Regional's license is issued pursuant to Chapter 395, Florida Statutes, the chapter of the Florida Statutes entitled, "Hospital Licensing and Regulation." The agency is "designated as the single state agency to issue ... or deny certificates of need ... in accordance with the district plans, the statewide health plan, and present and future federal and state statutes." Section 408.034(1), F. S. Integrated is a licensed 120-bed skilled nursing facility, also known as a long-term care facility, located in Palm Beach County, AHCA District 9. Its license is issued pursuant to Chapter 400, Florida Statutes, the statute entitled "Nursing Homes and Related Health Care Facilities." Columbia Hospital Corporation The parent company of petitioner, Columbia has a stock market capitalization of between $15 and $20 billion and enjoys a profitability of over $1 billion per year. It owns approximately 340 hospitals, well over 100 ambulatory surgical centers, and an extensive number of home health agencies. As to be expected of a Fortune 500 company, Columbia generates substantial annual revenues. In 1994, for example, the annual revenues generated by Columbia exceeded $17 billion. Columbia also lays claim to being the largest hospital system in the state. It has five divisions with approximately 60 hospitals in its "Florida Group," the organizational title for its Florida operations. The net revenues of the Columbia Florida Group is approximately $4.5 billion. One of five divisions of Columbia's Florida Group, the South Florida Division is a $1.2 billion operation. The division encompasses Dade, Broward and Palm Beach Counties and consists of 15 hospitals, six surgery centers, and one dozen home health agencies. The South Florida Division, of course, includes Palm Beach Regional. Background to the Application Palm Beach Regional was purchased by Columbia shortly after Columbia had purchased JFK Hospital, a 300-bed tertiary hospital approximately three miles from Palm Beach Regional. In August of 1995, as a business decision, Columbia consolidated the operations of the two facilities. The consolidation resulted in a patient census drop at Palm Beach Regional. Shortly thereafter, with the permission of the agency, Palm Beach Regional ceased operations at its emergency room. The result of the consolidation and limitation of the services offered was that it cost only about $100,000 a month to keep Palm Beach Regional running with its small census. Even with the small census, and the relatively low monthly operational expense, the operational expense was more than $1 million per year. In June of 1996, Palm Beach Regional and the agency entered a stipulation which authorized the hospital to suspend the acute care operations in contemplation of this proceeding. Palm Beach Regional's hospital-based skilled nursing unit has since been transferred. Palm Beach Regional is now closed and empty. The reason Palm Beach Regional had been kept operating at all after the consolidation with JFK was to preserve the opportunity to convert the license as proposed in the application. The Application Certified for accuracy on September 18, 1995, under the signature of its authorized representative, Robert L. Newman, CEO of Columbia/HCA, South Florida Division, the application was submitted to the agency bearing a date of September 20, 1995. The application describes what it seeks in the section titled "Project Summary" as follows: Hospital Corporation of Lake Worth (Palm Beach Regional) proposes in this Certificate of Need Application to convert 60 acute care hospital beds to 60 long-term acute care hospital beds and to delicense 128 existing acute care beds. (At a later date the existing 12 skilled nursing beds will be located to another Columbia/HCA hospital in District IX.) Palm Beach Regional Exhibit No. 1, AHCA Form 1455A, Oct 92, AHCA 4600-0005 Aug 93. The transfer of the 12 skilled nursing beds has already occurred and therefore is not at issue in this proceeding. Nor is the delicensure of the 128 beds really at the heart of the agency's denial and Integrated's opposition. In contrast, what is contested is the conversion of the 60 acute care hospital beds to 60 long- term acute care hospital beds. Such a conversion would make Palm Beach Regional a long-term acute care hospital. Long-term Acute Care Hospitals Referring to a hospital as both "long-term" and "acute," is confusing. The two terms have divergent meanings both in terms of average length of stay and the traits of the illness suffered by the acute and the long-term patient. In the context of hospitals, "long-term" refers to a patient with an average length of stay of greater than 25 days. By comparison, the acute patient's stay is typically much less than 25 days, with the average length of stay being between 5 and 6 days. As is the patient in need of acute care, the typical long-term hospital patient is very ill. The difference in the type of illness suffered by the acute care patient as opposed to the long-term patient, however, lies in other characteristics. Unlike the acute care patient, the long-term patient is not in the urgent, emergent or desperately critical state of patients in the acute care setting. The two terms, "long-term" and "acute" have been used together with reference to the type of hospital to which Palm Beach Regional proposes to convert because of the history of the long- term care hospital’s development. Originally in Florida, long-term hospitals were licensed as acute care hospitals and were referred to, therefore, as "long-term acute," hence the combination of terms with disparate meanings. In the context of a study conducted by the Hospital Cost Containment Board, however, the agency examined the issue of whether long-term hospitals should be subject to CON review as long-term hospitals apart from other acute hospitals. As a result, long-term hospitals came to be reviewed in their own separate category under certificate of need review, subject to the same licensure requirements as a specialty acute care hospital. Because they had been licensed earlier as acute care hospitals, the term "acute" was carried over into the new category. At present, there is a recommendation to refer to long-term acute care hospitals simply as "long-term hospitals" to clear up any confusion caused by the terminology. This recommendation will be followed for the most part in the remainder of this order when reference is made to acute and long-term facilities and acute and long-term care. Long-term Care Hospital-based long-term care is a distinction established in federal Medicare regulations that describes a hospital with patients having an average length of stay of greater than 25 days. The distinction allows an exclusion from the Medicare prospective payment system so that reimbursement is received by the long-term hospital on the basis of cost. The distinction is of great import financially because of the distinction between "cost-based" Medicaid and Medicare reimbursement systems and another payment system used by Medicaid and Medicare: the prospective payment system. Before the prospective payment system was instituted, hospitals generally were well utilized, in fact, “filled to the brim.” The high utilization was due to the "cost-based" reimbursement system which contained a financial incentive for the hospital to keep patients in the hospital. Under the cost-based system, the more a hospital spent, the more reimbursement it would receive from Medicare and Medicaid. The prospective payment system was instituted to save taxpayers the high cost of the cost-based reimbursement system. Under the prospective payment system, the hospital receives a flat fee for Medicare and Medicaid patients depending on the diagnostic category, or diagnostic-related group, ("DRG,") into which falls the illness treated. The flat fee is figured on the basis of average length of stay for that diagnostic category. Under this system, unlike the cost-reimbursed system, the hospital receives the same reimbursement for Medicare and Medicaid patients who stay for less than the average length of stay assigned to the patient's DRG as for those who stay longer. With regard to a patient who stays in the hospital longer than the average length of stay for the patient's DRG, the hospital, in many cases, not only profits less the longer the patient stays but begins to lose money at some point in the stay. If the average length of stay for an appendicitis patient is four days, for example, then the hospital profits more in the case of an appendicitis patient who stays only two days because it has incurred only two days of costs instead of the expected four days of costs. In the case of another appendicitis patient, who stays longer than the average length of stay, the hospital makes less money and reaches the point eventually in some cases where the hospital actually loses money for treating the patient if the patient stays long enough. Medicare provides additional payments for both "day-outliers" and "cost-outliers," but not enough to prevent financial pressure on hospitals to discharge acute patients as soon as possible. The prospective payment system has succeeded in forcing hospitals to operate more efficiently; the average utilization of hospitals has declined dramatically. Today, about half of the hospital beds in Florida on any given day go unused. The system does not have the same effect on long-term hospitals; they are exempt from the prospective payment system. Instead, long-term care hospitals are reimbursed under a cost-based system. A long-term hospital well located geographically is particularly attractive to a large hospital system, such as Columbia. Not only will it likely be a financial success in its own right but it will assist Columbia’s sister acute care hospitals in relieving them of patients too sick to be discharged to a subacute setting yet finished with the acute episode which required the acute care hospital’s service in the first place. Development of Long-term Care Hospitals in Florida The first long-term care hospital was instituted in Florida in the 1980's. Fairly soon thereafter there were three long-term care hospitals in Florida, but then there was a lull in the attempt to establish long-term care hospitals. With the advent of the prospective payment system, however, there eventually came the closing of a number of small hospitals in Florida because of their inability to continue to operate in sound financial condition. At the same time, four or five applications for the conversion of small hospitals to long- term care hospitals were filed with the agency. In the early part of the present decade the agency conducted a study of long-term hospital care. The study took place within a larger study by the Hospital Cost Containment Board. Ultimately, it was recommended that long-term care hospitals be regulated separately from acute care hospitals and that they be subject to separate certificate of need review. The recommendation was made for a number of reasons. First, long-term hospitals were viewed by the agency as very different from acute care hospitals because of the patients' average lengths of stay. Second, long-term care hospitals were found to be expensive for the type of care given in them which was of great concern to the state since cost control is an objective of the certificate of need program. Third, long-term hospitals were found to experience high mortality rates. As the result of the study and recommendation, the agency made the creation or conversion of hospitals into long-term hospitals subject to certificate of need review. Admission Criteria In the study, the agency also found that there are no clear admission criteria for long-term hospitals. To date, neither the Health Care Finance Administration (“HCFA”), nor the Joint Commission on Accreditation of Hospital Organizations ("JCAHO,") or any of its sub-organizations have developed any criteria to define a long-term care hospital. It is not clear, therefore, exactly what type of patients are suitable for care in a long-term hospital. Sub-acute Care The parties are in agreement that sub-acute care is a level of care that is below acute care. Palm Beach Regional claims, however, that the care provided by long-term care hospitals is not subacute but rather falls into a category of care between acute and sub-acute. An understanding of this claim requires some discussion. Unlike other classes of hospitals which are exempt from the prospective payment system, like cancer, children's or psychiatric hospitals, patients in long-term care hospitals do not have a specific type of illness nor are they limited to serving a specific age group. Generally, however, they are patients who have had an acute episode, whose program of care has been identified and who need a longer term of care to recover or to be rehabilitated because of an acute illness or surgical procedure. And, although they are not limited to a specific age group, the experience of long-term care hospitals is that a major part of their patient population is elderly, virtually all of whom are covered by Medicare. In these respects, long-term care hospital patients are not much different from patients in other "subacute" settings: comprehensive rehabilitation hospitals, acute care hospital skilled nursing units, skilled nursing facilities in free-standing nursing homes, and, even, in some cases, home health care, assisted living and outpatient services for the elderly. If there is a difference between the long-term hospital patient and patients in other subacute settings, it is that the long-term hospital patient has more at-risk types of physical problems, is more likely to be medically unstable or is, in fact, medically unstable. But this difference is not strictly observed because of the financial pressure on hospitals to discharge patients from the acute setting into a subacute setting. Medically unstable patients, therefore, are found in subacute settings such as skilled nursing facilities whether hospital-based or in free- standing nursing homes. In contrast to what has become commonplace practice, Dr. Kathleen Griffin, an expert in health care planning with a specialty in long-term acute care and subacute care, testified that it would not be appropriate for a medically unstable patient to be transferred to a skilled nursing bed. In her opinion it would be best for a medically unstable patient about to be discharged from acute care to be admitted instead to a long-term care hospital. Despite the reality that there are no admission criteria for long-term care hospitals, Dr. Griffin maintains that if a hospital discharge planner believes through information gathered from the medical and nursing staffs that the patient "is highly acute and at risk, and there is a long-term care acute hospital available, then that would be the placement of choice." (Tr. 523.) If a long-term care hospital is not available, however, the alternative is to keep the at-risk, medically unstable patient in the acute care hospital rather than discharge the patient into a nursing facility. Dr. Griffin's opinion is shared by the physician practicing in long-term hospitals. Representative of such a physician is Dr. Wendell Williams, presently the Medical Director of a long-term care hospital, Specialty Hospital of Jacksonville. Dr. Williams sees a distinction between long-term acute care and subacute care. Long-term hospital care is acute care without the need for "highly technical diagnostic capabilities," and "high surgical capabilities," but still care in the "medically complex case that requires frequent physician direction [and] high skill level of caregivers." (Petitioner's Ex. No. 16, pg. 13.) In Dr. Williams view, long-term hospital care occupies a level of care between acute and subacute care. The views of Dr. Griffin and Dr. Williams find support in analyses of nursing hours per patient. In a typical nursing home, the number of hours per patient is about 4.5 hours per day, while in a long-term care hospital, the number is around 6.5 hours per patient day. At Specialty Hospital of Jacksonville, the nursing hours per patient day for non-ventilator patients is 6.75 hours, and for ventilator patients is 10 hours. In contrast, Integrated, a nursing home, provided nursing hours per patient day in its "med-surg unit" at 4.34 hours in March of 1996, 4.60 hours in April and 4.52 hours in May although at times Integrated's nursing hours per patient day have reached as high as 6 hours. The opinions of Dr. Griffin and Dr. Williams have not yet been generally accepted. Following the agency's study in the earlier part of the 1990's, the federal government, under the auspices of HCFA, launched a major study that addresses what AHCA viewed as the "whole gamut of what is marketed as subacute care," (Tr. 272). The study included long-term care hospitals, as well as those settings which the parties all agree are clearly in the category of "subacute": hospital-based skilled nursing facilities, free-standing nursing homes, comprehensive rehab hospitals and home health care. The report was issued in November of 1995. It confirmed that there was a great deal of overlap among the settings studied including between the long-term care hospital and other settings unquestionably subacute. Moreover, it confirmed that many of the services are "primarily driven by reimbursement," (Tr. 275), and not by which provides the best or most cost-effective health care for the very ill, elderly patient no longer in need of acute care. In other words, the financial pressure on hospitals to discharge patients from the acute care setting was what accounted for the tremendous growth of subacute services and the move toward more long-term care hospitals rather than what is actually best for the patient or the health care system. The study concluded that there is insufficient data to determine the cost effectiveness of subacute care as defined in the study. As for overlap in the various settings, the extent of overlap was not precisely determined. But just as long-term care hospitals provide ventilator treatment, skilled nursing units specialize in ventilator patients. Nursing home subacute units specialize in wound care, infectious disease programs and IV antibiotic therapy programs, as well, just as would Palm Beach Regional if approved. The HCFA study also confirmed that the cost of care and mortality rates at long-term care hospitals are high, $2,000 per day and 40 percent, respectively. The average cost per discharge at a long-term care facility was between $150,000 and $250,000. Despite the long-term hospital's recognition by the federal government, the presence in Florida for more than eight years, and separate CON regulation for the last several years, it remain unsettled which patients should be treated and cared for in long-term hospitals. While for some, such as Dr. Griffin and Dr. Williams, the question is one which discharge planners, after consultation with nursing and medical staff, ably make, it is not generally accepted that it is clear which patients should be cared for in long-term care hospitals. It is not generally accepted as evidenced by the wont of admission criteria for long-term hospitals. Furthermore, it is not clear whether long-term hospitals represent the best means or the most cost-effective way of treating patients ready for discharge from an acute care setting. Specialty Hospital of Jacksonville: the Model The Palm Beach Regional proposal to convert to a long- term care hospital is modeled after another Columbia long-term care hospital, Specialty Hospital of Jacksonville, the hospital of which Dr. Williams is the medical director. Opened in 1992, Specialty offers four major program areas: ventilator and other respiratory complications, infectious diseases, wound management and complex medical and rehabilitative services. The typical ventilator patient is quite ill; often with other attendant system breakdown such as cardiac or renal failure. The goal is to free the patient from ventilator dependence. If the patient is judged to be a lifetime custodial ventilator patient, the patient would not be appropriate for Specialty. A variety of infections are treated in the infectious disease program. Often the primary antibiotic treatment has failed and there may be other conditions attendant. The typical wound care patient admitted to Specialty has severe wounds that may derive from circulatory problems. Often admission is from a hospital or nursing home. The patient may be diabetic, paraplegic or quadriplegic. The patient may have experienced a surgical intervention which has not healed. Or the patient may have a distressed digestive system which inhibits the body's ability to absorb the proper nutrients to support the healing process. The typical complex medical and rehab patient includes the spinal cord injured patient and the multiple system failure patient. The patients at Specialty are under the management of an attending physician but typically four or five different specialties are involved in each patient's care. Specialty Hospital has experienced approximately five percent Medicaid and one percent charity care. A representative patient at Specialty Hospital has an average length of stay of 23 days. The representative patient in the infectious diseases program would experience an average length of 18, 20 days in the pulmonary program, 29 days in the ventilator program, 36 days in the wound program, 18 days in the physical medicine and rehabilitation program and 26 days in the medicine program. These lengths of stay resemble acute or Medicare certified skilled nursing bed lengths of stay more than the historical 90 day lengths of stay experienced in Florida at long- term care hospitals. A representative patient at Specialty Hospital will experience an average daily charge of $1,122 and an average charge per case of $25,810, the highest averages incurred by the ventilator program at $1,848 per day and $52,781 per case. From a medical standpoint, all of the patients treated at Specialty Hospital could be treated in an acute care hospital. There is one difference between Specialty's patient profile and the one expected at Palm Beach Regional. The approach proposed by the applicant will include patients with greater levels of instability. Whereas Specialty has taken the approach that patients at the intensive care level should be in a general acute care hospital, Palm Beach Regional expects to treat patients in need of services from an intensive care unit. Palm Beach Regional, therefore, has planned for an intensive care unit at the facility should its CON application be approved. Integrated's Existing Programs Sixty of Integrated 120 beds are dedicated to meet the needs of patients requiring subacute care. Although they may differ slightly in intensity of application because of slightly lower acuity levels of the patients, the programs offered in this sixty-bed skilled nursing unit encompass the four programs proposed for Palm Beach Regional's long-term care hospital: ventilator and respiratory complications; infectious disease; wound management; and complex medical and rehabilitation service program. Integrated uses its own method to measure the acuity of its patients. Within this method, two of the levels require active treatment of co-morbidities, multiple diseases which complicate the primary diagnoses. By whatever means acuity is measured, it is reasonable to expect that the average level of acuity would be somewhat higher among patients treated at a Palm Beach Regional long-term care facility. (Although without criteria to measure acuity for admission or to know for sure what patients are actually being treated at long-term hospitals, this is not certain.) Nonetheless, considering both diagnosis and treatment, Integrated's patients at Integrated's two highest levels of acuity, even if not at quite as high an acuity level on average, would be similar to the patients Palm Beach Regional might serve if its application were granted. Patients at a Palm Beach Regional's long-term care facility who would exceed the highest level of acuity of those patients at Integrated are patients appropriate for treatment in an acute care hospital. Ventilator Care at Integrated Ventilator patients are treated in skilled nursing facilities both in hospitals and in free-standing nursing homes like Integrated. Some skilled nursing units even specialize in ventilator care. There is clearly overlap between ventilator services in skilled nursing facilities and long-term care hospitals. The precise extent of the overlap is not clear. While the overlap may not be 100%, it is certainly significant. Twenty of Integrated's 60 subacute beds are capable of assisting ventilator patients. Within this 20 bed unit, Integrated provides oxygen, air, and wall suctioning just like in a hospital setting. Additionally, Integrated can provide respiratory services outside of its specific unit by using portable suction machines and oxygen concentrators. The ventilator patients treated at Integrated are similar to the ventilator patient treated in intensive care units in hospitals. Some of Integrated ventilator patients are in need of acute care. All are hemodynamically stable but some are medically unstable. Nonetheless, there are patients who would be too unstable to allow them to be suitable for admission into Integrated's respiratory unit. Patients who would need to remain in acute care in the hospital would be patients who, for example, were bleeding or having trouble with a post-surgical trach placement. The medical director at Integrated is a pulmonologist. Integrated has a 24-hour respiratory staff. The ventilator program at Integrated meets the description in the application of the proposed ventilator program at Palm Beach Regional. Comparison of the respiratory services offered at Integrated to the services proposed to be offered in Palm Beach Regional's ventilator program reveals significant overlap between the two. Integrated primarily uses a Bear 3 Ventilator. Other equipment used by Integrated includes pulse oximeters and pneumatic blood pressure cuffs to provide hemodynamic monitoring. The respiratory unit is able to obtain an assessment of the patient's arterial blood gases within two hours through an arrangement with a courier service and nearby JFK Hospital. On average the blood work results are received within an hour of the blood being drawn from the patient. An interdisciplinary team of therapists, including respiratory therapists, physical therapists, occupational therapists and speech therapists, work together on the plan of care and recovery of the ventilator patient including weaning the patient from the ventilator. Of those ventilator patients determined to be weanable, 75% are actually weaned from the machines. Ninety-two percent of the tracheotomy patients achieve decannulation. The average length of stay in the respiratory unit for Integrated's ventilator patients is 37 days, an average length of stay that meets that which defines the long-term care hospital patient, that is, in excess of 25 days. Infectious Disease Treatment at Integrated Just as long-term care hospitals, nursing homes offer infectious disease programs employing IV anti-biotic therapies. Integrated provides its patients with multiple antibiotic therapies. Among the IV anti-biotic therapies used at Integrated are cepo, fortaz and vancomycin. Integrated treats patients with pulmonary edema, pleural affusion, pulmonary embolus and pulmonary infarcts and patients with bi-lobar and multi-lobar pneumonia. Patients are treated with intravenous cortico steroids, intravenous bronchodilators, intraveous diuretics and intramuscular antimedics. Wound Care at Integrated Nursing homes offer wound management programs. There is significant overlap between patients treated for wounds at nursing homes and at long-term care hospitals. Limitations in care of the wound patient are similar as well. Just as a patient in need of surgical intervention for wound care, for example, would be discharged to an acute care hospital from a nursing home so would that patient be discharged to an acute care hospital from Specialty Hospital of Jacksonville, the model hospital for Palm Beach Regional's long-term care facility. Integrated offers wound and skin management treatment of the type described by Palm Beach Regional's proposal. Many of Integrated's patients recieve wound care upon admission. For instance, respiratory patients who have tracheotomies receive care for their wounds throughout the day. Integrated treats all levels of decubitous ulcers, including the most severe, Stage III and IV ulcers, as required by law in order to qualify for Medicare Certification. Complex Medical and Rehabilitative Care Integrated offers radiology and other imaging services on campus: mobile chest x-rays, normal x-rays, and video flouroscopy as well as an in-house staff of rehabilitation professionals: physical and registered occupational therapists and registered speech therapists. The rehabilitation programs proposed by Palm Beach Regional and those programs of other long-term care hospitals overlap significantly with those programs already offered at Integrated. The difference between the complex medical and rehabilitative care offered at Integrated and that proposed for Palm Beach Regional lies in the expected acuity of the patients. One would reasonably expect the patients to be slightly higher in acuity at Palm Beach Regional if approved than as are presently at Integrated. Nonetheless, the patients at Integrated are similar to those Palm Beach Regional would care for, in that Integrated treats patients with co-morbidities, including combinations of congestive heart failure, post-open heart surgery, arteriosclerotic heart disease and renal failure. Integrated's Services in General On an average month, Integrated offered 7.28 hours per day of nursing and respiratory, physical and occupational therapy care per day to the patients within its subacute unit. Forty percent of Integrated's subacute nursing hours are provided by registered nurses, 20% by licensed practical nurses, and the remaining 40% by certified nurse aides. A sample of Integrated's admissions noted numerous patients admitted with cardiopulmonary vent and ventilator needs. Integrated also maintains a large number of orthopedic patients in need of complex rehabilitation. Integrated treats patients with congestive heart failures, patients recovering from recent open- heart surgery, patients requiring specialized wound care, patients with post-operative cranial head injuries, and patients requiring tube feedings, IVS, ventilator and tracheostomy care. Integrated offers the equipment that is listed in the application as equipment to be purchased by Palm Beach Regional if approved. Integrated accepts patients who are medically unstable. These include patients admitted to Integrated's cardiopulmonary unit, patients with recent tracheostomies, patients on ventilators, patients with hemodialysis and peritoneal dialysis who have co- morbidities. Palm Beach Regional's application lists diagnoses of patients to be treated through long-term care which it claims are not appropriate for skilled nursing facilities. The application alludes to various types of comprehensive therapies, care and resources available for these patients. Yet, despite the application's claim that care of these patients is not appropriate for the skilled nursing facility, present at Integrated for the benefit of patients with the same diagnoses are very nearly all, if not all, of these therapies, care and resources. These include: IV antibiotic therapy, IV drips, plasma pheresis, management of severe decubitus ulcers, tracheotomy care with hourly suction, treatment with chest tubes and PCA pumps, cardiac monitoring, dialysis and an on-site pharmacy. Moreover, Integrated's roster of consulting physicians credentialed at the facility included the range of specialists listed in Palm Beach Regional's application. Integrated's roster of physician ranges from family practitioners to practitioners specializing in internal medicine, dermatology, neurology, and infectious disease control, to orthopedic specialists, physiatrists and psychiatrists, nearly the "full gamut" of specialties in medicine. Adverse Impact There will be adverse impact on Integrated if Palm Beach Regional's proposal is approved. The impact occurs as the result of a combination of significant overlap of services offered by Integrated and proposed for Palm Beach Regional and the likely loss of admissions to Integrated's subacute unit generated by patients discharged from JFK Hospital. JFK Hospital and Palm Beach Regional are each approximately 2 miles from Integrated. Approximately 85% of Integrated's subacute admissions come from JFK. A good estimate of how many patients JFK refers to Integrated's subacute unit on an annual basis is 460. It is reasonable to assume that many of these patients would be referred to Palm Beach Regional by its sister Columbia Hospital, JFK, if the application were approved. If only two-thirds of these patients were lost to Palm Beach Regional, using a conservative figure for contribution margin of $100 per patient day, the loss to Integrated would be about $1 million in contribution margin per year. Furthermore, if the application is approved, Integrated will also have to either raise salaries to keep qualified staff for ancillary staff or risk losing them because Palm Beach Regional proposes to offer ancillary staff salaries higher than those paid by Integrated. Certificate of Need Criteria The criteria to be used in evaluating the application are found in statutes, and in rules of the agency which implement these statutes. Section 408.035(1)Health Plans Neither the District 9 Treasure Coast Health Plan nor the State Health Plan contain any mention of long-term acute care beds. Both plans were written before there were any CON requirements for this type of bed. (b) Availability, Quality of Care, Efficiency,Appropriateness, Accessibility, Extent of Utilization and Adequacy of Like and Existing Services There is no agency rule regarding need determination for long-term acute care beds. Neither is long-term hospital care defined by agency rule as a referral service, one dependent upon other hospitals to refer patients. The service area for a referral hospital is larger than just one district. Patients are referred from districts 9 and 11 to the long-term care hospitals in District 10. This is certainly not surprising for patients in district 9 since there is no long- term hospital in the district and referrals are the common way for long-term hospitals to gain patients. Patients are referred from Districts 3, 5, 6 and 8 to the long-term care facility in Tampa. With the exception of the long-term care hospital in District 11 where the largest proportion of patients came from within the District 11, all of the long-term hospitals in the state, "had referrals from all over the place." (Tr. 288.) Palm Beach Regional itself proposes to serve patients from Districts 7 and 10. The reality is that long-term care hospitals are primarily referral hospitals. Nonetheless, since there is no agency rule defining long-term care hospitals as referral hospitals and since there is no agency rule defining the service area of a long-term care hospital, District 9 may be the appropriate service area for the health planning purposes of Palm Beach Regional's application. In order for the district to be the appropriate service area, however, the application must demonstrate that there is a need for a certain number of beds based on the data collected from District 9. Since there is no need methodology applicable to long- term care acute beds, Palm Beach Regional developed three different methodologies for the agency's consideration. The agency found the "components," (Tr. 910,) of the methodologies to be reasonable. Indeed, the agency never offered any other need methodology which it claimed was superior to those offered by the agency. Instead the agency criticizes the methodologies for failing to take into consideration the availability of like and existing services and alternative to the proposed services. Patients who will be served in the proposed facility are currently being served in either the short-term acute hospitals or skilled nursing facilities in nursing homes such as Integrated, both of which are less costly alternatives to this proposal. Palm Beach Regional anticipates referrals from other Columbia Hospitals in the districts; however, six of the eight Columbia Hospitals have skilled nursing units which propose to treat the same patients and conditions the applicant proposes to treat. Furthermore, at the time of hearing, five Columbia hospitals in the districts had 56 approved skilled nursing beds not then operational. Included among the 56 were the 12 skilled nursing unit beds transferred from Palm Beach Regional. Palm Beach Regional's presents arguments in favor of improved quality of care to the patient in need of care following stabilization of an acute episode. There is, however, no data to support a conclusion that outcomes are better in long-term care hospitals. As for the applicant’s ability and record to provide quality of care, there is little doubt. The testimony of Dr. Ron Luke as to the high quality of care to be provided by Palm Beach Regional was not challenged. The patients proposed to be served by the applicant are currently being served in hospitals, subacute units at nursing homes or hospitals, or in rehabilitation facilities. Some may even be in home health with high technology equipment. Transferring these patients to a long-term care facility has significant financial implications costly to the health care system. The 60 beds proposed in the application will, in all likelihood, be adequately utilized. In the case of long-term care hospitals, demand follows the supply because of the strong financial incentive to fill the beds. There is nothing to indicate, however, that acute care beds are not an alternative to long-term hospital beds. There are plenty of empty beds in acute care hospitals to be filled by patients who would be treated by the applicant. That these patients proposed to be treated by Palm Beach Regional might receive treatment, if the application is denied, in hospital-based skilled beds or, perhaps inappropriately at times, in nursing home skilled nursing units is not due to lack of alternatives. Rather, it is the product of financial pressure on the acute care hospitals to discharge patients from the acute setting. Effective utilization of at least 85 percent of cost- based services such as long-term services is an important consideration because fixed costs can be spread over more patient days, thereby decreasing the costs per patient day. The average utilization rate in Florida for long-term care beds is 66 percent. The most recent occupancy rate for Specialty Hospital is only 41 percent. The record of long-term care hospitals would indicate that the utilization projections by Palm Beach Regional are unreasonable. But, there was nothing established that indicated the three methodologies used by Dr. Luke were unreasonable in any way. Given that Palm Beach Regional will be able to draw patients from its sister Columbia acute care hospitals, all of whom will be anxious to provide patients to this long-term hospital, and given that long-term hospital care is a kind of care for which demand follows the supply, it is likely that utilization at Palm Beach Regional, if approved, will be strong. Despite the record of other long-term care hospitals, Palm Beach Regional’s utilization projections are reasonable. Need for Research and Educational Facilities There are no plans to provide research or education at this facility. Availability of Manpower, Management Personnel and Funds for Capital and Operating Expenditures The State Agency Action Report shows that the agency believes that there will be adequate levels of staffing available. The adequacy of the staffing levels was confirmed by the administrator of Specialty Hospital of Jacksonville. Palm Beach Regional will be able to adequately staff the hospital at the salary levels proposed in the application. Long-term acute care hospitals treat the very old. Since almost all of these people have Medicare coverage, economic access is not a problem for the individuals the applicant proposes to serve. The applicant has a 1% indigent commitment and a 5% projected Medicaid utilization. Geographic access is also served well by this facility. The facility is located where the population base of the elderly population is in District 9. Financial Feasibility The immediate financial feasibility of Palm Beach Regional is evident from its ability to open and operate for the first two years with a positive cash flow with a financing letter in the amount of $407,000 from Columbia. Palm Beach Regional, in its pro formas and the analysis underlying its pro formas concluded that it would be under the prospective payment system for six months before it could transer to a facility exempt from the prospective payment system. This conclusion is reasonable. Palm Beach Regional has two months to get the necessary certification changed prior to the end of its fiscal year. Palm Beach Regional will be able to institute the necessary six month evaluation, within CON constraints, when it chooses. Furthermore, Palm Beach Regional could change the end of its fiscal year so that the six-month time period could be accommodated. Finally, short-term financial feasibility was demonstrated by the pro forma which properly shows reimbursement levels for patients who were treated in the first six months, and who were discharged after the first six months. Under Medicare regulations, the hospital would be reimbursed on a cost basis for these patients. Palm Beach Regional projected an occupancy level of 85% in the first year of operation and 87% in the second year of operation. Neither Specialty Hospital of Jacksonville, the model for Palm Beach Regional, nor the other long-term care hospitals in Florida have occupancy levels that high. Comparison, however, is not valid. The long-term care hospitals that converted from acute care facilities converted their entire complement of beds which resulted in overbedding. In contrast, Palm Beach Regional seeks to convert only 60 of its 200 beds. The situation of Specialty is very different. It is a converted 105 bed facility which was in bankruptcy when it first started, limiting its ability to attract patients. Within its district, Specialty competes with Vencor of North Florida, a 60 bed facility. Not only does Palm Beach Regional not have any in-district competition, but it will benefit greatly from being a member of the Columbia system. Palm Beach Regional's application demonstrates financial feasibility, both immediate and long-term. Special Needs and Circumstances of HMOs Whether the facility provides an additional level in the continuum of care available to HMO patients is uncertain. It is not generally accepted that the level of care Palm Beach Regional argues it will provide, that is, a level between acute care and subacute care, even exists let alone whether such a level of care is necessary, cost-effective or the best means of treating patients. Needs and Circumstances of Entities Providing Substantial Portion of Services to Individuals Residing Outside the District There are no facilities in the district which provide a substantial portion of its service to individuals residing outside the district. Probable Impact on Costs of Providing Health Services Total property costs for Palm Beach Regional amount to $3.572 million per year, or approximately $250,000 per month. This includes depreciation, interest, insurance and all other property costs. Because Palm Beach Regional would enjoy cost- reimbursement from Medicare instead of being paid on the basis of the prospective payment system, Medicare would pay as much as $190 per patient day for simple property costs and not for patient care, if Palm Beach Regional's utilization projections prove true. Were Palm Beach Regional's utilization projections to turn out to be incorrect and Palm Beach Regional's occupancies were more in the range of other long-term care facilities, (50% the first year and 60% the second), the cost would be "into the $3-400 a day cost range for the cost of [the] ... property allocated per patient day, which would be picked up in their entirety or close to their entirety [by Medicare.]" (Tr. 782.) Either way, the high property costs of Palm Beach Regional would result, should the application be approved, in shifting a huge financial burden to Medicare. The result would be to "wind up costing the Federal government, the Medicare program, multiples of what it now cost[s] ... to treat those same patients in acute care hospitals." (Tr. 792). The Applicant's Past and Proposed Provision of Services to Medicaid and the Medically Indigent Palm Beach Regional projected a 5% Medicaid utilization but its commitment is to indigent care only and that being a mere 1%. The commitment to indigent care (as opposed to the projection for Medicaid care) is meager. Furthermore, Palm Beach Regional has little established pattern accepting patients in these payor classes. Given the savings to Columbia acute care hospitals which would feed patients to Palm Beach Regional, and ultimately, the profit to be enjoyed by the applicant, a commitment of 1% is lacking. That recognized, it must be said that the modesty of the commitment is consistent with the advantage Medicare's cost- reimbursement system provides long-term care hospitals. It is not to be expected that there will be many Medicaid or indigent patients utilizing long-term care hospitals. "The vast majority of the population utilizing the facility will be the elderly, virtually all of whom are covered by Medicare." (Palm Beach Regional's Proposed Recommended Order, p. 23, Tr. 339.) Still, a greater commitment, more along the lines of the commitment provided by St. Petersburg Health Care Management, Inc., with which Palm Beach Regional has drawn comparison, (See Findings of Fact, 123- 128, below,) would lend this criterion to favor the application rather than disfavor it. The Applicant's Past and Proposed Provision of Services Which Promotes a Continuum of Care There is no long-term hospital available in District 9. But whether that means Palm Beach Regional is adding a level to the continuum of care available for patients in the district is uncertain. There is no data to support the conclusion that long- term care hospitals provide a level of care between that of acute and subacute. Despite the earnestness with which Dr. Griffin and Dr. Williams hold their opinions to the contrary, their opinions are simply not yet accepted widely enough at this point to support such a conclusion. That Less Costly, More Efficient, or More Appropriate Alternatives to Such Inpatient Services are not Available Long-term care hospitals have existed for years by Act of Congress. "[W]hile there has been an active discussion of alternatives, so far they have not come up with one which has been moved into rule or legislation." (Tr. 421). Certainly keeping long-term care hospital patients covered by Medicare in acute care hospitals would be a less costly alternative. Whether caring for these patients in one facility or another is more cost-efficient, however, is unknown. At bottom, there is no determinative data on the issue of cost-efficiency. As for more appropriate alternatives, there is a group of long-term care hospital patients for whom it is less appropriate to be in a free-standing skilled nursing unit. But, the size of this group is uncertain. Certainly, from the point of view of care to the patient, it is at least equally appropriate for all long- term care patients to remain in acute care hospitals rather than be discharged to long-term care. Alternatives to New Construction As the result of renovations, the facility requires little capital to convert it to a 60 bed long-term care hospital. The capital outlay of $500,000 is an indication of how little actual construction is necessary to complete the project. Problems in Obtaining the Proposed Inpatient Care in the Absence of the Proposed New Service With the exception of inappropriately premature discharges of patients from the acute care hospital's acute care setting, there are beds available for appropriate care in the absence of approval of the application. There is an abundance of beds in acute care hospitals available to patients who might otherwise be discharged to the long-term care hospital. As for the patient for whom discharge from the acute care setting is appropriate who might be admitted to a long-term care hospital, there are available for inpatient care skilled nursing beds in one type of facility or another. Administrative Due Process Palm Beach Regional contends that it has been treated differently by the agency, without reasonable explanation, from St. Petersburg Health Care Management, Inc., a successful applicant for the conversion of a general acute care hospital to a long-term care hospital in another district. Initially approved by the agency, the "St. Petersburg" application, CON 8213, was not subjected to the scrutiny of a formal administrative hearing at the Division of Administrative Hearings. Nonetheless, in support of its claim of unfair treatment, portions of the St. Petersburg application and omissions response for Certificate of Need number 8213 were introduced into evidence by petitioner as well as the State Agency Action Report. There are similarities between the two applications. For example, both proposed conversion of underutilized facilities to long-term acute care beds, as well as reduction of the hospitals' complements of 200 acute care beds to 60 long-term care beds. But there are differences as well. The St. Petersburg commitment to indigent and Medicaid care is 500% of the commitment by Palm Beach Regional. St. Petersburg's commitment is a combined 5%: 2% to indigent and 3% to Medicaid. In contrast, Palm Beach Regional's commitment is 1%, to indigent care only. Palm Beach Regional stated in its application that "[p]atients classified as Medicaid payers are projected to equal 5.0% of total patient days in 1999, 2000, and 2001." Petitioner's Ex. No. 1, p. 79. As reasonable as this projection may be, it is just that: a projection, nothing more and a projection is a far cry from a commitment. There is another difference between the two applications. While the facilities from which Palm Beach Regional's application received letters of support were limited to Columbia's affiliated facilities, St. Petersburg received letters of support from three disproportionate share providers as well as numerous unaffiliated hospitals and nursing homes in the Pinellas and Pasco County areas. The difference is critical to an understanding of the likelihood that the facility will, in fact, meet its commitment to the historically underserved. As Ms. Elizabeth Dudek, Chief of the Certificate of Need and Budget Review Office at the Agency for Health Care Administration testified, "You have, in the case of having the support of all the disproportionate share providers ... more of an assurance that the historically underserved, the Medicaid and the indigent patients, will be served and get access to the service." (Tr. 902). Such an assurance is omitted unfortunately from Palm Regional’s application.
Recommendation ACCORDINGLY, it is recommended that the application of Palm Beach Regional to establish a long-term acute care hospital by delicensing 128 beds and converting 60 acute care beds to 60 long- term acute care beds be denied.DONE AND ORDERED this 24th day of March, 1997, in Tallahassee, Florida. DAVID MALONEY Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 COPIES FURNISHED: Eric Tilton, Esquire Filed with the Clerk of the Division of Administrative Hearings this 24th day of March, 1997. Gustafson, Tilton & Henning, P.A. 204 South Monroe Street, Suite 200 Tallahassee, Florida 32301 Lesley Mendelson, Senior Attorney Agency for Health Care Administration 2727 Mahan Drive, Suite 3431 Fort Knox, Building III Tallahassee, Florida 32308-5403 Thomas F. Panza, Esquire Seann M. Frazier, Esquire Panza, Maurer, Maynard & Neel, P.A. 3600 North Federal Highway Fort Lauderdale, Florida 33308 Sam Power, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive, Suite 3431 Fort Knox, Building III Tallahassee, Florida 32308-5403 Jerome W. Hoffman, General Counsel Agency for Health Care Administration 2727 Mahan Drive, Suite 3431 Fort Knox, Building III Tallahassee, Florida 32308-5403
Findings Of Fact Harbour Shores is a 60-bed psychiatric facility located in Fort Pierce, St. Lucie County, Florida. Harbour Shores began operation in October, 1985, pursuant to licensure as part of Lawnwood Regional Medical Center, a general acute care hospital. Harbour Shores is located near Lawnwood Regional Medical Center and functions as a part of that hospital. Lawnwood Regional Medical Center, Inc., is a wholly owned subsidiary of Hospital Corporation of America (hereinafter "HCA"), a private, for-profit corporation. HCA Psychiatric Company manages and provides services to Harbour Shores pursuant to a management agreement. HCA Psychiatric Company has experience owning and/or operating approximately 54 psychiatric facilities, with 6,000 beds, nationwide. Services provided by HCA to Harbour Shores include a quality assurance surveying process to assure that the HCA facilities maintain high standards of care, continuing education and training seminars, professional staff including psychiatrists available to assist the individual facilities, computer services, and bulk purchasing. The Harbour Shores 60-bed psychiatric facility is divided into two patient care units: a 24-bed adolescent unit and a 36-bed adult unit. Within the adult unit, Harbour Shores operates three distinct patient care programs: a therapeutic community open unit for higher functioning adult psychiatric patients, a senior adult program for elderly adult psychiatric patients, and an intensive treatment or acute care program for lower functioning, violent, or suicidal psychiatric patients who are in need of closer monitoring and more intensive treatment than the other higher functioning patients. All of the Harbour Shores beds fall in the short-term inpatient psychiatric category, with an average length of stay of three to four weeks. The Harbour Shores facility is well-designed for the treatment of psychiatric patients. It is a one-floor design, with admissions and administrative spaces upon entry, the two separate patient care units for the adults and adolescents, each with separate entry, and ample program and activity space. Harbour Shores has a gymnasium, classrooms for the adolescents, occupational therapy and activities therapy rooms, seclusion rooms in each patient care unit, dining room and outpatient areas. There are courtyards and a swimming pool, outside of the patient care areas. All of these areas play an important clinical role in the treatment of the psychiatric patients. For example, the gymnasium has a basketball and volleyball court and exercise equipment such as punching bags. These activities are useful for getting rid of aggression in socially acceptable ways, instead of through physical confrontations. The activities and occupational therapy rooms, including a greenhouse, provide opportunities for development of job and social skills. Harbour Shores is located in a pleasant, professional neighborhood, without security or crime problems that could hinder therapy of patients and the ability or willingness of family or others to visit and participate in therapy. Harbour Shores' relationship with Lawnwood Regional Medical Center provides benefits to the psychiatric patients who need medical services not normally offered in a psychiatric hospital. Harbour Shores is able to quickly transport a psychiatric patient to the acute care hospital for emergency room care, if necessary, or for diagnostic laboratory services. Harbour Shores and Lawnwood Regional Medical Center have a single medical staff, and a full array of medical specialists other than psychiatrists are available for consultation at Harbour Shores. Harbour Shores seeks to provide a full continuum of care to its psychiatric patients. This goal is accomplished by the provision at Harbour Shores of a full array of short-term inpatient psychiatric services and also outpatient services. Harbour Shores also has in place transfer agreements for when the psychiatric facility or the Lawnwood acute care hospital are not appropriate for a patient, including an agreement with HCA Medical Center of St. Lucie and Indian River Estates in Vero Beach, a nursing home. The typical adult patient coming to Harbour Shores generally goes through an admissions process first for screening to determine whether inpatient treatment, instead of outpatient care, is necessary. The patient and family are given an overview of the program, and then the patient is taken onto the unit where the initial nursing assessment is performed, usually by the charge nurse. The attending psychiatrist sees the patient within 24 hours of admission, and the preliminary treatment plan is formulated. That plan is revised in three days, based upon information gathered from the family and through observation and treatment. The treatment team who formulate the plan include the psychiatrist, who is in charge of the team, clinical social worker, unit coordinator, the charge nurse or attending nurse, psychologist and mental health technicians. Simultaneous with the formulation of treatment plans, the team formulates and revises the patient's discharge plan. After ten days, a master treatment plan is prepared, comprehensively addressing the patient's problem, changes in the previous treatment plan, discharge plan and follow-up care plan. After the patient is discharged, the psychiatrist will often follow up with the patient on an outpatient basis. Harbour Shores has in place a number of quality assurance monitoring techniques to ensure that it will maintain a high level of quality care for its patients and will improve its care where improvement is possible. Harbour Shores has an ongoing quality assurance committee, and subcommittees, that meet regularly to assess patient care. Harbour Shores has accepted and implemented the recommendations of its committees. There is also a less formal quality assurance mechanism called patient care monitoring, whereby any time a staff member feels that there is a patient care problem, he or she can call up the staff group responsible for that patient, together with a professional not involved in that case, for a review and resolution of the problem. Harbour Shores provides very good overall quality of care to its patients. Harbour Shores' quality care has been formally recognized through its achievement of Joint Commission on Accreditation of Healthcare Organizations (hereinafter "JCAHO") accreditation, a voluntary accreditation process based on many standards judged through formal surveys and information gathering. JCAHO accreditation is recognized as the standard in the industry. Harbour Shores has also been awarded membership in the National Association of Private Psychiatric Hospitals. Like JCAHO, it requires a facility to undergo a quality assurance survey. Becoming a member demonstrates a level of quality of a facility that is well-recognized in the industry. One result of the careful monitoring of patient care at Harbour Shores was the recognition early on in its operation that the general open adult unit was not serving the combined needs of higher functioning and intensive treatment patients in the most beneficial way possible. The difference between general short-term psychiatric care and intensive treatment in a psychiatric hospital can be analogized to the difference between an acute care hospital's general medical-surgical care and its critical care. Because of the extra care and monitoring required for the intensive treatment patients, they were consuming the open unit staff's attention to the detriment of the higher functioning patients, and they could also be disruptive and dangerous. The more acutely disturbed patients also tended to become more agitated with the higher levels of stimulation they experienced when they were mixed with higher functioning patients. Therefore, Harbour Shores began taking steps to follow the medical staff's recommendation to separate the two patient populations into distinct subunits. In April, 1986, Harbour Shores filed a certificate of need application seeking approval for an addition of 30 beds to its facility: twelve beds to accommodate a separate intensive treatment unit and eighteen beds for a geriatric unit. At the final hearing, Harbour Shores sought approval of only its 12-bed intensive treatment unit. Harbour Shores did not offer evidence at hearing to support the 18-bed geriatric unit. After submitting its application and before hearing, a period of 26 months, and while its certificate of need application was undergoing preliminary review and the administrative hearing process, Harbour Shores made stopgap changes to address, at least in part, the needs of its patients requiring intensive, critical care. Pursuant to a certificate of need exemption recognized by HRS in October, 1987, Harbour Shores added two patient therapy rooms and one activity room to serve an 8-bed area in which it placed intensive treatment patients. The CON exemption was awarded because the capital expenditure was below the threshold dollar amount that would trigger CON review, and no new beds were being added. That project was an interim measure to relieve immediate problems in treating intensive treatment patients at Harbour Shores, independent of this CON project, although Harbour Shores prudently designed that addition to be convertible to patient rooms in the future. Part of Harbour Shores' proposal under review in this case involves a conversion of the added space to patient rooms, which is why the project is now required to undergo CON review. The addition will continue to serve as non-patient rooms unless and until a CON is granted. The intensive treatment area that has been in operation since January, 1988, does not fully meet the needs of patients at Harbour Shores. While there is now some physical separation of patients and staff, it is not complete. Some of the remaining problems to be addressed include the need for a separate nurse's station, complete with charting area and secure medicine area, a separate seclusion room for the exclusive use of the intensive treatment patients, and direct access to and from the unit without passage through other units. Without a separate nurse's station, the staff cannot be exclusively focused on the intensive treatment unit, and there is incomplete separation of staff. Similarly, without its own seclusion room and direct access, the intensive treatment unit fails to achieve complete separation of patients. The intensive treatment patients now have to pass through the open adult unit to get to their unit and have to leave their unit if they are required to utilize the seclusion room which is on the general adult open unit. This is disruptive to both groups of patients. Utilization of Harbour Shores has been steadily growing since its opening in October, 1985. Harbour Shores has experienced the typical start-up phasing in of patients experienced by psychiatric hospitals. Thus, in 1986, when HRS reviewed utilization at Harbour Shores during 1985, it had only three months of data to consider, and the average utilization was 42 percent. Harbour Shores made progress in 1986, with an average utilization of 60 percent. In 1987, its adult unit achieved a 73.3 percent utilization rate, and it has been holding steady for the first five months of 1988. Harbour Shores has a reasonable expectation that utilization of its facility, especially with respect to intensive treatment services, will materially increase because of its recent designation as a private Baker Act receiving facility. The Baker Act, Part I of Ch. 394, Florida Statutes, is a legal procedure for involuntarily committing someone to a psychiatric facility for treatment. A psychiatric hospital must apply to and be approved by HRS before it can treat Baker Act patients. Designation of facilities to treat Baker Act patients is not a ministerial step, but rather, involves a lengthy application submission and site visit and survey by HRS. Baker Act patients are by definition involuntary, are generally more acutely sick than the voluntary patient, and are proportionately more in need of intensive treatment. HRS District 9 consists of a large geographic area, stretching from Sebastian to the north to Boca Raton to the south, with the Atlantic Ocean as the eastern boundary. District 9 is divided into two subdistricts: subdistrict 1 includes the four northern counties: Indian River, St. Lucie, Okeechobee and Martin; and subdistrict 2 is Palm Beach County. Subdistricts 1 and 2 function primarily as distinct, separate markets for short-term psychiatric care. Harbour Shores primarily serves patients from subdistrict 1, the four- county area surrounding the hospital--St. Lucie County, Indian River County to the north, Okeechobee County to the west and Martin County to the south. Harbour Shores is the only designated private Baker Act receiving facility in subdistrict 1, and it is the only facility with licensed inpatient short-term psychiatric beds that is authorized to treat Baker Act patients. The only other facility authorized to treat Baker Act patients in subdistrict 1 is the Indian River Community Mental Health Center (hereinafter "IRCMHC"), a public receiving facility. The IRCMHC received between 680 and 750 Baker Act patients in 1987. The IRCMHC is not licensed to provide short-term inpatient psychiatric services. It has 15 crisis stabilization beds, which do not serve the same needs as short-term inpatient psychiatric beds. Crisis stabilization beds provide a very short-term service, intended to stabilize emergency patients who are then referred to appropriate facilities. The average length of stay is typically less than one week. The IRCMHC is not a reasonable alternative to provide all needed psychiatric services to Baker Act and other patients, in part because of the limited services that can be provided in crisis stabilization beds, and also in part because the Center is not in very good condition and is in a poor part of Fort Pierce, known for its crime and security problems. When patients or their families have a choice of facilities, it can be reasonably expected that they would choose Harbour Shores. The physical environment of a psychiatric facility plays a role in the patient's therapy, and the Harbour Shores environment is preferable. Until shortly before hearing, another psychiatric hospital in subdistrict 1, the Savannas Hospital, was treating Baker Act patients by referral from the IRCMHC with which it is affiliated, perhaps as many as 5500 patient days in 1987. However, in late May, 1988, the IRCMHC was notified by HRS to cease and desist from referring patients to the Savannas because the Savannas was not approved to serve Baker Act patients; instead, those patients were to be referred to Harbour Shores. Harbour Shores has a working relationship with the IRCMHC, and they receive and give referrals back and forth. As the only authorized Baker Act inpatient psychiatric facility in subdistrict 1, Harbour Shores can reasonably expect to serve those Baker Act patients who were being improperly referred to the Savannas. Harbour Shores' good start-up utilization of its eight intensive treatment beds of nearly 70 percent for the first five months of 1988 indicates the need for those eight beds, with the impact of the Baker Act population first beginning to be realized. Realization of the full Baker Act patient load would overload the intensive treatment unit. If Harbour Shores captures only 50 percent of the subdistrict 1 Baker Act patient market as reflected by the IRCMHC's 1987 patient days, assuming no growth of Harbour Shores' 1987 adult patient census, it would achieve an adult average daily census of approximately 39.8 in the adult (including the intensive treatment) unit, while it currently only has 36 beds. Comparing the quality of Harbour Shores with the IRCMHC, Harbour Shores could capture as much as 80-90 percent of the area's Baker Act patients. Using a conservative 50 percent Baker Act patient projection and projecting no growth of the current adult patient census, Dr. Luke, an expert in health planning and design and operation of mental health programs, projected a need for 47 adult beds with an 85 percent occupancy rate, or 50 beds with an 80 percent occupancy rate. Increased utilization of an expanded intensive treatment unit will also have a secondary impact of increased utilization of the rest of the Harbour Shores facility. Often, patients who are admitted to the intensive treatment unit will progress to a point where they qualify as higher functioning patients appropriate for transfer to the open unit. Establishment of a 12-bed intensive treatment unit that will be highly utilized should also increase utilization of the other 36 adult beds. While it is physically possible for Harbour Shores to put the 12-bed intensive treatment unit in place without adding any new beds, that would not be feasible because it would reduce the number of beds in the rest of the adult unit. With the reasonable expectation that Harbour Shores would achieve increased utilization of its whole expanded facility with approval of this project, and reasonably utilize 48 adult beds, it would be most efficient for Harbour Shores to add beds while it is renovating the facility anyway for the intensive treatment unit so as to avoid piecemeal, disruptive construction projects. Approval of the expansion project will allow Harbour Shores to provide a higher level of quality care through better segregation of the different patient groups and will also allow for accommodation of the reasonably expected utilization of intensive treatment and general adult psychiatric services. Harbour Shores has demonstrated that there is a need for its expansion project because of its unique position in subdistrict 1 as a Baker Act patient provider, the lack of alternatives for those patients, and the tendency of that patient group to need intensive treatment. Patients in the Harbour Shores service area will experience serious problems obtaining inpatient care of the type proposed by Harbour Shores in the absence of the proposed project. Subdistrict 2, Palm Beach County, has been demonstrated to be a geographically distant, separate market for short-term psychiatric services and is not an appropriate alternative for patients in subdistrict 1 needing short-term, especially intensive, psychiatric services, in light of the state health plan's goal of community-based mental health services. In addition to the special circumstance of need demonstrated at Harbour Shores, need for the additional beds is supported by the general need methodologies applied by HRS in its bed need rule for short-term inpatient psychiatric beds, Rule 10-5.011(1)(o), Florida Administrative Code, and by the local health council for HRS District 9 in its local health plan. The HRS rule methodology calculates the need for short-term psychiatric beds in an HRS district by applying a formula of .35 beds per 1,000 population projected five years into the future. Since the applications were filed in April, 1986, in its preliminary review HRS looked to the most recent population projections issued in January, 1986, for five years into the future, January, 1991. The January, 1986, District 9 population projection for January, 1991, was 1,235,361, and .35/1,000 yielded a gross need of 432 beds. Licensed and approved short-term psychiatric beds at the time of application submittal according to HRS totaled 404 beds, yielding a net bed need for the district of 28 beds. Some relevant facts external to the certificate of need applications at issue in this proceeding have changed since the applications were submitted and should be taken into account. One such fact is the more recent population projection issued for the January, 1991, planning horizon, released by the state in January, 1988. The revised District 9 population projection is 1,274,865, increasing the district bed need by 14. Another external change involves an HRS settlement with an existing provider in subdistrict 2, JFK Hospital. This settlement recognized the historic use of beds at JFK in a manner different from their licensed designation; rather than 36 short-term psychiatric beds as licensed, JFK had for many years been utilizing 22 of those beds as substance abuse beds, a different HRS bed category, and only 14 beds as short-term psychiatric beds. The HRS final order agreeing to change JFK's license to align it with JFK's actual usage was issued in March, 1988. It is, however, appropriate to correct the HRS inventory in this case to recognize the actual use of beds since by 1984, well before the applications at issue in this case were filed, HRS knew that JFK was using 22 of its 36 short-term psychiatric beds for substance abuse treatment and that those 22 beds should not be carried in the short-term psychiatric bed inventory. Additional adjustments to correct the inventory are appropriate. The Savannas Hospital's certificate of need generally indicates 70 short-term psychiatric beds; its license shows 50 short-term psychiatric beds and 20 substance abuse beds. The HRS inventory reflects the licensed bed breakdown. However, the Savannas has been reporting to the local health council that it has actually been operating only 40 short-term psychiatric beds and 30 substance abuse beds. Therefore, 10 additional beds should be subtracted from the short-term psychiatric bed inventory. There have also been questions about another District 9 facility's bed use. The average length of stay for 26 of Lake Hospital's short-term psychiatric beds is reported by Lake Hospital to be between 250 and 300 days, by definition not short-term beds. HRS admits that its inventory of beds for District 9 is not as reliable as one would hope (or expect). By making the first two adjustments (the original HRS calculation plus the JFK correction plus use of the updated population projections) to the HRS calculations, the total District 9 bed need is 64. By making all of the foregoing adjustments (the original HRS calculation plus the JFK correction plus use of the updated population projections plus the Savannas correction plus the Lake Hospital correction) to the HRS calculations, the total District 9 bed need is 100. There is no statute, and HRS has no rule or policy regulating how beds should be allocated between subdistricts. The 1985 local health plan, as updated in 1986, recommended that the district bed need be allocated between the two subdistricts in proportion to their population, i.e., .35 beds per 1,000 population projected for each subdistrict. After these applications were filed and deemed complete, the local health council approved its 1987 local health plan, in July, 1987. This new plan changed the recommended subdistrict allocation from the population-based method to a new utilization-based method. The utilization method seeks to equalize bed use in the two subdistricts in the future by applying historic utilization of existing beds to future population projections and assumes that the use pattern in each subdistrict will remain the same. In 1987, there were no more than two short-term inpatient psychiatric providers at any one time in subdistrict 1. The IRCMHC had been operating 15 inpatient psychiatric beds at capacity for some time, showing a 106.83 occupancy rate for 1986; Harbour Shores was in its second year of operation; and the Savannas Hospital first opened in March, 1987, when it began operating the 15 beds that were transferred to it from the IRCMHC and then phased in the rest of its seventy beds during the year. Essentially all of the short-term psychiatric beds in subdistrict 1, then, were in a start-up phase, utilized less than they would naturally be after a normal period of operation. Given the start-up nature of the subdistrict 1 facilities, and the corresponding 40 percent difference in use rate between subdistricts 1 and 2, it is reasonable to infer that the 1987 use rate for subdistrict 1 is artificially low, reflecting the historic forced outmigration of subdistrict 1 patients due to lack of nearby providers. The only other theory for the dramatic difference in use rates in the two subdistricts, offered by St. Mary's need witness--that subdistrict 2's population is more elderly--is rejected. No evidence was presented to substantiate that a more elderly population has a higher use rate of psychiatric services. The subdistrict allocation method in the 1987 health plan should not be applied in this case based on sound health planning principles of not changing the criteria in the middle of the application process. Further, although the new methodology might in theory be a better measure of local needs by addressing actual use patterns, in this particular case, for the data base year of 1987, the methodology is inappropriate and would perpetuate disproportionate allocation between the subdistricts. Although it is HRS's position that the 1985 local health plan (as updated in 1986) is the version that should be applied in this case, the 1985 plan should not be applied either. The plan itself states that its allocation methodology is weak at best and must be revised. Further, the Executive Director, testifying on behalf of the District 9 Health Council, stated that the 1985 allocation methodology should not be used in this case. Accordingly, no subdistrict allocation is appropriate in this case. At final hearing, Harbour Shores presented updated financial projections--pro forma statement of revenue and expenses, utilization projections, payor mix, charges and manpower salary requirements--to account for the passage of time from initial application submission and to address only the 12-bed portion of the original application for which approval is sought. The financial projections constitute an identifiable portion of the original projections, appropriately updated to take into account only factors external to the application. The financial projections provide a reasonable basis upon which to assess the financial feasibility of the proposed expansion project, and Harbour Shores has adequately demonstrated that the 12-bed expansion proposal would be financially feasible. Additionally, the parties have stipulated that Harbour Shores has the resources to fund the project and its operation if it is approved. The project cost, as updated with revised construction cost estimates, is $1,079,165. Projected utilization of the 12-bed unit is reasonable and conservative in light of the reasonable expectation of Baker Act patients who will use the intensive treatment unit. With the 12-bed expansion, Harbour Shores should easily achieve and exceed 70 percent utilization by the second year of operating a 72-bed facility, and 80 percent utilization by the third year. A reasonable projection from existing adult use and expected Baker Act utilization would be an adult average daily census of 39.8; an 80 percent facility-wide utilization would result with a minor increase in adolescent average daily census from 14.8 in 1987 to 17.8, or an adult increase in utilization. The projected charges for the intensive treatment unit, while higher than charges for general psychiatric units, are reasonable in light of the higher level of service provided in the unit, including more staff. The reasonableness of the charge is confirmed by the fact that the projected charge is the same as the Harbour Shores current charge that it is receiving for its intensive care services, i.e., $680. The projected patient mix by payor class is reasonable and reflective of the facility's actual experience. Harbour Shores includes a projection of 15 percent Medicaid patient days and 2 percent indigent days. The indigent care projection is reflective of true charity care, meaning those patients who present themselves for treatment with no means of pay. Harbour Shores has historically proven its commitment to providing care to medically indigent patients. Harbour Shores reasonably projects that it will serve a substantial percentage of those patients in its intensive treatment unit. Projected manpower for the 12-bed unit will well-serve the needs of the intensive treatment patients, and Harbour Shores should have no difficulty recruiting and securing the projected needed staff at the indicated salary levels. The projected salaries are reasonable and consistent with Harbour Shores' experience. The pro forma statement of revenues and expenses, taking into account the projected utilization, payor class breakdown and projected charges on the revenue side, and manpower salary requirements, depreciation and other expenses attributable to the 12-bed expansion, is a reasonable projection based on the facility's actual experience and future expectations; is a reasonable summary of the expected direct financial impact of the 12-bed expansion, and shows that the expansion project will be financially feasible. Additional financial benefits may accrue as a result of the secondary increase of utilization of the existing beds. The proposed 12-bed expansion project will include some new construction to create an expanded facility that will be appropriate from an architectural standpoint for the treatment of psychiatric patients, including intensive treatment patients. The construction plan is an identifiable portion of the plan presented in the original application. The only changes to the original plan are the deletion of the new geriatric wing and a change from new construction to renovation for the new patient therapy wing constructed in 1987 pursuant to a CON exemption. The construction changes necessary to accommodate the 12-bed intensive treatment unit include renovation of the central core of the facility where the classrooms are currently located for the addition of a nurse's station, creation of an entrance directly onto the unit from the central patient control corridor, creation of a charting and medicine work area directly on the unit, and installation of a separate group therapy room and a seclusion room dedicated to the intensive treatment patients. The project will also include construction of a new classroom building, required by the displacement of the existing classroom space. Construction costs for the 12-bed expansion project have been updated to reflect expected 1989 costs. Harbour Shores reasonably projects those costs to be $628,466. Expending these costs will enable Harbour Shores to complete its project in a manner that will exceed minimum licensure standards in Chapter 10D-28, Florida Administrative Code, and will fall in the upper quadrant of construction quality typical in the industry. Rule 10-5.08, Florida Administrative Code, as it existed when the letters of intent and applications were due for the batching cycle at issue in this case, established an application filing deadline of April 15, 1986, and an initial letter of intent deadline of 30 days before the application deadline, or March 16, 1986. However, paragraph (e) provided that where the ... initial letter of intent for a specific type of project has been filed with the department less than 38 days prior to the appropriate application filing due date ... a grace period shall be established to provide an opportunity for a competing applicant to file a letter of intent. The grace period, where applicable, allows letters of intent to be filed up to 16 days prior to the application due date. In this case, if a grace period were applicable the deadline for letters of intent would be March 31, 1986. Harbour Shores filed its letter of intent on March 28, 1986, and St. Mary's filed its letter of intent on March 27, 1986. Bethesda has raised the issue of whether Harbour Shores' and St. Mary's letters of intent were timely filed. Only one letter of intent related to an application that was included by HRS in the group of applications considered in the State Agency Action Report was filed with HRS 38 days or more before the application due date--the letter of intent filed by Martin Memorial Hospital. That letter of intent states that it is for 22 "short-term psychiatric/substance abuse" beds. There is no such combined category of beds. According to the State Agency Action Report, Martin Memorial's application was in fact for 22 substance abuse beds. As such, it was not a competing applicant with Harbour Shores or St. Mary's or Bethesda, and all other letters of intent were filed less than 38 days before the application due date. Accordingly, Harbour Shores' and St. Mary's letters of intent were timely filed. Bethesda filed its application with HRS on April 15, 1986. Bethesda filed its response to the HRS letter of omission on June 30, 1986, and HRS deemed Bethesda's application complete effective June 30, 1986. By letter dated July 18, 1986, received by HRS prior to the August 6, 1986, public hearing, Bethesda submitted additional information reflecting its intent to utilize and renovate existing space in its hospital instead of utilizing construction of a new wing for its psychiatric unit, as originally proposed. These three submissions constitute Bethesda's application reviewed by HRS in the State Agency Action Report. Bethesda's certificate of need application is for a 20-bed adult short-term inpatient psychiatric unit at Bethesda Memorial Hospital. Bethesda proposes to convert 20 existing licensed medical/surgical beds to short-term inpatient psychiatric beds. The beds will be placed in existing space, and there will be no new construction of space. Bethesda is a 362-bed community medical/surgical hospital licensed as a general hospital. It is a not-for-profit hospital and has served the southern portion of Palm Beach County for almost 30 years. It is accredited by the JCAHO. Bethesda has recognized from its beginning that the entire population of its service area needed to be served without regard to financial ability to pay, and the ability to pay is not a primary concern of the hospital when a patient is first admitted. The evidence is undisputed that Bethesda is committed to and provides excellent quality of care and will continue to provide excellent quality of care in the proposed psychiatric unit. The St. Mary's application seeks to place short-term psychiatric beds on a campus in the northern half of Palm Beach County, in West Palm Beach, and Bethesda Memorial Hospital is located in southern Palm Beach County, in Boynton Beach. Bethesda is the only applicant that proposes to convert underutilized medical/surgical beds into 20 short-term psychiatric beds. This factor significantly distinguishes Bethesda's proposal from that of the other applicants because there have been unused medical/surgical beds in Palm Beach County for approximately the last two years. Bethesda's proposal would take some of those unused resources and put them to more efficient and appropriate use. Historically, Bethesda has been recognized as a cost-effective hospital, not only in Palm Beach County, but throughout the State. Bethesda's projected charge per patient day, including ancillaries, is $349. This charge is reasonable. Bethesda proposes a rate significantly lower than any other applicant, making Bethesda's proposal more cost effective and competitive for patients. Bethesda's original proposed project cost was $85,000. That project cost has been updated to $88,100. This update was required primarily because of changes in the proposed floor plan necessitated by new licensure requirements imposed by HRS in Rule 10D-28.0816 adopted January 16, 1987, after the filing of Bethesda's application. The $3,100 increase in the total project cost is not a substantial change in the application. The proposed construction cost of Bethesda for renovation of $37,100 is a reasonable estimate. The movable equipment cost is a reasonable estimate. The project development cost of $20,000 is reasonable. In terms of project cost, the Bethesda application is significantly more cost effective than the St. Mary's application. The St. Mary's proposed project cost for 30 beds is $1,457,150. That is the equivalent of $48,571.67 per bed, contrasted against Bethesda's project cost of $4,405 per bed. Bethesda's project cost is also considerably lower than that of Harbour Shores. The schematic floor plan of Bethesda's proposed unit was updated due to the HRS adoption of the licensure minimum standards, which were not in existence at the time of the original application and, therefore, the original schematic did not comply with those standards. In fact, there is no significant physical difference between the updated schematic and that contained in the original application. Indeed, the space already exists in essentially the same configuration as that proposed and was in existence at the time of the filing of Bethesda's application. The proposed unit can reasonably be expected to meet licensure requirements. The Committee on Health Facilities Construction of the American Institute of Architects has set standards for the design of psychiatric facilities. They are acceptable, reasonable standards. Those standards prescribe one seclusion room for 24 beds or major fraction thereof. Bethesda's proposed facility complies with that standard. HRS has no standard for seclusion rooms. From the perspective of a practicing psychiatrist, the existing Bethesda facility with the proposed modifications meets the requirements for a facility for use in the treatment of inpatient psychiatric patients quite well. It is likely that psychiatrists in the general area surrounding Bethesda will seek to admit patients to the unit when it is in place. In addition, it is reasonable to assume that Bethesda Memorial Hospital itself will be a referral source to its psychiatric unit. The evidence also establishes that the South County Mental Health Center, Inc., a community mental health center, will be a significant referral source of patients to Bethesda's psychiatric unit. Bethesda has sufficient funds committed to cover the cost of its proposed project. The Southeast Palm Beach County Hospital District has already committed and approved $85,000 in capital expenditure funds for Bethesda's project. Bethesda has sufficient operating funds to provide the remaining $3,100. Indeed, Bethesda has sufficient operating funds to fund the entire project out of operating funds, if necessary. The Southeast Palm Beach County Hospital District has historically not used ad valorem tax revenues to subsidize the operations of Bethesda. Funds generated by the District have been used primarily for capital expenditures for Bethesda. Bethesda does not anticipate receiving any operational revenues from the Southeast Palm Beach County Hospital District for patients that might be eligible or meet some criteria established by the District for reimbursement. The projected utilization by class of pay, or payor mix, is consistent with the payor mix at Bethesda Memorial Hospital. It is reasonable to expect that the payor mix in the proposed psychiatric unit will be reflective of the payor mix at Bethesda. It was necessary for Bethesda to update its projected payor mix because the original projection reflected the 1986 payor mix of Bethesda and, primarily as a result of the extrinsic circumstance of the prospective pricing system, there has been a dramatic change in payor mix at Bethesda. Bethesda's projections include a category entitled "Baker Act/Medicaid." This category has combined Medicaid patients and those patients who would otherwise qualify as Baker Act patients who are indigent based upon their ability to pay. In the 7.7 percent for the "Baker Act/Medicaid" category, there is included 1.2 percent for indigent patients without any source of funds. It is reasonable to project that the Bethesda psychiatric unit will operate at 70 percent occupancy for the first year and 80 percent occupancy for the second year and beyond. The manpower requirements projected by Bethesda are sufficient to properly staff the proposed psychiatric unit. Bethesda has projected reasonable annual salaries. It is very likely that Bethesda will be able to recruit necessary manpower to staff its proposed facility. It was necessary for Bethesda to update its manpower requirements from these contained in its original application because of a management agreement entered into between Bethesda and Mental Health Management, Inc., on May 5, 1988. The updated manpower requirements reflect the staffing standard to be implemented by Mental Health Management, Inc., pursuant to the management agreement and the proposed treatment program. Mental Health Management, Inc., is a health care management firm that owns psychiatric and substance abuse hospitals as well as manages psychiatric and substance abuse hospital programs for client hospitals. It is a reputable and experienced management firm. No significant work, if any, was done on behalf of Bethesda by Mental Health Management, Inc., with regard to this project prior to the date of the management agreement. Bethesda's project completion forecast is reasonable. Bethesda is financially a healthy, viable institution. It is reasonable for Bethesda to project gross patient revenues in its first year of $1,783,390 and in its second year of $2,038,160. Further, it is reasonable after considering deductions from revenue for Bethesda to project net revenue in its first year of operation of $1,392,186 and in its second year of operation of $1,591,069. Bethesda has reasonably projected that its total expenses in the first year of operation will be $1,286,090 and in the second year of operation will be $1,379,362. The net result is that in the first year of operation there will be projected incremental revenue over expenses of $106,096 and in the second year of operation, incremental revenue over expenses of $211,707. In both the short term and long term, the psychiatric unit proposed by Bethesda is financially feasible. South County Mental Health Center, Inc., a community mental health center, has had a successful working relationship with Bethesda since approximately 1974. It has been a positive relationship and one which should continue with the inception of a psychiatric unit at Bethesda. Indeed, the only problem that has existed between South County Mental Health Center, Inc., and Bethesda is the lack of a psychiatric unit at Bethesda. South County Mental Health Center, Inc., presently has many patients that are not being referred for psychiatric care because there is no facility that will take them. Bethesda would, at least in part, remedy that problem. South County Mental Health Center, Inc., would primarily utilize Bethesda instead of St. Mary's because St. Mary's is in the northern part of Palm Beach County and the Center is in the southern part as is Bethesda, although it would also utilize St. Mary's. There is presently no written agreement between Bethesda and South County Mental Health Center, Inc. However, this would not be a hindrance to a relationship between Bethesda and the Center because the Center presently has no written contracts with any providers and does not anticipate any working relationship being contingent on a written contract. The service area of Bethesda Memorial Hospital includes from Southern Boulevard in Palm Beach County on the north to the Broward County line on the south, the Atlantic Ocean on the east and State Road 7 on the west. Bethesda's proposed project is consistent with the 1985, 1986 and the 1987 local District 9 health plans. The HRS rules governing amendment of applications in effect at the time the applications in this cause were filed allowed the submission of additional information without copying other applicants. HRS accepted Bethesda's July 18, 1986, application amendment letter and reviewed it as part of Bethesda's original application in its initial decision making set forth in the State Agency Action Report. HRS has never required applicants to submit copies of their applications or any supplemental or amendatory information to other applicants after the completion date but prior to the public hearing on those applications. No applicant was prejudiced by the information submitted by Bethesda to HRS in July of 1986. Indeed, the information was published at the public hearing held by HRS on August 6, 1986. All applicants knew or should have known at least by August 6 that Bethesda had changed its application to reflect use of existing space for its psychiatric unit instead of use of new construction. Yet, no applicant took any action in response to this information, even though a decision was not rendered by HRS in review of the applications until September 23, 1986, and any applicant could have changed its application up to five days prior to September 23, 1986. The changes submitted by Bethesda did not change the scope of its application. The amendment did not change the type of beds sought, the number of beds sought, the service area for those beds, the conversion of unused medical/surgical beds to psychiatric beds, or any other matter of substance. Rather, with everything else remaining essentially constant, Bethesda merely stated its intent to place the proposed unit in existing underutilized space at a cost of $85,000 instead of constructing new space at a cost of $1,391,165. Such a change is not of such a substantial nature as to improperly prejudice other applicants. There is a lack of availability in District 9 of other inpatient psychiatric services such as crisis stabilization units, short-term residential treatment programs and other inpatient beds whether licensed as a hospital facility or not. Bethesda will be linked with South County Mental Health Center, Inc., as well as practicing psychiatrists, for the provision of outpatient services. For fiscal year 1986, Bethesda gave $2,247,047 in charity care. That was 4.2 percent of its gross patient revenue for the year. In 1987, Bethesda increased its charity care to $3,615,324 which was 5.2 percent of its gross patient revenue. In fiscal 1986, St. Mary's provided $3,211,021 in charity which was 3.7 percent of its gross patient revenue. In 1987, St. Mary's provided $3,404,820 in charity care which was 3.8 percent of its gross patient revenue. As a function of percentage of gross patient revenue, Bethesda for fiscal years 1986 and 1987, provided more charity care than St. Mary' s. The average net operating revenue per adjusted admission for fiscal years 1986 and 1987, for St. Mary's was $3,120. The average net revenue per adjusted admission for the same time period for Bethesda was $3,089.50. Thus, it appears that for the years 1986 and 1987, St. Mary's effective charges for patient operations were slightly higher than Bethesda's. St. Mary's Hospital, Inc., is a 358-bed nonprofit acute care hospital located in West Palm Beach, Florida. The hospital is a wholly-owned subsidiary of St. Mary's Medical Center, Inc., which is owned by the Franciscan Sisters of Allegheny. The Franciscan mission is to provide quality health services to everyone, with a special emphasis on serving the poor and the disadvantaged. St. Mary's has been providing acute care to the medically indigent and traditionally underserved in Palm Beach County since 1938. St. Mary's contracts with the Palm Beach County Health Department to provide Palm Beach County with acute care services for the medically indigent, from prenatal to adults. Historically, St. Mary's has been the most heavily utilized hospital in the West Palm Beach area. St. Mary's has the largest market share of any hospital and serves Medicaid, uncompensated, and partially compensated patients in the area. St. Mary's has not, however, certified or committed to the provision of any specific percentage of care for Medicaid or indigent patients in this application. St. Mary's admits and treats an increasing number of AIDS patients. Because of the need to isolate AIDS patients and because of the number of indigent patients that St. Mary's treats, St. Mary's often does not have beds available for private pay patients. During the peak season, St. Mary's is unable to admit some private pay patients and must physically turn them away. Because of St. Mary's reduced ability to admit private pay patients, St. Nary's does not have a broad-based revenue source with which to cross-subsidize the cost of providing care to indigent patients. The 45th Street Mental Health Center is a not-for-profit corporation located in West Palm Beach which provides a full range of adult and older adult psychiatric services, serving primarily the indigent population. The 45th Street Center is a designated Baker Act receiving facility and, as such, it provides services without regard to the ability to pay. St. Mary's has a long-standing working relationship with the 45th Street Center and is a contracting service to the 45th Street Center. St. Mary's staff evaluates patients at both the 45th Street Center and at the St. Mary's emergency room. St. Mary's and the 45th Street Center provide referrals to each other and transfer patients between the two facilities. From 50 to 75 patients are referred from the 45th Street Mental Health Center each month to St. Mary's for medical clearance. An organized system of follow-up care exists for patients who are seen at both St. Mary's and the 45th Street Center. System protocol agreements exist between the two facilities. These agreements define the information that will be exchanged at a given clinical juncture and set forth procedures to ensure that all necessary medical and psychiatric follow-up care will take place. The demand for indigent care has become so large in the last several years that indigent patients typically occupy all of the available bed capacity at the 45th Street Center. Because it is usually fully occupied, the Center cannot always be responsive to a request from St. Mary's to accommodate psychiatric patients. In March, 1988, the 45th Street Center turned away 51 people who were in need of psychiatric treatment but for whom there were no available beds. St. Mary's filed its application for 30 short-term psychiatric beds in April, 1986. St. Mary's application was submitted by St. Mary's Hospital, Inc. The cover page of the application and the HRS CON remittance form clearly indicate that the applicant is St. Mary's Hospital, Inc. The letter from HRS to St. Mary's requesting responses to certain omissions from the application is addressed to St. Mary's Hospital, Inc., and was completed and returned by St. Mary's Hospital, Inc. The Board of Trustees of St. Mary's Hospital, Inc., adopted a Resolution authorizing the filing of the CON application by St. Mary's Hospital, Inc. The Resolution is signed by the Assistant Secretary of St. Mary's Hospital, Inc. The certification page at the end of St. Mary's application is signed by John Fidler, President of St. Mary's Hospital, Inc. Prior to submitting its CON application, St. Mary's considered converting some of its existing medical/surgical beds to short-term psychiatric beds, rather than engage in new construction. The cost of renovations, together with the compromises which would exist in the recreational and programmatic areas needed for psychiatric treatment, resulted in St. Mary's decision that it would be more appropriate to build a separate psychiatric pavilion than to convert existing medical/surgical beds to psychiatric beds. The psychiatric pavilion will not be a free-standing facility. The full services of St. Mary's acute care hospital will be available to the patients in the psychiatric unit. A continuum of care will be provided to the psychiatric patients through the use of St. Mary's existing psychiatrists, social workers, recreational therapists, psychologists, and other related therapy and support personnel. Clinical support personnel will be available to address the psycho-social problems of patients in the psychiatric unit. The psychiatric unit would be a distinct unit for reimbursement purposes, but would be licensed under St. Mary's hospital license. St. Mary's proposed psychiatric unit will use the existing food services at St. Mary's and will not require the construction of a new kitchen. The existing kitchen at St. Mary's is immediately adjacent to the planned psychiatric unit. The existing kitchen and food preparation area is currently operating at only 40 to 60 percent of capacity and is adequate for the proposed psychiatric unit. St. Mary's offers a full range of dietary products and specialized menus. The existing laundry facility at St. Mary's has sufficient capacity to support the planned psychiatric unit. St. Mary's submitted updated information at the Final Hearing relating to its original application for 30 short-term psychiatric beds. Several factors contributed to St. Mary's decision to update its original application. When the original application was prepared in April, 1986, St. Mary's had a CON application pending before HRS for a 20-bed rehabilitation unit. St. Mary's received approval from HRS for a 20-bed rehabilitation unit after the filing of this application. A portion of the existing emergency room space at St. Mary's intended for use by the psychiatric pavilion will be used as part of the 20-bed rehabilitation unit. Another factor was the promulgation of the new HRS minimum standards rule, which requires the addition of several service areas not required when St. Mary's submitted its original application. The new HRS rule requires a separate head nurse's office, separate charting areas, and more square footage in the activity areas. In addition, the new rule requires a second occupational therapy area, natural light in the seclusion rooms, and requires public toilets to be handicapped accessible. Because of the nature of St. Mary's original schematic, it was impossible to add square footage to the design, and St. Mary's therefore developed a new schematic to incorporate the various changes required by the new HRS rule and by the new rehabilitation unit. The JCAHO standards for hospital design specifically address the issue of having non-institutional architectural design in psychiatric units. The design of a psychiatric facility has a very definite affect on the patterns of behavior of psychiatric patients. The updated architectural schematic contained in St. Mary's application is highly conducive and therapeutically appropriate to a psychiatric program. The St. Mary's schematic is non- institutional in design and has a number of open spaces and clear vistas, with immediate access to outdoor recreational areas. St. Mary's proposal is designed to provide security surveillance of the exits while at the same time providing privacy for personal interaction between patients and staff. The more vistas and the more access to sunlight and open spaces a facility has, the less likely it is that systemic institutional responses and behavior will be produced. The enclosed open courtyard contemplated in the St. Mary's design has the advantage of providing open space while also providing a high level of security. The proposal by St. Mary's would be in substantial compliance with the JCAHO standards of providing a therapeutic environment. The proposed construction costs for St. Mary's psychiatric unit will be $85 per square foot. These costs are reasonable for the type of construction and design proposed by St. Mary' s. The staffing proposed by St. Mary's is sufficient to operate a 30-bed short-term psychiatric unit and is sufficient to address the clinical needs of the projected patient population. St. Mary's proposed admissions policy, clinical elements, and psychiatric program are appropriate for the treatment of psychiatric patients. St. Mary's proposed gero-psychiatric program is a logical extension of the services currently being provided by the 45th Street Mental Health Center. The Center has a geriatric residential treatment service, funded by the Legislature and HRS, which serves a relatively high percentage of gero- psychiatric patients. Many of the patients at the 45th Street Center have both psychiatric conditions and medical complications, and the St. Mary's psychiatric unit would be available for patients discharged from the 45th Street Center. The South County Mental Health Center, located 30 minutes from St. Mary's, will be willing to use St. Mary's proposed psychiatric unit. The total cost of St. Mary's proposal is $1,457,150. St. Mary's has a Foundation responsible for raising money for the various St. Mary's corporations. The present donated Foundation Fund balance as of April, 1988, is $12,486,566. Of the Fund balance, approximately $1.9 million is unrestricted and is available to construct the proposed 30-bed short-term psychiatric unit. St. Mary's proposes a per diem patient charge of $368 per day for the first year of operation and $398 per day for the second year of operation. This is an increase from the patient charges contained in St. Mary's original application, but the increase is attributable to the fact that salary levels at both St. Mary's and in the hospital industry as a whole have increased over the last several years. St. Mary's projects ancillary charges of $70.72 per day for the first year of operation and $76.51 per day for the second year of operation. The proposed room rates for St. Mary's are reasonable based on a market survey of room rates in the Palm Beach County area. The St. Mary's proposal is financially feasible on a long-term basis because there are adequate revenues to cover operating expenses. St. Mary's will assure high quality of care at its proposed 30-bed psychiatric unit through the existing medical information system at St. Mary's. The medical information system coordinates quality assurance, medical records, utilization, and medical staff office functions. With the system, all patient records at St. Mary's are screened on a daily basis against set indicators of care. If certain criteria are met, that patient record is automatically referred to an Evaluation Committee. There are four separate Evaluation Committees at St. Mary's, each composed of physicians who conduct peer review. The recommendation of the Evaluation Committee is forwarded to the Medical Executive Committee, which has the authority to act based upon the recommendation of the Evaluation Committee. The patient record review process at St. Mary's is part of a quality assurance umbrella, which includes infection control, utilization review, and discharge planning. The purpose of utilization review is to determine whether a given patient should be receiving the level of care being provided or if a lesser level of care could be provided on a more cost-effective basis. The quality assurance utilization review at St. Mary's is approved by the JCAHO.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is, RECOMMENDED that a Final Order be entered: Granting Harbour Shores' application for a certificate of need for 12 short-term psychiatric beds; Granting Bethesda's application for a certificate of need for 20 short-term psychiatric beds; and Granting St. Mary's application for a certificate of need for 30 short-term psychiatric beds. DONE and RECOMMENDED this 7th day of October, 1988, at Tallahassee, Florida. LINDA M. RIGOT, 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 7th day of October, 1988. APPENDIX TO RECOMMENDED ORDER CASE NOS. 86-4354, 86-4356, 86-4358 Harbour Shores' proposed findings of fact numbered 1-42, and 44-55 have been adopted either verbatim or in substance in this Recommended Order. Harbour Shores' proposed findings of fact numbered 43, 56, 57, and 58 have been rejected as being unnecessary for determination of the issues in this proceeding. Bethesda's proposed findings of fact numbered 1-4, 6-30, 32-47, 49, 51, 52, 64, 66, 69-71, 73-75, 78, and 83 have been adopted either verbatim or in substance in this Recommended Order. Bethesda's proposed findings of fact numbered 48, 67, 76, and 77 have been rejected as being unnecessary for determination of the issues in this proceeding. Bethesda's proposed findings of fact numbered 5, 54, 63, and 65 have been rejected as being contrary to the weight of the totality of credible evidence in this cause. Bethesda's proposed findings of fact numbered 31, 50, 53, 55-62, 68, 72, and 80-82 have been rejected as not constituting findings of fact but rather as constituting argument of counsel or conclusions of law. Bethesda's proposed finding of fact numbered 79 has been rejected as not being supported by the weight of the evidence in this cause. St. Mary's proposed findings of fact numbered 1-3, 5-29, 34, 36-38, and 40-53 have been adopted either verbatim or in substance in this Recommended Order. St. Mary's proposed findings of fact numbered 4, 30, 35, 39, 54, and 55 have been rejected as not being supported by the weight of the evidence in this cause. St. Mary's proposed findings of fact numbered 31-33 have been rejected as being unnecessary for determination of the issues in this proceeding. HRS' proposed findings of fact numbered 1, 2, 4, 6-9, 12-15, 20-22, 24, 32-34, 36-43, 45-48, 50-56, 59, 65, 67, 78-81, 85, 89, 99, and 101 have been adopted either verbatim or in substance in this Recommended Order. HRS' proposed findings of fact numbered 3, 17-19, 35, 57, 58, and 62- 64 have been rejected as being unnecessary for determination of the issues in this proceeding. HRS' proposed findings of fact numbered 5, 10, 11, 44, 49, 72, 74-77, 82-84, 95-97, 100, and 104 have been rejected as being subordinate to the issues in this proceeding. HRS' proposed findings of fact numbered 16, 23, 25, 28, 29, 31, 66, 69-71, 73, 90, and 103 have been rejected as being contrary to the weight of the evidence in this cause. HRS' proposed findings of fact numbered 26, 27, 30, 60, 61, and 86-88 have been rejected as not being supported by the weight of the evidence in this cause. HRS' proposed findings of fact numbered 68, and 91-93 have been rejected as not constituting findings of fact but rather as constituting argument of counsel, conclusions of law, or recitation of the testimony. HRS' proposed findings of fact numbered 94, 98, and 102 have been rejected as being irrelevant to the issues under consideration herein. COPIES FURNISHED: Gregory L. Coler, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 Robert D. Newell, Jr., Esquire Thomas W. Stahl, Esquire 102 South Monroe Street Tallahassee, Florida 32301 Lesley Mendelson, Esquire Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 Chris H. Bentley, Esquire 2544 Blairstone Pines Drive Tallahassee, Florida 32301 John Radey, Esquire Elizabeth W. McArthur, Esquire 101 North Monroe Street Tallahassee, Florida 32301 Sam Power, Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700
The Issue Whether DOT has improperly excluded Western Waste Industries, Inc. from bidding by combining two Volusia County sites in a single invitation to bid?
Findings Of Fact A three-man maintenance crew works out of DOT's Daytona Beach construction office, which is 16 miles distant from DOT's principal Volusia County facility, the Deland maintenance yard. In the summer, when both mowing operations and littering are at their peak, 72 DOT field people and 14 convicts set out from the Deland yard daily to sweep the roadways, police, grade and seed the shoulders, cut the grass and do other bridge, pipe and concrete maintenance. At one time, as the work day ended, crews dropped litter and mown grass at the county dump on their way back to the sites at which they assembled mornings in Deland and Daytona Beach. The Daytona Beach crew still does. But somebody calculated that DOT could save 100 man hours a month by arranging for "dumpsters" at both its Volusia County yards. That way all workers can return to their work stations directly, and no side trip is required in order to dispose of litter and cut grass. On April 1, 1988, petitioner Western Waste Industries, Inc. (WWII) installed two dumpsters, each with a capacity of eight cubic yards, at DOT's Deland yard. Under a month to month agreement, WWII empties both containers twice weekly in exchange for $273 monthly. DOT is satisfied with its decision to use dumpsters, but is obliged to invite bids, because DOT cannot procure the services it needs for less than $3000 a year. Among the specifications set out in DOT's invitation to bid is the form of the contract the successful bidder is to sign, which includes the following: 1.00 The Department does hereby retain the Contractor to furnish certain services in connection with Central Point Refuse Pickup and Disposal Originating at the Department's Maintenance Office Located at 1655 North Kepler Road, Deland, Florida, with an Option to Include Similar Services for the Department's Construction Office Located at 915 South Clyde Morris Boulevard, Daytona Beach, Florida. DOT's Exhibit No. 1 (emphasis in original) In Exhibit A to the form contract, entitled "SCOPE OF SERVICES," the specifications call for "trash containment and removal of litter ... from specific offices located in the Department's District Five." Id. Exhibit A specifies both the Daytona Beach and the Deland offices by name and address. Attachment B indicates that the successful bidder is to remove 40 cubic yards of refuse weekly from DOT's maintenance yard in Deland and, at DOT's option, additional refuse from the Deland yard, from the Daytona Beach office, or from both. If DOT exercised both options, the contractor would haul ten percent of DOT's refuse from the Daytona Beach office, on an annual basis. In its letter of protest, dated June 14, 1988, WWII complains that it "operate[s] on the West Side [of Volusia County] only." But the two companies who submitted bids in response to DOT's invitation to bid are willing to collect refuse at both sites. No exclusive franchise or other legal impediment precluded WWII from bidding on collection at both sites By soliciting bids for service at both sites, DOT avoids the administrative costs of inviting and evaluating two sets of bids.
The Issue Whether Petitioner's application for a Certificate of Need for a 50-bed addition to the Ormond Beach Hospital should be approved, pursuant to Chapter 381, Florida Statutes. This case involves petitioner's application for a certificate of need to expand, renovate, and consolidate ancillary service areas, and a 50-bed addition to its hospital. Respondent approved the application and issued a certificate of need for all aspects of the project except the 50-bed addition which it found would be inconsistent with the current health systems plan of Health Systems Agency of Northeast Florida, Inc., and because it determined that there was not a need for the additional beds in Volusia County. Petitioner filed its request for a Chapter 120 hearing. Thereafter, Intervenor Daytona Beach General Hospital, Inc., an orthopedic hospital located in Daytona Beach, petitioned for and was granted intervention in the proceeding over the objection of petitioner. During the course of the extensive hearing in this case, 15 witnesses testified in behalf of Petitioner, two were called by respondent, and four by the Intervenor. Eighty-seven exhibits were admitted in evidence. Exhibit 68 was withdrawn by stipulation of the parties.
Findings Of Fact Petitioner is a licensed 81-bed non-profit osteopathic general acute care hospital located at 264 South Atlantic Avenue, Ormond Beach, Florida. It is located on a site of approximately 4.6 acres bordered by Highway A1A on the east and Ormond Parkway on the north. The hospital plant consists of three buildings which have been joined together. One is a one-story dietary building that was originally a restaurant. A two-story building was built in 1970, and a one-story structure was built in 1954 and added to in 1960 and 1967. Other buildings owned by the hospital are adjacent residential homes on the premises which are used for storage, laundry, and other purposes. (Testimony of Hull, Exhibits 1-2, 13, 30, 59, 70) By a series of letters commencing on January 25, 1979, Petitioner advised Respondent's Office of Community Medical Facilities and the Health Systems Agency of Northeast Florida Area 3, Inc. (HSA) of its intent to expand and modernize its hospital and increase bed capacity. The last letter of intent was dated July 24, 1979. On September 21, 1979, Petitioner submitted its Certificate of Need Project Review Application to Respondent which included a request to increase the hospital's bed capacity from 81 to 161 beds. By letter of September 25, 1979, Respondent requested further information and, on December 11, 1979, Petitioner complied with the request and revised its application to seek only 50 additional beds. The proposed expansion and modernization plan included construction of a two-story addition to provide approximately 39,500 additional square feet, and renovation of approximately 22,000 square feet. Completion of the project would raise the hospital's total square footage of 39,350 to approximately 79,000 square feet. Incident to its request for additional beds, Petitioner proposes to initiate a 6-bed obstetrical unit at the hospital. (Exhibits 1-2, 7, 45-48) Petitioner's application was considered by various components of the HSA in January 1980, which resulted in a report and recommendations on the application which was filed with Respondent on February 25, 1980. During the course of the HSA's consideration of Petitioner's application at its several levels, representatives of Petitioner and the Intervenor appeared at the various meetings and presented their respective views regarding the application. The HSA report recommended approval of Petitioner's application for the renovation of its existing facilities and ancillary services, and approval of 44 additional beds. It further recommended that the state should take actions necessary to delicense a like number of beds within Petitioner's service area. The recommendation of 44 instead of 50 beds resulted from a finding that the proposed 6-bed obstetrical unit was not needed in the community in view of the probability that osteopathic physicians would likely be granted obstetric privileges in the future at allopathic facilities as a result of the enactment of legislation prohibiting the discrimination by particular provider professions against osteopathic physicians. The HSA found that although "Goal" DTS 1 in its Health Service Plan (HSP) which is used as a "guide" for health planning called for less than 4.3 acute care hospital beds per 1000 population with an overall average annual occupancy rate of at least 80 percent by 1984 in Health Service Area 3, it could approve additional beds for opening prior to 1984 if "extraordinary circumstances" exist as identified in "Goal" EA 2. It further found that Area 3 then had 5255 civilian acute care hospital beds, or a rate of 5.4 beds per 1000 population, with an average occupancy of 61 percent, and that, therefore, approval of additional beds, without cause, would be contrary to "Goal" DTS 1. However, the agency determined that extraordinary circumstances existed in Petitioner's case due to the fact that it had been operating for the past several years at an average occupancy of near or above 90 percent and that within its service area there existed in excess of 200 licensed medical surgical beds which were not staffed or used. The HSA therefore concluded that the situation denied ready access to acute care facilities to the citizens residing in Petitioner's service area. The HSA also considered that approval of the project would improve the effective and geographic distribution of beds and patient and physician accessibility in Volusia County because it was the only hospital located on the beach peninsula. It further found that the great number of elderly patients living in Volusia County and seasonal population fluctuations due to large numbers of tourists living in the area could be denied access to inpatient facilities if the project was not approved. As other extenuating factors, the HSA report stated that Petitioner had been granted prior certificates of need to expand its bed capacity, but that they had expired prior to implementation, that its inpatient facilities were antiquated, that denial of the beds would serve to deny access to patients of osteopathic facilities, and that federal law (PL 96-79) recognized that the need for additional or expanded osteopathic facilities should be determined on the basis of the need for and availability in the community for such services and facilities. (Testimony of Floyd, Hull, Exhibits 4, 8-12, 14, 59) By letter of March 28, 1980, Respondent's Administrator, Office of Community Medical Facilities, informed Petitioner that its application for certificate of need to expand, renovate and consolidate ancillary service areas at a total project cost of four million dollars was approved, and Certificate of Need Number 1236 was attached. The letter further advised petitioner that the proposed 50-bed addition was denied as being inconsistent with the current Health Systems Plan of the HSA, that there was not a need for the additional 50 beds in Volusia County as evidenced by facts contained in an attached State Agency Action Report, and that the extraordinary circumstances upon which the HSA recommended approval were not valid as evidenced by the same report. However, the referenced report was not submitted in evidence at the hearing, nor was any testimony adduced as to the rationale for the agency decision. By letter of May 28, 1980, Petitioner requested Respondent to increase the amount of the issued certificate of need to ten million dollars due to anticipated additional costs of construction and, by letter of July 24, 1980, Respondent advised Petitioner that the "cost over-run" had been approved and an amended copy of the Certificate of Need Number 1236 reflecting the additional cost was attached. (Testimony of Hull, Exhibits 57-58) Volusia County has eight hospitals of which six are allopathic and two are osteopathic. There are five hospitals in the Daytona Beach/Ormond Beach "coastal area" of the county which include Petitioner, Intervenor Daytona Beach General Hospital, Inc. (osteopathic), Ormond Beach Memorial Hospital, Daytona Community Hospital, and Halifax Hospital Medical Center. Two other hospitals in the county are Fish Memorial and West Volusia located in Deland. The remaining hospital is Fish Memorial at New Smyrna Beach. Petitioner is the only hospital on the beach peninsula which is connected to the mainland by several drawbridges. Daytona Beach General Hospital and Ormond Beach Memorial Hospital are located on the mainland in the northern "coastal area" several miles in distance from Petitioner. The remaining two hospitals in the area are within an average of 30 minutes driving time from Petitioner except during the peak tourist season of February to July each year, or when undue delays are experienced at the drawbridges. The HSA recognizes Petitioner's health service area to be Volusia County. In June 1979, the eight hospitals in Volusia County had a total of 1675 licensed beds, of which 1395 were open and staffed for use. Of the 378 osteopathic beds, only 178 were open and staffed. Occupancy of the licensed beds during the period July 1978 to June 1979 ranged from a low of 13.8 percent for Daytona Beach General Hospital to a high of 92 percent for Petitioner. The average occupancy of all licensed hospital beds was 51.2 percent. For the month of July, 1980, 1418 beds were open and staffed with 65.2 percent occupancy. Fish Memorial Hospital of New Smyrna Beach has a certificate of need for an additional 45 beds. In June 1979, all of Petitioner's licensed beds were staffed, but only 97 of Daytona Beach General Hospital's 297 licensed beds were staffed and available for use. Its patient population, however, has increased during the past year. In July 1978, Volusia County had a population of approximately 230,000 and therefore had about 7 acute care beds per 1,000 population. The 1980 preliminary census figures for the county showed the population to be 249,434 and it is projected that the final census figures will increase from one to two percent which would place the county population at between 252,000 and 254,000. If the higher figure is utilized, the bed ratio for the county at the present time would still be over 6 beds per 1,000 population. It is projected that the population of Volusia County will increase to 275,900 by 1984. If the current 1675 licensed beds remain the same, there would then be approximately 6 beds per 1,000 population. Approximately 25 percent of the Volusia County population consists of individuals who are 65 years of age or older whereas only some 9 percent of the population in the other six counties in HSA Area 3 are in that category. Although the HSA's plan arrived at its goal of 4.3 beds per 1,000 population for Area 3 in accordance with federal guidelines which allowed for adjustments in areas with referral hospitals, high tourism rates, and areas with greater than 12 percent of the population being 65 years of age or older, no further adjustment was made for Volusia County in spite of the fact that the Area 3 rate of about 13 percent of elderly population is about half that of the county. Further, the seasonal fluctuation as a result of tourists was not quantified on the basis of available statistics. However, in its justification for the 4.3 beds goal, the HSP makes note of the fact that Volusia County has 22 percent more patients per day during the high tourist months than during the lowest occupancy months of he year. On an average day in 1979, 73,000 tourists were in Volusia County which equated to approximately an additional 30 percent of the county population of 240,421. During the year 1979-80, about 22 percent of Petitioner's patients were residents of places other than Volusia County. However, there are no available statistics on the numbers of such persons who were inpatients. Most of the tourists seek only outpatient treatment for sunburn and minor injuries, although some undergo surgery during the months they are visiting the coastal area. (Testimony of Schwartz, Floyd, Smith, Hull, Clapper, Exhibits 3, 5-6, 18-26, 29, 51) Petitioner's application reflected that its 81 licensed beds were then utilized as medical/surgical (69 beds), intensive care (6 beds), and pediatrics (6 beds). The proposed additional 50 patient beds would be utilized as medical/surgical (29), intensive care (6), progressive care (4), pediatrics (3), obstetrical (6), and isolation (2). However, subsequent to filing its application, Petitioner discontinued its pediatric ward, and created 3 additional medical/surgical beds from the 6 former pediatric beds. (Testimony of Hull, Exhibit 2) The need for six additional intensive care beds and the initiation of a four-bed progressive care unit is to eliminate the past practice of prematurely transferring intensive care patients to other patient beds due to an insufficient number of intensive care beds. Such transfers required the conversion of semi-private into private rooms with additional equipment and nursing care which also reduced the total number of available beds within the hospital. Transfers of this nature were made extensively during the past fiscal year. (Testimony of Hull, Schwartz, Nargelovic, D'Assaro, Exhibit 2) The request in the application for two beds to serve as isolation rooms is based upon the fact that petitioner does not maintain any such rooms at the present time and it requires them to meet acceptable standards of health care. Currently, when isolation is necessary, a semi-private room is converted for the single patient requiring isolation, thus reducing the number of available beds. (Testimony of Schwartz, Hull, Nargelovic, Exhibit 2) Petitioner's request to establish a six-bed obstetrical unit is based upon its claim that such a unit is necessary to properly provide patients of osteopathic physicians with such a service and to provide full health care services which would not only attract new physicians to the hospital, but also enable Petitioner to conduct an intern training program. In addition, Petitioner is of the opinion that such a unit is necessary to provide service to patients living on the peninsula because the closest hospital providing obstetrical care is Halifax Hospital which is located on the mainland. The other obstetrical units are located at Fish Memorial Hospital at New Smyrna Beach and West Volusia Hospital at Deland which are some thirty miles away and do not conduct approved intern or residence programs for osteopathy. Halifax Hospital restricts staff privileges to those physicians who have met American Medical Association criteria and, therefore, osteopathic physicians generally are not eligible to utilize the obstetrical unit there. The HSA found that Petitioner projected 375 deliveries in its proposed obstetrics department during the third year of operation. The agency's HSP goal DTS 4.2 provides that no additional obstetrical departments should be approved in Volusia County until each existing department in the county is performing at least 1,000 deliveries annually. Only Halifax Hospital exceeds the 1,000 annual delivery standard. The HSA disapproved the requested obstetrical beds based upon its view that obstetrical beds at Halifax Hospital would eventually become available for use by osteopathic physicians. (Testimony of Schwartz, Hull, Rees, Exhibit 2-3, 6, 14, 54-55) Petitioner primarily bases its request for the additional 29 medical/surgical beds on the fact that it is the only hospital on the peninsula, has extreme seasonal demands placed on it by tourist population, and that the hospital census has been over 92 percent average occupancy during the past fiscal year. At times, the hospital has been filled to capacity, and has found it necessary to use "hall beds" to meet the need for emergency admissions. The crowded conditions have necessitated frequent delays in patient admissions or the referral of patients to other hospitals. A patient occupancy rate averaging 80-85 percent is normally acceptable, but Petitioner experiences a certain amount of inefficiency and lessened quality of care when over 80 percent of its beds are occupied. This is reflected in the difficulty of staffing and providing support services, and possible premature patient discharge. (Testimony of Schwartz, Hull, D'Assaro, Draper, Mason, Shoemaker, Exhibits 2, 51, 69) Although approximately 80 percent of Petitioner's patients reside in the coastal area of Volusia County, only some 29 percent reside in the northeastern part of the county where Petitioner's hospital is located. Petitioner currently has 27 osteopathic physicians on its staff, 18 of whom admit their patients principally to Ormond Beach Hospital and 7 admit there exclusively. Nineteen of the osteopathic physicians have staff privileges at other hospitals. Twenty-four allopathic physicians have staff privileges at Ormond Beach Hospital, but most are specialty consultants who admit less than one percent of Petitioner's patients. (Testimony of Schwartz, Floyd, Hull, D'Assaro, Exhibits 16-17, 60, 67) The quality of care provided patients at Ormond Beach Hospital is excellent, particularly in view of the antiquated physical plant and prevailing crowded conditions. These problems have led to the existence of a number of existing beds which do not conform to state fire, safety and other standards. It is planned that the majority of the existing beds will be located in a new building to provide room in the present buildings for expansion of ancillary and support facilities. The hospital is accredited by the American Osteopathic Association and by the Joint Commission on Accreditation of Hospitals. Accreditation by the Joint Commission indicates that a hospital provides an excellent standard of Health care. (Testimony of Draper, Boxx, Hull, Wisely, Mason, Shoemaker, D. Smith, Exhibits 1-2, 28-42, 49-50, 71-77) Petitioner is an osteopathic hospital whose Board of Directors is composed of osteopathic physicians. There are no physical differences between allopathic and osteopathic hospitals with the minor exception that the latter utilizes a table for manipulative therapy for some 20 to 30 percent of the patients. The primary difference between the two concepts is philosophical in nature. Osteopathy emphasizes a "wholistic" approach to medicine which stresses the importance of the musculoskeletal structure and manipulative therapy in the maintenance and restoration of health. It is family practice-oriented with about 75 percent of osteopathic physicians engaged in general practice rather than specialty medicine. Emphasis is placed upon personal attention by the physician to the patient. These factors produce a certain amount of patient preference for treatment in an osteopathic facility. (Testimony of Floyd, Schwartz, Wisely, Hull, Mason, Shoemaker, D. Smith, D'Assaro, Exhibit 78) Although the bylaws of two of the three allopathic hospitals located in the coastal area of Volusia County have recently been amended to permit osteopathic physicians to obtain staff privileges, certain vestiges of prior discrimination still exist due to the fact that hospital control is exercised by allopathic physicians, and that board certification is required which excludes many osteopathic physicians. The third hospital, Halifax, requires board certification in an American Medical Association approved specialty or residence program. As a consequence, only one osteopathic physician is on its staff. (Testimony of Draper, Hull, Porth, Helker, Rees, D. Smith, Exhibits 54, 63, 66) Daytona Beach General Hospital, Inc. is the other osteopathic hospital in the area which is located on the mainland several miles away from Ormond Beach Hospital. It has 297 licensed beds, but only 107 were staffed and open for use in July 1980. Its rate of occupancy in June 1979 was 13.8 percent of the licensed beds. The hospital has experienced past difficulties due to a substandard physical plant and inadequate staffing in certain areas. Although many osteopathic physicians decline to admit patients to the hospital, they generally agree that the standard of care is adequate, except for critical care cases. The hospital has sought in the past to attract additional patients by accepting staff applications from qualified area physicians. Daytona Beach General is accredited by The American Osteopathic Association and has pending an application for accreditation by the Joint Commission on Accreditation of Hospitals. (Testimony of Draper, Wisely, Boxx, Hull, D. Smith, Clapper, Solomon, Exhibits 27, 29-80) Petitioner has exerted efforts to acquire licensed hospital beds from other area hospitals to alleviate its shortage, but has been unsuccessful. Hospitals are reluctant to give up licensed beds even though they are not currently being utilized because they normally anticipate a need for them in future years. Although Daytona Beach General Hospital has been the subject of negotiations for sale with various entities, including Petitioner, in recent years, they have not been successful. None of the hospitals, including Petitioner, desires to share space in other hospitals due to the resulting lack of control over operations and procedures. Petitioner held a certificate of need for 84 beds in 1976 which it was forced to relinquish when it received a certificate of need for the proposed purchase of Daytona Beach General Hospital. (Testimony of Boxx, Hull, Porth, Hilker, Clapper, Rees, Draper, Exhibits 15, 28, 21-37, 43-44, 55-56) It is estimated that the renovation and expansion of Ormond Beach Hospital will take from 18 to 24 months to complete. Approval of additional beds will result in dividing construction expenses among a greater number of patients, thus lowering costs of health care. On the other hand, without the addition of hospital beds, an increase in patient costs is to be expected. The addition of new beds will be a positive factor in Petitioner's recruitment of osteopathic physicians to the area and in initiating an intern training program. It should also serve to increase Petitioner's competitive position among other area hospitals and provide a better quality of care for its patients. (Testimony of Draper, Boxx, Hull, D. Smith, Clapper)
Recommendation That the application of Petitioner for a certificate of need for a 50 acute-care bed addition to its facility be approved in part for 38 additional acute-care beds. DONE and ENTERED this 6th day of April, 1981, in Tallahassee, Florida. THOMAS C. OLDHAM 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 6th day of April, 1981. COPIES FURNISHED: Eric J. Haugdahl, Esquire Department of HRS 1323 Winewood Boulevard Tallahassee, Florida 32301 Bernard H. Dempsey, Jr., Karen L. Goldsmith, Esquires Suite 610 Eola Office Center 605 East Robinson Street Orlando, Florida 32801 L. LaRue Williams, and Glenn R. Padgett, Esquires Kinsay, Vincent, Pyle, Williams and Tumbleson 52 South Peninsula Drive Daytona Beach, Florida 32018 Honorable Alvin Taylor Secretary, Department of HRS 1323 Winewood Boulevard Tallahassee, Florida 32301 =================================================================
Conclusions Having reviewed the Administrative Complaint, and all other matters of record, the Agency for Health Care Administration finds and concludes as follows: 1. The Agency issued the attached Administrative Complaint and Election of Rights form to the Respondent. (Ex. 1) The Election of Rights form advised of the right to an administrative hearing. The above-styled case involves a revocation of license, a fine, and a survey fee. 2. A previous case was filed against this Respondent also involving the revocation of the license: Agency for Health Care Administration v. Angel Aides Center, Inc. d/b/a Boynton Beach Assisted Living, AHCA No. 2011012687, Case No.: 12-12-246PH. 3. On April 30, 2013, the Agency entered a Final Order in the above described case [AHCA No: 2011012687, Case No.: 12-246PH] adopting the findings of facts and the conclusions of law set forth in the Recommended Order issued by the Agency’s informal hearing officer, which upheld the revocation. 4. The Respondent appealed the Final Order to the Fourth District Court of Appeal, Fourth District Court of Appeal Case No.: 4D 13-1733. 5. On or about June 24, 2013, the parties agreed to place the case in abeyance while the appeal was being reviewed by the Fourth District Court of Appeals. 6. On September 18, 2014, the Fourth District Court of Appeal affirmed the Agency’s Final Order revoking the Respondent’s license 7. On November 17, 2014, the Respondent filed a Joint Notice of Dismissing its Request for a Formal Hearing with the DOAH and the Administrative Law Judge issued an order closing the file and relinquishing jurisdiction to the Agency. (Ex. 2) Filed December 24, 2014 3:16 PM Division of Administrative Hearings Based upon the foregoing, it is ORDERED: 8. The assisted living facility license of Respondent is REVOKED. 9. The Respondent shall pay the Agency $5,500.00. If full payment has been made, the cancelled check acts as receipt of payment and no further payment is required. If full payment has not been made, payment is due within 30 days of the Final Order. Overdue amounts are subject to statutory interest and may be referred to collections. A check made payable to the “Agency for Health Care Administration” and containing the AHCA ten-digit case number should be sent to: Office of Finance and Accounting Revenue Management Unit Agency for Health Care Administration 2727 Mahan Drive, MS 14 Tallahassee, Florida 32308 ORDERED at Tallahassee, Florida, on this /7_ day of Drandre 2014. Elizabeth Du , Secretary Agency for Health Care Administration
Other Judicial Opinions A party who is adversely affected by this Final Order is entitled to judicial review, which shall be instituted by filing one copy of a notice of appeal with the Agency Clerk of AHCA, and a second copy, along with filing fee as prescribed by law, with the District Court of Appeal in the appellate district where the Agency maintains its headquarters or where a party resides. Review of proceedings shall be conducted in accordance with the Florida appellate rules. ‘The Notice of Appeal must be filed within 30 days of rendition of the order to be reviewed. CERTIFICATE OF SERVICE I CERTIFY that a true and correct, of this Final er was served on-the below-named persons by the method designated on this 1? fay of et _ 2014. Richard J. Shoop, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive, Bldg. #3, Mail Stop #3 Tallahassee, Florida 32308-5403 Telephone: (850) 412-3630 2 Jan Mills Facilities Intake Unit Agency for Health Care Administration (Interoffice Mail) Catherine Anne Avery, Unit Manager Assisted Living Facility Unit Agency for Health Care Administration (Electronic Mail) Finance & Accounting Revenue Management Unit Agency for Health Care Administration (Interoffice Mail) | Arlene Mayo Davis, Field Office Manager Local Field Office Agency for Health Care Administration (Electronic Mail) Katrina Derico-Harris Medicaid Accounts Receivable Agency for Health Care Administration (Interoffice Mail) Lourdes A. Naranjo, Senior Attorney Office of the General Counsel Agency for Health Care Administration (Electronic Mail Shawn McCauley Medicaid Contract Management Agency for Health Care Administration (Interoffice Mail) Louis V. Martinez, Esq. Louis V. Martinez, P.A. 2333 Brickell Avenue — Suite A-1 Miami, Florida 33129 | (U.S. Mail) John G. Van Laningham Administrative Law Judge Division of Administrative Hearings (Electronic Mail) _ oe NOTICE OF FLORIDA LAW 408.804 License required; display.-- (1) It is unlawful to provide services that require licensure, or operate or maintain a provider that offers or provides services that require licensure, without first obtaining from the agency a license authorizing the provision of such services or the operation or maintenance of such provider. (2) A license must be displayed in a conspicuous place readily visible to clients who enter at the address that appears on the license and is valid only in the hands of the licensee to whom it is issued and may not be sold, assigned, or otherwise transferred, voluntarily or involuntarily. The license is valid only for the licensee, provider, and location for which the license is issued. 408.812 Unlicensed activity.-- (1) A person or entity may not offer or advertise services that require licensure as defined by this part, authorizing statutes, or applicable rules to the public without obtaining a valid license from the agency. A licenseholder may not advertise or hold out to the public that he or she holds a license for other than that for which he or she actually holds the license. (2) The operation or maintenance of an unlicensed provider or the performance of any services that require licensure without proper licensure is a violation of this part and authorizing statutes. Unlicensed activity constitutes harm that materially affects the health, safety, and welfare of clients. The agency or any state attomey may, in addition to other remedies provided in this part, bring an action for an injunction to restrain such violation, or to enjoin the future operation or maintenance of the unlicensed 4 3 provider or the performance of any services in violation of this part and authorizing statutes, until compliance with this part, authorizing statutes, and agency rules has been demonstrated to the satisfaction of the agency. (3) It is unlawful for any person or entity to own, operate, or maintain an unlicensed provider. If after receiving notification from the agency, such person or entity fails to cease operation and apply for a license under this part and authorizing statutes, the person or entity shall be subject to penalties as prescribed by authorizing statutes and applicable rules. Each day of continued operation is a separate offense. (4) Any person or entity that fails to cease operation after agency notification may be fined $1,000 for each day of noncompliance. (5) When a controlling interest or licensee has an interest in more than one provider and fails to license a provider rendering services that require licensure, the agency may revoke all licenses and impose actions under s. 408.814 and a fine of $1,000 per day, unless otherwise specified by authorizing statutes, against each licensee until such time as the appropriate license is obtained for the unlicensed operation. (6) In addition to granting injunctive relief pursuant to subsection (2), if the agency determines that a person or entity is operating or maintaining a provider without obtaining a license and determines that a condition exists that poses a threat to the health, safety, or welfare of a client of the provider, the person or entity is subject to the same actions and fines imposed against a licensee as specified in this part, authorizing statutes, and agency rules. (7) Any person aware of the operation of an unlicensed provider must report that provider to the agency.
Conclusions THIS CAUSE comes before the Agency For Health Care Administration (the "Agency") concerning Certificate of Need ("CON") Application No. 10131 filed by The Shores Behavioral Hospital, LLC (hereinafter “The Shores”) to establish a 60-bed adult psychiatric hospital and CON Application No. 10132 The entity is a limited liability company according to the Division of Corporations. Filed March 14, 2012 2:40 PM Division of Administrative Hearings to establish a 12-bed substance abuse program in addition to the 60 adult psychiatric beds pursuant to CON application No. 10131. The Agency preliminarily approved CON Application No. 10131 and preliminarily denied CON Application No. 10132. South Broward Hospital District d/b/a Memorial Regional Hospital (hereinafter “Memorial”) thereafter filed a Petition for Formal Administrative Hearing challenging the Agency’s preliminary approval of CON 10131, which the Agency Clerk forwarded to the Division of Administrative Hearings (“DOAH”). The Shores thereafter filed a Petition for Formal Administrative Hearing to challenge the Agency’s preliminary denial of CON 10132, which the Agency Clerk forwarded to the Division of Administrative Hearings (‘DOAH”). Upon receipt at DOAH, Memorial, CON 10131, was assigned DOAH Case No. 12-0424CON and The Shores, CON 10132, was assigned DOAH Case No. 12-0427CON. On February 16, 2012, the Administrative Law Judge issued an Order of Consolidation consolidating both cases. On February 24, 2012, the Administrative Law Judge issued an Order Closing File and Relinquishing Jurisdiction based on _ the _ parties’ representation they had reached a settlement. . The parties have entered into the attached Settlement Agreement (Exhibit 1). It is therefore ORDERED: 1. The attached Settlement Agreement is approved and adopted as part of this Final Order, and the parties are directed to comply with the terms of the Settlement Agreement. 2. The Agency will approve and issue CON 10131 and CON 10132 with the conditions: a. Approval of CON Application 10131 to establish a Class III specialty hospital with 60 adult psychiatric beds is concurrent with approval of the co-batched CON Application 10132 to establish a 12-bed adult substance abuse program in addition to the 60 adult psychiatric beds in one single hospital facility. b. Concurrent to the licensure and certification of 60 adult inpatient psychiatric beds, 12 adult substance abuse beds and 30 adolescent residential treatment (DCF) beds at The Shores, all 72 hospital beds and 30 adolescent residential beds at Atlantic Shores Hospital will be delicensed. c. The Shores will become a designated Baker Act receiving facility upon licensure and certification. d. The location of the hospital approved pursuant to CONs 10131 and 10132 will not be south of Los Olas Boulevard and The Shores agrees that it will not seek any modification of the CONs to locate the hospital farther south than Davie Boulevard (County Road 736). 3. Each party shall be responsible its own costs and fees. 4. The above-styled cases are hereby closed. DONE and ORDERED this 2. day of Meaich~ , 2012, in Tallahassee, Florida. ELIZABETH DEK, Secretary AGENCY FOR HEALTH CARE ADMINISTRATION
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found: Palm Beach County is located in Florida Health Service Area Region VII (HSA #7) which also includes Indian River, Martin, Okeechobee, and St. Lucie Counties. The Health Systems Plan (HSP) for Region VII breaks down bed need for Palm Beach County separately from the other four counties. The population of the southern portion of Palm Beach County is growing at a much faster rate than the population of the northern portion of the County. There is a maldistribution of hospital beds between the northern and southern portions of the County. The northern portion of the County has three times as many hospital beds as the southern portion of the County. Palm Beach County presently has 2,752 hospital beds which are either licensed or approved for construction. This figure includes a new 160-bed NME facility in Delray Beach projected to open in the Fall of 1982, a 50-bed expansion at Bethesda Memorial Hospital completed in January of 1982, a 50-bed expansion at Boca Raton Community Hospital and a 48-bed expansion at John F. Kennedy Hospital presently under construction. An additional 80 beds have been approved by HRS for the new Delray facility, but this is presently in litigation and these beds can not be considered in this proceeding. The two hospitals which currently serve the south Palm Beach County area are the Boca Raton Community Hospital (Boca Community) located in Boca Raton and the Bethesda Memorial Hospital (Bethesda) located in Boynton Beach and operated by the District. Both facilities are within a thirty minute driving distance for 95 percent of the population of the southwestern portion of Palm Beach County. According to patient origin studies, Boca Community draws some 7.7 percent of its patients from the southwest portion of Palm Beach County and Bethesda draws only 1.8 percent of its patients from such area. The primary service areas of both facilities are concentrated on the coastal side of the County. Boca Community has a closed medical staff and does not offer obstetrical services. In 1981, Boca Community had an average occupancy level of 91 percent. During the tourist season which runs from November to April of each year, Boca Community was overcrowded, at times operating at a 100 percent occupancy rate. Oftentimes, patients were either turned away or were placed in hallway or holding room beds. There were occasions during the tourist season when the Del Trail Fire Control Tax District, which provides emergency medical rescue service for the residents of southwest Palm Beach County, was advised by Boca Community that they were on a Priority 1 status only. This meant that they could only utilize that facility for the most severe cases of cardiac or respiratory arrest. The Fire Control Tax District's paramedic program anticipates that it will respond to approximately 2,250 medical rescue calls in 1982. A hospital located in the southwestern portion of Palm Beach County would reduce the response time of paramedics, enable them to make more calls and provide better medical service for members of the Fire Control District. In 1981, Bethesda operated at an average occupancy rate of 82.9 percent, with the rate exceeding 90 percent during the tourist season. The HSP utilizes a 75 percent occupancy rate as a guideline for determining the need for additional hospital beds. In health care planning, it is the policy of HRS to utilize county-wide population estimates prepared by the University of Florida's Bureau of Economic and Business Research (BEBR). The most recent population figure promulgated by BEBR for Palm Beach County is a 1981 estimate of 615,165. This figure indicates an increase over its prior projections of almost 20,000. For the year 1985, the medium range population estimate for Palm Beach County is projected by the BEBR to be 707,900. This figure does not significantly differ from projections made by various planning experts who testified at the hearing. Some 99 percent of the population growth in the County is attributable to migration. Among the guidelines for determining need for additional hospital beds in an area are occupancy levels of existing hospital facilities, utilization rates and a desired number of beds per thousand people in an area. The HSP for Region VII considers an occupancy rate of 75 percent to be desirable, and utilizes the formula of 4 beds per thousand population in reaching determinations on the question of need. The State Health Plan, in accordance with federal guidelines, takes into consideration the factors of age of the population and utilization, including migration in and out of an area. Persons over age 65 normally utilize hospital beds and facilities four times as much as people under 65. Some 23 percent of the residents of the southwest area of Palm Beach County were 65 years of age or older. This compares with a national average of approximately 11 percent, and a county-wide average of 20 percent. Accordingly, in computing preliminary bed need projections for 1985, the 1981 Florida State Health Plan utilizes a formula of 4.25 beds per thousand population for HSA #7 as its medium estimate and a formula of 4.61 beds per thousand population as its high estimate. Utilizing the 4/1000 formula, and assuming a 1985 population of 707,900, the bed need for Palm Beach County in 1985 would be 2,832. A 4.25/1,000 formula produces a bed need of 3,009, and a 4.61/1,000 formula results in a bed need of 3,263. Given the exsiting licensed and approved 2,752 beds in the County as a whole, there would be a need in 1985 for an additional 80 beds using the 4.0 approach, 257 beds using the 4.25 approach, and 511 beds using the 4.61 approach. Utilizing the University of Florida population figures for Palm Beach County, distributing that population to various areas within the County in accordance with the Area Planning Board estimates, and further distributing ,beds between the facilities in the southwest area of the County based upon anticipated market shares, the District's health care planning expert determined there would be a need for 157 new beds by 1986 in the southwest area. This projection takes into account the new Delray Hospital, the 50-bed additions at Bethesda and Boca Community and utilizes an 80 percent occupancy rate. By allocating County population figures into subregions, NME's planning expert projected the population of the west Boca service area to be 43,598 by 1985. Utilizing two different methodologies -- occupancy levels and bed per thousand population -- NME's expert determined that there would be a minimum additional bed need of 170 to 188 in the west Boca service area in 1985 to 1986. The previous HSA 1980-1984 HSP only showed a need for 40 or 50 beds in Palm Beach County. The 1981-1985 HSP, which now takes into account the recently approved 160 beds at Delray, 50 at Bethesda and 50 at Boca Community, shows a need for an additional 128 beds. John F. Kennedy Hospital, which does not serve the southwest portion of the County, has been granted approval for 48 beds. The Boca Raton City Council and the Board of County Commissioners for Palm Beach County have each adopted resolutions citing the need for a new hospital in the West Boca area. Many physicians practicing in the Boca Raton area are experiencing their greatest growth in numbers of patients from the West Boca area. Several physicians experienced delays in admitting patients to Boca Community in 1981, and do not believe that that facility's expansion by 50 beds will alleviate the overcrowing at that institution. There is community support for a new hospital facility located in the southwest portion of Boca Raton. The approved and existing hospitals which serve residents of the southwest Boca Raton area have expansion capabilities of approximately 300 beds -- 50 at Boca Community, 90 at Bethesda and 160 at Delray. Expansion of an existing facility can result in lower construction and operational costs than the construction of a new facility. This would be dependent upon the existence of adequate ancillary facilities, adequate space, personnel capabilities and the desires of the existing facility to expand. Other than the 80-bed expansion at Delray which is currently in litigation, no evidence was adduced at the hearing that either Boca Community or Bethesda were seeking expansion beyond that which has previously been approved. The Southeastern Palm Beach County Hospital Taxing District was created by Special Act of the Legislature in 1953 to provide hospital services for the people in a specified geographical area. It is operated by an eight- member Board of Commissioners who are appointed by the Governor for staggered four-year terms. The District currently owns and operates a 350-bed full service hospital known as Bethesda Memorial Hospital in Boynton Beach. Its services include gynecological, pediatric and new born nursery services. Bethesda has the capacity to expand to 440 beds. In 1980, Bethesda received approximately $2,000,000 in ad valorem tax revenues. Without these tax revenues, Bethesda would have operated at a deficit in excess of $1,000,000. The District proposes to construct and operate a new hospital to serve the residents of southwest Palm Beach County. The service area for the new hospital appears to include some areas beyond the geographical boundaries of the District. It intends to construct 138 medical/surgical beds and 12 intensive care beds, for a total bed count of 150. The new facility will not have obstetrics or pediatric services. The total estimated cost of the project is $34,007,000, or a cost of $226,713.33 per bed. Its cost per square foot is $162.12. The District did not itemize its predevelopment costs and based its equipment costs as a percentage of construction costs. It is anticipated that the new facility will share many services and be linked closely with Bethesda. The two facilities will utilize the same Directors of Personnel, Purchasing and Finance. Other shared services will be the central computer service, clinical laboratory services, anatomical-pathological services, certain pharmacy services and legal services. A pathologist will be on-site at the new facility during normal working hours and on-call during off hours to perform those pathological services which require an immediate result. Other lab tests will be performed at Bethesda. It is anticipated that the new facility will be financed through the issuance of two series of tax-exempt revenue bonds. The District anticipates that it can secure bond financing at an 11 percent projected interest rate, and that 87 percent of the project will be financed by debt with an equity contribution by the District of $2.2 million. Ad valorem revenue is not expected to be the source-of repaying the debt. The District projects a loss of some $1.9 million during the first year of operation and an income of $99,484 during the second year of operation of the new facility. A 21-month construction period is anticipated. While the District proposes to locate its new facility on 20 acres of land at the northeast corner of Glades Road and Lyons Road, it had no formal interest in that property as of the time of the hearing. The site is presently zoned as agricultural and is owned by a savings and loan institution. Pursuant to a "gentlemen's agreement" between the institution and the Chairman of the District's Board, it is anticipated that the District can purchase this property at an estimated cost of $1,000,000. If the District is unable to purchase this property, it intends to use its power of eminent domain to acquire that site or another suitable site. The proposed District site will not require any major road improvements, though a traffic control signal may be necessary. National Medical Enterprises, Inc. owns and operates about 40 hospitals and 160 nursing homes and manages another 18 hospitals and 22 nursing homes throughout the United States. Its corporate headquarters are in Los Angeles, California, and it has a regional office in Tampa, Florida. NME has total revenues exceeding $1.4 billion, net income of $70 million and stockholders' equity of $420 million. As of November 30, 1981, NME had over $150 million in the bank and unused commitments from lenders for $170 million. NME has sufficient cash and cash flow to fund a new project without outside financing. If financing were chosen, it would be of a long term (20 year) unsecured nature at a 15 percent interest rate which would cover 65 percent of the project cost. The balance would come from NME's equity contribution. NME proposes to construct and operate a 175-bed hospital to serve the southwest area of Palm Beach County. There are to be 151 medical/surgical beds, 16 intensive care beds and 8 beds for obstetrics, for a total project cost of $30,688,290 or $175,361.65 per bed. The cost per-square foot is $127.00. The new facility will be operated by a local governing board composed of physicians and lay persons originally appointed by NME. The Administrator of the new facility will be appointed by and report to NME's regional office. Hospitals owned and managed by NME share common support services from both the corporate and regional offices. NME employs specialists and experts in the areas of nursing (recruitment and training), energy conservation, administration, communications, architectural and design matters, financial and legal matters, planning and development, management engineering, and purchasing. These professionals are available to NME facilities. National contracts for the procurement of equipment and supplies are available to NME hospitals. NME proposes an opening date of October or November, 1984 and estimates that it will have a net income of $615,000 after its first year of operation and a net income of $917,000 after the second full year of operation. NME proposes to locate its new facility adjacent to the corner of U.S. Highway 441 and Glades Road. It has an option to purchase 20 acres of land at $30,000 per acre. It intends to use 10 of the 20 acres for the hospital site and use the remaining 10 acres for medical office buildings. Site development costs are designated as $800,000. Its total cost of $30,688,290 is broken down into predevelopment costs of $120,000, building and construction costs of $22,646,490 and equipment costs of $7,921,800. NME's projected equipment costs were based upon a room-by-room analysis. The proposed site is presently zoned for agricultural use. Some major roadway improvements would be required, and the cost for these improvements have not been specifically determined or included in NME's projected project costs, other than the $800,000 designated for site development. NME's proposal includes an 8-bed obstetrical unit. Approximately 500 deliveries are expected during the first year of operation. The recognized health planning standard for determining need for an obstetrical unit in an urban area with a population in excess of 100,000 is whether the facility would perform 1,500 births per year. In Florida, some 105 licensed hospitals have obstetrical beds. 74 of those hospitals recorded less than 1,500 births per year. Population statistics broken down by age do not illustrate a significant need for additional obstetrical beds in the southwest area of the County. Obstetrics and pediatrics are currently available at Bethesda. Bethesda recently closed down 9 of its 24 pediatric beds, and, in February of 1982, that unit had a 42 percent occupancy level. Bethesda's nursery had an occupancy rate of 52 percent in 1981, and the 18 post-partum beds had an occupancy rate of 79 percent in 1981. If needed, Bethesda can convert some of its medical/surgical beds to postpartum beds. The Boca Raton Community Hospital has an 11-bed pediatrics unit. Both the District and NME demonstrated that they would have no difficulty in staffing their proposed facilities. Each has vigorous and innovative recruiting program. By comparing data from Bethesda and Palms of Pasadena in St. Petersburg, a facility owned and operated by NME, the District attempted to illustrate that a not-for-profit tax district hospital is able to render services in a more cost-effective manner and at less cost to the patient or charge payors than an investor-owned or proprietary hospital. However, the analysis performed by the District's witness did not include the ad valorem tax income which the District receives and did not consider or compare the types or intensity of services offered or performed by the two different hospitals. It is impossible to infer the cost-effectiveness of a hospital without knowledge of the volume, intensity and mix of services provided. NME's application for a Certificate of Need included a CT scanner at its new proposed facility. No evidence was adduced at the hearing concerning the need for an additional CT scanner in the Palm Beach County area.
Recommendation Based upon the findings of fact and conclusions of law recited above, it is RECOMMENDED that a final order be entered by HRS determining that a need for a least a 170-bed hospital exists in the southwest area of Palm Beach County and that NME's application to construct such a hospital be approved, with the exception of that portion which proposes eight obstetrical beds and a CT scanner. It is further recommended that the application of the District to construct a 150-bed hospital be DENIED. Respectfully submitted and entered this 23rd day of August, 1982, in Tallahassee, Florida. DIANE D. TREMOR, 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 23rd day of August, 1982. COPIES FURNISHED: Fred W. Baggett, Esquire and Michael J. Cherniga, Esquire Roberts, Baggett, LaFace, Richards and Wiser 101 East College Avenue Post Office Drawer 1838 Tallahassee, Florida 32302 C. Gary Williams, Esquire Ausley, McMullen, McGehee, Carothers & Proctor Washington Square Building 227 South Calhoun Street Post Office Box 391 Tallahassee, Florida 32303 Eric J. Haugdahl, Esquire Assistant General Counsel Department of HRS 1323 Winewood Blvd. Building 1, Room 406 Tallahassee, Florida 32301 David Pingree Secretary Department of Health and Rehabilitative Services 1323 Winewood Blvd. Tallahassee, Florida 32301 Gary Clarke Deputy Assistant Secretary Health Planning & Development 1323 Winewood Blvd. Tallahassee, Florida 32301 =================================================================
The Issue The issues in this instance are promoted in keeping with an administrative complaint brought by the Petitioner against the Respondent, charging violations of Sections 943.13 and 943.145, Florida Statutes. These allegations relate to the claim that Respondent was involved in a liaison with a prostitute in which he exchanged Valium for sex. The encounter between the Respondent and the prostitute is alleged to have occurred while the Respondent was on duty. This Valium was allegedly obtained from an automobile which was examined as part of the Respondent's duties as a law enforcement officer. It is further alleged that the Valium should have been turned in as part of his responsibilities as a law enforcement officer.
Findings Of Fact Respondent is a holder of a certificate as law enforcement officer, Certificate No. 98-10527. That certificate is issued by the State of Florida, Department of Law Enforcement, Criminal Justice Standards and Training Commission, and Respondent has held that certificate at all relevant times in this proceeding. Respondent has been employed as a police officer by the Daytona Beach, Florida, Police Department in the relevant time period and it was during that tenure that Respondent is accused of having committed the offense as set forth in the administrative complaint. Debbie Ofiara is the only witness to the Respondent's alleged indiscretion while on duty. Ms. Ofiara is an admitted prostitute, who has drug problems so severe that she required specific program treatment to address them. In particular, that drug difficulty relates to the drug Dilaudid. In addition, Ofiara has served six months in jail for grand theft, a felony conviction. At the time of the alleged incident with the Respondent she was under the influence of drugs and was under the influence of drugs when she reported that incident to a police investigator in the Daytona Beach Police Department. When testimony was given at the hearing, Ofiara was attending a drug program while awaiting a sentence for a drug offense related to cocaine. She had pled guilty to that drug charge, a felony. Ofiara has been arrested for prostitution, arrests made by the Daytona Beach Police Department on three different occasions. She had been arrested for hitchhiking by Officer Cadenhead prior to the incident which underlies the administrative charges and indicates that she "took offense" at the arrest. Moreover, she acknowledges some past concern about her treatment in encounters with Officer Gary Gallion of the Daytona Beach Police Department in his official capacity. Ms. Ofiara claims that sometime in November 1982, in the evening hours, the Respondent, while on duty as a police officer, in uniform and driving a marked patrol car, approached Ofiara and made arrangements to meet her. She further states that this rendezvous occurred in Daytona Beach, Florida, and that in exchange for Valium tablets which the Respondent had obtained from an examination of a car he had been involved with in his police duties, which tablets were not turned in, Ofiara performed oral sex for Respondent's benefit. Some time later, Ofiara related the facts of the encounter with Officer Cadenhead to an internal affairs investigator with the Daytona Beach Police Department, Lieutenant Thomas G. Galloway. She also gave Galloway a bottle which she claimed was the bottle in which the Valium was found. The vial or container was not examined for any residue of the substance Valium or examined for fingerprints of the Respondent. Following Galloway's investigation of the allegations, the Daytona Beach Police Department determined to terminate the Respondent from his employment. That termination was effective February 11, 1983. Respondent was subsequently reinstated after service of a four-week suspension without pay by order of the City of Daytona Beach Civil Service Board, effective March 9, 1983. Having considered the testimony of Ms. Ofiara and the testimony of the Respondent in which he denies the incident with her, and there being no corroboration, Ms. Ofiara's testimony is rejected for reasons of credibility. As a prostitute, drug user, felon and person with a certain quality of animosity toward the Respondent and in consideration of the demeanor of the accusing witness and Respondent, her testimony is rejected.
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found: At all times material to this proceeding, Respondent was a licensed chiropractic physician in the state of Florida with license number CH 0003034. Respondent treated Mr. Richard Turner several times between February 3, 1988 and February 13, 1988. Respondent had treated Turner previously and, in fact, had been Turner's chiropractic physician for several years before treating him on this occasion. Turner had health care coverage through the Daytona Beach Community College Health Care Plan. However, Turner had not met the $200.00 annual deductible at this time. Therefore, Respondent allowed Turner to pay $20.00 per visit to be applied to the portion of his bill not covered by insurance. Turner furnished Respondent's office with certain information concerning his insurance coverage and was made aware by Respondent's office that a claim for reimbursement would be filed with Turner's insurance carrier as had been done on previous occasions. Respondent filed a claim for reimbursement with the Daytona Beach Community College Health Care Plan for services rendered Turner but failed to provide a copy of this billing to Turner until some 2 to 3 months after filing with the insurance carrier. Respondent was not reimbursed for these services by Turner's insurance carrier or Turner; therefore, a claim was filed in the County Court of Volusia County, Florida against Turner. The court awarded the Respondent a judgment in the amount of the unpaid balance, plus costs.
Recommendation Having considered the foregoing Findings of Fact and Conclusions of Law, the evidence of record and the candor and demeanor of the witnesses, it is, therefore, RECOMMENDED that the Board enter of Final Order reprimanding Respondent, Michael A. Petker for his failure to strictly comply with Section 460.413(1)(bb), Florida Statutes. Respectfully submitted and entered this 16th day of February, 1989, in Tallahassee, Leon County, Florida. WILLIAM R. CAVE 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 16th day of February, 1989. APPENDIX TO RECOMMENDED ORDER, CASE NO. 88-5267 The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties in this case. Specific Rulings on Proposed Findings of Fact Submitted by Petitioner Adopted in Finding of Fact 1. Adopted in Finding of Fact 2. Adopted in Finding of Fact 5. Adopted in Finding of Fact 5. Specific Rulings on Proposed Findings of Fact Submitted by Respondent Adopted in Finding of Fact 1. Adopted in Finding of Fact 2. Adopted in Finding of Fact 5. Adopted in Findings of Fact 2 and 4. Adopted in Finding of Fact 4. Adopted in Finding of Fact 6. COPIES FURNISHED: Cynthia Shaw, Esquire Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0760 Paul Bernardini, Esquire LaRue Bernardini, Seitz & Tresher Post Office Drawer 2200 Daytona Beach, Florida 32015-2200 Lawerence A. Gonzalez, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750 Kenneth E. Easley, Esquire General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750 Pat Guilford, Executive Director Department of Professional Regulation, Board of Chiropractic 130 North Monroe Street Tallahassee, Florida 32399-0750
