Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found: In the latter part of April, 1976, petitioner Ambulatory Surgical Center of West Palm Beach (hereinafter referred to as ASC) submitted its capital expenditure proposal to construct a freestanding ambulatory surgical center in West Palm Beach. The concept of ambulatory surgical care is approximately six or seven years old. It allows the patient to have surgery performed under general anesthesia in one day at an approximate savings of fifty percent. The patient goes to the facility the day before surgery, goes through laboratory tests, meets the anesthesiologist or other medical staff members, fills out insurance and other forms and then returns home. The next day, the surgical procedure is performed and the patient then goes home accompanied by a member of his family or a friend. The advantages of the system include more precise scheduling and less anxiety and stress for the patient. The petitioner's proposal is to occupy some 9,000 square feet on the first floor of a 33,000 square foot three story medical office building. Also to be located-on the first floor is a 1,000 square foot pharmacy, a 1,000 square foot restaurant and a 500 square foot clinical laboratory. The facility will encompass dressing rooms with lockers, five operating rooms -- one of which is to be used exclusively for dental surgery under general anesthesia -- and sixteen or seventeen recovery beds. ASC will have the same life support equipment and facilities as exist at a general hospital. Any doctor who is licensed by the State of Florida and on the staff of another hospital will be permitted to use the ASC facility. Petitioner's facility will accept all patients for treatment whether they be reimbursed by Medicare, Medicaid or other sources available at the state or county level. Some one hundred and twenty different surgical procedures are proposed to be offered at the ASC facility. Some fifty physicians in Palm Beach County were sent a questionnaire by one of the organizers of petitioner. The thirty-seven responses received indicated a weekly utilization rate of approximately sixty surgical procedures by the end of the fourth quarter of operation of petitioner's facility. On June 24, 1976, the Health Facilities Committee of the area Health Planning Council, Inc. (HPC) met to consider the petitioner's certificate of need request. By a vote of six to four, with one abstention, a motion to approve the facility failed. On the same date, the Board of Directors of the HPC voted nine to seven, with one abstention, to recommend approval of petitioner's proposal. The Board considered the fact that outpatient surgery departments were being planned for existing hospitals in the area and heard comments from proponents and opponents of the application. The Board further considered the factors supporting approval as set forth in the staff project review. These include: "1. Such a facility has the potential of lowering to a great extent the cost of patient health care by avoiding unnecessary hospital confinement; Such a service, both in terms of cost savings and utilization, have been endorsed by the HPC in its document entitled Acute Care General Hospitals, Long Range Growth Position Statement and Recommendations. In effect, this proposed service will provide a cost effective component to the area's existing health care system; Based on the manpower requirements, both from the standpoint of parti- cipating physicians and support per- sonnel, there appears to be both sufficient and appropriate manpower available to effectively operate the proposed services; and Based on a sample utilization survey, it appears that the proposed ASC will serve a population group large enough to provide a reasonable utilization level. At the same time, it is expected that this population group will be basically separate and distinct from the population group expected to be served by the OSD at the Palm Beach-Martin - County Medical Center." (Exhibit No. 11) Although Good Samaritan Hospital had been considering doing so since June of 1975, it actually opened its outpatient surgical department in early August of 1976. Being a hospital based facility, no certificate of need was required. The State Hospital Advisory Committee met on August 10, 1976, to consider petitioner's application. This Committee heard discussion from and directed questions to both the applicant and the intervenor-opponent. Letters from physicians in support of and in opposition to the application were considered. This committee, by a vote of five to zero with one abstention, voted to recommend that the application be denied. (Exhibit 6) By letter dated August 12, 1976, respondent notified petitioner that its capital expenditure proposal was not favorably considered for the following reasons: "1. Your proposed ambulatory surgical facility would be a duplication of facilities and services which are available in Good Samaritan Hospital which is within a block or two of the site of your facility. In addition, St. Nary's Hospital, approximately three (3) miles from your site, has ambulatory surgery capability. The charges you propose for surgical procedures are comparable to those of Good Samaritan Hospital, therefore, cost containment is not a real factor in this case. The fact that Medicaid virtually has eliminated the provision for paying for elective surgery for persons qualifying for care under this program. Under such restrictions, it appears that your proposed facility would not be necessary in terms of providing services to such persons. Petitioner was advised of its right to appeal this decision and petitioner timely requested a hearing on the matter. At its regular meeting on August 26, 1976, the Board of Directors of the HPC voted, by a vote of twenty-one of the twenty-two Board members present, to support petitioner's appeal. There are presently some 700 physicians in Palm Beach County. Some 265 of these doctors are on the staff of Good Samaritan Hospital, which is located on the same block as petitioner's proposed facility. Physicians not staffed at Good Samaritan are able to refer their patients for treatment by physicians staffed there. Good Samaritan has no black doctors on its staff, no podiatrists and no osteopaths. The only dentists allowed staffing privileges are those having two years of post graduate training. Good Samaritan, while it does some charity work, does not participate in the Medicare or Medicaid program, nor does it have any contract with the county to provide services for the indigent. It does have an emergency contract with Medicare. The actual amount of charity work performed is somewhat in dispute. While a figure in excess of $900,000.00 was given by the Administrator of Good Samaritan, it appears that a portion of this amount was uncollected bills. Approximately twenty percent of the procedures offered by Good Samaritan in its outpatient surgery department overlap with the procedures proposed to be offered by ASC. The patient costs of these procedures are substantially similar to those proposed by ASC. While the intervenor has had an outpatient clinic for some time now, it first began to offer general anesthetic surgical procedures on an outpatient basis in early August of 1976. Good Samaritan is currently performing about thirty such procedures per month, or six per week. While the intervenor's operating room is equipped to handle dental services under general anesthesia, it does not contain a dental chair. The evidence regarding other existing ambulatory or outpatient surgical centers or departments in the immediate area of petitioner's proposed facility is somewhat in dispute. While two hospital-based facilities, each twenty miles away, do exist, it is not clear whether St. Mary's Hospital located some three or four miles from petitioner and the intervenor actually has such a separate facility. It is clear that St. Mary's has the capabilities for such a facility. The Palm Beach County Social Services Department provides services for indigent persons in the county through the use of ad valorem tax monies. About ninety percent of the services performed are in the medical field. During the last fiscal year, the county's hospitalization budget for indigents was approximately $1,790,000.00. Amounts paid from September of 1975 through August of 1976 for short term hospitalizations were in excess of $19,400.00 for a total of 158 hospital days. (Exhibit No. 15) All of such procedures performed might have been done in an ambulatory facility. Substantially all of the procedures to be offered by ASC are performed for indigents in Palm Beach County if it is deemed necessary for the client. If the patient were able to undergo surgery and go home in the same day, the hospital per diem charge, which averages $160.00 per day, would be eliminated. The Director of the County Social Services is supporting petitioner's application for the reason that while a similar facility exists nearby -- Good Samaritan Hospital, such facility is not accessible for the indigent client. Dr. C.L. Brumback, Director of the Palm Beach County Health Department, affirmed that procedures to be offered by ASC could be provided to eligible county patients with payment available through the County Social Service Department or the County Health Department. (Exhibit No. 2). The issue of Medicaid reimbursement to an ambulatory surgical facility was somewhat in dispute during the earlier public hearings on petitioner's application. It appears that such reimbursement is presently limited to those services actually provided by a physician. The legislature decides on the services to be provided by line item appropriations, and presently physician service is a listed item while free standing outpatient clinics are not listed. The Florida Department of Health and Rehabilitative Serviced has expressed an interest in having ambulatory surgical care with adequate regulations and their legislative budget request for next year will reflect this interest. (Exhibit No. 3).
Recommendation Based upon the findings of fact and conclusions of law recited above, it is recommended that the determination of the Office of Community Medical Facilities to deny the petitioner's application for a certificate of need be REVERSED. Respectfully submitted and entered this 16th day of November, 1976, in Tallahassee, Florida. DIANE D. TREMOR, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: John H. French, Jr. P.O. Box 1752 Tallahassee, Florida 32302 Jon C. Moyle 707 North Flagler Drive West Palm Beach, Florida Eric J. Haugdahl 1323 Winewood Boulevard Room 406 Tallahassee, Florida 32301 Harold D. Lewis 203 West College Avenue Tallahassee, Florida
The Issue The issue is whether Hialeah Hospital, Inc. may be licensed for a 21-bed psychiatric unit, without first obtaining a certificate of need, on the basis that it provided psychiatric services before a certificate of need was statutorily required.
Findings Of Fact Background of the Controversy The Parties The Department of Health and Rehabilitative Services (the Department) is responsible for determining whether health care projects are subject to review under the Health Facility and Services Development Act, Sections 381.701- 381.715, Florida Statutes. It also licenses hospitals under Chapter 395, Florida Statutes. The Department's Office of Community Medical Facilities renders decisions about requests for grandfather status which would exempt a psychiatric service offered at hospital from certificate of need review. The Department's Office of Licensure and Certification issues licenses but does not grant grandfather exemptions. A hospital will not receive separate licensure for psychiatric beds unless a certificate of need has been obtained for those beds, or the beds are in a psychiatric unit which had been organized before certificate of need review was required. See Section 381.704(2), Florida Statutes (1987). A hospital can provide inpatient psychiatric services to a patient in one of three ways: a) as a patient housed among the general hospital population, b) as a patient housed in a special unit organized within the hospital and staffed by doctors, nurses and other personnel especially to serve patients with psychiatric diagnoses, or c) in a hospital organized as a psychiatric specialty hospital. Serving patients through methods b and c requires special certificate of need approval and licensure. Most community hospitals place psychiatric patients among the general patient population; few hospitals create a distinct psychiatric unit; fewer hospitals still specialize as psychiatric hospitals. Hialeah Hospital, Inc. is a 411-bed general hospital in Hialeah, Florida. It does not currently hold a certificate of need for licensure of a distinct psychiatric unit. As a result, its reimbursement for psychiatric services from the Federal government for Medicare patients is limited. The Health Care Finance Administration (HCFA) generally reimburses hospitals for services based upon flat rates which are paid according to categories known as diagnostic related groups. Hialeah Hospital now receives reimbursement for services it renders to psychiatric patients on this basis. If it is entitled to a grandfather exemption from certificate of need review, and its distinct psychiatric unit is separately licensed by the Department, Hialeah Hospital will receive cost-based reimbursement for services to psychiatric patients, which will result in higher income to the hospital. Approval of the grandfathering request will not result in a) any capital expenditure by the hospital, b) the addition of staff, or c) a change in the type of services currently offered at the hospital. Just before July 1, 1983, the hospital had an average daily census of 16-17 psychiatric patients. If the psychiatric services the hospital has offered do not qualify for grandfathering, Hialeah Hospital may apply for a certificate of need for a distinct psychiatric unit. Even without a psychiatric certificate of need, Hialeah is still entitled to continue to serve patients with psychiatric diagnoses among its general population, and to receive the lower diagnostic related group reimbursement for those services from HCFA. Palmetto General Hospital is a licensed general hospital with 312 acute care beds and 48 separately licensed psychiatric short-term beds operated as a distinct psychiatric unit. It is located near Hialeah Hospital, and both hospitals serve the same geographic area. The primary markets of both hospitals overlap. They compete for patients, including psychiatric patients. Agency Action Under Review From 1973 to 1979 the license issued to Hialeah Hospital by the Department bore a designation for 21 psychiatric beds, based on information submitted in the hospital's licensure application. The hospital then dropped the psychiatric bed count from its licensure applications. This change probably was caused by a problem generated by an announcement from the Northwest Dade Community Health Center, Inc., the receiving facility for psychiatric emergencies in northwestern Dade County, which includes Hialeah. That center had written to the Hialeah Police Department, informing the police that when the center was not open, it had a crisis worker at the Hialeah Hospital emergency room, and that persons needing involuntary psychiatric hospitalization should be taken to the Hialeah Hospital emergency room. The only other hospital in Hialeah treating psychiatric patients was Palmetto General Hospital, which did not accept, as a general rule, patients who could not pay for care. The Hialeah Police Department thereafter began dropping psychiatric patients at Hialeah Hospital, much to the distress of the Hialeah Hospital emergency room staff. The Hospital thereafter dropped the designation of any of its beds as psychiatric beds on its annual licensure applications. It still received psychiatric patients from Jackson Memorial Hospital when that hospital reached its capacity for psychiatric patients. On its 1980 licensure application Hialeah Hospital collapsed all of its medical, surgical and psychiatric beds into a single figure. This was consistent with its practice of serving medical, surgical and psychiatric patients throughout the hospital. Hialeah Hospital filed similar licensure applications in 1981, 1982, 1983. In 1984 there was a dispute over the total number of beds to be licensed, which was resolved in early 1985. In 1985, after a change in the licensing statute which is discussed below, the Department informed Hialeah Hospital that its application for licensure was incomplete and could not be processed until Hialeah explained its basis for seeking separate licensure for 20 short-term psychiatric beds. In its response, Hialeah's Vice President stated: [W]e felt it was appropriate to indicate that Hialeah Hospital did accept psychiatric admissions. These patients have been randomly placed in the institution, many times based on other primary or secondary diagnoses. The application indicates bed usage, not that it is currently a discrete unit. Hialeah Hospital does currently have a Letter of Intent [on file] for establishment of a discrete med/psych unit. Hialeah Ex. 24a On August 1, 1985, the Department's Office of Licensure and Certification informed Hialeah Hospital by certified mail that the application for licensure of 20 short-term psychiatric beds was denied for failure to have obtained a certificate of need for them or to have obtained an exemption from review [both could only come from the Department's Office of Community Medical Facilities]. The hospital was provided a clear point of entry to challenge this determination through a proceeding under Chapter 120, Florida Statutes, but Hialeah filed no petition for review of that decision. Instead, Hialeah pursued the certificate of need application which it had filed in April, 1985 for separately licensed psychiatric beds. There was no reason to challenge the August 1, 1985, denial because the factual bases alleged by the Department were true--the hospital had no certificate of need for psychiatric beds and had not yet asked the Department's Office of Community Health Facilities to decide whether Hialeah qualified for grandfathered beds. On October 21 and 23, 1986, Hialeah Hospital wrote to the Office of Community Health Facilities seeking a determination that it was entitled to have 21 pyschiatric beds grandfathered on its license. In certificate of need application 4025 Hialeah Hospital sought the establishment of a distinct 69 bed psychiatric unit at Hialeah, with separately licensed beds. The application went to hearing and was denied on its merits on February 17, 1987, in DOAH Case 85-3998. In his recommended order, the Hearing Officer discussed the issue of whether Hialeah Hospital was exempt from certificate of need review because it already had a psychiatric unit. He found that the issue was not appropriately raised in the proceeding before him, which was Hialeah Hospital's own application for a certificate of need to establish a psychiatric unit. He therefore found he lacked jurisdiction to consider the grandfathering issue. Hialeah Hospital v. HRS, 9 FALR 2363, 2397, paragraph 5 (HRS 1987). The Department adopted that ruling in its May 1, 1987, final order. Id. at 2365. A letter dated December 5, 1986, from the Office of Community Medical Facilities denied Hialeah's request to grandfather 21 short-term psychiatric beds on its license and thereby exempt them from certificate of need review, as requested in Hialeah's letters of October 21 and 23, 1986. The Department denied the grandfathering request for four reasons: When the Department conducted a physical plant survey on June 1, 1980, there were no psychiatric beds in operation at the hospital; The hospital bed count verification form returned to the Department on January 31, 1984 by the Director of Planning for Hialeah, Gene Samnuels, indicated that the hospital had no psychiatric beds; An inventory of psychiatric beds had been published by the Department in the Florida Administrative Weekly on February 17, 1984 which showed that Hialeah Hospital had no psychiatric beds, and Hialeah never contested that inventory; The Department had not received evidence demonstrating that psychiatric services were provided "in a separately set up and staffed unit between 1980 and 1985." This letter again gave Hialeah a point of entry to challenge the Department's decision to deny licensure of psychiatric beds and it was the genesis of Hialeah's petition initiating this case. It is significant that the Department's Office of Community Health Facilities gave Hialeah a clear point of entry to challenge the December 5, 1986, grandfathering denial with full knowledge that the Department's Office of Licensure and Certification had denied a request from Hialeah Hospital on August 1, 1985, to endorse psychiatric beds on Hialeah's 1985 license. The Departmental personnel knew that those two denials involved different issues. Once the Office of Licensure and Certification told the hospital it had to produce either a certificate of need or a grandfathering approval to have psychiatric beds endorsed on its license, the hospital had to turn to the Office of Community Health Facilities to get a ruling on its grandfathering claim. The letter of December 5, 1986, was the first ruling on the merits of Hialeah Hospital's claim that it was entitled to have 21 beds grandfathered. History of the Department's Specialty Bed Recognition Psychiatric Beds in Florida Hospitals Before July 1, 1983 Before April 1, 1983 no state statute or Department rule required that psychiatric beds in a hospital be located in physically distinct units. Psychiatric patients could be located throughout a hospital. They were not required to be placed in rooms having distinguishing characteristics, or to use group therapy rooms, dining rooms, or other rooms exclusively dedicated to use by psychiatric patients. There were, of course, hospitals that had distinct psychiatric units, and some entire hospitals which were specifically licensed as psychiatric hospitals. After 1983, a hospital had to obtain a certificate of need to organize what had previously been diffuse psychiatric services into a distinct unit dedicated to serving patients with psychiatric diagnoses. Today no special certificate of need is required to serve psychiatric patients in the general hospital population, but without separate licensure the hospital receives Medicare reimbursement from the federal government for psychiatric patients at the level established by the diagnostic related groups, not cost based reimbursement. Before July 1, 1983 annual hospital licensure application forms asked hospitals to identify their number of psychiatric beds as an item of information. The hospital licenses issued, however, were based on the hospital's total number of general medical-surgical beds, a category which included psychiatric beds. The 1983 Amendments to the Florida Statutes and the Department's Rules on Specialty Beds In April of 1983, the Department adopted a rule which established a separate need methodology for short-term psychiatric beds, Rule 10-5.11(1)(o), Florida Administrative Code. Thereafter, the Legislature amended the statutes governing the hospital licensing, Section 395.003, Florida Statutes (1983) by adding a new subsection (4) which read: The Department shall issue a license which specifies the number of hospital beds on the face of the license. The number of beds for the rehabilitation or psychiatric service category for which the Department has adopted by rule a specialty bed need methodology under s. 381.494 shall be specified on the face of the hospital license. All beds which are not covered by any specialty bed need methodology shall be specified as general beds. Section 4, Chapter 83-244, Laws of Florida (underlined language was added). In the same Act, the Legislature amended the planning law to require hospitals to apply for certificates of need to change their number of psychiatric and rehabilitation beds. Section 2, Chapter 83-244, Laws of Florida, codified as Section 381.494(1)(g), Florida Statutes (1983). The Department's rules defined short-term psychiatric services as: [A] category of services which provide a 24- hour a day therapeutic milieu for persons suffering from mental health problems which are so severe and acute that they need intensive, full-time care. Acute psychiatric inpatient care is defined as a service not exceeding three months and averaging a length of stay of 30 days or less for adults and a stay of 60 days or less for children and adolescents under 18 years. Rule 10- 5.11(25)(a), Florida Administrative Code (1983), effective April 7, 1983. A minimum size for any new psychiatric unit was prescribed in Rule 10- 5.11(25)(d)7., which states: In order to assure specialized staff and services at a reasonable cost, short-term inpatient psychiatric hospital based services should have at least 15 designated beds. Applicants proposing to build a new but separate psychiatric acute care facility and intending to apply for a specialty hospital license should have a minimum of 50 beds. After the effective date of the rule, April 7, 1983, no hospital could organize its psychiatric services into a distinct psychiatric unit using specialized staff unless the unit would have at least 15 beds. This did not mean that a hospital which already had organized a distinct psychiatric unit using specialized staff had to have at least 15 beds in its unit to continue operation. Whatever the number of beds, whether fewer or greater than 15, that number had to appear on the face of the hospital's license. Section 395.003(4), Florida Statutes (1983). To change that number, the hospital had to go through the certificate of need process. Section 381.494(1)(g) Florida Statutes (1983). Those hospitals whose pre-existing units were endorsed on their licenses can be said to have had those units "grandfathered". There is no specific statutory exemption from certificate of need review for pre-existing units, but such treatment is implicit in the regulatory scheme. The Department's Grandfather Review Process To know which hospitals were entitled to continue to operate discrete psychiatric units without obtaining a certificate of need, the Department's Office of Community Medical Facilities had to identify hospitals which had separate psychiatric units before the July 1, 1983, effective date of Section 395.003(4), Florida Statutes (1983). An inventory of beds in the existing psychiatric units also was necessary to process new certificate of need applications. The Department's rule methodology authorized additional beds in psychiatric units based upon a projected need of 15 beds per 10,000 population. Rule 10-5.11(25)(d)1., Florida Administrative Code (1983). The Legislature approved the psychiatric service categories which the Department had already adopted by rule when it enacted Section 4 of Chapter 83- 244, Laws of Florida. The Legislature thereby validated a process the Department had initiated in 1976 with its Task Force on Institutional Needs. That group had developed methodologies to be used throughout the state to determine the need for different types of medical services, because local health systems agencies were reviewing CON applications based upon idiosyncratic methodologies. To develop review criteria for psychiatric services, the Task Force had to both define psychiatric services and determine how it should measure them. In doing so, the Department looked for assistance to publications of entities such as the American Hospital Association and the Joint Commission on Accreditation of Hospitals. According to the American Hospital Association, psychiatric services are services delivered in beds set up and staffed in units specifically designated for psychiatric services. In the Task Force report, a psychiatric bed was defined as: A bed in a clinical care unit located in a short-term, acute care hospital or psychiatric hospital which is not used to provide long-term institutional care and which is suitably equipped and staffed to provide evaluation, diagnosis, and treatment of persons with emotional disturbances. An inpatient care unit or clinical care unit is a group of inpatient beds and related facilities and assigned personnel in which care is provided to a defined and limited class of patients according to their particular care needs. HRS Exhibit 14 at 92 and 1-5. The definition of a psychiatric bed in the Report of the Department Task Force on Institutional Needs is compatible with the requirements of the Florida Hospital Cost Containment Board in its Florida Hospital Uniform Reporting Manual. Reports made by hospitals to the Hospital Cost Containment Board include information about services provided in separately organized, staffed and equipped hospital units. The information provided to the Board assisted the Department in determining which Florida hospitals already were providing psychiatric services in separately organized, staffed and equipped hospital units before separate licensure became necessary. The Department surveyed hospitals to determine the number of existing beds in distinct psychiatric units. It also looked to old certificates of need which referenced psychiatric services at hospitals, reports hospitals had made to the Florida Hospital Cost Containment Board, to past licensure applications the Department had received from hospitals, and to the Department's 1980 physical plant survey. These sources of information were, however, imperfect, for the reasons which follow: 1. Certificates of Need Issued 22. Before July 1, 1983, certificates of need were required for the initiation of new services which involved capital expenditures above a certain threshold dollar amount. Hospitals which had a long-standing psychiatric units would have had no occasion to request a certificate of need for psychiatric services. Review of certificates issued would not turn up a hospital with a mature psychiatric service. 2. Hospital Cost Containment Board Information 23. The reports from hospitals during the early years of the Hospital Cost Containment Board are not entirely reliable, because the hospitals did not yet have uniform accounting systems in place, despite the Board's attempt to establish uniform accounting methods through its reporting system manual. Hospitals commonly made errors in their reports. If the reports were prepared correctly, they would identify hospitals with discrete psychiatric units. Hialeah's HCCB Reports for 1981, 1982 and 1983 indicated that the hospital had no active psychiatric staff, no psychiatric beds and no psychiatric services. 3. Departmental Survey Letters 24. In Spring, 1983, the Department tried to verify the existing inventory of beds for specialty services such as psychiatric services, comprehensive medical rehabilitation services and substance abuse services. There is no record, however, that this survey letter was sent to Hialeah Hospital. In late 1983 or early 1984, the Department again attempted to establish inventories for psychiatric beds and rehabilitation beds. It distributed a cover letter and a form entitled "Hospital Bed Count Verification", which asked hospitals to confirm the Department's preliminary count of the hospital's "number of licensed beds". Hialeah's planner returned the form verifying that Hialeah Hospital was licensed for 411 "acute general" beds and that it had no short or long term psychiatric beds. The answer was correct, for that is the figure which appeared on Hialeah's license at that time. The Department did not ask the hospitals for an average daily census of short-term psychiatric patients. The cover letter for the survey form told hospital administrators that the Department was seeking to verify its preliminary bed count for services for which a special bed need methodology had been established, viz., long and short term psychiatric beds, substance abuse beds and comprehensive medical rehabilitation beds. The cover letter drew attention to the Department's intention to use the data collected from the responses to the form as a beginning inventory for short-term psychiatric beds. The cover letter also cautioned hospitals that when completing the form, they should "keep in mind the service definitions". Copies of the definitions were attached to the form. The appropriate inference to be drawn from the answer given by Hialeah Hospital to the survey form was that in January, 1984, the hospital had no beds organized into a short term psychiatric unit. This is consistent with the later letter from the hospital's vice president quoted in Finding of Fact 6, above. The Department published on February 17, 1984, its base inventory of psychiatric and rehabilitation beds in the Florida Administrative Weekly. The publication stated that "any hospital wishing to change the number of beds dedicated to one of the specific bed types listed will first be required to obtain a certificate of need." 10 Florida Administrative Weekly at 493. Hialeah was shown as having no psychiatric beds. Id. at 498. The notice did not specifically inform the hospitals of the right to petition for a formal hearing to challenge the inventory figures published. 4. Licensure Files 25. Although, the Department's licensure application form listed "psychiatric" as a possible hospital bed utilization category before 1983, these categories were set up for informational purposes only. No definitions were given to hospitals describing how beds should be allocated among the categories available on the form, making those figures unreliable. Before 1980 Hialeah Hospital had listed psychiatric beds on its licensure applications, see Finding of Fact 5, above. Since 1980 it listed no psychiatric beds. 5. Physical Plant Survey The Department performed a physical plant survey in 1980 to determine the total number of beds in service at each hospital. That survey did not attempt to make distinctions between different types of services listed on the survey form. The Department's architect who performed the survey did not attempt to evaluate the quality or intensity of the psychiatric services provided at any hospital. Each of the types of information the Department examined to determine the existing inventory of short-term psychiatric beds in 1983 had weaknesses, and no single source is dispositive. It is difficult to credit the assertion that Hialeah Hospital had a distinct psychiatric unit before July, 1983 which was not reflected in any of these sources of information. The use of multiple sources of information served as a cross-check on information from each source. It is understandable that Hialeah would not have applied for a certificate of need to operate a separate psychiatric unit. Before 1983, no such application was needed if the establishment of the unit entailed an expenditure of money below a threshold amount. All of its reports to the Hospital Cost Containment Board, however, indicate that there was no separate psychiatric service at the hospital and that the hospital had no active psychiatric staff. With respect to the Department's survey letters, while the 1984 survey form itself did not specifically inform hospital administrators that their responses would be used to establish a base inventory of psychiatric beds, the cover letter did make that clear. This should have put the hospital's planner, who filled out the form, on notice that if Hialeah had a discrete, short-term psychiatric service the number of beds in that unit should be listed. What is perhaps the most significant point is that the hospital reported no psychiatric beds on its licensure application at all from 1980 to 1985. Medical doctors in general practice can and do treat psychiatric patients, in addition to doctors who specialize in psychiatry. No doubt patients commonly were admitted to the hospital who had primary diagnoses of psychiatric illnesses. The hospital's licensure filings, however, since 1979 fail to record any psychiatric beds. This is important evidence that the hospital did not regard itself as having any distinct unit organized to provide psychiatric care. The Hospital's 1985 correspondence from the Hospital's vice president to the Department, quoted in Finding of Fact 6 confirms this. The failure to list any psychiatric beds at Hialeah on the Department's 1980 physical plant survey is not significant, since determining the number of psychiatric beds was not the focus of that survey. It is true that the Department never conducted site visits at all hospitals to determine whether they had a) distinct psychiatric units, b) psychiatric medical directors, c) written psychiatric admission and treatment policies, or d) psychiatric policy and procedures manuals. The efforts the Department did make to establish the beginning inventory of psychiatric beds were reasonable, however Hialeah Hospital's Licensure History and Efforts to Obtain Grandfather Status The entries on Hialeah's applications for annual licensure from the Department are cataloged above, and need not be repeated. During the years 1980-84, after it ceased listing psychiatric beds on its licensure application, psychiatric services were still being provided to patients throughout the hospital. In 1984, the hospital engaged in correspondence with the Department over the appropriate number of licensed beds for the hospital as a whole. Ultimately the hospital and the Department agreed that 411 beds should be licensed. In its 1985 licensure application, Hialeah then requested that 20 short-term psychiatric beds be listed on the license. The Office of Licensure and Certification questioned this. Ultimately, the Office of Licensure and Certification refused to endorse those 20 psychiatric beds on the license because there was no certificate of need on file for them, nor any statement from the Office of Community Medical Facilities granting the hospital an exemption from that licensure requirement. Hialeah Hospital did not challenge that decision in a proceeding under Chapter 120, Florida Statutes. The discussions between the hospital and the Department's Office of Community Medical Facilities continued, and by late October, 1986, Hialeah requested the Department to approve 21 short-term psychiatric beds at the facility, and sent the Department backup material which it believed justified a grandfather determination. After review, the Department denied the grandfather request by letter dated December 5, 1986. The Department's Action Regarding Other Grandfathering Requests Hialeah's is not the first request the Department received for grandfathering beds. After June of 1983, when the Legislature required CON approval for hospitals to change their number of psychiatric or rehabilitation beds, a number of institutions made similar requests. 1. Comprehensive Medical Rehabilitation Beds The rule on comprehensive medical rehabilitation beds was developed by the Department at the same time as the rule on psychiatric beds. The Department used a similar process to determine the existing inventory of both types of beds. The Department determined that preexisting comprehensive medical rehabilitation units at Parkway General Hospital, Naples Community Hospital, Orlando Regional Medical Center, Holy Cross Hospital, and University Community Hospital entitled those facilities to grandfathering of their comprehensive medical rehabilitation services. The Department has also determined that a preexisting distinct psychiatric unit at Palmetto General Hospital entitled that institution to grandfather status for its psychiatric beds. Parkway General Parkway General Hospital did not specify rehabilitation beds on its licensure applications for the years 1980 through 1984. The Department denied Parkway's request for endorsement of 12 comprehensive medical rehabilitation beds on its 1985 license because Parkway had not obtained a certificate of need for them or an exemption from review. The Department thereafter determined that Parkway had been providing comprehensive medical rehabilitation services before June, 1983 in a physically distinct and separately staffed unit consisting of 12 beds. It then endorsed 12 beds on Parkway's license, even though the rule which became effective in July, 1983 would require a minimum unit size of 20 beds for any hospital organizing a new comprehensive medical rehabilitation unit. See Rule 10-5.011(24), Florida Administrative Code. Naples Community Hospital The Department granted Naples Community Hospital a grandfather exemption for its rehabilitation beds in February, 1987. In had not listed the rehabilitation beds on its license application for the years 1983-1985, had not returned the Department's bed count verification form, nor did it challenge the bed count which the Department published in the Florida Administrative Weekly. The hospital had applied for and received a certificate of need in January of 1981 to establish a 22-bed rehabilitation unit and that unit began operation in late 1982. The Department ultimately determined that the hospital had provided rehabilitation services in a physically distinct unit and the services were organized and delivered in a manner consistent with applicable regulatory standards. It granted a grandfather request in February, 1987. Orlando Regional Medical Center A grandfather exemption for 16 rehabilitation beds was granted to Orlando Medical Center in 1986. The 16-bed brain injury unit had been authorized by the Department through certificate of need number 2114 before the Department had adopted its rule governing comprehensive medical rehabilitation beds in 1983. The services were provided in a physically distinct unit. The Department determined the 20-bed minimum size for a new unit did not apply to a unit which qualified for grandfathering. Holy Cross Hospital The Department granted a grandfather exemption for comprehensive medical rehabilitation beds to Holy Cross Hospital after a proceeding was filed with the Division of Administrative Hearings to require the Department to recognize the existence of a 20-bed comprehensive medical rehabilitation center. The Department determined by a site visit that Holy Cross had established a separate unit, probably in 1974, long before the Department's comprehensive medical rehabilitation unit rule became effective in July, 1983. The unit had its own policy manual, quality assurance reports, patient screening criteria, and minutes of multidisciplinary team staff conferences. The hospital had neglected to report the unit in its filings with the Hospital Cost Containment Board but the hospital contended that it never treated the unit as a separate unit for accounting purposes, and had not understood the need to report the unit as a distinct one under Hospital Cost Containment Board reporting guidelines. The hospital corrected its reporting oversight. The grandfathering is consistent with the hospital's actual establishment of the unit long before the Department's rules went into effect. University Community Hospital A dispute over whether to grandfather a comprehensive medical rehabilitation unit which went through a Chapter 120 administrative hearing and entry of a final order involved University Community Hospital (UCH). The Department initially determined that the nine comprehensive medical rehabilitation beds at UCH had been in existence before July, 1983 and were exempt from certificate of need review. That decision was challenged in a formal administrative proceeding by a competing hospital, Tampa General. The competitor was successful, for both the Hearing Officer in the recommended order and the Department in the final order determined that University Community Hospital's 9 bed rehabilitation unit was not entitled to be grandfathered. University Community Hospital v. Department of Health and Rehabilitative Services, 11 FALR 1150 (HRS Feb. 14, 1989). In determining that grandfathering was inappropriate, the Department found that the hospital had not prepared separate policies and procedures for its rehabilitation unit before the rule on comprehensive medical rehabilitation beds became effective, and that the unit did not have a physical therapy room on the same floor as the patients. The beds supposedly dedicated to rehabilitative care were mixed with non- rehabilitative beds, so that a semiprivate room might have one bed used for rehabilitative care and another for an unrelated type of care. This conflicted with the requirement that the rehabilitation unit be physically distinct, with all patients and support services located on the same area or floor, rather than scattered throughout the hospital. The Department also determined that many hospitals offer physical therapy, occupational therapy, or speech therapy, but that to qualify as a comprehensive medical rehabilitation center, these services had to be coordinated in a multidisciplinary approach to the patient's needs, which had not been the case at University Community Hospital. The common strand running through the grandfathering decisions on comprehensive medical rehabilitation beds is that grandfathering is appropriate when a hospital demonstrates that before the comprehensive medical rehabilitation rule became effective in July, 1983, it had a separate unit which met the standards and criteria for a comprehensive medical rehabilitation unit (other than the minimum size for new units). Psychiatric Beds Tampa General Hospital Only two cases involve a decision on whether psychiatric services at a hospital qualify for grandfathering. Tampa General Hospital, which was owned by the Hillsborough County Hospital Authority, operated 93 psychiatric beds in 1981, 71 at Hillsborough County Hospital and 22 at Tampa General Hospital. A certificate of need granted in 1981 authorized the expenditure of $127,310,000 for the consolidation of both hospitals and an overall reduction of 14 psychiatric beds after the hospitals were integrated. When the Hillsborough County Hospital Authority obtained its certificate of need, it was not necessary to differentiate between general acute care beds and psychiatric beds for licensure purposes. Increased demand for acute care beds led Tampa General to close its psychiatric unit and make those 22 beds available for ordinary acute care. After the 1983 statutory and rule changes regarding the separate licensure of psychiatric beds, the Hillsborough County Hospital Authority told the Department that Tampa General had no psychiatric beds in operation. On its 1985 licensure application, the Hillsborough County Hospital Authority applied for licensure for 22 psychiatric beds at Tampa General and 77 at Hillsborough Hospital. The Department denied the request for the psychiatric beds at Tampa General. The Final Order entered in Hillsborough County Hospital Authority v. HRS, 8 FALR 1409 (Feb. 16, 1986), determined that there had been a discontinuation in the use of psychiatric beds at Tampa General, and that to allow Tampa General to add psychiatric beds after the statutory and rule changes in 1983 would frustrate the certificate of need process and would be detrimental to good health care planning. Palmetto General Hospital Palmetto General Hospital participated in an administrative hearing in 1975 regarding the disapproval of its proposed expansion, which included the dedication of one floor and 48 beds as a psychiatric unit. The Hearing Officer found that there was a need for psychiatric beds in the community and recommended that the Secretary of the Department issue a certificate of need "for that portion of the applicant's proposed capital expenditures relating to the addition of a 48 bed psychiatric unit". Palmetto General Exhibit 32, at 12, paragraph 2. The order of the Hearing Officer was affirmed by the District Court of Appeal in Palmetto General Hospital, Inc. v. Department of HRS, 333 So.2d 531 (Fla. 1st DCA 1976). The approval of the 48 psychiatric beds is clear only from a review of the Hearing Officer's order. Certificate of Need 292X was issued for the 48 psychiatric beds. Palmetto General exhibit 45. Palmetto received Medicare certification for its psychiatric inpatient unit, and listed 48 short-term psychiatric beds on its licensure applications each year from 1979 to 1983. It failed to show its psychiatric beds on the bed count verification survey form sent by the Department. Palmetto General's chief financial officer told the Department on June 10, 1983 that Palmetto General did not have psychiatric beds in a separately organized and staffed unit. This resulted in the issuance of a license which showed no psychiatric beds. The Department itself wrote to the administrator of Palmetto to learn why the 48 short-term psychiatric beds had not been listed on Palmetto's application for licensure in 1985. Palmetto wrote back and acknowledged that it did have 48 short-term psychiatric beds. A license showing those 48 beds was then issued. Thereafter, staff from the HRS Office of Comprehensive Health Planning took the position that the 48 short-term psychiatric beds should not have been listed on the license, and the Department's Office of Licensure and Certification requested that the 1985 license containing the endorsement for those 48 psychiatric beds be returned to the Department for cancellation. Palmetto then sought an administrative hearing on the attempted cancellation of the license. Palmetto and the Department entered into a Final Order dated March 9, 1986 which agreed that Palmetto met all the requirements for the designation of 48 short-term psychiatric beds on its license. Palmetto, had, in fact, operated a 48 bed psychiatric unit on its third floor since 1981, but moved that unit to the sixth floor in 1985. It was dedicated exclusively to psychiatric patients and there were specific policy and procedure manuals developed and used in dealing with psychiatric patients since 1981. The history of Palmetto's licensure is certainly one replete with contradictions. It is inexplicable that the chief financial officer of the hospital would have told the Department in 1983 that it had no separately organized and staffed psychiatric unit when, in fact, it had such a unit. It was also unclear why it would have shown no psychiatric beds on the bed count verification form returned in late December or early January, 1984, or why its April, 1983, and its 1985/1986 license application forms listed no psychiatric beds. Nonetheless, it had obtained a certificate of need for a psychiatric unit after administrative litigation and an appeal to the District Court of Appeal. The unit was opened and remained continuously in existence. It had appropriate policies and procedures in place for a distinct psychiatric unit as the 1983 statutory and rule amendments required for separate licensure of psychiatric beds. History of Psychiatric Bed Services at Hialeah Hospital Since at least 1958, Hialeah Hospital has had psychiatrists on its medical staff, and the number of psychiatric physicians on staff has increased. Thirteen psychiatrists had admitting privileges at the hospital by 1983; there are now 23 psychiatrists with privileges. As is true with most community hospitals, physicians specializing in psychiatry would admit patients to the general population at Hialeah Hospital if they needed intensive psychotherapy or medication which needed to be monitored by nurses. Patients who were homicidal, suicidal or intensely psychotic were not admitted to Hialeah Hospital. Those patients need a more intensive psychiatric environment, either in a locked psychiatric unit or in a psychiatric specialty hospital. The persons physicians placed at Hialeah through 1983 did not need the intensive services of a discrete psychiatric unit. Hialeah Hospital indicated on its licensure application to the Department that it had 21 psychiatric beds throughout the 1970's, but ceased this listing in the 1980's as set forth in Finding of Fact 5 above. The nature of the services available at the hospital had remained constant. Under the psychiatric diagnosis coding system published in the Diagnostic Statistical Manual III, (which is commonly used by psychiatrists) Hialeah Hospital had an average daily census of 25 patients with primary or secondary psychiatric diagnoses in 1980, and 18 in 1981. Only about 25 percent of those patients had a primary psychiatric discharge diagnosis. The additional patients had secondary psychiatric diagnoses. Hialeah must rely on these secondary diagnoses to argue that its average daily census for psychiatric patients approached 21 beds. It was not until 1985 that Hialeah consolidated its psychiatric services to a medical/psychiatric unit. That unit serves patients with medical and psychiatric diagnosis as well as patients with solely psychiatric diagnoses. Before 1983, there was no medical director of psychiatry at Hialeah Hospital, and no separate policies and procedures for the admission of patients to a psychiatric unit, nor any staff dedicated to the care of psychiatric patients. To be sure, the hospital was in a position to provide quality psychiatric care to patients whose needs were psychotherapy, monitored medication, or individual counseling by psychiatric physicians and nurses. This reflects the reality that not all patients who need to be placed in the hospital for psychiatric care require the services of a separate medical/psychiatric unit. Patients with more acute psychiatric illness do need interdisciplinary approaches to their care. These interdisciplinary approaches are more expensive than serving psychiatric patients in the general hospital population. This is why the Federal government provides higher, cost-based reimbursement to the hospitals with specialty psychiatric licenses. Hialeah has not proven that the psychiatric services it was providing before 1983 were significantly different from those provided in typical community hospitals which did not have distinct psychiatric units. Hialeah's long-standing relationship with the Northwest Community Mental Health Center is not especially significant. Certainly, the Center was aware that Hialeah was a potential source of psychiatric care. Baker Act patients who needed hospitalization were taken there between 1980 and 1983. There was a flow of patients back and forth between the Center and the hospital's inpatient population, and discharge plans by Hialeah's social workers included referrals back to the Mental Health Center for follow-up and outpatient care. Similarly, the Dade-Monroe Mental Health Board knew that Hialeah was a potential provider of inpatient psychiatric services. The predecessor to the current local health council, the health systems agency of South Florida, recorded that there were psychiatric admissions at Hialeah Hospital in the early 1980's, and the health systems agency recommended a conversion of existing beds to psychiatric services because of a need for additional psychiatric services in the area. None of this, however, means that Hialeah had operated a distinct psychiatric unit before 1983 which entitles it to grandfather status.
Recommendation It is recommended that the application of Hialeah Hospital for grandfather status for 21 short-term psychiatric beds, and the inclusion of those short-term psychiatric beds on its license and on the Department's bed inventory be denied. DONE AND ENTERED this 6th day of October, 1989, in Tallahassee, Leon County, Florida. WILLIAM R. DORSEY Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 6th day of October, 1989.
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.
Findings Of Fact New findings of fact have only been made in accord with the limited mandate/remand jurisdiction of the appellate court. Otherwise, findings of fact contained in the recommended order of Hearing Officer R. T. Carpenter entered September 18, 1985, have been adopted and incorporated by reference. To the extent the adopted original findings impact on the new findings, they have been adopted, following review of the record and the parties' submissions, for content. Any language from the original recommended order which has not been adopted is rejected in accord with the court's limited remand. Paragraph 1 (including footnote 1) of the original recommended order entered in this cause, copy attached as Exhibit "A", is adopted and incorporated by reference. The "service area" at issue was disputed by the parties. HRS District 9 encompasses Palm Beach, Indian River, Okeechobee, Martin and St. Lucie counties. Paragraph 3 of the original recommended order entered in this cause, copy attached as Exhibit "A", is adopted and incorporated by reference. Only the second and third sentences of paragraph 4 of the original recommended order entered in this cause, copy attached as Exhibit "A", are adopted and incorporated by reference. Paragraph 5 including (footnote 3) of the original recommended order entered in this cause, copy attached as Exhibit "A", is adopted and incorporated by reference. See also new finding of fact 8 infra. The Network 19 representative, who was similarly qualified, calculated a need for five additional stations but his methodology, calculations, and ultimate result is rejected for reasons clear from the remand opinion dealing with application by Mr. Moutsatos of the wrong population data and for use of an incorrect "service area" as set forth in new finding of fact 7 infra. As noted, the geographic location wherein the applicant, West Boca, seeks to locate, is Boca Raton, Palm Beach County, Florida, a county within HRS District 9. Rule 10-5.11(18), Florida Administrative Code, does not define "service area." District 9 has not been subdivided by either the local health council or HRS. The original application filed by West Boca indicated the proposed service area would be Palm Beach County. At the administrative hearing, West Boca, over Boca Raton AKC's and Delray AKC's objections, was permitted to introduce an amended application which designated a sub-area of Palm Beach County as its "service area", and the original recommended order entered herein recognized such an abbreviated area. Contrariwise, the HRS final order ruled that Palm Beach County was the appropriate service area to be used in applying the need methodology contained in the rule. Because this aspect of the final order was affirmed by the First District Court of Appeal, it becomes "law of the case" and Palm Beach County must be used as the service area for applying the methodology to this applicant. State v. Stebile, 443 So.2d 398 (Fla. 4th DCA 1984), Marine Midland Central v. Cote, 384 So.2d 658, (Fla. 5th DCA 1980). However, because the parties' submissions have insinuated this element of "service area" into the remand consideration of this cause, it may be noted that the record is clear that at all times relevant (including but not limited to the date West Boca's application was deemed complete, the date the application was preliminarily reviewed by HRS, and the date of hearing) HRS used Palm Beach County as the appropriate "service area" as contemplated by Rule 10- 5.11(18). West Boca has failed to demonstrate within the evidence received at the prior hearing that a smaller area should be defined for purposes of these proceedings. This determination is made notwithstanding evidence of desirable driving times for end stage renal dialysis (ESRD) patients and superfluous language employed by HRS' expert witness, Ms. Dudek, to the effect that although HRS policy and procedure always utilized Palm Beach County, a sub-area need determination is not an inappropriate measure of need for health planning purposes. These latter elements have been considered but are not persuasive that a smaller sub-area is appropriate in the face of sound health planning reasons for not using smaller than county sub-areas. The present submissions of West Boca on remand also fail to demonstrate any compelling reason to depart from normal HRS policy and procedure. In evaluating an application for a CON for a proposed chronic renal dialysis facility, HRS utilizes the methodology contained in Rule 10-5.11(18), Florida Administrative Code. The First District Court of Appeal has ruled that the need for the West Boca facility must be determined utilizing the "1983-84 population data as received into evidence at the prior hearing" and determining need for the proposed dialysis center one year from the date that the application is deemed complete by HRS. West Boca's application was deemed complete in February of 1983. The 1984 population of the service area (Palm Beach County) was 689,325. The 1984 new patient acquisition rate was 197.29 per million. The 1984 service area mortality rate was 23.8 percent. This data was gathered by the District 9 Health Council and the HRS Office of Community Medical Facilities from ESRD providers for the calendar year 1984. In calculating the need under the ESRD methodology the first variable is "current ESRD patients by census for service area." At the administrative hearing in this case, Elizabeth Dudek, Community Medical Facilities Consultant for HRS concluded that 4 stations were needed. (See original Finding of Fact 5, adopted in new Finding of Fact 5 supra.) However, Ms. Dudek also testified that this "patient census" number was 260. Ms. Dudek obtained this "260" figure from the Florida ESRD Network 19 First Quarter Report 1985. She totaled the in-patient census figures for the Palm Beach County facilities to obtain this figure. However, since that figure represents only in-center patients, from which the second variable ("ESRD patients on home dialysis") is to be subtracted, the patient census number of 260 as given by Ms. Dudek and as contained in HRS exhibit 1 is in error. The correct number for the first variable in the ESRD methodology can only be determined by adding in-center patients and home dialysis patients (260 + 24 284). HRS is required to correct any factual errors within its knowledge. Balsam v. HRS, 486 So.2d 1341 (Fla. 1st DCA 1986). Since the patient census in HRS exhibit 1 is in error, the correct figure should be substituted. Once this is done, the correct procedure for calculating the need for a proposed ESRD facility in Palm Beach County, which application was deemed complete in 1983, is as follows: Current ESRD patients by census for service area (Palm Beach County) 284 Less ESRD patients on home dialysis 24 Plus new ESRD patients per 1 million population for one year [computed using 1984 new patient acquisition rate multiplied by 1984 projected population] 136 Less projected number of ESRD patients to receive home dialysis training 12 Less number of ESRD patients receiving transplant operations for one year 7 Less number of unsuccessful transplants for one year 0 Less ESRD patient mortality for one year [In calculating need under the ESRD methodology, if the "patient census" number is changed, then the variable "ESRD patient mortality for one year" will also change. Therefore, the patient mortality is determined by the following procedure: mortality rate based on experience for service area applied to the subtotal of previous calculations (284-24+136-12-7-0--377; 377 x 23.8 percent 90). See Rule 10-5.11(18)(b)1. Florida Administrative Code and HRS exhibit 1.] 90 Plus 10 percent of current and projected ESRD patients on home dialysis 4 Equals number of patients requiring chronic dialysis services for one year in the service area 291 The Rule also provides that 80 percent of the capacity of four patients per station per week is to be utilized, yielding a factor of 3.2. This is divided into the number of patients requiring chronic dialysis services for one year in the service area (291). The dividend, 91, is the number of stations needed in the service area, less the 84 existing stations, for a net need of seven stations in Palm Beach County in 1984. (Note that where permitted all figures have been "rounded" to the nearest whole number). Petitioners identified some relatively minor errors in input data and calculations. These errors would not, however, significantly change the so- called "hard numbers" stated above in new Finding of Fact 8. The more significant error of Ms. Dudek described therein is purely one of arithmetic and its required correction, in no way does violence to that witness' correct application of the rule methodology. Both the Applicant and Petitioners presented additional expert testimony of health care consultants. Not surprisingly, their conclusions tended to reduce the need on one hand (Petitioners) and increase it on the other (Applicant). Although their testimony is incorporated in those considerations discussed in new Finding of Fact 11 (adopting original recommended order paragraphs 11-24 inclusive), it is rejected as to modification of the data utilized and generated by the HRS witness. 11. Paragraphs 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22 (see also new findings of fact 5-8,) 23, and 24 of the previous recommended order entered in this cause, copy attached as Exhibit "A", are adopted and incorporated by reference.
Findings Of Fact On January 4, 1983, Dan Cook, Director of Planning and Development for CDC, submitted a letter to HRS indicating CDC's intent to submit an application for a CON to establish an 11-station outpatient dialysis facility in Fort Pierce, Florida. This letter of intent was acknowledged by HRS by its letter of January 13, 1983, which also advised the application must be filed by February 15, 1983, and complete by April 15, 1983, for an action by HRS in May, 1983. CDC's CON application was received in HRS on February 15, 1983, timely filed; and by letter of April 8, 1983, HRS deemed the application complete. On May 31, 1983, HRS issued a CON to CDC for a 10-station facility in Fort Pierce. The law and regulations applicable to CON applications in Florida and the criteria by which they are judged are contained in Section 381.494(6)(c), Florida Statutes, and Chapter 10-5, Florida Administrative Code. The parties stipulate that several criteria in both authorities have been met CDC or are not relevant, but are in dispute over others. HRS is designated as the single state agency for the issue or denial of CONs for health care facilities. Dialysis is a medical procedure whereby blood of persons with end stage renal disease is passed through an artificial kidney to remove the impurities contained therein. End stage renal disease is that stage of renal failure where the kidneys no longer naturally remove the impurities form of health maintenance which requires three treatments of about four to five hours' duration each per week. Patients are usually dialyzed at a dialysis facility during one of normally three dialysis shifts per day. Dialysis treatments are reimbursable under Medicare. When CDC's pro forma statement of revenue was originally prepared for submission with the application for the CON, the assumption was that the reimbursement by Medicare would be at the then existing figure of $135 per treatment. Subsequent to that time, however, Medicare reduced its reimbursement figure to $115.21 per treatment. On the basis of this new figure, this reduction has resulted in an estimated $7 500 pretax loss for the proposed facility during the first year and a profit of $41,749 before taxes for the second year for CDC, which has adjusted its total corporate profits to offset the first year facility loss and to capitalize the new center. With that exception, there is no change in the pro forma statement originally submitted. Mr. Dan Sullivan, an accountant for CDC, estimates that CDC can operate the facility at a profit with its break-even point coming during the eleventh month, of operation. From that point on, each month should show a profit. Petitioners operate renal dialysis facilities in areas contiguous to that requested by CDC. The Indian River Artificial kidney Center facility is located in Stuart, Florida, 18 miles to the south Fort Pierce; and the Vero Beach Artificial Kidney Center facility is located in Vero Beach, 14 miles to the north. The Indian River facility currently has 14 stations, and the Vero Beach facility six. The Stuart facility expanded from 11 to the current 14 stations in 1983 after its request to expand to 21 stations was reduced upon the recommendation of Network 19's staff analysis, which indicated no greater need than that. Network 19, a short title for ESRD Network 19, established approximately six years ago under the auspices of the Federal Health Care Finance Administration (HCFA). In Florida, it covers the whole state as a peer review organization which represents 75 dialysis units, 4 transplant units, and 9 patient advocates in the policy-making group, the coordinating council. In addition to that council is an executive committee made up of 17 members, most of whom are doctors, and a medical review board of doctors, nurses, social workers, dieticians and professionals of a similar background. Network 19 performs three major functions: (1) that of a patient ombudsman, (2) that in the planning area and (3) that in the patient tracking area. The agency has a computer registry that maintains information on every dialysis and transplant patient in Florida for the last five years, and this information serves as a data base for certificate of need determinations in new ESRD CON applications. This data base is updated monthly, and Network 19 processes an average of 25 to 30 applications per year. By invitation from HRS, for the last five years, Network 19 has provided expert counsel and advice on all new hemodialysis service applications. Network 19's advice has been followed in approximately 95 percent of the cases upon which recommendations have been made. In the preparation of a recommendation, the executive director and his staff first perform an analysis of the applications which is thereafter submitted to the executive committee for review. It is the recommendation of the executive committee that is forwarded to HRS. Network 19 did an analysis for this application considering information regarding all patients in the entire health service area (based on zip code). From that information, a subarea was defined, otherwise known as a catchment area, that best fits this application; and it was determined that Okeechobee and St. Lucie Counties would best fit the analysis' purposes. Based on the director's experience and the population figures within the Network 19 data base, it unit could start operating in Fort Pierce, within 12 months, at least one-half of the patient population would leave those facilities where they are now being treated and transfer to the new, Fort Pierce facility. Considering only the issue of better access, it was further determined that within a two- year period from the date the facility would open, between 75 and 100 percent of the current patients would shift over to the new facility. However, this geographical area in question has experienced one of the highest rates of patient growth in the State of Florida which is estimated will produce a patient load of 162 per million population. Of the 24 patients presently undergoing treatment at the Vero Beach center, eight live in the identified catchment area, and these would be the ones most likely to transfer to the Fort Pierce facility, and 16 patients would remain. As for the Indian River unit, of the 22 patients currently undergoing treatment there, 11 or 12 would probably want to transfer to the new unit; and over the succeeding 12 months, the remaining 10 or 11 would probably transfer, as well. Based on growth experience in the area, however, the Network 19 director anticipated both units (Vero Beach and Indian River) would gain back the patient load by virtue of the anticipated increase in the patient population. The transfer-out figures estimated by Network 19 are based on their experience which in the past showed that a more convenient center opened, about 50 percent of the patients transfer. Loyalty to doctors and other factors make it difficult for some patients to make the transition immediately. After a while, however, access and a shorter driving time begins to override loyalty and the remaining patients begin to transfer to a unit closer to their homes. Relating to the patient population, this area contains one of the oldest in Florida. Sixty-six percent of the population is older than 55 years. A patient over 55 is considered a good candidate for either transplant or home dialysis; therefore, he or she would be dependent on a dialysis center. Age also makes the trip harder because the treatment is fatiguing and debilitating; and the less the patient has to drive, the better. At this age, patients tend to be more unstable and require more care. Many drive over 30 minutes, identified by Network 19 as a great distance, which is a problem. Since dialysis is a lifetime proposition, access is a prime motivating criterion used by Network 19 in considering new service. It is the policy of Network 19 that patients should not have to drive more than 30 minutes to get treatment. Older population tends to be more brittle, more unstable and to require more hospitalization, medicine and care. After a session, older patients tend to be tired and unable to cope with driving. As a result, friends or relatives have to drive for them, which constitutes a burden on the patient and the family. However, Network 19's analysis of the patient members who have to drive over 30 minutes to get treatment is not particularly accurate. It was gained from a review of zip codes and may not be exact. To be more accurate, it would us necessary to do a personal survey of the patients, and this was not done. Based on their estimate, however, most of the patients in the catchment area resided more than 33 minutes from the existing units. When it errs, Network 19 also errs on the conservative side by under estimating need rather than overestimating it. Petitioners take issue with Network 19's determination of excessive traveling distance for patients from the subarea in question to the currently existing facilities. Contending that the driving time from Fort Pierce to the Vero Beach facility is between 20 and 25 minutes, depending on traffic, and that from Fort Pierce to the Stuart facility is 25 minutes, the Vero Beach facility has 24 total patients of whom 10 reside in the catchment area. The Stuart facility has catchment area; and though Mr. LaParl, Petitioner's local director, does not know exactly where each resident resides, he is convinced none has to travel more than 30 minutes to get treatment. Dialysis takes an average of four hours per treatment. The first shift at Petitioner's facilities comes in at 6:00 a.m. and is through by 10:00 a.m. or 11:00 a.m. After a turnover period between shifts, the second shift begins between 1:00 and 3:00 p.m. and finishes up between 5:00 and 5:30 p.m. Examining those figures, it would appear that the first shift patients would not be traveling during the rush hour, but the second shift patients would most probably be going home at the conclusion of their treatment during the rush hour. Consequently, based upon the distances to be traveled, the estimate of driving time for the second shift patients, both to the Vero Beach and Stuart facilities, appears to be somewhat understated by the Petitioners. Network 19 calculates that based on its population figures, there will be 255 patients unserved in the district by September 1, 1984. A group this size will require 111 dialysis stations. At this time, including those presently in operation and the ones approved (10 for Fort Pierce and 8 for Belle Glade), there are 114 stations, or a surplus of 3. Without the 10 stations at issue here, there would be a shortage of 7 stations districtwide. In the subarea, however, the growth pattern is such that in one year, based on project growth, there will be a need for 13 stations. Currently, in the catchment area for the two counties, there are none. Even considering the district as a whole with the surplus of three units, it is not at all unusual for Network 19 to recommend approval of new units where there is a surplus of units in the health service area, but a shortage in the subarea, such as in the situation here. Approximately one-third of the total number of applications for hemodialysis units certificates filed in the last couple of years fell within that category. In a case such as this, Network 19, in analyzing the situation, applies districtwide acquisition rates as applied to the particular subarea, not special rates for that subarea. The result of this is generally a tendency to underestimate growth and need rather than overestimate it. A net increase or decrease in patient census may be affected by factors other than mere transfers in and out; for example, transplants, mortality, and seasonal visitors an increase or decrease in home treatment patients over whom the center exercises care and treatment and for which it is reimbursed. Therefore, while a center may show an increase or only seven patients in in-center treatment which would call for an increase of only two units, this figure may not accurately reflect a patient census/workload/reimbursable patient load, which is the bottom line as far as profit. Petitioners questioned the figures utilized by Network 19 in its evaluation of CDC's application, claiming that the figures used violate Rule 10- 5.11(18)(a), Florida Administrative Code, which in substance states that acquisition rates cannot be projected into the future. It is noted at these projections utilized bin the analysis submitted to HRS did not include any date beyond 1982, and the testimony at the hearing by Mr. Moutsatsos Executive Director of Network 19, referred to figures for the entire year of 1983. Regardless of whether one considers the 1983 figure of 969,000, plus or minus, or the 4984 figure of difference or approximately 40,000 people in the districtwide population base, the net difference in dialysis station requirements is one station--certainly not a significant variation. In addition, as was stated before, the formula used by Network 19 in its review and analysis of the application and the projections thereto are applied to the entire five-county district, as well as to the subarea. Referencing the Network 19 meeting at which Petitioners could have voiced their objections to CDC's application and failed to do so, an initial mailing containing a notification of all applications to be considered at the meeting was sent to every facility administrator in the State. The subsequent staff analysis was sent to all 17 executive committee members, including the five medical directors of the Petitioners' facilities who serve on the executive committee of Network 19. Mr. LaParl, the center administrator for the two existing BMA facilities in Stuart and Vero Beach, was present at the Network 19 meeting at which Respondent CDC's application was considered, but contends he was not aware that this particular application was going to be reviewed at that meeting. He contends he received no mail-out from Network 19 regarding the Fort Pierce facility. The mailing he did receive regarded the Lantana facility, which was one of Petitioners' facilities, and that is why he was there. Because of the lack of prior knowledge, he contends he was not prepared to testify at the hearing regarding it. Accepting, arguendo, that Mr. LaParl was not given prior notice of the fact that the Fort Pierce facility was to be considered at that meeting, that omission is not a weighty factor. Network 19's evaluation of Respondent CDC's application was based on a reliable data base and a failure of Petitioners to comment on it at that juncture and is not dispositive. The occupancy and utilization percentage at the Indian River facility on March 31, 1983, was 93 percent, not counting transient and seasonal patients. At the same time, the Vero Beach facility rate was 92 percent. HRS and Network 19 consider optimal occupancy rate at 80 percent. Occupancy as high as that shown for both of Petitioners' currently existing area facilities tends to inhibit the ability of those facilities to accept new patients. Petitioners contend that the opening of CDC's facility in Fort Pierce would have serious financial consequences for their two closely located existing a result of the reduction in Medicare reimbursement to $118, as well as increased medical necessity requirements for ancillary services which have been in the past moneymakers to operators of facilities such as these, the Stuart facility will probably show a loss for the 1984 year, especially with the projected loss of patients to the new Fort Pierce facility proposed. If this happens, Petitioners indicate they may well close the unit. It is noted, however, that in August of 1983, this particular facility made a profit primarily, it is explained, because of the 81 acute treatments done for Martin Memorial Hospital, in addition to the routine patients, at a fee of $250 per treatment. Normally, the number of acute treatment patients is between 35 and 40 per month. The next highest month prior to August, 1983, was in May, 1982, when 70 acute treatments were done. Charges for acute care treatments are more expensive than In the chronic care facilities because of the added expense; i.e., a one-on-one situation (registered nurse) versus a three patients to one nurse ratio in the chronic care facility. As to the Vero Beach unit, the financial condition is as bad or worse than that for the Stuart facility. This unit had a loss in both 1981 and 1982 and was just beginning to recover in 1983. Mr. LaParl contends that if this facility loses patients to the Port Pierce unit (44 percent loss is predicted) it will be "devastating," and Petitioners will close this unit. This opinion is shared by Mr. Last, Regional Administrator for BMA, who contends that opening the Fort Pierce center, along with the reduced rates of Medicare reimbursement, would be fatal to the Vero Beach facility and will throw the Stuart-facility into a loss position. In fact, he contends, if the reduced rates remain and the Fort Pierce facility opens, he will recommend closing the Vero Beach facility, but would have to study the three-year projection on the Stuart facility before, making a recommendation there. He disagrees totally with Network 19's projection of growth in the area and contends the past growth has been no greater for this subarea than for the whole health service area. Further, the percentage of utilization figures cited by Network 19 does not really have bearing on facility use. For example, when a facility reaches 80 or even 100 percent utilization, he contends, this does not stop the taking of new patients. It would result only in the opening of another shift to accommodate the new patients. This would be consistent with Network 19's theory that for a small (under 12 stations) facility or a medium (12 to 20 stations) facility to be profitable with the reduced dialysis reimbursement rate, three shifts would be minimal. Under currently existing agency rules, however, operation of three shifts in existing facilities should not be considered in determining need for further stations. When Network 19 calculated the effect on the patient load on the Vero Beach and Indian River stations, if the Fort Pierce were allowed, it made no analysis of the financial aspects of the opening because the detailed information, such as cost information, was privileged and was not available to Network 19. While no direct request was made of the Petitioners for the information, Petitioners were offered the opportunity to be heard at the Network 19 meeting the application as reconsidered at the time the analysis and the decision-making process was conducted. No one from Petitioners came forward with a showing that there would be a negative cost effect. The dire predictions of Messrs. LaParl and Last regarding the disastrous financial result to the Stuart and Vero Beach facilities were questioned by CDC's comptroller. His analysis for the projections for both Petitioners' facilities indicates an overstating of the future costs of treatment. For example, Petitioners projected a 10.6 percent increase in costs during 1984 for the Vero Beach facility to an ultimate $148.16 per treatment. In the projection for the Stuart facility, the projected cost per treatment is $149, an increase of almost 14 percent, when the inflation rate projected for the period is in the area of 6 percent. The CDC comptroller attributes this to a lack of cost control, both in fixed and nonfixed costs, and compares these figures to its own (CDC's) projected costs, which it estimates will be approximately $20 per treatment less than that of Petitioners. In CDC's opinion, supply costs are going down, and it raises a question as to the accuracy of Petitioners stated supply costs when it is seen that Petitioners buy the majority of their dialysis supplies from Erica, a medical supply company which is a sister division to Petitioners in the BMA corporate structure. For example, CDC's dialysis filters cost between $11.50 and $18.50, as opposed to the Petitioners' costs for the same unit of $29 to $40 paid to Erica. On the other hand, Erica sells to other facilities besides those owned by BMA and, while admittedly making a reasonable profit, does not charge BMA facilities any more or less than that which is charged to other facilities outside the corporate structure. However, considering both arguments, there is little doubt Petitioners' costs run high. Analysis of the above factors shows that while opening of the Port Pierce facility will have a definite negative impact on both the Stuart and the Vero Beach facilities owned BMA, proper management of these facilities which are but segments of a large corporate operation will result, when taken along with the projected reasonable population growth for the area, will result in survival of Petitioners' facilities at the same time room is made for Respondent CDC's facility in between the two. Respondent HRS has always accepted the recommendation of Network 19 organization in the area of renal hemodialysis. When the agency receives the Network review, it advertises it for public hearing. This was done in this case, and no hearing was requested. The agency considered only CDC's application, Network 19 report in king its analysis. No other input was considered. The agency accepted Network 19's findings on the effect on existing facilities. It found that the applicant's availability of manpower and financial resources was adequate. In the area of financial feasibility, the two years for profitability as projected in the pro forma financial statement submitted along with the application was considered reasonable, and the projected loss during the first year is not considered significant and is expected. Most bills for hemodialysis treatment are paid by Medicare. The agency also accepted Network 19's utilization rates after the first year and the projected changes in population. The agency's position is that based on the composition of Network 19's executive board and the input it receives from the many disciplines involved, it has a better feel for the need in a area than HRS does in Tallahassee. In addition, HRS considers heavily the results of public hearings held and the comments the applicants and affected parties have submitted. In that regard, it is note-worthy that none were submitted here. HRS also defers to Network 19 because it does not unnecessarily have the specific language in its rules regarding all of the various disciplines whose applications are considered, from hospitals to ambulatory surgeries to end stage renal dialysis units. As a result, by using Network 19 as an expert, there is promoted a flexibility as to what service area is considered, depending on the type of activity involved and the needs of those patients. In light of all the above, after considering Network 19's report, the agency concluded that a need existed for 12 hemodialysis stations in the health service district of which this subarea needed 10. Notwithstanding the additional possible requirements, since the application asked only for approval of 11 new units, that figure as modified 10 was granted. The use of subareas in determining need in the case of end stage renal dialysis has constantly been the policy of HRS, as opposed to a districtwide need.
Recommendation It is, accordingly, RECOMMENDED: That HRS grant Community Dialysis Centers of Fort Pierce's application for a certificate of need for a 10-station hemodialysis facility in Fort Pierce, Florida. RECOMMENDED: this 10th day of November, 1983, in Tallahassee, Florida. ARNOLD H. POLLOCK Hearing Officer Division of Administrative Hearings Department of Administration 2009 Apalachee Parkway Tallahassee, Florida 32301 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 10th day of November, 1983. COPIES FURNISHED: Eric Haugdahl, Esquire 1020 East Lafayette Street Tallahassee, Florida 32301 Douglas L. Mannheimer, Esquire 318 North Calhoun Street Tallahassee, Florida 32301 Morgan L. Staines, Esquire 2204 East Fourth Street Santa Ana, California 92705 Mr. Pingree Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32301 =================================================================
