Findings Of Fact Findings of Fact contained in the Recommended Order are hereby adopted and incorporated by reference except: Paragraph 2 is modified for the reasons set forth in paragraph 1 of the Ruling on Exceptions to Read: "The proposed new location for Flagler is approximately one-quarter (1/4) mile northeast of Intervenor St. Augustine General Hospital (General) which also is located on U.S. Route 1 near Route 312 (Petitioner's Exhibit 3). General is a for-profit hospital owned by the Hospital Corporation of America which does not provide obstetric or psychiatric services and does not have a separate, segregated pediatric service, (T-26)." Paragraph 19 is not adopted in this Final Order for the reasons set forth in paragraph 3 of the Ruling on Exceptions.
Recommendation Based on the foregoing Findings Of Fact and Conclusions Of Law, it is recommended that respondent Department of Health and Rehabilitative Services enter a final order: (1) granting Flagler Hospital's application for a certificate of need to replace and relocate its hospital, CON Action No. 2883; and (2) dismissing St. Augustine General as a party for lack of standing. RECOMMENDED this 25th day of February, 1985 in Tallahassee, Florida. J. LAWRENCE JOHNSON Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 25th day of February, 1985.
The Issue Does Petitioner, AHF MCO of Florida, Inc., d/b/a PHC Florida HIV/AIDS Specialty Plan (Positive), have standing to contest the intended award to Simply for Regions 10 and 11 or to seek rejection of all proposals? (Case No. 18-3507 and 18-3508) Should the intended decision of Respondent, Agency for Health Care Administration (Agency), to contract with Simply Healthcare Plans, Inc. (Simply), for Medicaid managed care plans for HIV/AIDS patients in Regions 10 (Broward County) and Region 11 (Miami-Dade and Collier Counties) be invalidated and all proposals rejected? (Case Nos. 18-3507 and 18-3508) Must the Agency negotiate with Petitioner, South Florida Community Care Network, LLC, d/b/a Community Care Plan (Community), about a plan to provide HIV/AIDS Medicaid managed care services in Region 10 because it was the only responsive proposer of services that was a Provider Service Network (PSN)? (Case No. 18-3512) Must the Agency negotiate with Community to provide Medicaid managed care services in Region 10 for people with Serious Mental Illnesses because Community is a PSN? (Case No. 18-3511) Must the Agency contract with Community to provide Medicaid managed care services for Children with Special Needs in Region 10 because Community is a PSN? (Case No. 18-3513) Must the Agency negotiate with Community to provide Medicaid managed care services for Child Welfare patients in Region 10 because Community is a PSN? (Case No. 18-3514)
Findings Of Fact THE PARTIES Agency: Section 20.42, Florida Statutes, establishes the Agency as Florida’s chief health policy and planning agency. The Agency is the single state agency authorized to select eligible plans to participate in the Medicaid program. Positive: Positive is a Florida not-for-profit corporation operating a Medicaid health plan dedicated to serving people with HIV/AIDS. Positive serves about 2,000 patients in Florida. Positive’s health plan is accredited by the Accreditation Association for Ambulatory Healthcare. Its disease management program is accredited by the National Committee for Quality Assurance. Currently, the Agency contracts with Positive for a SMMC HIV/AIDS Specialty Plan serving Regions 10 and 11. Simply: Simply is a Florida for-profit corporation operating a Medicaid health plan dedicated to serving people with HIV/AIDS. Currently, the Agency contracts with Simply to provide a SMMC HIV/AIDS Specialty Plan for Regions 1 through 3 and 5 through 11. Simply has maintained the largest patient enrollment of all HIV/AIDs plans in Florida since Florida started its statewide Medicaid managed care program. Community Care: Community is a Florida limited liability company. It is a PSN as defined in sections 409.912(1)(b) and 409.962(14), Florida Statutes. Staywell: Staywell is the fictitious name for WellCare of Florida, Inc., serving Florida’s Medicaid population. Sunshine: Sunshine State Health Plan (Sunshine) is a Florida corporation. It offers managed care plans to Florida Medicaid recipients. THE INVITATION TO NEGOTIATE TIMELINE On July 14, 2017, the Agency released 11 ITNs plans for Florida’s Medicaid managed care program in 11 statutorily defined regions. Region 10, Broward County, and Region 11, Miami-Dade and Collier Counties, are the regions relevant to this proceeding. Part IV of chapter 409, creates a statewide, integrated managed care program for Medicaid services. This program called Statewide Medicaid Managed Care includes two programs, Managed Medical Assistance and Long-term Care. Section 409.966(2), directs the Agency to conduct separate and simultaneous procurements to select eligible plans for each region using the ITN procurement process created by section 287.057(1)(c). The ITNs released July 14, 2017, fulfilled that command. The Agency issued 11 identical ITNs of 624 pages, one for each region, in omnibus form. They provided elements for four types of plans. Some elements were common to all types. Others were restricted to a specific plan type defined by intended patient population. The plan types are comprehensive plans, long-term care plus plans, managed medical assistance plans, and specialty plans. Section 409.962(16) defines “Specialty Plan” as a “managed care plan that serves Medicaid recipients who meet specified criteria based on age, medical condition, or diagnosis.” Responding vendors identified the plan type or types that they were proposing. The Agency issued Addendum No. 1 to the ITNs on September 14, 2017. On October 2, 2017, the Agency issued Addendum No. 2 to the ITNs. Addendum 2 included 628 questions about the ITNs and the Agency’s responses to the questions. Florida law permits potential responders to an ITN to challenge the specifications of an ITN, including the addendums. § 120.57(3)(b), Fla. Stat. Nobody challenged the specifications of the ITNs. As contemplated by section 287.057(c)(2), the Agency conducted “a conference or written question and answer period for purposes of assuring the vendors’ full understanding of the solicitation requirements.” Positive, Community, and Simply, along with United Healthcare of Florida, Inc., HIV/AIDS Specialty Plan (United), submitted responses to the ITN in Region 10 proposing HIV/AIDS Specialty Plans. Community was the only PSN to propose an HIV/AIDS plan for Region 10. Positive, Simply, and United submitted replies to the ITN for Region 11, proposing HIV/AIDS Specialty Plans. Community, United, Staywell, and one other provider submitted proposals to provide SMI Specialty Plan services in Region 10. Community was the only responding PSN. Community, Sunshine, and Staywell submitted proposals to provide Child Welfare Specialty Plans (CW) in Region 10. Community was the only PSN. Community, Staywell, and two others submitted proposals to offer Specialty Plans for Children with Special Needs (CSN) in Region 10. Community was one of two responding PSNs. Proposal scoring began November 6, 2017, and ended January 16, 2018. The Agency announced its intended awards on April 24, 2018. On April 24, 2018, the Agency issued its notices of intent to award specialty contracts in Regions 10 and 11. The following charts summarize the Agency’s ranking of the proposals and its intended awards. The two highest ranked plans, which the Agency selected for negotiations, are identified in bold. Region 10 – Children with Special Needs Respondent Intended Award Ranking Staywell No 1 Community No 2 Miami Children’s Health Plan, LLC No 3 Our Children PSN of Florida, LLC No 4 Region 10 – Child Welfare Respondent Intended Award Ranking Staywell No 1 Sunshine Yes 2 Molina Healthcare of Florida, Inc. No 3 Community No 4 Region 10 – HIV/AIDS Respondent Intended Award Ranking Simply Yes 1 United No 2 Community No 3 Positive No 4 Region 10 – Serious Mental Illness Respondent Intended Award Ranking Staywell Yes 1 United No 2 Florida MHS, Inc. No 3 Community No 4 Region 11 – HIV/AIDS Respondent Intended Award Ranking Simply Yes 1 United No 2 Positive No 3 All of the Specialty Plan awards noticed by the Agency went to bidders who also proposed, and received, comprehensive plan awards. The protests, referrals, and proceedings before the Division summarized in the Preliminary Statement followed the Agency’s announcement of its intended awards. TERMS The voluminous ITN consisted of a two-page transmittal letter and three Attachments (A, B, and C), with a total of 34 exhibits to them. They are: Attachment A, Exhibits A-1 through A-8, Attachment B, Exhibits B-1 through B-3, and Attachment C, Exhibits C-1 through C-8. The ITN establishes a two-step process for selecting: an evaluation phase and a negotiation phase. In the evaluation phase, each respondent was required to submit a proposal responding to criteria of the ITN. Proposals were to be evaluated, scored, and ranked. The goal of the evaluation phase was to determine which respondents would move to negotiations, not which would be awarded a contract. The top two ranking Specialty Plans per specialty population would be invited to negotiations. In the negotiation phase, the Agency would negotiate with each invited respondent. After that, the Agency would announce its intended award of a contract to the plan or plans that the Agency determined would provide the best value. Together, the attachments and exhibits combined instructions, criteria, forms, certifications, and data into a “one size fits all” document that described the information required for four categories of managed care plans to serve Medicaid patients. The ITN also provided data to consider in preparing responses. The transmittal letter emphasized, “Your response must comply fully with the instructions that stipulate what is to be included in the response.” The ITNs identified Jennifer Barrett as the procurement officer and sole point of contact with the Agency for vendors. The transmittal letter is reproduced here. This solicitation is being issued by the State of Florida, Agency for Health Care Administration, hereinafter referred to as “AHCA” or “Agency”, to select a vendor to provide Statewide Medicaid Managed Care Program services. The solicitation package consists of this transmittal letter and the following attachments and exhibits: Attachment A Instructions and Special ConditionsExhibit A-1 Questions TemplateExhibit A-2-a Qualification of Plan Eligibility Exhibit A-2-b Provider Service Network Certification of Ownership and Controlling InterestExhibit A-2-c Additional Required Certifications and StatementsExhibit A-3-a Milliman Organizational Conflict of Interest Mitigation Plan Exhibit A-3-b Milliman Employee Organizational Conflict of Interest AffidavitExhibit A-4 Submission Requirements and Evaluation Criteria InstructionsExhibit A-4-a General Submission Requirements and Evaluation Criteria Exhibit A-4-a-1 SRC# 6 - General Performance Measurement ToolExhibit A-4-a-2 SRC# 9 - Expanded Benefits Tool (Regional) Exhibit A-4-a-3 SRC# 10 - Additional Expanded Benefits Template (Regional)Exhibit A-4-a-4 SRC# 14 - Standard CAHPS Measurement Tool Exhibit A-4-b MMA Submission Requirements and Evaluation Criteria Exhibit A-4-b-1 MMA SRC# 6 - Provider Network Agreements/Contracts (Regional)Exhibit A-4-b-2 MMA SRC# 14 - MMA Performance Measurement Tool Exhibit A-4-b-3 MMA SRC# 21 - Provider Network Agreements/Contracts Statewide Essential Providers Exhibit A-4-c LTC Submission Requirements and Evaluation CriteriaExhibit A-4-c-1 LTC SRC# 4 - Provider Network Agreements/Contracts (Regional) Exhibit A-4-d Specialty Submission Requirements and Evaluation CriteriaExhibit A-5 Summary of Respondent CommitmentsExhibit A-6 Summary of Managed Care Savings Exhibit A-7 Certification of Drug-Free Workplace ProgramExhibit A-8 Standard Contract Attachment B Scope of Service - Core Provisions Exhibit B-1 Managed Medical Assistance (MMA) ProgramExhibit B-2 Long-Term Care (LTC) ProgramExhibit B-3 Specialty Plan Attachment C Cost Proposal Instructions and Rate Methodology NarrativeExhibit C-1 Capitated Plan Cost Proposal TemplateExhibit C-2 FFS PSN Cost Proposal Template Exhibit C-3 Preliminary Managed Medical Assistance (MMA) Program Rate Cell Factors Exhibit C-4 Managed Medical Assistance (MMA) Program Expanded Benefit Adjustment Factors Exhibit C-5 Managed Medical Assistance (MMA) Program IBNR Adjustment Factors Exhibit C-6 Managed Medical Assistance (MMA) Program Historical Capitated Plan Provider Contracting Levels During SFY 15/16 Time Period Exhibit C-7 Statewide Medicaid Managed Care Data BookExhibit C-8 Statewide Medicaid Managed Care Data Book Questions and Answers Your response must comply fully with the instructions that stipulate what is to be included in the response. Respondents submitting a response to this solicitation shall identify the solicitation number, date and time of opening on the envelope transmitting their response. This information is used only to put the Agency mailroom on notice that the package received is a response to an Agency solicitation and therefore should not be opened, but delivered directly to the Procurement Officer. The ITN describes the plans as follows: Comprehensive Long-term Care Plan (herein referred to as a “Comprehensive Plan”) – A Managed Care Plan that is eligible to provide Managed Medical Assistance services and Long-term Care services to eligible recipients. Long-term Care Plus Plan – A Managed Care Plan that is eligible to provide Managed Medical Assistance services and Long-term Care services to eligible recipients enrolled in the Long-term Care program. This plan type is not eligible to provide services to recipients who are only eligible for MMA services. Managed Medical Assistance (MMA) Plan – A Managed Care Plan that is eligible to provide Managed Medical Assistance services to eligible recipients. This plan type is not eligible to provide services to recipients who are eligible for Long-term Care services. Specialty Plan – A Managed Care Plan that is eligible to provide Managed Medical Assistance services to eligible recipients who are defined as a specialty population in the resulting Contract. Specialty Plans are at issue. The ITN did not define, describe, or specify specialty populations to be served. It left that to the responding vendors. Beyond that, the ITN left the ultimate definition of the specialty population for negotiation, saying in Section II(B)(1)(a) of Attachment B, Exhibit B-3, “[t]he Agency shall identify the specialty population eligible for enrollment in the Specialty Plan based on eligibility criteria based upon negotiations.” Some respondents directly identified the specialty population. Simply’s transmittal letter stated that it proposed “a Specialty plan for individuals with HIV/AIDS.” Positive’s response to Exhibit A-4-d Specialty SRC 4, eligibility and enrollment, stated, “the specialty population for the PHC [Positive] plan will be Medicaid eligible, male and female individuals from all age groups who are HIV positive with or without symptoms and those individuals who have progressed in their HIV disease to meet the CDC definition of AIDS.” Some others left definition of the specialty population to be inferred from the ITN response. The result is that the ITN left definition of the specialty populations initially to the respondents and ultimately to negotiations between the Agency and successful respondents. Petitioners and Intervenors describe the populations that they propose serving as HIV/AIDS patients, patients with SMI, CSN, and child welfare populations. ITN respondents could have proposed serving only cancer patients, serving only obstetric patients, or serving only patients with hemophilia. The part of the ITN requiring a respondent to identify the plan type for which it was responding offered only four alternative blocks to check. They were: “Comprehensive Plan,” Long-Term Care Plus Plan,” “Managed Medical Assistance Plan,” or “Specialty Plan.” Attachment A to the ITN, labeled “Instructions and Special Conditions,” provides an overview of the solicitation process; instructions for response preparation and content; information regarding response submission requirements; information regarding response evaluation, negotiations, and contract awards; and information regarding contract implementation. Exhibits A-1 to A-3 and A-5 to A-7 of the ITN contain various certifications and attestations that respondents had to prepare and verify. Exhibit A-4 contains submission requirement components (SRCs) to which respondents had to prepare written responses. Exhibit A-8 contains the state’s standard SMMC contract. ITN Exhibit A-4-a contains 36 general submission requirements and evaluation criteria (General SRCs). ITN Exhibit A-4-b contains 21 MMA submission requirements and evaluation criteria (MMA SRCs). ITN Exhibit A-4-c contains 13 LTC submission requirements and evaluation criteria (LTC SRCs). ITN Exhibit A-4-d contains five specialty submission requirements and evaluation criteria (Specialty SRCs). The responses that the 36 SRCs require vary greatly. Some are as simple as providing documents or listing items. Others require completing tables or spreadsheets with data. Consequently, responses to some SRCS apparently could be reviewed in very little time, even a minute or less. Others requiring narrative responses might take longer. Examples follow. General SRC 1 required a list of the respondent’s contracts for managed care services and 12 information items about them including things such as whether they were capitated, a narrative describing the scope of work; the number of enrollees; and accomplishments and achievement. General SRC 2 asked for documentation of experience operating a Medicaid health plan in Florida. General SRC 3 asked for information confirming the location of facilities and employees in Florida. General SRC 12 requested a flowchart and written description of how the respondent would execute its grievance and appeal system. It listed six evaluation criteria. MMA SRC 2 asks for a description of the respondent’s organizational commitment to quality improvement “as it relates to pregnancy and birth outcomes.” It lists seven evaluation criteria. MMA SRC 10 asks for a description of the respondent’s plan for transition of care between service settings. It lists six evaluation criteria including the respondent’s process for collaboration with providers. Specialty SRC 1 asks for detailed information about respondent’s managed care experience with the specialty population. Specialty SRC 5 asks for detailed information about the respondent’s provider network standards and provides five evaluation criteria for evaluating the answers. Exhibit A-8 of the ITN contains the standard SMMC contract. Attachment B and Exhibits B-1 to B-3 of the ITN contain information about the scope of service and core provisions for plans under the SMMC program. Attachment C and Exhibits C-1 to C-8 of the ITN contain information related to the cost proposals and rate methodologies for plans under the SMMC program. The ITN permitted potential respondents to submit written questions about the solicitation to the Agency by August 14, 2017. Some did. On September 14, 2017, the Agency issued Addendum No. 1 to the ITN. Among other things, Addendum No. 1 changed the anticipated date for the Agency’s responses to respondents’ written questions from September 15 to October 2, 2017. The Agency issued Addendum No. 2 to the ITN on October 2, 2017. Addendum No. 2 included a chart with 628 written questions from potential respondents and the Agency’s answers. Attachment A at A 10-(d) makes it clear that the answers are part of the addendum. Both Addendums to the ITN cautioned that any protest of the terms, conditions, or specifications of the Addendums to the ITN had to be filed with the Agency within 72 hours of their posting. No respondent protested. Instructions for the A-4 Exhibits included these requirements: Each SRC contains form fields. Population of the form fields with text will allow the form field to expand and cross pages. There is no character limit. All SRCs, marked as “(Statewide)” must be identical for each region in which the respondent submits a reply. For timeliness of response evaluation, the Agency will evaluate each “(Statewide)” SRC once and transfer the score to each applicable region’s evaluation score sheet(s). The SRCs marked as “(Regional)” will be specific and only apply to the region identified in the solicitation and the evaluation score will not be transferred to any other region. The instructions continue: Agency evaluators will be instructed to evaluate the responses based on the narrative contained in the SRC form fields and the associated attachment(s), if applicable. Each response will be independently evaluated and awarded points based on the criteria and points scale using the Standard Evaluation Criteria Scale below unless otherwise identified in each SRC contained within Exhibit A-4. This is the scale: STANDARD EVALUATION CRITERIA SCALE Point Score Evaluation 0 The component was not addressed. 1 The component contained significant deficiencies. 2 The component is below average. 3 The component is average. 4 The component is above average. 5 The component is excellent. The ITN further explained that different SRCs would be worth different “weights,” based on the subject matter of the SRC and on whether they were General, MMA, LTC, or Specialty SRCs. It assigned weights by establishing different “weight factors” applied as multipliers to the score a respondent received on a criteria. For example, “Respondent Background/Experience” could generate a raw score of 90. Application of a weight factor of three made 270 the maximum possible score for this criteria. “Oversight and Accountability” could generate a raw score of 275. A weight factor of one, however, made the maximum score available 275. General SRC 6 solicits HEDIS data. HEDIS is a tool that consists of 92 measures across six domains of care that make it possible to compare the performance of health plans on an “apples-to-apples” basis. SRC 6 states: The respondent shall describe its experience in achieving quality standards with populations similar to the target population described in this solicitation. The respondent shall include, in table format, the target population (TANF, ABD, dual eligible), the respondent’s results for the HEDIS measures specified below for each of the last two (2) years (CY 2015/ HEDIS 2016 and CY 2016/ HEDIS 2017) for the respondent’s three (3) largest Medicaid Contracts (measured by number of enrollees). If the respondent does not have HEDIS results for at least three (3) Medicaid Contracts, the respondent shall provide commercial HEDIS measures for the respondent’s largest Contracts. If the Respondent has Florida Medicaid HEDIS results, it shall include the Florida Medicaid experience as one (1) of three (3) states for the last two (2) years. The respondent shall provide the data requested in Exhibit A-4-a-1, General Performance Measurement Tool[.] x x x Score: This section is worth a maximum of 160 raw points x x x For each of the measure rates, a total of 10 points is available per state reported (for a total of 360 points available). The respondent will be awarded 2 points if their reported plan rate exceeded the national Medicaid mean and 2 points if their reported plan rate exceeded the applicable regional Medicaid mean, for each available year, for each available state. The respondent will be awarded an additional 2 points for each measure rate where the second year’s rate is an improvement over the first year’s rate, for each available state. An aggregate score will be calculated and respondents will receive a final score of 0 through 150 corresponding to the number and percentage of points received out of the total available points. For example, if a respondent receives 100% of the available 360 points, the final score will be 150 points (100%). If a respondent receives 324 (90%) of the available 360 points, the final score will be 135 points (90%). If a respondent receives 36 (10%) of the available 360 points, the final score will be 15 points (10%). The SRC is plainly referring to the broad Medicaid- eligible population when it says “the target population (TANF, ABD, dual eligible).” “Dual eligible” populations are persons eligible for Medicaid and Medicare. There, as throughout the ITN, the ITN delineates between a target population of all Medicaid-eligible patients and a specialty population as described in a respondent’s ITN proposal. The clear instructions for SRC 6 require, “Use the drop-down box to select the state for which you are reporting and enter the performance measure rates (to the hundredths place, or XX.XX) for that state's Medicaid population for the appropriate calendar year.” Community did not comply. General SRC 14 solicits similar data, in similar form using a similar tool, about a respondent’s Consumer Assessment of Healthcare Providers and Systems (CAHPS). CAHPS data is basically a satisfaction survey. It asks respondents to provide “in table format the target population (TANF, ABD, dual eligible) and the respondent’s results for the Consumer Assessment of Healthcare Providers and Systems (CAHPS) items/composites specified below for the 2017 survey for its adult and child populations for the respondent’s three (3) largest Medicaid Contracts (as measured by number of enrollees).” Just like General SRC 6 did with HEDIS data, General SRC 14 ITN instructed bidders to put their CAHPS data for the “target population (TANF, ABD, dual eligible)” “for the respondent’s three (3) largest Medicaid Contracts (measured by number of enrollees)” for multiple states into an excel spreadsheet “to the hundredths place[.]” Also, like General SRC 6, General SRC 14 includes an objective formula described in the ITN for scoring bidders’ CAHPS data. RANKING PROVISIONS Attachment A at (D)(4)(c)(2) stated: Each response will be individually scored by at least three (3) evaluators, who collectively have experience and knowledge in the program areas and service requirements for which contractual services are sought by this solicitation. The Agency reserves the right to have specific sections of the response evaluated by less than three (3) individuals. The ITN’s example of how total point scores would be calculated, discussed below, also indicated that some sections may be scored by less than three evaluators. The explanatory chart had a column for “[o]ther Sections evaluated by less than three (3) evaluators. ” The Agency’s policy, however, has been to assign at least three evaluators to score program specific SRCs. Attachment A at (D)(4)(e)(2) advised respondents how the agency will rank the competing responses. It was clear and specific, even providing an example of the process showing how the scores “will” be calculated. Step one of the explanatory chart stated that the Agency would calculate a total point score for each response. Step two stated that “[t]he total point scores will be used to rank the responses by an evaluator. . . .” Next, the rankings by the evaluator are averaged to determine the average rank for each respondent. This average ranking is critical because ranking is how the ITN said the Agency would select respondents for negotiation and how the Agency did select respondents for negotiation. The step two and step three charts, reproduced below, demonstrate that the ITN contemplated an evaluation process in which each response was to be evaluated in its entirety by three different evaluators, or maybe less than three, but indisputably in its entirety by those who evaluated it. This did not happen. Step 2 The total point scores will be used to rank the responses by evaluator (Response with the highest number of points = 1, second highest = 2, etc.). POINTS SUMMARY Evaluator A Evaluator B Evaluator C Evaluator D Respondent 446 Respondent 396 Respondent 311 Respondent 413 Respondent 425 Respondent 390 Respondent 443 Respondent 449 Respondent 397 Respondent 419 Respondent 389 Respondent 435 Respondent 410 Respondent 388 Respondent 459 Respondent 325 RANKING SUMMARY Evaluator A Evaluator B Evaluator C Evaluator D Respondent 1 1 Respondent 1 2 Respondent 1 4 Respondent 3 Respondent 2 2 Respondent 2 3 Respondent 2 2 Respondent 1 Respondent 3 4 Respondent 3 1 Respondent 3 3 Respondent 2 Respondent 4 3 Respondent 4 4 Respondent 4 1 Respondent 4 c) Step 3 An average rank will be calculated for each response for all the evaluators. Respondent 1 1+2+4+3=10÷4=2.5 Respondent 2 2+3+2+1=8÷4=2.0 Respondent 3 4+1+3+2=10÷4=2.5 Respondent 4 3+4+1+4=12÷4=3.0 PROVIDER SERVICE NETWORK PROVISIONS Florida law permits a PSN to limit services provided to a target population “based on age, chronic disease state, or medical condition of the enrollee.” This allows a PSN to offer a specialty plan. For each region, the eligible plan requirements of section 409.974(1) state, “At least one plan must be a provider service network if any provider service networks submit a responsive bid.” Section 409.974(3) says: “Participation by specialty plans shall be subject to the procurement requirements of this section. The aggregate enrollment of all specialty plans in a region may not exceed 10 percent of the total enrollees of that region.” The ITN addressed those requirements. The Negotiation Process section of Attachment A, Instructions and Special Conditions, says: The Agency intends to invite the following number of respondents to negotiation: Comprehensive Plans The top four (4) ranking Comprehensive Plans. Long-term Care Plus Plans The top two (2) ranking Long-term Care Plus Plans Managed Medical Assistance Plans The top two (2) ranking Managed Medical Assistance Plans Specialty Managed Medical Assistance Plans The top two (2) ranking Specialty Managed Medical Assistance Plans per specialty population. If there are no provider service networks included in the top ranked respondents listed above, the Agency will invite the highest ranked PSN(s) to negotiations in order to fulfill the requirements of Section 409.974(1), Florida Statutes and Section 409.981(1), Florida Statutes. Emphasis supplied. The ITN specifications in Section D.7, titled Number of Awards, state as follows about Specialty Plan awards: 7. Number of Awards In accordance with Sections 409.966, 409.974, and 409.981, Florida Statutes, the Agency intends to select a limited number of eligible Managed Care Plans to provide services under the SMMC program in Region 10. The Agency anticipates issuing the number of Contract awards for Region 10 as described in Table 5, SMMC Region, below, excluding awards to Specialty MMA Plans. Table 5 SMMC Region Region Total Anticipated Contract Awards Region 10 4 If a respondent is awarded a Contract for multiple regions, the Agency will issue one (1) Contract to include all awarded regions. The Agency will award at least one (1) Contract to a PSN provided a PSN submits a responsive reply and negotiates a rate acceptable to the Agency. The Agency, at its sole discretion, shall make this determination. A respondent that is awarded a Contract as a Comprehensive Plan is determined to satisfy the requirements in Section 409.974, Florida Statutes and Section 409.981, Florida Statutes and shall be considered an awardee of an MMA Contract and a LTC Contract. The Agency will issue one (1) Contract to reflect all awarded populations in all awarded regions. In addition to the number of Contracts awarded in this region, additional Contracts may be awarded to Specialty Plans that negotiate terms and conditions determined to be the best value to the State and negotiate a rate acceptable to the Agency. The Agency, at its sole discretion, shall make this determination. The Agency reserves the right to make adjustments to the enrollee eligibility and identification criteria proposed by a Specialty Plan prior to Contract award in order to ensure that the aggregate enrollment of all awarded Specialty Plans in a region will not exceed ten percent (10%) of the total enrollees in that region, in compliance with Section 409.974(3), Florida Statutes. If a respondent is awarded a Contract as a Specialty Plan and another plan type, the Agency will issue one (1) Contract to include all awarded populations in all awarded regions. A prospective vendor asked about the interplay of Specialty Plan options and the PSN requirements. The question and the answer provided in Addendum 2 follow: Q. Please clarify the number of PSN awards per region and how PSN awards will be determined based on the PSN's plan type (e.g., Comprehensive, LTC Plus, MMA, Specialty). As you know, Sections 409.974 and 409.981, Florida Statutes require one MMA PSN and one LTC PSN award per region (assuming a PSN is responsive) and the Agency has stated that an award to a Comprehensive Plan PSN will meet the requirements of both statutes. However, can the Agency further clarify whether other types of PSNs would meet the statutory requirements? Specifically, would a PSN LTC Plus award meet the requirements of Section 409.981, Florida Statutes? Similarly, would an award to a Specialty Plan PSN meet the requirements of Section 409.974, Florida Statutes? A. See Attachment A Instructions and Special Conditions, Section D Response Evaluations, and Contract Award, Sub-Section 7 Number of Awards. Yes, a PSN LTC Plus award would meet the requirements of Section 409.981(2). A Specialty Plan PSN would not meet the requirements of Section 409.974(1). The only reasonable interpretation of this answer is that Specialty Plan PSNs do not satisfy the requirement to contract with a responsive PSN imposed by section 409.974. None of the prospective vendors, including Community, challenged this clarification. EVALUATION PROCESS THE EVALUATORS The Agency selected 11 people to evaluate the proposals. The Agency assigned each person a number used to identify who was assigned to which task and to track performance of evaluation tasks. The procurement officer sent the evaluators a brief memo of instructions. It provided dates; described logistics of evaluation; emphasized the importance of independent evaluation; and prohibited communicating about the ITN and the proposals with anyone other than the procurement office. The Agency also conducted an instructional session for evaluators. Evaluator 1, Marie Donnelly: During the procurement, Ms. Donnelly was the Agency’s Chief of the Bureau of Medicaid Quality. She held this position for five years before resigning. This bureau bore responsibility for ensuring that the current SMMC plans met their contract requirements for quality and quality improvement measures. Her role specifically included oversight of Specialty Plans. Evaluator 2, Erica Floyd Thomas: Ms. Thomas is the chief of the Bureau of Medicaid Policy. She has worked for the Agency since 2001. Her Medicaid experience includes developing policies for hospitals, community behavioral health, residential treatment, and contract oversight. Before serving as bureau chief, she served as an Agency administrator from 2014 through 2017. Ms. Thomas oversaw the policy research and development process for all Medicaid medical, behavioral, dental, facility, and clinic coverage policies to ensure they were consistent with the state Plan and federal Medicaid requirements. Evaluator 3, Rachel LaCroix, Ph.D.: Dr. LaCroix is an administrator in the Agency’s Performance Evaluation and Research Unit. She has worked for the Agency since 2003. All her positions have been in the Medicaid program. Dr. LaCroix has served in her current position since 2011. She works with the performance measures and surveys that the current SMMC providers report to the Agency. Dr. LaCroix is a nationally recognized expert on healthcare quality metrics like HEDIS. She is also an appointee on the National Association of Medicaid Directors’ task force for national performance measures. Evaluator 4, Damon Rich: Mr. Rich has worked for the Agency since April 2009. He is the chief of the Agency’s Bureau of Recipient and Provider Assistance. This bureau interacts directly with AHCA’s current SMMC care providers about any issues they have, and with Medicaid recipients, usually about their eligibility or plan enrollment. Before Mr. Rich was a bureau chief, he worked as a field office manager for the Agency. Mr. Rich’s experience as bureau chief and field office manager includes oversight of the current SMMC Specialty Plans. Evaluator 5. Eunice Medina: Ms. Medina is the chief of the Agency’s Bureau of Medicaid Plan Management, which includes a staff of over 60 individuals, who manage the current SMMC contracts. Her experience and duties essentially encompass all aspects of the current SMMC plans. Ms. Medina started working with the Agency in 2014. Evaluator 6, Devona “DD” Pickle: Ms. Pickle most recently joined the Agency in 2011. She also worked for the Agency from November 2008 through November 2010. Ms. Pickle’s Agency experience all relates in some way to the Medicaid program. Since March 2013, Ms. Pickle has served as an administrator over managed care policy and contract development in the Bureau of Medicaid Policy. Her job duties include working with the current SMMC contractors. Ms. Pickle is also a Florida licensed mental health counselor. Evaluator 7, Tracy Hurd-Alvarez: Ms. Hurd-Alvarez has worked for the Agency’s Medicaid program since 1997. Since 2014, she has been a field office manager, overseeing compliance monitoring for all the current SMMC contractors. Before assuming her current position, Ms. Hurd-Alvarez implemented the LTC SMMC program. Evaluator 8, Gay Munyon: Ms. Munyon is currently the Chief of the Bureau of Medicaid Fiscal Agent Operations. Ms. Munyon began working with the Agency in April 2013. Ms. Munyon’s bureau oversees fulfillment of the Agency’s contract with the current SMMC fiscal agent. Her unit’s responsibilities include systems maintenance and modifications and overseeing the fiscal agent, which answers phone calls, processes claims, and processes applications. Ms. Munyon has 25 years of experience working with the Medicaid program. Evaluator 9, Laura Noyes: Ms. Noyes started working for the Agency in April 2011. Her years of Agency experience all relate to the Medicaid program, including overseeing six current comprehensive managed care plans by identifying trends in contractual non-compliance. Evaluator 10, Brian Meyer: Mr. Meyer is a CPA, who has worked for the Agency in the Medicaid program since 2011. He is currently chief of the Bureau of Medicaid Data Analytics. Mr. Meyer’s primary responsibility is overseeing the capitation rates for the current SMMC contractors. His experience includes Medicaid plan financial statement analysis, surplus requirement calculation analysis and, in general, all types of financial analysis necessary to understand financial performance of the state’s Medicaid plans. Evaluator 11, Ann Kaperak: Since April 2015, Ms. Kaperak has served as an administrator in the Agency’s Bureau of Medicaid Program Integrity. Ms. Kaperak’s unit oversees the fraud and abuse efforts of the current SMMC plans. She also worked for the Medicaid program from November 2012 through May 2014. Ms. Kaperak worked as a regulatory compliance manager for Anthem/Amerigroup’s Florida Medicaid program between May 2014 and April 2015. Positive and Community challenge the Agency’s plan selections by questioning the qualifications of the evaluators. The first part of their argument is that the evaluators did not have sufficient knowledge about HIV/AIDS and its treatment. The evidence does not prove the theory. For instance, Positive’s argument relies upon criticizing the amount of clinical experience evaluators had managing patients with HIV/AIDS. That approach minimizes the fact that the managed care plan characteristics involve so much more than disease- specific considerations. For instance, many of the components require determining if the respondent provided required documents, verifying conflict of interest documents, management structure, quality control measures, and the like. General SRCs asked for things like dispute resolution models (SRC 16), claims processing information (SRC 17), and fraud and abuse compliance plans (SRC 31). MMA SRCs included criteria, like telemedicine (SRC 4), demonstrated progress obtaining executed provider agreements (SRC 6), and a credentialing process (SRC 12). Specialty SRCs included criteria like copies of contracts for managed care for the proposed specialty population (SRC 1), specific and detailed criteria defining the proposed specialty population (SRC 4), and the like. The evidence does not prove that disease-specific experience is necessary to evaluate responses to these and other SRCs. SRC 6 involving HEDIS data and SRC 14 involving CAHPS data are two good examples. They required respondents to input data into a spreadsheet. All the evaluators had to do was determine what those numbers showed. Evaluation did not require any understanding of disease or how the measures were created. All the evaluator had to know was the number in the spreadsheet. The second part of the evaluator qualification criticisms is that the evaluators did not give adequate weight to some responses. Positive and Community just disagree with the measures requested and the evaluation of them. They conclude from that disagreement that the evaluators’ qualifications were deficient. The argument is not persuasive. The last sentence of paragraph 69 of Positive’s proposed recommended order exemplifies the criticisms of Positive and Community of the evaluators’ qualifications. It states, “The fact that PHC [Positive] was ranked last among competing HIV plans shows that the SRC evaluators did not understand enough about managing individuals with HIV/AIDs to score its proposal competently.” The argument is circular and “ipse dixit”. It does not carry the day. The collective knowledge and experience of the evaluators, with a total of 128 years of Medicaid experience, made them capable of reasonably evaluating the managed care plan proposals, including the Specialty plan proposals. The record certainly does not prove otherwise. EVALUATION PROCESS The Agency assigned the evaluators to the SRCs that it determined they were qualified to evaluate and score. The Agency did not assign entire responses to an evaluator for review. Instead it elected a piecemeal review process assigning various evaluators to various sections, the SRCs of each response. Paragraph 30 of the Agency’s proposed recommended order describes this decision as follows: Although the ITN had contemplated ranking each vendor by evaluator, based on an example in the ITN, such ranking presumed a process where all evaluators scored all or nearly all of the responses to the ITN, which had occurred in the procurement five years ago. In this procurement, each evaluator reviewed only a subset of SRCs based on their knowledge, and experience; therefore, ranking by evaluator was not logical because each had a different maximum point score. The initial SRC scoring assignments were: General SRCs 1 through 4, LTC SRCs 1 and 2, and Specialty SRC 1: Marie Donnelly, Laura Noyes, and Brian Meyer. General SRCs 5 through 8, MMA SRCs 1 through 7, LTC SRCs 3 and 4, and Specialty SRCs 1 and 2: Marie Donnelly, Erica Floyd- Thomas, and Rachel LaCroix. General SRCs 9 through 14, MMA SRCs 8 through 11, LTC SRCs 5 through 7, and Specialty SRC 4: Damon Rich, Eunice Medina, and DD Pickle. General SRCs 15 through 17, MMA SRCs 12 and 13, and LTC SRCs 8 through 10: Damon Rich, Tracy Hurd-Alvarez, Gay Munyon. General SRCs 18 through 25, MMA SRCs 14 through 20, LTC SRCs 11 and 12, and Specialty SRC 5: Erica Floyd-Thomas, Eunice Medina, and DD Pickle. General SRCs 26 through 33 and LTC SRC 13: Gay Munyon, Ann Kaperak, and Brian Meyer. General SRCs 34 through 36 and MMA SRC 21: Marie Donnelly, Rachel LaCroix, and Tracy Hurd-Alvarez. The ranking process presented in the ITN and described in paragraphs 62-64, contemplated ranking each respondent by evaluator. The Agency carried this process over from an earlier procurement. In this procurement, despite what the ITN said, the Agency assigned responsibilities so that each evaluator reviewed only a subset of SRCs. Therefore, the ranking of responses by evaluator presented in the ITN could not work. It was not even possible because no one evaluator reviewed a complete response and because each SRC had a different maximum point score. Instead, the Agency, contrary to the terms of the ITN, ranked proposals by averaging the “total point scores” assigned by all of the evaluators. The Agency considered issuing an addendum advising the parties of the change. The addendum would have informed the respondents and provided them an opportunity to challenge the change. The Agency elected not to issue an addendum. EVALUATION AND SCORING The evaluators began scoring on November 6, 2017, with a completion deadline of December 29, 2017. The 11 evaluators had to score approximately 230 separate responses to the ITNs. The evaluators had to score 67,175 separate items to complete the scoring for all responses for all regions for all types of plans. No one at the Agency evaluated how much time it should take to score a particular item. None of the parties to this proceeding offered persuasive evidence to support a finding that scoring any particular item would or should take a specific length of time or that scoring all of the responses would or should take a specific length of time. Evaluators scored the responses in conference room F at the Agency’s headquarters. This secure room was the exclusive location for evaluation and scoring. Each evaluator had a dedicated workspace equipped with all tools and resources necessary for the task. The workspaces included a computer terminal for each evaluator. The system allowed evaluators to review digital copies of the ITN and proposals and to enter evaluation points in spreadsheets created for the purpose of recording scores. Evaluators also had access to hard copies of the proposals and the ITN. The Agency required evaluators to sign in and to sign out. The sign-in and sign-out sheets record the significant amount of time the evaluators spent evaluating proposals. Evaluators were not permitted to communicate with each other about the responses. To minimize distractions, the Agency prohibited cell phones, tablets and other connected devices in the room. The Agency also authorized and encouraged the evaluators to delegate their usual responsibilities. Agency proctors observed the room and evaluators throughout the scoring process. They were available to answer general and procedural questions and to ensure that the evaluators signed in and signed out. A log sheet documented how much time each evaluator spent in the scoring conference room. Some evaluators took extensive notes. For example, Ms. Median took over 200 pages of notes. Similarly, Ms. Munyon took nearly 400 pages of typewritten notes. The evaluators worked hard. None, other than Dr. LaCroix, testified that they did not have enough time to do their job. The computer system also automatically tracked the evaluators’ progress. Tracking reports showed the number of items assigned to each evaluator and the number of scoring items completed. The first status report was generated on December 8, 2017, approximately halfway through the scheduled scoring. At that time, only 28 percent of the scoring items were complete. Ms. Barrett usually ran the status reports in the morning. She made them available to the evaluators to review. The pace of evaluation caused concern about timely completion and prompted discussions of ways to accelerate scoring. Because it was clear that the majority of the evaluators would not complete scoring their SRCs by December 29, 2017, the Agency extended the scoring deadline to January 12, 2018. It also extended the hours for conference room use. Most respondents filed proposals for more than one type of plan and more than one region. This fact combined with the provision in the instructions saying that all statewide SRC responses must be identical for each region and that scores would transfer to each applicable region’s score sheets, enabled evaluators to score many SRCs just once. The system would then auto-populate the scores to the same SRC for all proposals by that respondent. This time saving measure permitted scoring on many of the items to be almost instantaneous after review of the first response to an SRC. The fact that so many respondents submitted proposals for so many regions and types of plans provided the Agency another opportunity for time-saving. The Agency loaded Adobe Pro on the evaluators’ computers as a timesaving measure. This program allowed the evaluators to compare a bidder’s Comprehensive Plan Proposal to the same company’s regional and Specialty Plan proposals. If the Adobe Pro comparison feature showed that the proposal response was the same for each plan, the Agency permitted evaluators to score the response once and assign the same score for each item where the respondent provided the same proposal. This speeded scoring. It, however, meant that for SRCs where evaluators did this, that they were not reviewing the SRC response in the specific context of the specialty plan population, each of which had specific and limited characteristics that made them different from the broader General and MMA plan populations. This is significant because so many SRCs required narrative responses where context would matter. There is no Specialty SRCs A-4 instruction requirement for specialty plans analogous to the requirement that responses for statewide SRCs must be identical for each region. In other words, the instructions do not say all SRCs marked as statewide must be identical for each specialty plan proposal and that the Agency will evaluate each Statewide SRC once and transfer the score to each applicable Specialty Plan score. In fact, according to the procurement officer, the Agency expected that evaluators would separately evaluate and score the statewide SRCs for Comprehensive Plans and for Specialty Plans, even if the same bidder submitted them. Despite the Agency’s expectation and the absence of an authorizing provision in the ITN, many evaluators, relying on the Adobe Pro tool, copied the SRC scores they gave to a respondent’s comprehensive plan proposal to its specialty plan proposal if the respondent submitted the same response to an SRC for a Comprehensive Plan and a Specialty Plan. For instance, Ms. Thomas (Evaluator 2) and Ms. Munyon (Evaluator 8) did this to save time. Ms. Donnelly (Evaluator 1) did this even when the comprehensive and specialty responses were not identical. This does not amount to the independent evaluation of the responses pledged by the ITN. On separate days, Evaluator 1 scored 1,315 items, 954 items, 779 items and 727 items. On separate days, Evaluator 2 scored 613 items, 606 items, 720 items, 554 items and 738 items. Evaluator 4 scored 874 items on one day. Evaluator 5 scored 813 items in one day. Evaluator 6 scored 1,001 items in one day. Evaluator 8 scored 635 items in one day. The record does not identify the items scored. It also does not permit determining how many of the item scores resulted from auto-population or assignment of scores based upon previous scoring of an identical response. It bears repeating, however, that the record does not support any finding on how long scoring the response to one SRC or an entire response could reasonably be expected to take. Even with the extended scoring period and time-saving measures, the Agency concluded that Evaluator 3 would not be able to finish all of the SRCs assigned to her. Rather than extend the deadline for scoring a second time, the Agency decided to reassign the nine of Evaluator 3’s SRCs that she had not begun scoring to two other evaluators. The Agency did not include scores of other SRCs for which Evaluator 3 had not completed scoring. The Agency only counted Evaluator 3’s scores for an SRC if she scored the SRC for everyone. The result was that only two people scored nine of the Specialty Plan SRCs. The Agency did not reassign all of Evaluator 3’s SRCs’. It only reassigned the SRCs to evaluators who were qualified to evaluate the items, who were not already assigned those items to score, and who had already finished or substantially completed their own evaluations. The decision to reassign the SRCs was not based on any scoring that had already been completed. The Agency did not allow changes to data submitted by any of the vendors. It allowed vendors to exchange corrupted electronic files for ones which could be opened and allowed vendors to exchange electronic files to match up with the paper copies that had been submitted. The Agency allowed Community to correct its submission where it lacked a signature on its transmittal letter and allowed Community to exchange an electronic document that would not open. It did not allow Community to change its reported HEDIS scores, which were submitted in the decimal form required by the instructions. Community erred in the numbers that it reported. There is no evidence showing that other vendors received a competitive or unfair advantage over Community in the Agency’s review of the SMI Specialty Plan submission for Region 10. There was no evidence that the Agency allowed any other vendors to change any substantive information in their submittals for that proposed specialty in that region. HEIDIS ISSUES Positive asserts that Simply’s proposal is non- responsive because Simply submitted HEDIS data from the general Medicaid population in response to SRC 6 and MMA SRC 14. Positive contends that Simply obtained a competitive advantage by supplying non-HIV/AIDS HEDIS data in response to SRC 6 and MMA SRC 14 because HIV/AIDS patients are generally a sicker group and require more care and because some HEDIS measures cannot be reported for an HIV/AIDS population. HEDIS stands for Healthcare Effectiveness and Data Information Set and is a set of standardized performance measures widely used in the healthcare industry. The instructions for both SRC 6 and MMA SRC 14 provide, in relevant part: The respondent shall describe its experience in achieving quality standards with populations similar to the target population described in this solicitation. The respondent shall include in table format, the target population (TANF, ABD, dual eligible), the respondent’s results for the HEDIS measures specified below for each of the last two (2) years (CY 2015/HEDIS 2016 and CY 2016/HEDIS 2017) for the respondent’s three (3) largest Medicaid Contracts (measured by number of enrollees). If the respondent does not have HEDIS results for at least three (3) Medicaid Contracts, the respondent shall provide commercial HEDIS measures for the respondent’s largest Contracts. If the Respondent has Florida Medicaid HEDIS results, it shall include the Florida Medicaid experience as one (1) of three (3) states for the last two (2) years. (JE 1 at 75 (SRC 6); JE 1 at 158 (MMA SRC 14)). SRC 6 and MMA SRC 14 instruct respondents to provide HEDIS measures for “the target population (TANF, ABD, dual eligible).” Id.. TANF, ABD, and dual eligible are eligibility classifications for the Medicaid population. The Agency sought information regarding the target Medicaid-eligible population, even from respondents proposing a Specialty Plan, because Specialty Plans are required to serve all of the healthcare needs of their recipients, not just the needs related to the criteria making those recipients eligible for the Specialty Plan. Following the instructions in SRC 6 and MMA SRC 14, Simply provided HEDIS data from the Medicaid-eligible population for its three largest Medicaid contracts as measured by the total number of enrollees. For the requested Florida HEDIS data, Simply utilized legacy HEDIS data from Amerigroup Florida, Inc., a Comprehensive Plan. Amerigroup and Simply had merged in October of 2017. Therefore, at the time of submission of Simply’s proposal, the HEDIS data from Amerigroup Florida was the data from Simply’s largest Medicaid contract in Florida for the period requested by the SRCs. Positive asserts that the Agency impermissibly altered scoring criteria after the proposals were submitted when the Agency corrected technical issues within a HEDIS Measurement Tool spreadsheet. SRC 6 and MMA SRC 14 required the submission of numeric data for the requested HEDIS performance measures. To simplify submission of the numeric data for the requested HEDIS performance measures, the Agency required respondents to utilize a HEDIS Measurement Tool spreadsheet. The evaluation criteria for SRC 6 and MMA SRC 14 provided that respondents will be awarded points if the reported HEDIS measures exceed the national or regional mean for such performance measures. Some respondents, including Positive, entered “N/A,” “small denominator,” or other text inputs into the HEDIS Measurement Tool. During the evaluation and scoring process, the Agency discovered that if a respondent input any text into the HEDIS Measurement Tool, the tool would assign random amounts of points, even though respondents had not input measureable, numeric data. The Agency reasonably resolved the problem by removing any text and inserting a zero in place of the text. The correction of the error in the HEDIS Measurement Tool prevented random points from being awarded to respondents and did not alter scores in any way contrary to the ITN. It was reasonable and fair to all respondents.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency for Health Care Administration enter a final order rejecting all r esponses to the ITNs to provide a Medicaid Managed Care plan for patients with HIV/AIDS in Regions 10 and 11. Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency for Health Care Administration enter a final order inviting Community to negotiate to provide Medicaid Managed Care plan in Region 10 for patients with serious mental illness. Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency for Health Care Administration enter a final order inviting Community to negotiate to provide a Medicaid Managed Care plan in Region 10 for patients with serious mental illness. Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency for Health Care Administration enter a final order inviting Community to negotiate to provide a Medicaid Managed Care plan in Region 10 for c hild w elfare specialty services. Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency for Health Care Administration enter a final order awarding Wellcare of Florida, Inc., d/b/a Staywell Health Plan of Florida, a contract for a specialty Medicaid Managed Care plan for patients with Serious Mental Illness in Region 10. Based on the foregoing Findings of Fact and Conclusions of Law it is RECOMMENDED that the Agency for Health Care Administration enter a final order dismissing the Petition in Case No. 18-3513. DONE AND ENTERED this day of , , in Tallahassee, Leon County, Florida. S JOHN D. C. NEWTON, II 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 day of , .
The Issue The issue in these cases is whether certain rules proposed by the Agency for Health Care Administration (AHCA) related to adult interventional cardiovascular services are an invalid exercise of delegated legislative authority.
Findings Of Fact By stipulation of the parties, all Petitioners and Intervenors in these cases are acute care hospitals licensed in Florida pursuant to Chapter 395, Florida Statutes; are substantially affected by the proposed rules at issue in these cases; and have standing to participate in this proceeding. AHCA is the state agency responsible for licensure of hospitals pursuant to Chapter 395, Florida Statutes, and responsible for promulgation of the proposed rules at issue in these cases. This dispute specifically involves proposed rules related to the licensure of adult cardiovascular services in Florida hospitals. Such services include percutaneous cardiac intervention (PCI), also referred to as percutaneous transluminal coronary angioplasty (PCTA). PCI involves the insertion of a device placed into an artery and directed to the site of a coronary artery blockage. The device is used to compress or remove the blockage material and restore arterial blood flow to heart tissue. A mechanism called a "stent" may be left in place at the site of the former blockage to reduce the potential for re-blockage ("restenosis") of the artery. The procedure is performed in a cardiac catheterization laboratory ("cath lab"). PCI that is performed on an emergency basis to open an arterial blockage causing myocardial infarction (heart attack) is referred to as "primary" or "emergent" PCI. PCI performed to resolve symptoms of coronary artery disease manifesting in presentations other than through myocardial infarction is referred to as "elective" PCI. Previous law restricted PCI services to those hospitals with onsite cardiac surgery (commonly referred to as "open heart" surgery). Hospitals are required to obtain a Certificate of Need (CON) from AHCA to operate a cardiac surgery program. Accordingly, in order to offer PCI services, a hospital was required to obtain a cardiac surgery program CON from AHCA. As cardiac catheterization procedures have become more widely available and physician training and experience have increased, the relative safety of the procedures has improved. The volume of open heart cardiac surgery has declined as the patient outcomes for non-surgical coronary artery disease treatments have improved, yet Florida hospitals seeking to provide PCI were still operating under the CON-based restrictions. There is an ongoing debate within the medical community related to the issue of whether non-emergent patients should receive PCI services at hospitals which lack cardiac surgery programs. The historic rationale for restricting the availability of elective PCI procedures to hospitals where onsite cardiac surgery was also available was related to the possibility that an unsuccessful PCI would require immediate resolution through surgery. The evidence establishes that PCI-related events requiring immediate access to onsite cardiac surgery have become less frequent, at least in part due to increased training and experience of practitioners, as well as an increased technical ability to resolve some events, such as arterial ruptures or perforations, within the cath lab. Nonetheless, there is also evidence that the outcomes of cardiac catheterization procedures performed in hospitals with onsite cardiac surgery may be superior to those performed in hospitals where onsite cardiac surgery is not available. In 2004, the Florida Legislature adopted two bills that, insofar as are relevant to this proceeding, had an impact on the regulatory process related to adult interventional cardiovascular services. The effect of the legislation was to shift the regulation of PCI programs away from CON-based restrictions and towards a licensing process. Both bills established a two-level classification of hospitals providing adult interventional cardiology services. House Bill 329 limited the provision of PCI at hospitals without onsite cardiac surgery to emergent patients and provided, in relevant part, as follows: In establishing rules for adult interventional cardiology services, the agency shall include provisions that allow for: Establishment of two hospital program licensure levels: a Level I program authorizing the performance of adult primary percutaneous cardiac intervention for emergent patients without onsite cardiac surgery and a Level II program authorizing the performance of percutaneous cardiac intervention with onsite cardiac surgery. (Emphasis supplied) Senate Bill 182 did not limit PCI services on the basis of onsite cardiac surgery availability and provided, in relevant part, as follows: Section 2. Notwithstanding conflicting provisions in House Bill 329, Section 408.0361, Florida Statutes, is amended to read: * * * In establishing rules for adult interventional cardiology services, the agency shall include provisions that allow for: Establishment of two hospital program licensure levels: a Level I program authorizing the performance of adult percutaneous cardiac intervention without onsite cardiac surgery and a Level II program authorizing the performance of percutaneous cardiac intervention with onsite cardiac surgery. (Emphasis added) Both the House Bill and the Senate Bill were signed into law. The legislation was codified as Section 408.0361, Florida Statutes (2004), which provided, in relevant part, as follows: 408.0361 Cardiology services and burn unit licensure.-- * * * In establishing rules for adult interventional cardiology services, the agency shall include provisions that allow for: Establishment of two hospital program licensure levels: a Level I program authorizing the performance of adult percutaneous cardiac intervention without onsite cardiac surgery and a Level II program authorizing the performance of percutaneous cardiac intervention with onsite cardiac surgery. Extensive evidence was offered at the hearing to support both sides of the debate regarding the appropriateness of performing elective PCI in hospitals without onsite cardiac surgery, and it is clear that the debate continues. However, the evidence establishes that the Florida Legislature specifically chose not to restrict non-emergent PCI to Florida hospitals with onsite cardiac surgery units and has determined that properly-licensed Florida hospitals may provide PCI services without regard to the availability of on-site cardiac surgery. It is reasonable to assume that had the Legislature intended to restrict provision of adult PCI in hospitals without cardiac surgery programs to emergent patients, the "notwithstanding" language contained in Senate Bill 182 would not have been adopted. There is no credible evidence that the Legislature was unaware of the continuing debate within the cardiology community at the time the legislation was adopted in 2004. The Legislature has acknowledged the distinction between emergent and elective PCI as indicated by Subsection 408.036(3)(o), Florida Statutes (2008), which provides under certain circumstances that a hospital without an approved "open heart surgery program" can obtain an exemption from CON requirements and provide emergent PCI services to "patients presenting with emergency myocardial infarctions." It is reasonable to assume that had the codification of the 2004 legislation been incorrect, the Florida Legislature would have subsequently amended the statute to reinstate the restriction. In fact, the Legislature has revised the referenced statute without substantively altering the relevant language establishing the two-level licensure designation. Section 408.0361, Florida Statutes (2008), the current statute directing AHCA to adopt the rules at issue in this proceeding, provides, in relevant part, as follows: 408.0361 Cardiovascular services and burn unit licensure.-- Each provider of diagnostic cardiac catheterization services shall comply with rules adopted by the agency that establish licensure standards governing the operation of adult inpatient diagnostic cardiac catheterization programs. The rules shall ensure that such programs: Comply with the most recent guidelines of the American College of Cardiology and American Heart Association Guidelines for Cardiac Catheterization and Cardiac Catheterization Laboratories. Perform only adult inpatient diagnostic cardiac catheterization services and will not provide therapeutic cardiac catheterization or any other cardiology services. Maintain sufficient appropriate equipment and health care personnel to ensure quality and safety. Maintain appropriate times of operation and protocols to ensure availability and appropriate referrals in the event of emergencies. Demonstrate a plan to provide services to Medicaid and charity care patients. Each provider of adult cardiovascular services or operator of a burn unit shall comply with rules adopted by the agency that establish licensure standards that govern the provision of adult cardiovascular services or the operation of a burn unit. Such rules shall consider, at a minimum, staffing, equipment, physical plant, operating protocols, the provision of services to Medicaid and charity care patients, accreditation, licensure period and fees, and enforcement of minimum standards. The certificate-of-need rules for adult cardiovascular services and burn units in effect on June 30, 2004, are authorized pursuant to this subsection and shall remain in effect and shall be enforceable by the agency until the licensure rules are adopted. Existing providers and any provider with a notice of intent to grant a certificate of need or a final order of the agency granting a certificate of need for adult cardiovascular services or burn units shall be considered grandfathered and receive a license for their programs effective on the effective date of this act. The grandfathered licensure shall be for at least 3 years or until July 1, 2008, whichever is longer, but shall be required to meet licensure standards applicable to existing programs for every subsequent licensure period. In establishing rules for adult cardiovascular services, the agency shall include provisions that allow for: Establishment of two hospital program licensure levels: a Level I program authorizing the performance of adult percutaneous cardiac intervention without onsite cardiac surgery and a Level II program authorizing the performance of percutaneous cardiac intervention with onsite cardiac surgery. For a hospital seeking a Level I program, demonstration that, for the most recent 12-month period as reported to the agency, it has provided a minimum of 300 adult inpatient and outpatient diagnostic cardiac catheterizations or, for the most recent 12-month period, has discharged or transferred at least 300 inpatients with the principal diagnosis of ischemic heart disease and that it has a formalized, written transfer agreement with a hospital that has a Level II program, including written transport protocols to ensure safe and efficient transfer of a patient within 60 minutes. For a hospital seeking a Level II program, demonstration that, for the most recent 12-month period as reported to the agency, it has performed a minimum of 1,100 adult inpatient and outpatient cardiac catheterizations, of which at least 400 must be therapeutic catheterizations, or, for the most recent 12-month period, has discharged at least 800 patients with the principal diagnosis of ischemic heart disease. Compliance with the most recent guidelines of the American College of Cardiology and American Heart Association guidelines for staffing, physician training and experience, operating procedures, equipment, physical plant, and patient selection criteria to ensure patient quality and safety. Establishment of appropriate hours of operation and protocols to ensure availability and timely referral in the event of emergencies. Demonstration of a plan to provide services to Medicaid and charity care patients. In order to ensure continuity of available services, the holder of a certificate of need for a newly licensed hospital that meets the requirements of this subsection may apply for and shall be granted Level I program status regardless of whether rules relating to Level I programs have been adopted. To qualify for a Level I program under this subsection, a hospital seeking a Level I program must be a newly licensed hospital established pursuant to a certificate of need in a physical location previously licensed and operated as a hospital, the former hospital must have provided a minimum of 300 adult inpatient and outpatient diagnostic cardiac catheterizations for the most recent 12- month period as reported to the agency, and the newly licensed hospital must have a formalized, written transfer agreement with a hospital that has a Level II program, including written transport protocols to ensure safe and efficient transfer of a patient within 60 minutes. A hospital meeting the requirements of this subsection may apply for certification of Level I program status before taking possession of the physical location of the former hospital, and the effective date of Level I program status shall be concurrent with the effective date of the newly issued hospital license. (5)(a) The agency shall establish a technical advisory panel to develop procedures and standards for measuring outcomes of adult cardiovascular services. Members of the panel shall include representatives of the Florida Hospital Association, the Florida Society of Thoracic and Cardiovascular Surgeons, the Florida Chapter of the American College of Cardiology, and the Florida Chapter of the American Heart Association and others with experience in statistics and outcome measurement. Based on recommendations from the panel, the agency shall develop and adopt rules for the adult cardiovascular services that include at least the following: A risk adjustment procedure that accounts for the variations in severity and case mix found in hospitals in this state. Outcome standards specifying expected levels of performance in Level I and Level II adult cardiovascular services. Such standards may include, but shall not be limited to, in-hospital mortality, infection rates, nonfatal myocardial infarctions, length of stay, postoperative bleeds, and returns to surgery. Specific steps to be taken by the agency and licensed hospitals that do not meet the outcome standards within specified time periods, including time periods for detailed case reviews and development and implementation of corrective action plans. Hospitals licensed for Level I or Level II adult cardiovascular services shall participate in clinical outcome reporting systems operated by the American College of Cardiology and the Society for Thoracic Surgeons. As required by Subsection 408.0361(5), Florida Statutes (2004), AHCA created the TAP, which convened and met over the course of two years at a series of public hearings. The TAP also received written materials and comments from interested parties. Thereafter, AHCA convened rule development workshops to formulate the proposed rules at issue in this proceeding. The proposed rules were initially noticed in the September 28, 2007, Florida Administrative Weekly (Vol. 33, No. 39). Subsequent Notices of Changes to the proposed rules were published in the Florida Administrative Weeklies of November 16, 2007 (Vol. 33, No. 46); March 28, 2008 (Vol. 34, No. 13); and May 9, 2008 (Vol. 34, No. 19). There is no evidence that AHCA failed to comply with statutory requirements related to the rule adoption process. As required by Subsection 408.0361(3)(a), Florida Statutes (2008), the proposed rules set forth the procedures by which a hospital may apply for licensure as a Level I or Level II provider of adult cardiovascular services without differentiation based on the availability of on-site cardiac surgery. The proposed rules applicable to a hospital seeking licensure as a Level I provider of adult cardiovascular services are set forth at Proposed Rule 59A-3.2085(16). The proposed rules applicable to a hospital seeking licensure as a Level II provider of adult cardiovascular services are set forth at Proposed Rule 59A-3.2085(17). Subsection 408.0361(3)(b), Florida Statutes (2008), establishes minimum volume reporting requirements for licensure as a Level I program. Accordingly, Proposed Rule 59A- 3.2085(16)(a) provides, in relevant part, as follows: 1. A hospital seeking a license for a Level I adult cardiovascular services program shall submit an application on a form provided by the Agency (See Form 1: Level I Adult Cardiovascular Services License Application Attestation; AHCA Form, Section 18(a) of this rule ), signed by the chief executive officer of the hospital, attesting that, for the most recent 12-month period, the hospital has provided a minimum of 300 adult inpatient and outpatient diagnostic cardiac catheterizations or, for the most recent 12-month period, has discharged or transferred at least 300 inpatients with the principal diagnosis of ischemic heart disease (defined by ICD-9-CM codes 410.0 through 414.9). Reportable cardiac catheterization procedures are defined as single sessions with a patient in the hospital’s cardiac catheterization procedure room(s), irrespective of the number of specific procedures performed during the session. Reportable cardiac catheterization procedures shall be limited to those provided and billed for by the Level I licensure applicant and shall not include procedures performed at the hospital by physicians who have entered into block leases or joint venture agreements with the applicant. (Emphasis supplied) Subsection 408.0361(3)(c), Florida Statutes (2008), establishes minimum volume reporting requirements for licensure as a Level II program. Accordingly, Proposed Rule 59A- 3.2085(17)(a) provides in relevant part as follows: 1. A hospital seeking a license for a Level II adult cardiovascular services program shall submit an application on a form provided by the Agency (See Form 2: Level II Adult Cardiovascular Services License Application Attestation; AHCA Form , Section 18(b) of this rule ) to the Agency, signed by the chief executive officer of the hospital, attesting that, for the most recent 12-month period, the hospital has provided a minimum of a minimum of 1,100 adult inpatient and outpatient cardiac catheterizations, of which at least 400 must be therapeutic cardiac catheterizations, or, for the most recent 12-month period, has discharged at least 800 patients with the principal diagnosis of ischemic heart disease (defined by ICD-9-CM codes 410.0 through 414.9). a. Reportable cardiac catheterization procedures shall be limited to those provided and billed for by the Level II licensure applicant and shall not include procedures performed at the hospital by physicians who have entered into block leases or joint venture agreements with the applicant. (Emphasis supplied) St. Anthony's asserts that the proposed rule is invalid on the grounds that it fails to provide a clear and reasonable methodology for assessing and verifying the number of diagnostic catheterization procedures performed. St. Anthony's asserts that the exclusion of cardiac catheterization procedures performed within the hospital's cardiac cath lab but not billed by the hospital is arbitrary and capricious, modifies, enlarges, or contravenes the specific provisions of the statute implemented, fails to establish adequate standards for agency decision making, and vests unbridled discretion in the agency. The evidence fails to support these assertions. Although the phrase "block lease" is undefined by statute or rule, the evidence establishes that insofar as relevant to this proceeding, the term refers to a practice by which a group of cardiologists lease blocks of time from a hospital for exclusive use of a hospital's cardiac cath lab. St. Anthony's has a leasing arrangement with a group of cardiologists identified as the "Heart and Vascular Institute South" ("HAVI South") whereby St. Anthony's leases blocks of time in a cardiac cath lab to HAVI South cardiologists. The facility is located in a privately-owned medical office building physically attached to St. Anthony's hospital building. St. Anthony's leases the medical office building from a developer. HAVI South cardiologists perform cardiac catheterization procedures at the St. Anthony's facility during both leased and non-leased time. St. Anthony's provides personnel to staff the cardiac cath lab regardless of whether the procedure is performed during leased or non-leased time. The HAVI South cardiology group develops the schedule of cardiac catheterization procedures to be performed during the leased time and notifies St. Anthony's of the schedule. The HAVI South cardiology group bills for both their professional fees and the facility charges (referred to as the "technical component") for the cardiac catheterization procedures performed during leased time. St. Anthony's does not bill for cardiac catheterization procedures performed during the leased time. For the cardiac catheterization procedures performed during non-leased time, the HAVI South cardiology group bills for professional fees, and St. Anthony's bills for the technical component. Patricia Sizemore, vice-president for patient services at St. Anthony's, acknowledged that other hospitals could have block-leasing arrangements different from those existing between St. Anthony's and the HAVI South group. The proposed rules would preclude St. Anthony's from including the outpatient cardiac catheterization procedures done by HAVI South during the block-leased time within those procedures available to meet the numeric threshold requirements identified in the statute. The evidence fails to establish that the proposed rule fails to provide a clear and reasonable methodology for assessing and verifying the number of diagnostic catheterization procedures performed. The relevant language of Subsection 408.0361(3), Florida Statutes (2008), identifies the hospital as the applicant and requires that the applicant "provide" the procedures or discharges being reported to meet the specified volume thresholds. The applicable definition of hospital is set forth at Subsection 408.032(11), Florida Statutes (2008), which defines a hospital as a health care facility licensed under Chapter 395, Florida Statutes. Subsection 395.002(12), Florida Statutes (2008), sets forth the following definition: (12) "Hospital" means any establishment that: Offers services more intensive than those required for room, board, personal services, and general nursing care, and offers facilities and beds for use beyond 24 hours by individuals requiring diagnosis, treatment, or care for illness, injury, deformity, infirmity, abnormality, disease, or pregnancy; and Regularly makes available at least clinical laboratory services, diagnostic X- ray services, and treatment facilities for surgery or obstetrical care, or other definitive medical treatment of similar extent, except that a critical access hospital, as defined in s. 408.07, shall not be required to make available treatment facilities for surgery, obstetrical care, or similar services as long as it maintains its critical access hospital designation and shall be required to make such facilities available only if it ceases to be designated as a critical access hospital. Physicians are not "hospitals" and are not licensed or regulated by Chapter 395, Florida Statutes. Physicians are not authorized to apply for licensure under the provisions of the statute and proposed rules at issue in this proceeding. Nothing in the statute suggests that entities other than hospitals may apply for licensure of a Level I or Level II adult cardiovascular services program. The rationale underlying the restriction of reportable procedures to those for which the applicant hospital issues bills for payment is based upon AHCA's reasonable intention to validate the procedure volume data submitted by applicant hospitals. Jeffrey Gregg, chief of AHCA's Bureau of Health Facility Regulation and CON Unit, testified that "the only practical, realistic way" for AHCA to routinely verify the accuracy of the procedure volume identified by a hospital's licensure application is through AHCA's ambulatory patient database. The reporting requirements for the ambulatory patient database are set forth at Florida Administrative Code Chapter 59B-9 and include elements such as demographic information, diagnosis codes, and charges. The database provides AHCA with access to patient record documentation and directly allows AHCA to verify the procedure volume identified in the licensure application. Because St. Anthony's has no charges related to the procedures performed by HAVI South cardiologists during the leased time, St. Anthony's has not reported procedures performed during leased time to the ambulatory patient database. St. Anthony's reports far more cardiac catheterization procedures to the local Suncoast Health Council than it does to AHCA's ambulatory patient database and asserts that AHCA could rely on health council data. AHCA has no organizational relationship with the local health council, and the evidence fails to establish that such data is as reliable as that collected by the ambulatory patient database. AHCA asserts that an additional basis to exclude procedures performed by entities other than the applicant hospital is that AHCA has no direct regulatory authority over the non-hospital entity. St. Anthony's asserts that AHCA would have its customary authority over the hospital and, by extension, over the third-party leasing the cardiac cath lab from the hospital. At best, AHCA's authority to obtain records from the non-hospital operator of the hospital's cardiac cath lab is unclear. St. Anthony's position effectively would permit a third-party operator to lease all of the time in a hospital's cardiac cath lab, yet allow the hospital to apply for and receive an adult cardiovascular service license. Nothing in Section 408.0361, Florida Statutes (2008), suggests that the Legislature intended to provide such an option. The proposed rule designating the reportable cardiac catheterization procedures is logical and rational, is not arbitrary or capricious, and does not modify, enlarge or contravene the specific provisions of the statute implemented. The evidence fails to establish that the designation of appropriately reportable cardiac catheterization procedures constitutes a failure to establish adequate standards for agency decision making or vests unbridled discretion in the agency. Subsection 408.0361(3)(d), Florida Statutes (2008), requires that the proposed rules include provisions "that allow for" compliance with the most recent guidelines of the American College of Cardiology and AHA guidelines for "staffing, physician training and experience, operating procedures, equipment, physical plant, and patient selection criteria to ensure patient quality and safety." Subsection 408.0361(5), Florida Statutes (2008), requires that the TAP "develop procedures and standards for measuring outcomes" and that, based thereon, AHCA adopt rules that include a risk adjustment procedure that accounts for variations in severity and case mix, outcome standards specifying expected levels of performance, and "specific steps to be taken by the agency and the licensed hospitals" that fail to meet outcome standards. The statute also requires that licensed hospitals participate in clinical outcome reporting systems operated by the American College of Cardiology and the Society of Thoracic Surgeons. The TAP determined that the appropriate method of measuring outcome was to utilize the data available through the clinical outcome reporting systems referenced in the statute. Accordingly, Proposed Rule 59A-3.2085(16)(a) identifies the guidelines applicable to Level I adult cardiovascular services; identifies the specific provisions of the guidelines with which a Level I hospital must comply; requires that the Level I hospital participate in the statutorily-identified data reporting system; and requires that Level I hospitals document a quality improvement plan to meet performance measures set forth by the data reporting system. The proposed rule provides, in relevant part, as follows: All providers of Level I adult cardiovascular services programs shall operate in compliance with subsection 59A- 3.2085(13), F.A.C., the American College of Cardiology/Society for Cardiac Angiography and Interventions Clinical Expert Consensus Document on Cardiac Catheterization Laboratory Standards: Bashore et al, ACC/SCA&I Clinical Expert Consensus Document on Catheterization Laboratory Standards, JACC Vol. 37, No. 8, June 2001: 2170-214 and the ACC/AHA/SCAI 2005 Guideline Update for Percutaneous Coronary Intervention A Report of the American College of Cardiology/American Heart Association Task Force on Practice Guidelines (ACC/AHA/SCAI Writing Committee to Update the 2001 Guidelines for Percutaneous Coronary Intervention) guidelines regarding the operation of adult diagnostic cardiac catheterization laboratories and the provision of percutaneous coronary intervention. The applicable guidelines, herein incorporated by reference, are the American College of Cardiology/Society for Cardiac Angiography and Interventions Clinical Expert Consensus Document on Cardiac Catheterization Laboratory Standards: Bashore et al, ACC/SCA&I Clinical Expert Consensus Document on Catheterization Laboratory Standards, JACC Vol. 37, No. 8, June 2001: 2170-214; and the ACC/AHA/SCAI 2005 Guideline Update for Percutaneous Coronary Intervention A Report of the American College of Cardiology/American Heart Association Task Force on Practice Guidelines (ACC/AHA/SCAI Writing Committee to Update the 2001 Guidelines for Percutaneous Coronary Intervention). Aspects of the guideline related to pediatric services or outpatient cardiac catheterization in freestanding non-hospital settings are not applicable to this rule. Aspects of the guideline related to the provision of elective percutaneous coronary intervention only in hospitals authorized to provide open heart surgery are not applicable to this rule. Hospitals are considered to be in compliance with the American College of Cardiology/Society for Cardiac Angiography and Interventions Clinical Expert Consensus Document on Cardiac Catheterization Laboratory Standards: Bashore et al, ACC/SCA&I Clinical Expert Consensus Document on Catheterization Laboratory Standards, JACC Vol. 37, No. 8, June 2001: 2170-214 and the ACC/AHA/SCAI 2005 Guideline Update for Percutaneous Coronary Intervention A Report of the American College of Cardiology/American Heart Association Task Force on Practice Guidelines (ACC/AHA/SCAI Writing Committee to Update the 2001 Guidelines for Percutaneous Coronary Intervention) guidelines when they adhere to standards regarding staffing, physician training and experience, operating procedures, equipment, physical plant, and patient selection criteria to ensure patient quality and safety. Hospitals must also document an ongoing quality improvement plan to ensure that the cardiac catheterization program and the percutaneous coronary intervention program meet or exceed national quality and outcome benchmarks reported by the American College of Cardiology-National Cardiovascular Data Registry. Level I adult cardiovascular service providers shall report to the American College of Cardiology-National Cardiovascular Data Registry in accordance with the timetables and procedures established by the Registry. All data shall be reported using the specific data elements, definitions and transmission format as set forth by the American College of Cardiology-National Cardiovascular Data Registry. Proposed Rule 59A-3.2085(17)(a) identifies the guidelines applicable to Level II adult cardiovascular services; identifies the specific provisions of the guidelines with which a Level II hospital must comply; requires that the Level II hospital participate in the statutorily-identified data reporting system; and requires that Level II hospitals document a quality improvement plan to meet performance measures set forth by the data reporting system. The proposed rule provides in relevant part as follows: All providers of Level II adult cardiovascular services programs shall operate in compliance with subsections 59A-3.2085(13) and 59A-3.2085(16), F.A.C. and the applicable guidelines of the American College of Cardiology/American Heart Association regarding the operation of diagnostic cardiac catheterization laboratories, the provision of percutaneous coronary intervention and the provision of coronary artery bypass graft surgery. The applicable guidelines, herein incorporated by reference, are the American College of Cardiology/Society for Cardiac Angiography and Interventions Clinical Expert Consensus Document on Cardiac Catheterization Laboratory Standards: Bashore et al, ACC/SCA&I Clinical Expert Consensus Document on Catheterization Laboratory Standards, JACC Vol. 37, No. 8, June 2001: 2170-214; and ACC/AHA/SCAI 2005 Guideline Update for Percutaneous Coronary Intervention A Report of the American College of Cardiology/American Heart Association Task Force on Practice Guidelines (ACC/AHA/SCAI Writing Committee to Update the 2001 Guidelines for Percutaneous Coronary Intervention; and ACC/AHA 2004 Guideline Update for Coronary Artery Bypass Graft Surgery: A Report of the American College of Cardiology/American Heart Association Task Force on Practice Guidelines (Committee to Update the 1999 Guidelines for Coronary Artery Bypass Graft Surgery) Developed in Collaboration With the American Association for Thoracic Surgery and the Society of Thoracic Surgeons. Aspects of the guidelines related to pediatric services or outpatient cardiac catheterization in freestanding non-hospital settings are not applicable to this rule. Hospitals are considered to be in compliance with the guidelines in the American College of Cardiology/Society for Cardiac Angiography and Interventions Clinical Expert Consensus Document on Cardiac Catheterization Laboratory Standards: Bashore et al, ACC/SCA&I Clinical Expert Consensus Document on Catheterization Laboratory Standards, JACC Vol. 37, No. 8, June 2001: 2170-214; in the ACC/AHA/SCAI 2005 Guideline Update for Percutaneous Coronary Intervention A Report of the American College of Cardiology/American Heart Association Task Force on Practice Guidelines (ACC/AHA/SCAI Writing Committee to Update the 2001 Guidelines for Percutaneous Coronary Intervention; and in the ACC/AHA 2004 Guideline Update for Coronary Artery Bypass Graft Surgery: A Report of the American College of Cardiology/American Heart Association Task Force on Practice Guidelines (Committee to Update the 1999 Guidelines for Coronary Artery Bypass Graft Surgery) Developed in Collaboration With the American Association for Thoracic Surgery and the Society of Thoracic Surgeons when they adhere to standards regarding staffing, physician training and experience, operating procedures, equipment, physical plant, and patient selection criteria to ensure patient quality and safety. Hospitals must also document an ongoing quality improvement plan to ensure that the cardiac catheterization program, the percutaneous coronary intervention program and the cardiac surgical program meet or exceed national quality and outcome benchmarks reported by the American College of Cardiology-National Cardiovascular Data Registry and the Society of Thoracic Surgeons. In addition to the requirements set forth in subparagraph (16)(a)7. of this rule, each hospital licensed to provide Level II adult cardiovascular services programs shall participate in the Society of Thoracic Surgeons National Database. The Petitioners generally assert that the proposed rules insufficiently identify or establish the minimum standards identified as "guidelines" and "benchmarks" in the rule. The evidence fails to support the assertion. The guidelines are specifically identified and incorporated by reference within the rule. There is no evidence that the documents identified do not constitute the "most recent guidelines of the American College of Cardiology and the American Heart Association" as required by the statute. Hospitals are not obligated to meet all of the requirements set forth in the guidelines. A licensed hospital is deemed to be in compliance when, as specified in the statute, the hospital adheres to the standards related to staffing, physician training and experience, operating procedures, equipment, physical plant, and patient selection criteria to ensure patient quality and safety. The Petitioners generally assert that such distinctions between the various compliance elements are unclear. The evidence fails to support the assertion. There is no credible evidence that the guidelines, albeit technical and complex, are not commonly understood by appropriate medical practitioners and hospital administrators. Martin Memorial asserts that the Proposed Rule 59A-3.2085(16)(a)5. is vague on grounds that it requires Level I hospitals to operate in compliance with the referenced guidelines while Proposed Rule 59A-3.2085(16)(a)9. authorizes provision of elective PCI at Level I hospitals. Martin Memorial further asserts that because the proposed rules provide for elective PCI in hospitals without onsite cardiac surgical programs, the proposed rules enlarge, modify or contravene the enacting statute. Subsection 408.0361(3)(d), Florida Statutes (2008), requires that AHCA include "provisions that allow for" the following: Compliance with the most recent guidelines of the American College of Cardiology and American Heart Association guidelines for staffing, physician training and experience, operating procedures, equipment, physical plant, and patient selection criteria to ensure patient quality and safety. (Emphasis supplied) Proposed Rule 59A-3.2085(16)(a)9. provides as follows: Notwithstanding guidelines to the contrary in the American College of Cardiology/Society for Cardiac Angiography and Interventions Clinical Expert Consensus Document on Cardiac Catheterization Laboratory Standards: Bashore et al, ACC/SCA&I Clinical Expert Consensus Document on Catheterization Laboratory Standards, JACC Vol. 37, No. 8, June 2001: 2170-214 and the ACC/AHA/SCAI 2005 Guideline Update for Percutaneous Coronary Intervention A Report of the American College of Cardiology/American Heart Association Task Force on Practice Guidelines (ACC/AHA/SCAI Writing Committee to Update the 2001 Guidelines for Percutaneous Coronary Intervention), all providers of Level I adult cardiovascular services programs may provide emergency and elective percutaneous coronary intervention procedures. Aspects of the guidelines related to pediatric services or outpatient cardiac catheterization in freestanding non-hospital settings are not applicable to this rule. (Emphasis supplied) Martin Memorial's disagreement with the proposed rule is premised on the following statement in the ACC/AHA/SCAI 2005 Guideline Update: Elective PCI should not be performed at institutions that do not provide onsite cardiac surgery. (Level of Evidence: C) The statement is contained within subsection 4.3 ("Role of Onsite Cardiac Surgical Backup") within Section 4 ("Institutional and Operator Competency"). The statement is defined as a "Class III" standard, meaning within the "conditions for which there is evidence and/or general agreement that a procedure/treatment is not useful/effective and in some cases may be harmful." According to the "Level of Evidence: C" identification, the statement reflects "consensus opinion of experts, case studies, or standard of care." A footnote to the statement provides as follows: Several centers have reported satisfactory results based on careful case selection with well-defined arrangements for immediate transfer to a surgical program (citation omitted). A small but real fraction of patients undergoing elective PCI will experience a life-threatening complication that could be managed with the immediate onsite availability of cardiac surgical support but cannot be managed effectively by urgent transfer. Wennberg, et al., found higher mortality in the Medicare database for patients undergoing elective PCI in institutions without onsite cardiac surgery (citation omitted). This recommendation may be subject to revision as clinical data and experience increase. The guidelines are statements of "best practices" in health care delivery. They are intended to assist practitioners and facility administrators in making appropriate decisions. The cited statement neither prohibits nor requires performance of elective PCI in hospitals without onsite cardiac surgical programs. Whether a practitioner performs elective PCI in a licensed Level I hospital remains a medical decision under the provisions of the enacting statute and proposed rules. The footnote recognizes that elective PCI is available at some hospitals without onsite cardiac surgery through "careful case selection with well-defined arrangements for immediate transfer to a surgical program." The proposed rule specifically establishes staff and transfer requirements designed to facilitate rapid transfer of a patient from a Level I to a Level II facility. There is no evidence that such staff and transfer requirements are insufficient or otherwise inappropriate. Patient selection criteria are those which expressly identify clinical presentations of patients who are appropriate for revascularization through PCI. Section 5 of the referenced ACC/AHA/SCAI 2005 Guideline Update, titled "Clinical Presentations" explicitly addresses such criteria and constitutes the patient selection criteria contained within the document. The patient selection criteria do not regulate the location where PCI procedures are performed. As stated previously, the Florida Legislature, presented with the option of limiting the availability of cardiac catheterization services available at Level I hospitals to emergent patients, rejected the limitation. The evidence fails to establish that Proposed Rule 59A-3.2085(16)(a)5. is vague or that Proposed Rule 59A-3.2085(16)(a)9. enlarges, modifies or contravenes the enacting statute. Martin Memorial and St. Anthony's assert that the proposed rule contravenes Subsection 408.0361(5)(a), Florida Statutes (2008), which provides that AHCA adopt rules that include "at least the following" elements: A risk adjustment procedure that accounts for the variations in severity and case mix found in hospitals in this state. Outcome standards specifying expected levels of performance in Level I and Level II adult cardiovascular services. Such standards may include, but shall not be limited to, in-hospital mortality, infection rates, nonfatal myocardial infarctions, length of stay, postoperative bleeds, and returns to surgery. Specific steps to be taken by the agency and licensed hospitals that do not meet the outcome standards within specified time periods, including time periods for detailed case reviews and development and implementation of corrective action plans. The TAP recommended to AHCA that existing outcome data reporting systems created by the American College of Cardiology and the Society of Thoracic Surgeons be utilized for data collection related to licensed hospital adult cardiovascular services programs. Subsection 408.0361(5)(b), Florida Statutes (2008), requires that hospitals licensed under the proposed rules participate in clinical reporting systems operated by the American College of Cardiology and the Society of Thoracic Surgeons. The requirement was adopted by the 2007 Legislature based on the TAP recommendation. Proposed Rule 51A-3.2085(16)(a)8. requires licensed Level I hospitals to participate in the American College of Cardiology-National Cardiovascular Data Registry (ACC-NCDR) and sets forth additional directives related to such participation. The ACC-NCDR system is a risk adjusted outcome reporting system that accounts for variation in severity and case mix. It collects approximately 200 data elements and is in use in approximately 2,000 hospitals. Proposed Rule 51A-3.2085(17)(a)6. directs licensed Level II hospitals to participate in the Society of Thoracic Surgeons National Database (STS database) and sets forth additional requirements related to such participation. The STS database provides information generally similar to the ACC-NCDR database. Although Proposed Rule 59A-3.2085(17)(a)5. states that the Level II hospital must meet or exceed the performance standards identified within the ACC-NCDR, there appears to be no specific requirement in the proposed rules that a Level II hospital participate in the ACC-NCDR system. Proposed Rule 59A-3.2085(17)(a)6. contains a citation to Proposed Rule 59A-3.2085 (16)(a)7. The cited paragraph consists of text that is similar to the paragraph preceding the citation. The intent of the reference is unclear. If the reference were intended to incorporate the ACC- NCDR reporting requirements with those applicable to Level II hospitals, the citation in Proposed Rule 59A-3.2085(17)(a)6. should have been to Proposed Rule 59A-3.2085(16)(a)8., where the ACC-NCDR requirements are identified. In any event, the statute requires participation by licensed hospitals in the reporting systems, and, as stated previously, Level II hospitals must document plans to ensure that the cited standards are met; so, it is logical to presume that Level II hospitals will participate in the ACC-NCDR system, in addition to the STS database. Martin Memorial and St. Anthony's assert that the proposed rule does not include the "outcome standards specifying expected levels of performance" required by Subsection 408.0361(5)(a)2., Florida Statutes (2008), and that the proposed rules fail to identify the "national quality and outcome benchmarks" referenced therein. The evidence fails to support the assertions. 93. Proposed Rules 59A-3.2085(16)(a)7. and 59A- 3.2085(17)(a)5. require that each licensed hospital must document a "quality improvement plan to ensure" that the specified cardiac services meet or exceed "national quality and outcome benchmarks" reported by the ACC-NCDR and the STS databases. The word "benchmark" is not defined by statute or rule. Merriam Webster's dictionary defines "benchmark" as "a point of reference from which measurements may be made" or "something that serves as a standard by which others may be measured or judged." The evidence establishes that the "national quality and outcome benchmarks" referenced in the proposed rules are the "expected levels of performance" identified through the ACC-NCDR system. Each hospital participating in the ACC-NCDR system receives a detailed quarterly outcome report indicating the particular hospital's performance relative to all other reporting hospitals on a variety of elements associated with cardiac catheterization and PCI provided at the hospital. Accompanying each periodic report is an "Executive Summary" that identifies the relative performance of the hospital receiving the report on ten specific "PCI and Diagnostic Catheterization Performance Measures," including six "PCI Quality Measures," two "PCI Utilization Measures," and two "Diagnostic Quality Measures." The Executive Summary information visually displays the data through a set of "box and whisker plots" that present the range of data reported by all participating hospitals on each specific measure. The summary received by each hospital identifies its specific performance through an "arrow" and numeric data printed on the plot. The plot visually displays "lagging" and "leading" performance levels. The plot identifies hospitals performing below the tenth percentile of all participating hospitals as "lagging" hospitals. The plot identifies hospitals performing above the 90th percentile as "leading" hospitals. The evidence, including review of the ACC-NCDR data reporting system, establishes that the "expected levels of performance" are rationally those levels within the broad range of hospitals which are neither "leading" nor "lagging" according to the data. It is reasonable to assume that a "leading" hospital is performing at a level higher than expected and that a "lagging" hospital is performing at a level lower than expected. By reviewing the plot for each measure, a hospital can determine its performance relative to other participating hospitals on the ten measures included in the Executive Summary. The additional numeric data contained within the quarterly report permit additional comparison between an individual hospital and all other participating hospitals. Subsection 408.0361(5)(a)2., Florida Statutes (2008), does not require that AHCA establish numeric minimal standards, but only requires that the rule identify "outcome standards specifying expected levels of performance." The ACC-NCDR reporting system required by the statute and adopted by the proposed rules sufficiently identifies expected levels of performance. By their very nature, the outcome standards are not fixed. It is reasonable to presume that as hospital practices change, measurements of relative performance will also change. The rule requires only that each licensed hospital include within a quality improvement plan, documentation to ensure that such outcome standards will be met or exceeded, essentially encouraging a pattern of continual improvement by licensed programs. Subsection 408.0361(5)(a)3., Florida Statutes (2008), requires that the rule include the "specific steps to be taken by the agency and licensed hospitals that do not meet the outcome standards within specified time periods, including time periods for detailed case reviews and development and implementation of corrective action plans." The proposed rule complies with the requirements of the statute. Enforcement of outcome standards requirements applicable to Level I programs is addressed at Proposed Rule 59A-3.2085(16)(f) which provides as follows: Enforcement of these rules shall follow procedures established in Rule 59A-3.253, F.A.C. Unless in the view of the Agency there is a threat to the health, safety or welfare of patients, Level I adult cardiovascular services programs that fail to meet provisions of this rule shall be given 15 days to develop a plan of correction that must be accepted by the Agency. Failure of the hospital with a Level I adult cardiovascular services program to make improvements specified in the plan of correction shall result in the revocation of the program license. The hospital may offer evidence of mitigation and such evidence could result in a lesser sanction. Enforcement of outcome standards requirements applicable to Level II programs is addressed at Proposed Rule 59A-3.2085(17)(e), which provides as follows: Enforcement of these rules shall follow procedures established in Rule 59A-3.253, F.A.C. Unless in the view of the Agency there is a threat to the health, safety or welfare of patients, Level II adult cardiovascular services programs that fail to meet provisions of this rule shall be given 15 days to develop a plan of correction that must be accepted by the Agency. Failure of the hospital with a Level II adult cardiovascular services program to make improvements specified in the plan of correction shall result in the revocation of the program license. The hospital may offer evidence of mitigation and such evidence could result in a lesser sanction. AHCA does not routinely conduct surveys of accredited hospitals. Such surveys are conducted by the Joint Commission on Accreditation of Healthcare Organizations (JCAHO). AHCA generally conducts hospital surveys only during the investigation, pursuant to Florida Administrative Code Rule 59A-3.253(8), of a complaint filed against a hospital. AHCA would likely review ACC-NCDR and Society of Thoracic Surgeons data reports associated with the investigation of a specific complaint related to adult cardiovascular services. Assuming that AHCA's review of the data identified a deficiency, the proposed rules provide the licensee a 15-day period to develop a plan of correction acceptable to AHCA, unless the issue poses "a threat to the health, safety or welfare of patients" in which case it is reasonable to expect that a more prompt resolution of a deficiency would be required. Pursuant to Florida Administrative Code Rule 59A- 3.253, a hospital could be sanctioned for failing to submit a plan of correction related to an identified deficiency, or for failing to implement actions to correct deficiencies specified in an approved plan of correction. There is no evidence that AHCA's enforcement authority under the proposed rules differs in any significant manner from the general enforcement authority already available to the agency. There is no evidence that the proposed rules would result in any alteration of AHCA's investigative practices. Martin Memorial notes that, while the proposed rule provides a 15-day period for development of a plan of correction, AHCA's general enforcement rules already provide a ten-day period and asserts that the proposed rule is therefore inconsistent, fails to establish adequate standards for agency decisions, and vests unbridled discretion in the agency. The specific time period set forth in the proposed rule is clearly applicable, and there is no credible evidence of legitimate confusion in this regard. AHCA has suggested that "lagging" hospitals could be specifically regarded as failing to meet the outcome benchmarks identified in the ACC-NCDR data, but the proposed rule makes no specific reference to any systematic classification of hospital performance, and the statute does not require that a minimal performance level be established. Martin Memorial asserts that the Proposed Rule 59A- 3.2085(17)(a)6. is capricious because it requires that "each hospital licensed to provide Level II adult cardiovascular services programs shall participate in the Society of Thoracic Surgeons National Database," but only physicians can participate in the database. The enacting statute requires such participation. Subsection 408.0361(5)(b), Florida Statutes (2008), directs AHCA to adopt rules that require Level I or Level II licensed hospitals to "participate in clinical outcome reporting systems operated by the American College of Cardiology and the Society for Thoracic Surgeons." The proposed rule clearly implements the directive established by the statute. There is no credible evidence that the proposed rule is irrational or that a licensed Level II hospital would be unable to meet the obligations of the rule by requiring that its thoracic surgeons participate in the STS database. Martin Memorial asserts that the requirement that an applicant hospital's chief executive officer attest to compliance with certain guidelines is vague because "it is unclear what guidelines apply and what guidelines will not." The evidence fails to support the assertion. The referenced requirement applicable to a hospital seeking licensure as a Level I facility is set forth at Proposed Rule 59A-3.2085(16)(a)2., which provides as follows: The request [for licensure] shall attest to the hospital’s intent and ability to comply with the American College of Cardiology/Society for Cardiac Angiography and Interventions Clinical Expert Consensus Document on Cardiac Catheterization Laboratory Standards: Bashore et al, ACC/SCA&I Clinical Expert Consensus Document on Catheterization Laboratory Standards, JACC Vol. 37, No. 8, June 2001: 2170-214; and the ACC/AHA/SCAI 2005 Guideline Update for Percutaneous Coronary Intervention A Report of the American College of Cardiology/American Heart Association Task Force on Practice Guidelines (ACC/AHA/SCAI Writing Committee to Update the 2001 Guidelines for Percutaneous Coronary Intervention); including guidelines for staffing, physician training and experience, operating procedures, equipment, physical plant, and patient selection criteria to ensure patient quality and safety. The referenced requirement applicable to a hospital seeking licensure as a Level II facility is set forth at Proposed Rule 59A-3.2085(17)(a)2., which provides as follows: The request [for licensure] shall attest to the hospital’s intent and ability to comply with applicable guidelines in the American College of Cardiology/Society for Cardiac Angiography and Interventions Clinical Expert Consensus Document on Cardiac Catheterization Laboratory Standards: Bashore et al, ACC/SCA&I Clinical Expert Consensus Document on Catheterization Laboratory Standards, JACC Vol. 37, No. 8, June 2001: 2170-2; in the ACC/AHA/SCAI 2005 Guideline Update for Percutaneous Coronary Intervention A Report of the American College of Cardiology/American Heart Association Task Force on Practice Guidelines (ACC/AHA/SCAI Writing Committee to Update the 2001 Guidelines for Percutaneous Coronary Intervention); and in the ACC/AHA 2004 Guideline Update for Coronary Artery Bypass Graft Surgery: A Report of the American College of Cardiology/American Heart Association Task Force on Practice Guidelines (Committee to Update the 1999 Guidelines for Coronary Artery Bypass Graft Surgery) Developed in Collaboration With the American Association for Thoracic Surgery and the Society of Thoracic Surgeons, including guidelines for staffing, physician training and experience, operating procedures, equipment, physical plant, and patient selection criteria to ensure patient quality and safety. Proposed Rule 59A-3.2085(16)(a)6. designates the guidelines applicable to the operation of Level I hospital services. Proposed Rule 59A-3.2085(17)(a) designates the guidelines applicable to the operation of Level II hospital services. The specific elements of the referenced guidelines are identified in both the statute and the proposed rules. Martin Memorial asserts that the proposed rule is vague as to training requirements applicable for physicians performing elective PCI in Level I hospitals. In making the assertion, Martin Memorial references training requirements established at Proposed Rule 59A-3.2085(16)(b)2. and applicable to Level I physicians performing emergent PCI with less than 12 months experience. There is no credible evidence that the proposed rule is vague. Proposed Rule 59A-3.2085(16)(b), in relevant part, provides as follows: Each cardiologist shall be an experienced physician who has performed a minimum of 75 interventional cardiology procedures, exclusive of fellowship training and within the previous 12 months from the date of the Level I adult cardiovascular licensure application or renewal application. Physicians with less than 12 months experience shall fulfill applicable training requirements in the ACC/AHA/SCAI 2005 Guideline Update for Percutaneous Coronary Intervention A Report of the American College of Cardiology/American Heart Association Task Force on Practice Guidelines (ACC/AHA/SCAI Writing Committee to Update the 2001 Guidelines for Percutaneous Coronary Intervention) prior to being allowed to perform emergency percutaneous coronary interventions in a hospital that is not licensed for a Level II adult cardiovascular services program. The rule provides that a physician with less than 12 months experience working in a Level I facility can perform emergent PCI only if applicable training requirements have been met. The proposed rule does not authorize performance of elective PCI in a Level I hospital by a physician not meeting the minimum annual procedure volume requirements. Proposed Rule 59A-3.2085(17)(b) clearly identifies the requirements applicable to Level II physicians and in relevant part provides as follows: Each cardiac surgeon shall be Board certified. New surgeons shall be Board certified within 4 years after completion of their fellowship. Experienced surgeons with greater than 10 years experience shall document that their training and experience preceded the availability of Board certification. Each cardiologist shall be an experienced physician who has performed a minimum of 75 interventional cardiology procedures, exclusive of fellowship training and within the previous 12 months from the date of the Level II adult cardiovascular licensure application or renewal application. Martin Memorial asserts that the experience requirements set forth at Proposed Rule 59A-3.2085(16)(b)3. (related to Level I hospitals) and Proposed Rule 59A- 3.2085(17)(b)3. (related to Level II hospitals) are arbitrary or capricious. The evidence fails to support the assertion. The text of both proposed rules provides as follows: The nursing and technical catheterization laboratory staff shall be experienced in handling acutely ill patients requiring intervention or balloon pump. Each member of the nursing and technical catheterization laboratory staff shall have at least 500 hours of previous experience in dedicated cardiac interventional laboratories at a hospital with a Level II adult cardiovascular services program. They shall be skilled in all aspects of interventional cardiology equipment, and must participate in a 24-hour-per-day, 365 day-per-year call schedule. Martin Memorial argues that there is no evidence to suggest that 500 hours of experience indicates that appropriate competency levels has been achieved. The evidence establishes that the required experience level was developed by AHCA's hospital licensure unit staff and is the training level currently applicable for hospitals providing emergency PCI services under existing exemptions from CON requirements. The training requirements are not arbitrary or capricious. Martin Memorial asserts that the Proposed Rule 59A-3.2085(16)(c)1. is arbitrary or capricious. The cited rule requires that a Level I hospital make provisions for the transfer of an emergent patient to a Level II hospital, as follows: A hospital provider of Level I adult cardiovascular services program must ensure it has systems in place for the emergent transfer of patients with intra-aortic balloon pump support to one or more hospitals licensed to operate a Level II adult cardiovascular services program. Formalized written transfer agreements developed specifically for emergency PCI patients must be developed with a hospital that operates a Level II adult cardiovascular services program. Written transport protocols must be in place to ensure safe and efficient transfer of a patient within 60 minutes. Transfer time is defined as the number of minutes between the recognition of an emergency as noted in the hospital’s internal log and the patient’s arrival at the receiving hospital. Transfer and transport agreements must be reviewed and tested at least every 3 months, with appropriate documentation maintained. Martin Memorial asserts that the rule is arbitrary or capricious because it does not include a requirement that a Level I hospital make provisions for the transfer of an elective patient to a Level II hospital. There is no credible evidence to support the assertion. There is no evidence that a patient undergoing elective PCI at a Level I would not be regarded as an emergent patient were circumstances such that an emergent transfer to a Level II hospital warranted. There is no credible evidence to suggest a rationale for transferring a non-emergent patient from a Level I to a Level II hospital. Martin Memorial asserts that the proposed rule enlarges, modifies or contravenes the enacting statute on grounds that, although AHCA is directed to adopt rules to ensure compliance "with the most recent guidelines of the American College of Cardiology and American Heart Association Guidelines for Cardiac Catheterization and Cardiac Catheterization Laboratories," the proposed rule provides that "in case of conflicts between the provisions of this rule and the designated guidelines" the rule provisions "shall prevail." Such provisions appear in Proposed Rule 59A-3.2085(13)(j), Proposed Rule 59A-3.2085(16)(g), and Proposed Rule 59A-3.2085(17)(f). The enacting statute requires that hospitals licensed under the provisions of the proposed rules comply with guidelines "for staffing, physician training and experience, operating procedures, equipment, physical plant, and patient selection criteria to ensure patient quality and safety." To the extent that guidelines that relate to elements other than "staffing, physician training and experience, operating procedures, equipment, physical plant, and patient selection criteria to ensure patient quality and safety," the enacting statute does not require compliance by properly- licensed Florida hospitals. Other than as addressed elsewhere herein, the evidence fails to identify any specific conflicts between the guidelines and the proposed rules and, accordingly, fails to establish that the cited proposed rules enlarge, modify or contravene the enacting statute.
Conclusions THIS CAUSE came on for consideration before the Agency for Health Care Administration (“the Agency”), which finds and concludes as follows: 1. The Agency issued the Petitioner (“‘the Applicant”) the attached Notice of Intent to Deny (Ex. 1). The parties entered into the attached Settlement Agreement (Ex. 2), which is adopted and incorporated by reference. 2. The parties shall comply with the terms of the Settlement Agreement. If the Agency has not already completed its review of the application, it shall resume its review of the application. The Applicant shall pay the Agency an administrative fee of $2,000.00 within 30 days of the entry of this Final Order. A check made payable to the “Agency for Health Care Administration” containing the AHCA number(s) should be sent to: Agency for Health Care Administration Office of Finance and Accounting Revenue Management Unit 2727 Mahan Drive, MS 14 Tallahassee, Florida 32308 ORDERED in Tallahassee, Florida, on this_J_ day of frente , 2014. Elizabeth Dudek, Agency for Health/Care Administration Filed June 11, 2014 2:14 PM Division of Admfnigtrative Hearings
Other Judicial Opinions A party that is adversely affected by this Final Order is entitled to seek judicial review which shall be instituted by filing one copy of a notice of appeal with the agency clerk of AHCA, and a second copy, along with filing fee as prescribed by law, with the District Court of Appeal in the appellate district where the agency maintains its headquarters or where a party resides. Review of proceedings shall be conducted in accordance with the Florida appellate rules. The notice of appeal must be filed within 30 days of rendition of the order to be reviewed. CERTIFICATE OF SERVICE named persons/entities by the method designated on this (day of Uw , 2014. [onl Richard Shoop, Ageficy Clerk Agency for Health Care Administration 2727 Mahan Drive, MS 3 Tallahassee, Florida 32308 Telephone (850) 412-3630 I HEREBY CERTIFY that a true and correct copy of this Final (os was served on the below- David J. Menkhaus Bradford C. Herter KZMSS Again, LLLP d/b/a TLC Outpatient Assistant General Counsel Surgery and Laser Center Office of the General Counsel 201 West Guava Street Agency for Health Care Administration Lady Lake, Florida 32159 (Electronic Mail) (U.S. Mail) Jan Mills Finance and Accounting Facilities Intake Unit Revenue Management Unit Agency for Health Care Administration Agency for Health Care Administration (Electronic Mail) (Electronic Mail) L_ Jay Adams, Esq. Broad and Cassel 215 South Monroe Street, Suite 400 Tallahassee, Florida 32302 (U.S. Mail) Page 2 of 2
The Issue At issue in this proceeding is whether Memorial West should be issued CON 7249 to establish a 10-bed Level II NICU program at its facility in southwest Broward County based on "not normal circumstances." Also at issue is whether the Intervenor, Plantation General Hospital, L.P., has sufficiently demonstrated standing, based on whether its existing NICU service will be substantially adversely affected if Memorial West's proposed project is approved.
Findings Of Fact The agency hereby adopts and incorporates by reference the findings of fact set forth in the Recommended Order except where inconsistent with the rulings on the exceptions.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That Plantation General Hospital, L.P. be dismissed as a party to these proceedings based upon its failure to demonstrate standing, and That Certificate of Need No. 7249 be granted to South Broward Hospital District, d/b/a Memorial Hospital West to establish a 10-bed Level II Neonatal Intensive Care Unit at its Pembroke Pines facility. DONE and ORDERED this 20th day of January, 1995, in Tallahassee, Florida. JAMES W. YORK Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 20th day of January, 1995.
The Issue Whether Rule 59C-1.038, the acute care bed need rule, is an invalid exercise of delegated legislative authority. Whether this rule challenge should be dismissed as an untimely attack on a published fixed need pool.
Findings Of Fact In August 1994, the Agency for Health Care Administration ("AHCA") published a numeric need of zero for additional acute care beds in AHCA District 9, Subdistrict 5, for southern Palm Beach County. Pursuant to Subsection 408.034(3), Florida Statutes, AHCA is the state agency responsible for establishing, by rule, uniform need methodologies for health services and facilities. In September 1994, NME Hospitals, Inc. d/b/a Delray Community Hospital, Inc. ("Delray") applied for a certificate of need ("CON") to add 24 acute care beds for a total construction cost of $4,608,260. AHCA published its intent to approve the application on January 20, 1995, in Volume 21, No. 3 of the Florida Administrative Weekly. By timely filing a petition, Bethesda Memorial Hospital, Inc. ("Bethesda") challenged AHCA's preliminary decision in DOAH Case No. 95-0730. Bethesda is also located in AHCA District 9, Subdistrict 5. On May 24, 1995, Bethesda also filed the petition in this case challenging Rule 59C-1.038, Florida Administrative Code, the acute care bed need rule. Pursuant to the acute care bed need rule, AHCA's August 1994 notice published its finding that zero additional acute care beds will be needed in the southern Palm Beach County subdistrict by July, 1999. The data, formulas, and calculations used in arriving at the number zero were not published. AHCA and Delray argue that the publication put persons on notice to inquire into the population data, occupancy rates, or the calculations leading to the published need number. An AHCA rule bars a person from seeking, and AHCA from making, any adjustments to the fixed need pool number if the person failed to notify AHCA of errors within ten days of publication. Still another rule defines "fixed need pool" as the " . . . numerical number, as published. " Bethesda is not contesting and, in fact, agrees that the fixed need pool number as published, zero, is correct. Using AHCA's definition of the fixed need pool, Bethesda's challenge is not barred because it failed to notify AHCA of an error in the fixed need pool number within 10 days of publication. Bethesda is challenging as irrational and invalid subsections (5), (6), and (7) of the acute care bed need rule. Subsection (5) directs the local health councils to determine subdistrict bed need consistent with the methodology for determining district bed need. Under that provision, total projected patient days of acute care needed in a district is calculated by adding together the projected patient care days needed in medical/surgical, intensive care, coronary care, obstetric, and pediatric beds. Each of these separate bed need projections is computed, in general, by multiplying projected population in the district for the appropriate age or gender group times a factor which is the product of the statewide discharge rate and the average length of stay for that particular type of care. After the total projected acute care patient days for district residents is computed, the number is adjusted to reflect historical patient flow patterns for acute care services, for out-of-state residents served in the district, for residents of other districts served in the district, and for residents of the district served outside the district. The rule includes specific percentages to apply for each patient flow group for each of the eleven districts. After the total number of beds needed in the district is derived, that number is decreased by the number of existing licensed or approved beds to get the number of additional acute care beds needed in the district, if any. Bethesda is challenging subsections (7)(a), (b), and (c) of the acute care rule, which authorize adjustments to the calculations from subsections (5) and (6) to achieve desired occupancy levels, based on historic utilization of acute care beds in a district. Bethesda is also seeking a determination that subsections 7(d) and (e) are invalid. Each of those subsections of the rule refer to (5)(b), although AHCA's expert witness testified that they should refer to (6)(b). Subsection (7)(d) requires at least 75 percent occupancy in all hospitals in the district before new acute care beds normally are approved, regardless of the net need projected by the formulas. Subsection (7)(e) allows approvals under special circumstances if net need is projected by the formulas and the applicant facility's occupancy rate equals or exceeds 75 percent. Subsection (7)(e), the provision directly related to the Delray application, is as follows: (e) Approval Under Special Circumstances. Regardless of the subdistrict's average annual occupancy rate, need for additional acute care beds at an existing hospital is demonstrated if a net need for beds is shown based on the formula described in paragraphs (5)(b), (7)(a), (b), (c), and (8)(a), (b), (c), and provided that the hospital's average occupancy rate for all licensed acute care beds is at or exceeds 75 percent. The determination of the average occupancy rate shall be made based on the average 12 months occupancy rate made available by the local health council two months prior to the beginning of the respective acute care hospital batching cycle. Phillip C. Rond, III, Ph.D., was the primary architect of the rule, beginning in 1981. The rule was initially published in 1982, and adopted in 1983. Constants in the rule formulas, including use rates, average lengths of stay, occupancy standards and patient flow patterns were taken from a 1979 survey of some state hospitals. Because data used for the constants in the formulas was expected to change, subsection (6) also provides, in pertinent part, that: Periodic updating of the statewide discharge rates, average lengths of stay and patient flow factors will be done as data becomes available through the institution of statewide utilization reporting mechanisms. Patient flow factors were updated in March 1984 to reflect a change in the realignment of counties in Districts 5 and 8. No other constants have been updated since the rule was adopted in June 1983. More current data is available. The Hospital Cost Containment Board ("HCCB") began collecting statewide hospital inpatient discharge data in the fourth quarter of 1987, which became available by the fall of 1988. AHCA now collects the data. Using the rule, the projected net need for acute care beds in 1999 in District 9 is 1,442 additional beds. By contrast, with the factors updated by Dr. Rond, the projected net need is a negative 723 or, in other words, District 9 has 723 more acute care beds than it will need in 1999. The updated formulas show a need for a total of 3,676 beds in District 9, which already has 4,399 licensed or approved acute care beds. Since 1983, hospital utilization has declined in both rates of admissions or discharges, and in average lengths of stay. Although the occupancy goals in the rule are 75 to 80 percent, depending on the type of hospital service, the occupancy rate achieved by using the number of beds projected by the rule methodology is 45 to 52 percent. The statewide occupancy rate in acute beds is approximately 50 percent in 49,215 licensed beds. The formulas in the rule show a statewide net need for 6,000 more beds in 1999, but updated constants in the same formulas result in a total statewide need for approximately 36,000 acute care beds in 1999, or 13,000 fewer beds than currently exist. Statewide utilization of acute care hospital beds declined from 1187.2 days per 1000 population in 1983 to 730.5 days per 1,000 in 1993, despite increases in the percentage of the elderly population. By 1987, AHCA's predecessor realized that the need methodology in the rule was grossly overestimating need and inconsistent with its health planning objectives. Subsection (7)(d) was added to the rule to avoid having a published fixed need based on the outdated methodology in subsections (5), (6) and 7(a)- (c). The occupancy data is also, as the 1987 amendment requires, that reported for the most recent 12 months, available 2 months before the scheduled application cycle. In August 1994, AHCA published a numeric need of zero for District 9, Subdistrict 5, rather than 1,442, the calculated net need predicted by the formulas in the rule, because all subdistrict hospital occupancy rates did not equal or exceed 75 percent. Elfie Stamm of AHCA, who is responsible for the publication of fixed need pools, confirmed that the 1987 amendment to the rule was an efficient and cost-effective way to avoid publishing need where there was no actual need. She confirmed Dr. Rond's conclusions that the formulas are no longer valid and produce excessive need numbers, as in projecting a need for 6,000 or 7,000 more acute care beds in the state. She also confirmed that none of the constants in the formula have been updated as required by subsection 6. Ms. Stamm claims that the information needed to update the formulas cannot be obtained easily from any statewide utilization reporting mechanism. One problem, according to Ms. Stamm, is the possibility of including patients in acute care beds with comprehensive rehabilitation, psychiatric, or substance abuse problems, although it is not lawful for acute care providers to place patients with these primary diagnoses in licensed acute care beds and all data bases have some miscoding of diagnoses. She also testified that some factors required in the formulas are not included in HCCB data base. In addition, she testified that AHCA is in the process of filing a notice to repeal the acute care bed need rule. The filing of the notice of repeal, published in Volume 21, Florida Administrative Week, pp. 4179-4180 (6/23/95) was confirmed by Bethesda's Request For Official Recognition, which was filed on July 20, 1995, and is granted. Ms. Stamm also noted that rules for other need-based health services have facility-specific special circumstances provisions, which are not tied to numerical need, otherwise the special circumstances are not really facility- specific. Need rules make no sense, according to Ms. Stamm, without an exception in the absence of a determination of need. Subsection (7)(e) of the acute care rule requires a finding of numeric need and a 75 percent occupancy rate at the applicant facility. Ms. Stamm's records indicate that AHCA's predecessor adopted the facility-specific provisions tied to net need at the same time it adopted the 75 percent average district occupancy standard to overcome the problems with the net need formula. AHCA asserts that the admittedly irrational need methodology when combined with the 1987 amendment achieves a rational result. Because the need methodology always over estimates numeric need, facilities exceeding 75 percent occupancy have an opportunity to demonstrate special circumstances. Daniel Sullivan, Delray's expert, also testified that problems exist in extracting acute care bed from specialty bed utilization data, in hospitals which have both. He also agreed with Ms. Stamm that the 1987 amendment corrects the erroneous projections of the formula to give a rational outcome from the rule as a whole when not all hospitals in a subdistrict equal or exceed 75 percent occupancy and when one hospital, over 75 percent occupancy, attempts to establish a special circumstance, despite the fact that the need methodology itself is always wrong in projecting numeric need. Ms. Stamm testified that one district is approaching 75 percent occupancy in all hospitals. Mr. Sullivan testified that, if and when that occurs, then the formula is intended to, but does not, reflect the number of additional beds needed. An alternative methodology is required to determine bed need. AHCA, with its responsibility for the data base formerly collected by the HCCB, receives discharge data and financial worksheets from every hospital in the state. The claim that AHCA cannot update the formulas because its data may be unreliable is rejected as not credible. The data now available is more reliable than the 1979 data used in developing the rule, which was not collected from a formalized statewide reporting system, but from a sample of hospitals. The claim that AHCA cannot use its data base from mandatory statewide reporting mechanisms to extract the data needed to update the formulas is also rejected. The rule contemplated ". . .the institution of statewide utilization reporting mechanisms." Dr. Rond's work to update the formulas before the final hearing began on May 23, 1995. Dr. Rond used a total of approximately 1.5 million acute care discharges from the AHCA (formerly, HCCB) data base for the 1992 calendar year. At the time of the final hearing, Dr. Rond had not separated days of care for medical/surgical, intensive and coronary care. The data can be taken from hospital financial data, including detailed budget worksheets which are submitted to AHCA. Separate data are anticipated in the formula because the computation of need for the different bed categories is based on different occupancy goals. For medical/surgical and intensive care beds, the goal is 80 percent occupancy, but it is 75 percent for coronary care for persons age 0 to 64. For persons 65 and older, the rule applies a combined occupancy standard of 79.7 percent for all three bed categories, which assumes that approximately 4 percent of the combined days of older patients will be spent in coronary care. Dr. Rond reasonably applied the 79.7 percent occupancy standard to the combined days for persons under 65, in arriving at the total district bed need for 3,676 beds. To check these results and to assume a worse case scenario of all patient days attributable to coronary care beds, for which more beds are needed to maintain a lower occupancy, Dr. Rond worked the formula using 75 percent occupancy as the goal for medical/surgical, intensive and care coronary care beds combined. Although the base number increased by 100, the calculations and adjustments in the rule yielded the same number of total acute care beds needed in the district, 3,676. That reliably confirms that the maximum number of acute care beds needed in District 9 is 3,676 by 1999. AHCA could use its data base to update formulas and achieve rational results in the rule by using the hospital financial data to distinguish coronary care days for patients 0-64 to include in the formula, or by using a rational blended occupancy standard in a rule amending the existing methodology. AHCA demonstrated that the 1987 amendment overrides the exaggerated numeric need number to yield a rational published fixed need pool in the absence of 75 percent occupancy in all acute care beds in a subdistrict. AHCA also demonstrated that because the projected need is always excessive under the formula, hospitals are allowed to demonstrate special circumstances, although it is absurd to include a requirement of numeric need in a provision for special circumstances. AHCA's claim that the excessive need projection is, therefore, irrelevant is rejected. Net need under the rule formula fails to give any rational indication of the number of beds needed when all hospitals in a subdistrict reach 75 percent occupancy.
The Issue Whether Trustees of Mease Hospital, Inc., d/b/a Mease Hospital Dunedin ("Mease") is entitled to be included on the Neonatal Intensive Care Unit ("NICU") inventory, as authorized to provide Level III NICU services in five (5) Level III beds in Department of Health and Rehabilitative Services ("HRS") District 5. Whether All Children's established its standing to intervene in Case No. 90-6255, as an existing provider of Level III NICU services in HRS District 5. Whether Morton Plant established is standing to intervene in the consolidated cases, as an existing provider of Level II NICU services in HRS District 5.
Findings Of Fact On September 14, 1990, Mease a 278-bed acute care hospital, located in Dunnedin, Florida, timely challenged the inventory of neonatal intensive care beds published for District 5 (Pasco and Pinellas Counties) by HRS. The preliminary inventory, published on August 24, 1990, authorized five (5) Level II and no Level III beds at Mease. All Children's is a 168-bed specialty children's hospital, which has a 24-bed Level III NICU, located in St. Petersburg, Florida, in Pinellas County. Morton Plant is a 750-bed acute care hospital with Level II NICU beds, located in Clearwater, Florida, in Pinellas County. Of the 2,670 babies delivered at Morton Plant in 1990, 598 came from the Mease area; 569 of the 2,670 were classified as not normal or in need of some NICU services, and 148 of the 569 not-normal newborns came from the Mease service area. HRS is the department with responsibility for promulgating NICU rules pursuant to legislation passed in May 1987, effective in October 1987. See, Section 381.702(20) and 381.706(1)(a), (e), (h), and (m), Florida Statutes (1989). The NICU rule became final in August 1990, and included a "grandfather" provision for providers of NICU services prior to October 1, 1987, to avoid any disruption in the availability of NICU services. The grandfather provision includes, as one of three tests for determining if NICU services were offered prior to October 1, 1987, the requirement that 50% of the neonates admitted to Level II and III units from October 1, 1986 through September 30, 1987, were classified in Diagnostic Related Groups (DRGs) 385, 386, 387 or 388. See, Florida Administrative Code, Rule 10-5.042(14)(f) (2)(b) (III). In August 1987, HRS, in preparation for the promulgation of the NICU rule, mailed surveys to various hospitals, including Mease, requesting information about the provision of NICU services at those hospitals. Using the Guidelines for Perinatal Care to distinguish the level of services it was providing, Mease responded to the August 1987 survey by reporting that it had three (3) Level II beds and no Level III beds. In response to the survey questions, Mease also reported that its NICU services began on April 1, 1987, coinciding with the time that a neonatologist, Mary Newport, M.D., joined the staff at Mease. In March 1987, Board Certified Neonatologist Mary Newport began providing 24-hour coverage at Mease, receiving final approval for active staff privileges in early May 1987, so that Mease could treat rather than transfer sick neonates. Mease resubmitted the August 1987 survey in February 1989, reporting that it had increased from three to six Level II beds, after October 1, 1987, and from one to four Level III beds beginning on October 1, 1987, although such changes required certificate of need ("CON") approval effective October 1, 1987. HRS sent out a second survey in April 1989, to which Mease responded that it currently had six Level II beds and no Level III services, under the more stringent requirements included within the proposed rule as compared to the Guidelines for Perinatal Care standards used in the first survey. In August 1989, Mease resubmitted the second survey and reported a current total of six Level II beds and four Level III beds of which three Level II beds and one Level III bed were operating on September 30, 1987. Mease, in the August resubmittal of the second survey, also reported that 37 neonates were admitted to the Level III bed for 63 patient days and that a total of 188 neonates were admitted to both Level II and Level III beds, from October 1, 1986 through September 30, 1987. Of the 188 neonates admitted to Level II and Level III beds from October 1, 1986 through September 30, 1987, Mease claimed that 87 of those had DRG's 385, 386, 387 or 388. On September 10, 1990, Mease submitted documentation to HRS showing that from October 1, 1986 through September 30, 1987, NICU admissions totaled 122 patients, of which 77 were in DRGs 385, 386, 387 or 388. Subsequently, Mease claimed to have had 18 fewer admissions. On December 18, 1990, Mease claimed to have had 107 NICU patients, of which 69 were in DRGs 385, 386, 387 or 388. At the final hearing, Mease claimed that its review of the available records of 1512 of the 1520 deliveries from October 1, 1986 through September 30, 1987, showed that, when diagnoses and codes were changed retrospectively, there were 126 NICU admissions, of which 74 were in DRGs 385, 386, 387, and 388. The number of neonates in intensive care and the number of neonates in the specified DRGs asserted by Mease are both unreliable. There is no credible evidence to support Mease's claim that it started offering NICU services upon the arrival of Dr. Newport on the courtesy staff on March 28, 1987, or upon her becoming a member of the active staff in early May, 1987. Credible expert testimony was presented that a time lag occurs between the arrival on staff of a neonatologist and the initiation of NICU services. In fact, Dr. Newport testified that after she arrived at Mease, she tried out various rented equipment and evaluated it before making purchases, and altered the locations of the nurseries. The Mease Perinatal Committee Agenda dated May 26, 1987 included an item "Task Force for Development of Level II Facility." Even assuming arguendo that Mease did establish NICU services on April 1, 1987, as reported to HRS in response to the first HRS survey, a substantial number of the neonates Mease claimed to have served in its NICU were, in fact, discharged from Mease prior to April 1, 1987. 1/ Mease has failed to submit documentation that it had neonatal intensive care services from October 1, 1986 through September 30, 1987. Mease has failed to submit documentation that it admitted 126 neonates to intensive care services from October 1, 1986 through September 30, 1987. Mease has failed to submit documentation that 74 neonates were classified into DRGs 385, 386, 387 or 388. Credible expert testimony supports the conclusion that retrospective changes in diagnoses are not reliable, in view of the fact that observation of a patient, not just the patient's record, is significant in making a diagnosis. Mease reported to the Health Care Cost Containment Board that it had no revenue from the operation of a NICU from October 1, 1986 to September 30, 1987.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered: Including Mease on the final inventory as an authorized Level II neonatal intensive care unit with five beds, based on the Summary Recommended Order of April 9, 1991, entered without objection; and Excluding Mease from the final inventory as an authorized provider of Level III neonatal intensive care services. DONE and ENTERED this 1st day of November, 1991, at Tallahassee, Florida. ELEANOR M. HUNTER Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 1st day of November, 1991.
Findings Of Fact CON APPLICATIONS HCR-CON No.7530 HCR is a publicly owned, for-profit corporation which operates approximately 25 nursing homes in Florida. HCR filed an application, CON No. 7530, to construct a 98-bed freestanding nursing home. HCR proposes to locate the nursing home in the northwest part of Orange County, Florida. HCR proposes that the entire 98-bed facility will be dedicated to the care of patients with Alzheimer's Disease and related dementias. The total cost of the HCR project is $7,132,000 for 47,750 square feet, or $472,776 per bed. The HCR proposal is modeled after an HCR 120-bed nursing home facility in Boynton Beach, Florida. The Boynton Beach facility is entirely dedicated to the treatment of patients with Alzheimer's Disease or related dementias. The proposed HCR facility in Orange County would be identical to the Boynton Beach facility less one patient wing. HCR's Boynton Beach facility, as well as HCR's existing Orange County nursing home facility, have superior licensure ratings. HCR's Boynton Beach facility received accreditation with commendation from the Joint Commission on the Accreditation of Health Care Organizations (JCAHCO), a national accreditation body which has established standards to measure the quality of care in dementia care units. Dementia is a complex of symptoms that can be caused by many different underlying diseases. Alzheimer's disease is one cause of dementia. Alzheimer's disease is the most common cause of dementia. Significant research is being conducted into the cause and treatment of Alzheimer's disease. Dementia is defined as a decline in intellectual function; global cognitive impairment, that is memory impairment and at least one of the following: impairment of abstract thinking; impairment of judgment; impairment of other complex capabilities such as language use, ability to perform complex physical tasks, ability to recognize objects or people, or to construct objects; and, personality change. The Reisberg Cognitive Rating Scale (RCS) classifies the stages of Alzheimer's disease from 1 to 7, with a rating of 7 being most severe. The rating scale is based on 10 axes: concentration, recent memory, past memory, orientation, functioning and self-care, speech, motor functioning, mood and behavior, practice of an art or skill, and calculation ability. The Global Deterioration Scale (GDS) for Age-Associated Cognitive decline and Alzheimer's Disease also defines seven stages of deterioration ranging from no cognitive decline to very severe cognitive decline. Persons suffering from Alzheimer's disease generally cannot survive without assistance upon reaching early dementia or level five on both the RCS and GDS. Approximately 50-58 percent of persons currently residing in community nursing homes suffer from some form of dementia. There is a need for community nursing home beds for persons suffering from the latter stages (levels 5-7) of Alzheimer's disease in Orange County. It is particularly difficult to place in nursing homes in Orange County, persons suffering from the latter stages of Alzheimer's disease (levels 5-7) who also have displayed a history of disruptive behavior patterns. Persons suffering from the latter stages of Alzheimer's disease have specific needs for care and treatment in nursing homes. Alzheimer's victims tend to wander and should have areas set aside for secured walking. The movement of Alzheimer's victims should also be carefully monitored. HCR's Boynton Beach facility, which is the prototype for HCR's proposed Orange County facility, has specific design features to accommodate the needs of patients suffering from the latter stages (levels 5-7) of Alzheimer's disease. HCR proposes a pod design of five residential pod units each with a central living area, also called the atrium area. The resident rooms open to the central living area. Each pod has an enclosed courtyard. Access to the courtyards is controlled. The two nursing stations are centrally located in each wing of the facility. Each central living area, or atrium, is visible from one or the other of the nursing stations. HCR provides specific staff training in the care and treatment of Alzheimer's disease and related dementias. A unit or a facility dedicated to the treatment of dementia patients may reduce the need for psychotropic medication of the patients. On a long-term basis, there may be some staff burnout in a facility or unit dedicated solely to the care and treatment of victims of Alzheimer's disease or related dementias. HCR proposes that its CON be conditioned upon locating in northwest Orange County, providing at least 30 percent of its patient days to Medicaid eligible persons, providing respite care, and dedicating all 98 beds to the care and treatment of persons suffering from Alzheimer's disease and related dementias. HCR currently meets its Medicaid commitment in the Boynton Beach facility. LIFE CARE CON Nos. 7534 and 7534P LIFE CARE is a for-profit corporation which owns and operates two nursing homes in Florida. LIFE CARE also operates three other nursing homes in Florida. As of September 1993, LIFE CARE had a net worth of approximately $50 million. LIFE CARE proposes to construct a freestanding 98-bed nursing home (CON No. 7534) in southwest Orange County, at a total cost of $5,988,000. The LIFE CARE 98-bed facility proposal includes a 20-bed unit dedicated to the care and treatment of persons suffering from Alzheimer's disease, a 20-bed subacute unit, an adult day care center, mental health services, and services to persons suffering from AIDS/HIV. LIFE CARE also made a partial request (CON No. 7534P) for a 60-bed facility which would be constructed at the same site and would include the same features. For economic reasons, patients are being released from acute care hospital settings at earlier stages of recovery and there is a need for subacute nursing home services in Orange County. The incidence of AIDS/HIV is increasing and there is a need for nursing home services for persons suffering from AIDS/HIV in Orange County. The 20-bed unit proposed by LIFE CARE for the care and treatment of Alzheimer's patients will be a distinct part of the facility, separate from other residents. The Alzheimer's unit has its own dining area and activity area, a centrally located bathing facility, and a secured courtyard for wandering space. The 20-bed LIFE CARE subacute unit will also be separate. The subacute unit will have two ventilator areas and be contiguous to a therapy area. The LIFE CARE design includes outdoor courtyards, a library, gift shop, and ice cream parlor. Pursuant to Sections 408.037(2)(a) and (b), Florida Statutes, one of the required elements of a CON application is the listing of capital projects, which is presented in Schedule 2 of the CON application. The Schedule 2 filed by LIFE CARE in these proceedings is identical to the Schedule 2 filed by LIFE CARE in the December 1993 batching cycle for LIFE CARE'S proposed Clay County Project, CON No. 7501. It has been held that Schedule 2 of the LIFE CARE Clay County Project CON application No. 7501 met minimum CON application content requirements. Life Care Centers of America, Inc. v. State of Florida, Agency for Health Care Administration, 20 F.L.W. 1435 (Fla. 1st DCA June 12, 1995). During November of 1993, a LIFE CARE nursing home located in Altamonte Springs was downgraded from a superior to a conditional licensure rating due to a deficiency related to outdated medication. The conditional rating given to the facility was in effect for approximately fifty days. The facility was then given a standard rating, and upon the annual survey in the fall of 1994, the facility has been recommended for a superior rating. All other LIFE CARE facilities have superior ratings. LIFE CARE proposes to condition its CON application upon providing Medicaid participation of 65 percent in the 98-bed facility, and 43 percent in the 60-bed facility. ADVENTIST CON No. 7528 ADVENTIST is a not-for-profit corporation that owns and operates nursing homes, hospitals, and other health care related enterprises. ADVENTIST is a wholly owned subsidiary of Adventist Health System/Sunbelt Health Care Corporation, which owns and operates hospitals and health care facilities throughout the United States. ADVENTIST has operated health care facilities in Orange County since the early 1900s when Florida Hospital was founded. ADVENTIST is the largest hospital system in Orange County, with more than 1,400 beds located on five campuses. ADVENTIST proposes to add 38 beds to an existing freestanding 80-bed community nursing home, Sunbelt Living Center-East Orlando (SLC), which is directly adjacent to Florida Hospital's East Orlando campus. The ADVENTIST proposal would include a 20-bed subacute unit and also an 18-bed skilled nursing unit. This addition to SLC would be accomplished by constructing two new wings to the existing facility. The projected cost of the ADVENTIST addition is $1,386,500, or approximately $36,000 per bed. SLC is an 80-bed skilled nursing facility which opened in January of 1993. SLC has a superior licensure rating. SLC provides nursing home service to a variety of residents, including persons with AIDS/HIV, as well as persons with a primary diagnosis of Alzheimer's disease and related dementia. SLC does not have a distinct Alzheimer's unit, but is equipped with security features to accommodate Alzheimer's patients. SLC staff is trained in the care and treatment of all its residents, including those with dementia. SLC reached an occupancy rate of 96 percent-97 percent capacity in its first ten months of operation. The SLC design is based on a residential model. The intent of the design is to create a residential community, and to encourage the interaction among the residents, and also between the residents and staff. The residential wings contain twelve rooms with private and semiprivate accommodations. Each room has its own toilet facilities. The support facilities, food service, therapy areas, administrative offices, visitor and welcoming areas, are located in the center of the facility. The residential wings are clustered on each side of the facility. The facility also features outdoor courtyards and walkways adjacent to the residential wings. ADVENTIST proposes to condition its CON application on providing a Medicaid commitment of 65 percent of total patient days in the non-subacute wing of the 38-bed expansion. The ADVENTIST proposal also features an AIDS program and respite care. ADVENTIST currently meets it Medicaid commitment at SLC. As indicated above, there is a need for subacute nursing home beds in Orange County. There is a need for nursing home beds for persons suffering from AIDS/HIV in Orange County. In the 20-bed subacute unit ADVENTIST proposes that each room will include wall-mounted suction and gases to accommodate ventilator dependent patients, which will enable ADVENTIST to provide more intensive subacute care. RHA/PRINCETON CON No.7538 RHA is the owner and operator of Princeton Hospital, located on the west side of Orlando. Princeton Hospital is situated on 32 acres bordering Lake Lawne. Princeton Hospital has 150 beds, including 24 psychiatric beds, a multipurpose intensive care unit, a 13-bed progressive care unit, a nursery, pediatric services, women's services, an obstetrical unit and an inpatient cardiac catheterization lab. The psychiatric unit at Princeton Hospital treats a wide range of mental disorders, including those afflicting the elderly population. The hospital also operates a senior psychiatric partial hospitalization program which serves geriatric patients, including persons suffering from Alzheimer's disease and related dementias. Princeton Hospital currently provides care and treatment to persons suffering from AIDS/HIV. Princeton Hospital is accredited by the Joint Commission on Accreditation of Health Care Organizations. On August 1, 1994, subsequent to the filing of CON application No. 7538, Princeton Hospital entered into a wide-ranging affiliation agreement with the University of Florida, College of Medicine and Shands Hospital. The agreement provides for extensive reciprocal training and educational programs between Princeton Hospital and the College of Medicine, as well as Shands Hospital. The agreement also provides for priority transfer of patients between Princeton and Shands hospitals. RHA proposes to include its nursing home facility within the scope of the affiliation agreement. The nursing home staff would benefit from the training and educational opportunities, and the nursing home patients would have access to priority reciprocity with the College of Medicine and Shands Hospital as provided for in the agreement. During fiscal years 1993 and 1994 Princeton Hospital had a Medicaid patient ratio of approximately 40 percent. Princeton Hospital also provides indigent care. RHA proposes to construct a freestanding 60-bed Medicaid certified skilled nursing facility on the campus of Princeton Hospital at a cost of $4,991,961 for 43,741 square feet, or $83,199 per bed. The services that are proposed include subacute care, a 15-bed unit for persons suffering from Alzheimer's disease and related dementias, long term care, and two pediatric beds. Respite care will also be provided. RHA proposes that its subacute care unit would provide step-down care for patients referred from acute care hospital settings. RHA also proposes to provide rehabilitative therapies to serve patients suffering from fractured hips and joint replacements as well as other patients needing more intensive physical therapy. Cardiac and respiratory patients will also be served in the subacute unit. As indicated above, there is a need for subacute nursing home beds in Orange County. RHA's proposed 15-bed Alzheimer's unit will be a distinct and secured part of the facility. The unit will have its own enclosed courtyard and activities area. As indicated above, there is a need for nursing home beds for persons suffering from Alzheimer's disease and related dementias in Orange County. RHA also proposes a program dedicated to the care and treatment of persons suffering from AIDS/HIV. This program will provide long-term care, and will include psychiatric, as well as subacute services. As indicated above, there is a need for nursing home beds for persons suffering from AIDS/HIV in Orange County. The RHA proposal includes two pediatric nursing home beds. It is not uncommon to provide pediatric nursing home beds in a small unit within a nursing home facility. These beds will provide subacute care to pediatric patients referred from acute care hospital settings. It is anticipated that the pediatric unit will serve patients with respiratory problems and other multiple system failures. RHA has experienced difficulty in placing pediatric patients discharged from Princeton Hospital. The RHA facility is designed in a series of modules. There are four patient wings located around a single nursing station. The Alzheimer's wing is distinct and secured. The pediatric beds are located in a single semiprivate room close to the nursing station. The subacute unit includes six beds with wall-mounted medical gases and vacuums. Each residential room has approximately 272 net square feet, and features its own handicapped toilet and bathing facilities. The facility includes a chapel, convenience store, laundry, ice cream shop, and beauty shop, designed in a mall concept. The corridors are ten feet in width instead of the standard eight feet. The intent of the design concept is to encourage social interaction. As designed, the location of the soiled utility room in the facility does not comply with applicable Florida code regulations; however, a proposed minor change in the design will move the soiled utility room approximately twenty feet to bring the facility into compliance with Florida code regulations. ALLOCATION FACTORS Relationship to District and State Health Plans Section 408.035(1)(a), Florida Statutes District Health Plan Allocation Factor 1 of the District Health Plan provides a priority for an applicant proposing to locate in the northwest Orange County population center. This preference will continue to be given applicants until a total of 120 beds is obtained. HCR is the only applicant proposing to locate in the northwest Orange County population center; however, in January of 1993, Sunbelt Living Center, a 120-bed community nursing home opened in Apopka, Florida, which is located in the northwest Orange County population center. Accordingly, the total bed number for this preference has been obtained, and this district allocation factor is inapplicable to these proceedings. Allocation Factor 2 of the District Health Plan provides a preference for applicants developing specific services for newborn and/or pediatric patients. RHA is the only applicant proposing specific services which include a unit for the care and treatment of pediatric patients. Accordingly, RHA is the only applicant which meets this allocation factor. Allocation Factor 3 of the District Health Plan provides a preference for an applicant proposing to develop a specific specialty service (or services), such as a unit for medically complex patients, a unit dealing with psychiatric disorders as a primary diagnosis, or services for persons suffering from AIDS/HIV. This preference is also provided to an applicant which commits to working with, or in conjunction with, an existing provider of a specialty service, such as hospices, or mental health providers. RHA is the applicant which best meets this allocation factor. The RHA proposal provides for specialty services for medically complex patients, provides for services to persons suffering from AIDS/HIV, and RHA specifically commits to working with mental health providers, including working with the psychiatric unit at Princeton Hospital. ADVENTIST and LIFE CARE also propose to provide specialty services to medically complex patients in subacute units; however, the ADVENTIST facility is better equipped in this regard and is designed with piped in medical gases, vacuum, and expanded electrical capacity will have the capability to provide more extensive services. LIFE CARE also proposes to treat persons suffering from AIDS/HIV and persons with mental disorders. The LIFE CARE proposal, however, is not as specific in this regard as that of RHA. HCR proposes to provide specialty services to persons suffering from Alzheimer's disease and related dementias, and is in general compliance with this allocation factor. State Health Plan Allocation Factors Each applicant meets the first State Health Plan allocation factor which provides a preference for an applicant proposing to locate in areas within the subdistrict with occupancy rates exceeding 90 percent. The occupancy rate in Orange County exceeds 90 percent. RHA and LIFE CARE meet the second State Health Plan allocation factor which provides a preference for an applicant proposing to serve Medicaid patients in proportion to the average subdistrict-wide percentage of nursing homes. In Orange County the average is 65 percent for Medicaid service. ADVENTIST meets this preference with regard to its non-subacute unit. HCR which proposes a 30 percent Medicaid service does not meet this preference. The third State Health Plan allocation factor provides a preference to an applicant proposing specialized services to special care residents, including AIDS residents, Alzheimer's residents, and the mentally ill. Each applicant generally complies with this allocation factor and offers specialty services; however, RHA with its broader spectrum of specialty services, including services to AIDS/HIV residents, Alzheimer's residents, and its specific commitment to working with residents suffering from psychiatric disorders best meets this preference. The fourth State Health Plan allocation factor provides a preference to an applicant proposing to provide a continuum of services to community residents including, but not limited to, respite care and adult day care. RHA and ADVENTIST best meet this preference. RHA and ADVENTIST have a history of providing quality health care service to the community. RHA and ADVENTIST have extensive ongoing relationships with acute care hospitals. HCR and LIFE CARE have also established relationships which will address providing a continuum of care, but not to the extent proposed by RHA and ADVENTIST. The fifth State Health Plan allocation factor provides a preference to an applicant proposing to construct facilities which provide maximum resident comfort and quality of care. Each applicant proposes facilities designed to provide resident comfort and quality care. Each design has comfortable resident rooms, spacious activities areas, recreation areas, courtyards, landscaping, therapy rooms, and staff lounge areas. Each applicant meets this preference. The sixth State Health Plan allocation factor provides a preference for an applicant proposing innovative therapeutic programs which have proven effective in enhancing the residents' physical and mental functioning level and which emphasize restorative care. Each of the applicants' proposals feature specific elements of innovative therapeutic programs. HCR has received an award for its innovative design of the Boynton Beach Alzheimer's unit. RHA offers a multi-discipline approach with a psychiatric program. ADVENTIST offers an intensive subacute care unit, and LIFE CARE offer a well-balanced approach with intensive staff training. The seventh State Health Plan allocation factor provides a preference for an applicant proposing charges which do not exceed the highest Medicaid per diem rate in the subdistrict. In this respect, HCR projects Medicaid charges of $96.20 per patient day in Year 1, and $93.32 in Year 2. LIFE CARE projects Medicaid charges of $104.74 per patient day in Year 1, and $106.20 in Year 2. ADVENTIST projects Medicaid charges of $106.00 per patient day in Year 1, and $111.30 in Year 2. RHA projects Medicaid charges of $107.02 per patient day in Year 1, and $109.24 in Year 2. While HCR projects the lowest Medicaid per diem charges and appears to best meet this allocation factor, all applicants have agreed to a specified Medicaid utilization rate, and will accept the appropriate Medicaid reimbursement levels. The eighth State Health Plan allocation factor provides a preference for an applicant with a history of providing superior resident care in Florida or other states. HCR has maintained superior licensure ratings, and its prototype Boynton Beach facility currently is rated superior. LIFE CARE in 1993 experienced a conditional rating for its Altamonte Springs facility; however, the facility, upon evaluation in the fall of 1994, is now recommended for a superior licensure rating. RHA does not currently operate nursing homes; however, RHA has a history of providing quality care in its Princeton Hospital. ADVENTIST is the only applicant proposing to add nursing home beds to an existing facility that currently has a superior licensure rating, and in this respect, ADVENTIST best meets this allocation factor. The ninth State Health Plan allocation factor provides a preference to an applicant proposing staff levels which exceed minimum staffing standards contained in licensure administrative rules. Applicants proposing higher ratios of RNs- and LPNs-to-residents shall be given preference. All applicants meet this factor; however a comparison of the nursing staffing patterns of the applicants reflects that HCR (45.40 nursing FTE) and LIFE CARE (45.30 nursing FTE) have a higher than the minimum required ratio of nursing staff to residents for their proposed 98-bed facilities. RHA has proposed 35.30 nursing FTE for its 60-bed facility. ADVENTIST proposes a total 62.40 nursing FTE for its facility after the proposed 38-bed addition. The tenth State Health Plan allocation factor provides a preference for an applicant who will use professionals from a variety of disciplines to meet the residents' needs for social services, specialized therapies, nutrition, recreational activities, and spiritual guidance. These professionals shall include physical therapists, mental health nurses, and social workers. All the applicants offer a wide range of social, spiritual, nutritional, and recreational services. RHA, however, also proposes specific utilization of mental health care professionals, and a specific affiliation with the psychiatric care professionals from Princeton Hospital, and best meets this factor. The eleventh State Health Plan allocation factor provides a preference for an applicant who ensures the residents' rights and privacy, and who implements a well-designed quality assurance and discharge planning program. Each applicant has documented specific plans for quality assurance and ensuring the residents' rights and privacy are protected. Accordingly, each applicant meets this factor. The final State Health Plan allocation factor provides for a preference to an applicant proposing lower administrative costs, and higher resident care costs compared to the average nursing home in the district. HCR has the lowest projected administrative and overhead costs ($18.28 per patient day as of Year 2), and best meets this allocation factor. Statutory Review Criteria, Section 408.035(1), F.S. Section 408.035(1)(b): The availability, quality of care, efficiency, appropriateness, accessibility, extent of utilization, inadequacy of like and existing health care services and hospices in the service district of the applicant. HCR, LIFE CARE, and RHA each proposes a unit dedicated to the care and treatment of persons suffering from Alzheimer's disease and related dementias (HCR 98-bed facility, LIFE CARE 20-bed unit, and RHA 15-bed unit). ADVENTIST, while currently providing care for Alzheimer's patients at SLC, does not propose a distinct Alzheimer's unit in its 38-bed addition. There are currently at least five nursing homes in the service district, and two others in close proximity, which feature dedicated Alzheimer's units, with a total of at least 345 nursing home beds serving Alzheimer's patients. There is a high utilization rate of Alzheimer's nursing home beds in the district. While there is an established need for more beds to serve Alzheimer's patients, particularly Alzheimer's patients with a history of disruptive behavior, there are additional needs in the service district to provide care and treatment for subacute patients, and for persons suffering from AIDS/HIV. It is difficult to quantify the need for subacute nursing home beds due to the differing professional definitions of what constitutes subacute care; however, acute care hospitals in Orange County are, for cost-effective reasons, now releasing patients on an earlier basis, and there is an established need for nursing home beds to accommodate persons released from acute care hospitals. There is a high utilization rate of subacute beds in the district. There has also been an increase in the incidence of AIDS/HIV patients, and in the need for nursing home beds for persons suffering from AIDS/HIV in the service district. Section 408.035(1)(c): The ability of the applicant to provide quality of care and the applicant's record of providing quality of care. Each applicant has the ability to provide quality of care, and each applicant has a history of providing quality of care. The distinguishing factors in this regard are that LIFE CARE is the only applicant that has experienced a downgrading of a nursing home facility from a superior to a conditional licensure rating, and ADVENTIST is the only applicant that proposes to add nursing home beds to a facility that currently has a superior licensure rating. In comparison, ADVENTIST best meets this factor, and LIFE CARE least meets this factor. Section 408.035(1)(e): Probable economies and improvements in service that may be derived from operation of joint, cooperative, or shared health care resources. ADVENTIST and RHA both have specific proposals to work with, and share services with acute care hospitals. Both are in close proximity to acute care hospitals which will expedite sharing of medical resources. RHA will also share dietary services with Princeton Hospital. The freestanding facilities proposed by HCR and LIFE CARE do not have this advantage. Section 408.035(1)(f): The need in the service district for special equipment and services which are not reasonably and economically accessible in adjoining areas. This factor is inapplicable to the proposals. No specific need was established as to special services and equipment not reasonably and economically accessible in adjoining areas. There are dedicated Alzheimer's units and dementia services for persons in adjoining areas. Section 408.035(1)(g): The need for research and educational facilities, including but not limited to, institutional training programs and community training programs for health care practitioners. RHA has an extensive proposal for the participation and training of health care practitioners in conjunction with Princeton Hospital and best meets this criterion. RHA's affiliation with the University of Florida College of Medicine, Shands Hospital, and the Brain Institute at the University of Florida enhances this proposal. ADVENTIST shares a similar educational and training relationship with Florida Hospital, and with Florida Hospital's registered nurse baccalaureate degree program through Southern College. LIFE CARE proposes to establish relationships with local community colleges and education centers to sponsor nursing programs. Section 408.035(1)(h): The availability of resources, including health manpower, management personnel, and funds for capital and operating expenditures for project accomplishment As stipulated, each applicant meets this criterion. Each applicant also has substantial personnel and management resources available for project accomplishment. Section 408.035(1)(i): The immediate and long- term financial feasibility of the proposal. LIFE CARE, ADVENTIST and RHA meet this criterion, and reasonably project positive cash flows by the second year of operation. RHA a not-for- profit corporation, projects a net loss of $114,000 in Year 1 of operation, and an excess of revenues over expenses of $53,000 in Year 2 of operation. LIFE CARE projects a net loss of $440,496 in Year 1 and a net gain of $145,085 in Year 2 for the 98-bed facility, and a net loss of $259,971 in Year 1 and a net gain of $54,920 in Year 2 for the 60-bed facility. HCR projects an after-tax profit of $25,000 in Year 2; however, in order to attain a level of profitability HCR must meet its projected 65 percent private pay utilization. This is a very high private payor mix, and there is a significant question as to whether this payor mix is attainable in the subdistrict; however, as proposed, HCR meets this factor. Sections 408.035(1)(k)(l) and (m): Impact of the project on cost of health services; cost effective- ness; construction costs. ADVENTIST proposes the most cost-effective project by adding beds to an existing facility (SLC). The addition of 38 beds to SLC will promote and maximize the overall efficiency of the facility which was originally designed with core support features to accommodate 120 residents. The proposed 38-bed addition to SLC will also lower the costs per patient day of the entire facility. The ADVENTIST proposal adds nursing home beds at the lowest per bed cost ($36,000 per bed) of all applicants. Similarly, RHA is located on the campus of an existing acute care hospital owned by the applicant and, unlike HCR and LIFE CARE, projects no actual cash expenditure for land acquisition. Each applicant has proposed a reasonable design of its proposed facility and reasonable construction costs, and taken into consideration applicable costs and methods of energy provision and conservation. Each applicant meets this criterion. Each applicant has also proposed a very high quality of care facility that will foster competition and promote quality assurance and cost- effectiveness. Each applicant meets this criterion. Section 408.035(1)(n): The applicant's past and proposed provision of health care services to Medicaid patients and the medically indigent. RHA, ADVENTIST and LIFE CARE have proposed providing health care services to Medicaid patients at rates at, or in excess of, the district average. HCR proposes the lowest Medicaid service rate at 30 percent. RHA also has a strong record of providing Medicaid services and service to the medically indigent at Princeton Hospital. All applicants except HCR meet this factor. Section 408.035(1)(o): The applicant's past and proposed provision of services which promote a continuum of care in a multilevel health care system. The RHA and ADVENTIST proposals best meet this criterion. Both the RHA and the ADVENTIST proposals are closely associated with existing hospitals, and emphasize a continuum of care from the acute hospital setting to a nursing home facility. The RHA and ADVENTIST proposals promote the interaction of health care professionals in a multilevel health care system. The HCR and LIFE CARE proposals do not reflect such an extensive interconnection with other aspects of the health care system, and do not promote a continuum of care to the extent proposed by RHA and ADVENTIST. Section 408.035(2)(b): Whether existing inpatient facilities providing inpatient services similar to those being proposed are being used in an appropriate and efficient manner. The evidence reflects that the existing inpatient facilities in, or adjacent to, the district which offer subacute and AIDS services, as well as services dedicated to the care and treatment of persons suffering from Alzheimer's disease and related dementias are operating at, or near, capacity, and are being used in an appropriate and efficient manner.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that: RHA's application for CON No. 7538 be APPROVED. ADVENTIST'S application for CON No. 7528 be APPROVED. HCR's application for CON No. 7530 be DENIED. LIFE CARE'S applications for CON Nos. 7534 and 7534P be DENIED. RECOMMENDED in Tallahassee, Leon County, Florida, this 27th day of July, 1995. RICHARD HIXSON Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 27th day of July, 1995. APPENDIX HCR's Proposed Findings 1-5. Accepted in substance. 6. Rejected, insofar as quantification of need for subacute services, while not readily ascertainable, was demonstrated by other applicants.demonstrated need existed in district 7-8. Accepted in substance. 9. See Number 6. 10-14. Accepted in substance, but disposed of by ruling in Clay County case. 15-27. Accepted in substance. 28-36. Rejected insofar as quantification of need for subacute services is not readily accessible; however, need for such services was established. Accepted, except that need for 120 beds has been met. Accepted, except that RHA proposes specific pediatric services and is entitled to preference. Accepted in substance, except last sentence is rejected. Accepted. Accepted, except that ADVENTIST meets preference as to the non- subacute unit. 42-43. Accepted in substance. 44-45. Rejected. Accepted in substance. Accepted, except that ADVENTIST and RHA also meet this factor, and ADVENTIST is adding beds to an existing superior-rated facility. 48-50. Accepted in part, other applicants meet these factors. 51-65. Accepted in substance; however other services are also needed in the district. 66-67. Rejected. 68-73. Accepted in substance. 74-76. Accepted; however other services are also needed in the district. 77. Rejected. 78-86. Accepted in substance. 87-94. Accepted only to the extent that the HCR proposal meets the minimum requirements to demonstrate financial feasibility. 95-103. Accepted in substance; however each applicant's proposal also meets this factor. 104-112. Accepted in substance. 113. Rejected. 114. Accepted; however RHA proposes a minor change to correct this design. 115-116. Accepted only as to RHA design features. 117-122. Rejected. 123-127. Accepted in substance. 128-131. Rejected. LIFE CARE's Proposed Findings 1-3. Accepted in substance. 4. Accepted, except that district plan includes consideration of pediatric population. 5-7. Accepted; however other applicants also meet these factors. See Finding No. 4. Rejected to the extent that it is not uncommon for pediatric care to be provided in a nursing home setting. 10-38. Accepted in substance. 39-40. Rejected to the extent that RHA and ADVENTIST have competitive staff salaries and have experienced no difficulty in hiring qualified staff. 41-57. Accepted in substance. 58-59. Rejected. Accepted; however RHA proposes a minor change to correct this design. Rejected. 62-65. Accepted in substance. 66-69. Disposed of by Clay County case. Accepted; however ADVENTIST meets this factor in the non-subacute unit. Accepted in substance. ADVENTIST's Proposed Findings 1-4. Accepted in substance. 5. Accepted only to the extent that HCR does not propose a specific subacute care unit. 6-13. Accepted in substance. Rejected to the extent that HCR's proposal meets minimum financial feasibility requirements. Accepted. 16-17. Rejected. Accepted. Accepted to the extent that RHA and ADVENTIST best meet this criterion. 20-21. Accepted in substance. 22-26. Disposed of by Clay County case. 27-29. Accepted in substance 30-31. Rejected. 32-35. Accepted in substance. 36. Rejected; see No. 19. 37-106. Accepted in substance. 107. Accepted; see No. 19. RHA's Proposed Findings 1-21. Accepted in substance. 22. Accepted; however other applicants also meet these factors. 23-54. Accepted in substance. 55. Accepted to the extent that there are at least seven nursing homes with dedicated Alzheimer's units in or near the service area. 56-92. Accepted in substance. 93-96. Accepted; however HCR meets minimum financial feasibility requirements. 97-102. Accepted; however LIFE CARE meets minimum financial feasibility requirements. 103. Rejected. 104-122. Accepted in substance. 123. Rejected. 124-135. Accepted in substance. 136. Rejected to the extent that all applicants have met the design criterion. 137-140. Accepted in substance. 141. Rejected. 142-145. Accepted in substance. 146. Accepted to the extent that RHA and ADVENTIST best meet this criterion. COPIES FURNISHED: Stephen K. Boone, Esquire BOONE, BOONE & BOONE, P.A. Post Office Box 1596 Venice, Florida 34284 Alfred W. Clark, Esquire 117 South Gadsden, Suite 201 Tallahassee, Florida. 32301 R. Bruce McKibben, Jr., Esquire PENNINGTON & HABEN, P.A. 215 South Monroe Street, 2nd Floor Post Office Box 10095 Tallahassee, Florida 32301 Michael J. Glazer, Esquire MACFARLANE, AUSLEY, FERGUSON & MCMULLEN, P.A. Post Office Box 391 Tallahassee, Florida 32301 Samuel Dean Bunton, Esquire Senior Attorney, AHCA Atrium Building, Suite 301 325 John Knox Road Tallahassee, Florida 32303-4131 Steven R. Bechtel, Esquire MATEER, HARBERT & BATES, P.A. Post Office Box 2854 Orlando, Florida 32802 James M. Barclay, Esquire COBB, C0LE & BELL 131 North Gadsden Street Tallahassee, Florida 32301
