Findings Of Fact Petitioner, Dialysis of Broward, Inc., apparently filed an application for a Certificate of Need, No. 4092, to establish a ten-station chronic hemodialysis facility in Broward County, Florida. The Intervenors all filed timely petitions to intervene and have standing to intervene in this proceeding. At hearing, Petitioners presented no witnesses and only one admissible exhibit, the State Agency Action Report. No other evidence was submitted to show entitlement by Dialysis of Broward, Inc., to the Certificate of Need sought. According to the State Agency Action Report there are excess dialysis stations in Broward County and no need for the proposed facility.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Health and Rehabilitative Services enter a Final Order and therein deny the application of Dialysis of Broward, Inc., for Certificate of Need No. 4092. DONE and ENTERED this 20th day of October, 1986, in Tallahassee, Florida. _ DIANE K. KIESLING, Hearing Officer Division of Administrative Hearings 2009 Apalachee Parkway Tallahassee, Florida 32399 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 20th day of October, 1986. COPIES FURNISHED: Nathan Militzok, Esquire 1250 E. Hallandale Beach Blvd. Suite 1005A Hallanadale, Florida 33009 E. G. Boone, Esquire Peter Giroux, Esquire 1001 Avenida del Circo Venice, Florida 34284 George N. Meros, Jr. Carlton, Fields Law Firm P. O. Drawer 190 Tallahassee, Florida 32301 Lesley Mendelson, Esquire Assistant General Counsel 1323 Winewood Blvd. Building 1, Suite 407 Tallahassee, Florida 32399-0700 William Page, Jr. Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32301 APPENDIX The proposed findings of fact of Department of Health of Health and Rehabilitative Services, Inc., Florida Kidney Center, Rena1 Support Services, Inc., Plantation Artificial Kidney Center, Inc., and University Dialysis Artificial Kidney Center are adopted in substance in Findings of Fact 1-4 of this Recommended Order.
Conclusions THIS CAUSE comes before the State of Florida, Agency for Health Care Administration, (“the Agency”) regarding certificate of need ("CON") application number 10157 filed by Tallahassee Medical Center, Inc. d/b/a Capital Regional Medical Center (“CRMC”) and CON application number 10156 filed by Bay Hospital, Inc. d/b/a Gulf Coast Medical Center (*GCMC”). 1. CRMC filed a CON application which sought the establishment of a 12-bed comprehensive medical rehabilitation unit within its hospital located in Leon County, Florida, Service District 2. The Agency denied CRMC’s CON application 10157. 2. GCMC filed a CON application which sought the establishment of a 20-bed comprehensive medical rehabilitation unit within its hospital located in Bay County. Florida, Service District 2. The Agency denied GCMC’s CON application 10156. 3. Both parties filed a petition for formal hearing challenging the Agency’s denials of their respective CON applications. 4. Both parties have since voluntarily dismissed their petitions for formal hearing. 5. Based upon these voluntary dismissals, the Division of Administrative Hearings entered an Order Closing Files in the above styled matter. IT IS THEREFORE ORDERED: 6. The denial of CRMC’s CON application 10157 is UPHELD. 7. The denial of GCMC’s CON application 10156 is UPHELD. ORDERED in Tallahassee, Florida on thie 2 day of Crfebe_ . 2013. hob Py eclets Elizabeth Dudk, Secretary Agency for Health Care Administration
Other Judicial Opinions A party who is adversely affected by this final order is entitled to judicial review, which shall be instituted by filing the original notice of appeal with the agency clerk of AHCA, and a copy along with the filing fee 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 proceedings shall be conducted in accordance with the Florida appellate rules. The notice of appeal must be filed within 30 days of the rendition of the order to be reviewed. CERTIFICATE OF SERVICE 1 HEREBY CERTIFY that a true and correct copy of the foregoing Final Order has been furnished by U.S. Mail or electronic mail to the persons named below on this f 3S day of /Voye—he/ . 2013. Richard J. Shoop, Agency Cler Agency for Health Care Administration 2727 Mahan Drive, Mail Stop #3 Tallahassee, Florida 32308 (850) 412-3630 Janice Mills Facilities Intake Unit Agency for Health Care Administration (Electronic Mail) James McLemore, Supervisor Certificate of Need Unit Agency for Health Care Administration (Electronic Mail) James H. Peterson, IE] Administrative Law Judge Division of Administrative Hearings | (Electronic Mail) Lorraine M. Novak, Esquire Assistant General Counsel Agency for Health Care Administration (Electronic Mail) Stephen A. Ecenia, Esquire R. David Prescott, Esquire Rutledge Ecenia, P.A. 119 South Monroe Street, Suite 202 Tallahassee, Florida 32302 Counsel for CRMC and GCMC (U.S. Mail) R. Terry Rigsby, Esquire Pennington, Moore, Wilkinson, Bell & Dunbar, P.A. 215 South Monroe Street, 2"! Floor Tallahassee, Florida 32301 Counsel for HealthSouth { (US. Mail)
The Issue The issue in these proceedings is whether HRS should grant petitioners' application for a certificate of need to build a 100-bed general acute care hospital in Deltona, Florida. The parties have stipulated to the applicants' ability to staff the proposed facility and that no issue remains as to the criteria set forth in Section 381.494(6)(c)(3), (5), (6), (7), (10), (11), and , Florida Statutes (1983).
Findings Of Fact Petitioners propose to "transfer" 100 beds from Daytona Beach General Hospital (DBGH) in Subdistrict 4 of District 4 to Deltona, which lies in Subdistrict 5 of District 4; and have agreed to "delicensure" of an additional 50 beds at DBGH (for a total of 150) if their application for a certificate of need (CON) to build in Deltona is granted. Saxon General Hospital, Inc. (Saxon) is a wholly owned subsidiary of Daytona Beach General Hospital, Inc., which operates DBGH. HCA's Central Florida Regional Hospital (CFRH), is located outside of District 4 altogether in Sanford, which is in Seminole County. Baker, Clay, Duval, Flagler, Nassau, St. Johns and Volusia Counties make up HRS District 4, the domain of the Health Planning Council of Northeast Florida, Inc. District 4 as a whole has more hospital beds than it needs. The present controversy concerns medical/surgical hospital beds in the two southern subdistricts of District 4, Subdistricts 4 and 5. Flagler County and Volusia County east of Little Haw Creek and Deep Creek comprise Subdistrict 4 of District 4. Deland, Deltona, Orange City and DeBary are in Subdistrict 5 of District 4, which is congruent with Volusia County west of Little Haw Creek and Deep Creek. See Appendix. THE DISTRICT PLAN The Health Planning Council of Northeast, Florida, Inc. has adopted a district health plan, Petitioner's Exhibit No. 6, but the plan has not been promulgated as a rule. HRS, but not CFRH, has admitted that petitioners' proposal is consistent with the district health plan. Among the policies stated in the plan is the following: If the district as a whole has a surplus of acute care hospital beds but the subdistrict has a substantial shortage, or if beds are not available or accessible within 30 minutes travel time in an urban county or 45 minutes travel time in a rural county to at least 90 percent of the county's residents, the state should consider the need for more beds on a subdistrict basis. (Reference: Chapter 10-5.11(23)(i) of the Florida Administrative Code.) Given the provisions as outlined above and so long as there is an overall surplus of hospital beds in the district, it is the policy of the Health Planning Council not to support approval of additional beds within a subdistrict until it can be clearly demonstrated by the circumstances that the number of beds needed in the subdistrict is substantial. With respect to subdistrict five, the plan makes the following recommendation: Within the framework of the most appropriate planning for the entire West Volusia-East Seminole County area, the State Office of Community Medical Facilities could give consideration to the transfer of acute care beds from within the district to the Deltona area--so long as the total number of licensed beds in the district does not increase. Any applicant to open hospital beds and other hospital services in Deltona should take into consideration the general needs of the Deltona area population. The Health Planning Council of Northeast Florida, Inc. adopted this recommendation with the specific purpose of declaring itself neutral as between then competing applications to build a hospital in Deltona. BED NEED BY RULE HRS has by rule specified a need for 195 medical/surgical, 18 intensive and cardiac care, ten obstetric and eight pediatric beds in Subdistrict 4 for the year 1988. Rule 10-16.005(1)(b) Petitioner's Exhibit No. 37, codified as Rule 10-17.005(1)(b), Florida Administrative Code. This represents 23 fewer medical/surgical beds than are presently licensed or authorized, but three more medical/surgical beds than are presently available in fact; the same number of intensive and coronary care beds as are presently available; two fewer obstetric and three fewer pediatric beds than are presently available in Subdistrict 5. Excess capacity in Subdistrict 4 is even more pronounced, according to Rule 10-17.005(1)(b), Florida Administrative Code. This HRS rule specifies a need for 911 medical/surgical, 122 intensive and coronary care, 26 obstetric and 33 pediatric beds in Subdistrict 4 for the year 1988. These figures represent a projected excess of 254 medical/surgical, 14 intensive and cardiac care, four obstetric and 35 pediatric, licensed or approved beds for Subdistrict 4 in 1988, assuming no more beds are licensed, approved, delicensed or disapproved, in the interim. BEDS IN PLACE In District 4's Subdistrict 4, there are seven general acute care hospitals. Bunnell Community Hospital, with 81 licensed or approved beds, is the only hospital in Flagler County. The other six are clustered along the coast between Ormond Beach and New Smyrna Beach. Licensed and approved beds aggregate 1,165 medical/surgical, 136 intensive and cardiac care, 30 obstetric and 68 pediatric for Subdistrict4. Not all of these beds are actually available for occupancy, however. DBGH, for example, is licensed at 297 beds but had only 115 beds available for use on average between October 1, 1980, and September 30, 1981. (At the time of hearing, its average daily census was 50 patients.) There are only two existing hospitals in District 4's Subdistrict 5, Fish Memorial Hospital (Fish) and West Volusia Memorial Hospital (West Volusia), both of which are located in or near Deland, an older population center in western Volusia County to the north of Deltona. West Volusia, which is further than Fish from the emerging Deltona-DeBary-Orange City population center in the southwestern part of the county, has 162 beds, of which 128 are medical/surgical; eleven are intensive or cardiac care; twelve are obstetric and eleven are pediatric. West Volusia had a 1983 average occupancy rate, based on 139 medical/surgical and intensive and coronary care beds, of 67 percent. During fiscal year 1981, most of West Volusia's admissions were of persons from Deland, but 22.34 percent of the total came from DeBary, Deltona and Orange City. Fish has 97 licensed beds, but only 71 are available for use. Of these, 64 are medical/surgical, and the remaining seven beds are devoted to cardiac and intensive care. Fish's physical plant is older and in need of replacement or rehabilitation. The Fish Memorial Hospital physical plant is a composite structure which is the result of three decades of renovation and add-on construction. * * * As a result, much of the facility does not comply with current building codes, the recommendations of the Joint Commission for Accreditation of Hospitals (JCAH) or current patient care management practices. An internal survey was begun to identify and quantify the extent of work necessary to bring the entire physical plant into compliance with all applicable codes or standards. The survey included all major components of the physical plant or hospital-wide systems that will have to be replaced or repaired within the next three year period just to maintain the current facility operations as a comparison to the replacement cost. The survey identified over thirty projects, ranging between $4,000 and $1,500,000 each. Furthermore, these direct costs do not account for interruption of medical services to the community residents, nonproductive staff time due to phasing of renovation, and patient inconveniences during construction. Intervenor's Exhibit No. 1., p.1. Rehabilitation would involve direct costs of some $4,500,000.00. In July, August and September of 1980, Fish had 105 admissions of persons residing in the Deltona and DeBary-Orange City census division, or 22.9 percent of its total admissions. In the same months the year before 87 admissions or 23 percent of the total was attributable to the Deltona and DeBary-Orange City census divisions. The great majority of Fish's patients came from the Deland census division during both periods. Fish's 1983 average occupancy rate was 46.7 percent, but, at time of hearing, occupancy was at 80 percent. Licensed at 226 beds, CFRH had about 200 beds staffed at the time of the hearing, including ten pediatric and nine obstetrical beds. (T. 592) CFRH's average occupancy was 72 percent for January and February of 1984, down from 76.9 percent for the same period last year. During the two months preceding the hearing, CFRH was on "red flag" status. No admissions were allowed, unless approved by the chief of staff; but no true emergencies were turned away. Some 34.8 percent of CFRH's admissions are of people who reside in the Deltona- DeBary-Orange City area or elsewhere in Volusia County. CFRH meets most of the need for medical/surgical beds attributable to the population in southwestern Volusia County. (Testimony of Scott) Most people living in the Deltona-DeBary- Orange City area who need hospitalization leave the county, in order to be admitted at intervenor CFRH. ACCESSIBILITY The evidence did not establish what proportion of the population of Subdistrict 5, if any, is further than 30 minutes' driving time from the nearest hospital at present, or what proportion would be in the future. Petitioners' expert measured travel times from central points in DeBary, Orange City, Sanford and Deland to area hospitals and to the site proposed for a new hospital, with the following results: West Volusia Fish Memorial Central Florida Proposed Memorial Hospital Regional Daytona Beach TO: Hospital (Central (West Sanford) General (North Deland) (Saxon Blvd. Deland) at 1-4) (A) (B) (C) (D) DeBary 32.2 26.4 18.2 14.9 Orange 28.6 22.8 26.3 17.7 City Deltona 36.8 31.0 24.6 11.5 Sanford 51.6 44.9 17.1 33.7 Deland 20.7 14.9 41.7 32.6 In computing these averages, peak travel times were weighted equally with other travel times measured in December of 1983, and January and February of 1984. One route to Sanford and CFRH from Deltona entails crossing a drawbridge. It takes Beverly Spitz "20 minutes just to get out of Deltona," with its winding roads and abundance of elderly drivers. Mary Lou Foster takes 29 to 45 minutes to drive from her Deltona home to CFRH. John Schmeltz can do it in "about 25 minutes." In February of 1982, When Mrs. Schmeltz passed out, the ambulance he summoned took 22 minutes to arrive. John Mosley made the drive from his Deltona home to CFRH in 25 minutes, but that was the night he thought his wife had had a heart attack and he "averaged over 100 miles an hour." (T. 204) "[A]t night . . . you realize just how far it is." (T. 211) Clyde Mann's testimony to the effect that the remoteness of existing hospitals had cost lives went unchallenged. Mary Meade, a registered nurse, reported that the Deltona area "ha[s] lost several patients, several people" (T. 216) in the time it takes to get to a hospital. Bernie Levine, a public witness, testified that there were "constant people dying. They didn't make it to the hospital." (T. 210) A hospital in Deltona would significantly improve access for the people of Deltona, and would also improve access for residents of Orange City and DeBary, albeit less dramatically. FINANCIAL FEASIBILITY The parties stipulated that land is available for the project, and that projected construction costs are reasonable. Daytona Beach General Hospital, Inc. (DBGH, Inc.) plans to lend its subsidiary Saxon General Hospital, Inc. $4,159,700; and petitioners plan to borrow the remaining $12,569,000 necessary to build the hospital, at 13 percent, repayable over a 25 year period, with the new hospital serving as collateral. DBGH, Inc. had "[a]pproximately one-million-three, one-million-four" (T. 245) on hand which could be devoted to construction of a new hospital in Deltona, at the time of hearing. The remaining "equity," $2,900,000 or so, is to be raised by sales of DBGH, Inc.'s common stock. Of the 2,000,000 shares of common stock authorized, Daytona Beach General Hospital, Inc. has issued 600,000. The hope is that additional shares can be issued and sold at $15 a share, which is about five times as much as the stock is currently trading for over the counter. John E. Kaye and Jackson B. Bragg, the osteopaths who between them own 405,000 shares of DBGH, Inc. common, each plan to guarantee purchase of another $1,400,000 worth of DBGH, Inc. common stock, when it is issued. The net worth statements of each man came in as exhibits at hearing, for the purpose of showing their supposed ability to honor such a guarantee. Aside from the DBGH, Inc. stock, however, neither man had sufficient net assets, and this assumes the accuracy of their financial statements, which listed as assets $253,000 in unsecured receivables of unstated age. Cars and boats were valued at cost, as was a pick-up truck ($3,000) while real estate was apparently valued at somebody's idea of market. Between them, the two doctors purport to have $150,000 worth of household furniture. For obvious reasons, no accountant's name appeared on these documents. The doctors have an agreement between them to the effect that neither sells DBGH, Inc. stock unless the other also sells. Their unaudited statements put the value of DBGH, Inc. stock at $20 a share. A few days after the Daytona Beach News Journal reported that "HCA had lost the right to purchase Fish," (T. 264) Robert E. Hardison, Jr. of HCA spoke to Drs. Kaye and Bragg and told them "he realized it was futile to try to continue seeking a CON for Deltona adding new beds unless he could get some existing beds from [DBGH] and move them to Deltona." (T. 266) Mr. Hardison asked Drs. Bragg and Kaye what they would be willing to sell their stock for but did not offer to buy it. Shortly before the hearing they were offered $25 a share for all their holdings on condition the prospective buyer could arrange financing, and on condition that Saxon receive a certificate of need. This price is almost certainly higher than could be gotten in the market for shares which would not give the buyer a controlling interest in DBGH, Inc. One Milton W. Pepper appeared at hearing and testified without contradiction that, in the event a certificate of need issued, he was willing and able to invest approximately $1,500,000 "in the beginning. . . and make arrangements for the additional $5,000,000 if necessary." Drs. Kaye and Bragg may lose control of the corporate petitioners in the process, but there is every reason to believe that money to build a hospital would be available. After raising a quarter of the project cost, DBGH, Inc. proposes to lend that sum to Saxon, at one percent above prime. Although this arrangement would mean that the money was "debt" as between the subsidiary and its parent, outside financers would apparently treat the money as equity. Loy D. Deloney, an underwriter for Stephens, Inc., "the ninth-ranking investment banking firm in the country in terms of equity," knows "of at least 10 major financial institutions that would be interested in" providing long-term financing, if the CON issues. The future holds many uncertainties for hospitals, but whether this money could be repaid and whether a new hospital would be otherwise feasible financially depends finally on how many patients it would serve. POPULATION GROWTH FORECAST The population of census tracts 908, 909, 910.02, 910.03 and 910.04, in which Deltona, Orange City and DeBary are located, is projected to increase by some 11,000 persons between 1984 and 1989, when the population in this part of southwestern Volusia County is expected to be 48,789. Of the projected 1989 population of census tracts 908, 909, 910.02, 910.03, 910.04, eleven thousand one hundred twenty-four persons are expected to be over 65 and eleven thousand one hundred twenty-four persons are expected to be less than 65 but older than Some three fifths of Deltona's present population (about 26,000) is over 55 years old. EFFICIENT UTILIZATION LIKELY IN SUBDISTRICT Even without the lure of a hospital, physicians have opened offices in southwest Volusia County. Seven specialists on the medical staff at CFRH have part-time practices in the Deltona-DeBary-Orange City area. A half dozen family practice physicians practice in the area full-time. They admit to hospital an average of 50 patients daily, 80 percent of them to CFRH. Before HCA abandoned its application for a certificate of need to "transfer Fish's beds" and build a new 97-bed hospital in Deltona, it caused a health service study to be done by John Short & Associates. CFRH offered the study as evidence at hearing. Intervenor's Exhibit No. 1. The CFRH study looked at the western area of Volusia County, as a whole, including Deland, and concluded that 1987 would see 12,686 medical/surgical discharges of residents of western Volusia County. The CFRH study calculated the average length of a patient's stay in hospital at 7.03 days. CFRH's own evidence shows, therefore, that 89,183 medical/surgical patient days attributable to the population of the DeBary-Orange City, Deland and Deltona census districts can be expected in 1987. CFRH's administrator, James D. Tesar, predicted that CFRH "could lose 80 percent of its admissions from the area including Deltona, Geneva, DeBary, Osteen, and Orange City," if Saxon built a new hospital in Deltona. In 1983, CFRH admissions from these Volusia County communities totalled 3,150. If a new hospital in Deltona did indeed change patient flow to the extent Mr. Tesar warns is possible, there would still be 630 admissions annually to CFRH of residents leaving southwest Volusia County for hospitalization. If west Volusia Countians' admissions drop to 630 at CFRH, CFRH will be supplying only 4,429 patient days (630 X 7.03) to residents of West Volusia County. In that case, some 84,754 medical/surgical patient days will have to be accommodated in 1987 by hospitals within Subdistrict Five (or outside the subdistrict at hospitals other than CFRH). In 1987, to the extent patient days attributable to southwest Volusia County residents admitted to pediatric or obstetric beds at CFRH exceed patient days at CFRH attributable to Subdistrict Five residents living outside Deltona, Geneva, DeBary, Osteen and Orange City, 84,754 would be an understatement. Dividing patient days by the number of days in a year (84,754/365) yields an average daily medical/surgical census of 232. Medical/surgical beds are put to good use when they are full 80 percent of the time, almost all health planners agree. In order to accommodate an average daily census of 232 at an 80 percent average occupancy rate, 290 medical/surgical beds will be needed as early as 1987. Only 192 medical/surgical beds are now open in Subdistrict Five. Chances are good that 292 hospital beds in Subdistrict Five could be used efficiently long before the spring of 1989. IMPACT OUTSIDE SUBDISTRICT A new 100-bed hospital in Deltona could operate consistently with efficient utilization of the medical/surgical beds already open in Subdistrict Five, even if the new hospital achieved 80 percent average occupancy as early as 1987 but only by diverting patients from CFRH. The effect on CFRH would be significant, but temporary, since population growth would ensure its efficient utilization once again within two to four years of the 1986 opening of a 100-bed hospital in Deltona. All along, CFRH's loss of patients to a new Deltona hospital would be offset to some extent by ongoing population growth in Seminole County where CFRH is located. CFRH's own application for a certificate of need was granted on the theory that a new hospital of CFRH's size was needed just to serve the population of Seminole County. Petitioners' expert concluded that CFRH, Fish and West Volusia had had only 1,139 more medical/surgical patient days to split among themselves in 1983 than they could be expected to have in 1988, with a 100-bed hospital in its second year of operation in Deltona. DBGH's surrender of the right to open 150 additional beds would have no immediate economic impact; the effect would be to reduce excess capacity in Subdistrict Four, but on paper only. No beds would be closed, no staff dismissed, no expenses pared. But, if petitioners' efforts to obtain a CON for a new hospital in Deltona fail, they intend to expend $10,000,000 for renovation of DBGH, a project for which they already have a CON. This would inevitably mean recovering additional costs from payers for hospital care in Subdistrict Four. Like the Deltona proposal, the renovation proposal contemplates some reduction in beds in Subdistrict Four, although fewer: "50-some-odd." (T. 293) The 150 bed reduction in approved beds in Subdistrict Four contemplated by the pending application would mean that, if and when new hospital beds are needed in Subdistrict Four, they could be added wherever they are needed rather than being added at DBGH whenever management decrees.
Recommendation Upon consideration of the foregoing, it is RECOMMENDED: That HRS grant petitioners' application for a certificate of need to construct a 100-bed acute care general hospital in Deltona. DONE and ENTERED this 9th day of July, 1984, in Tallahassee, Florida. ROBERT T. BENTON II Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 9th day of July, 1984. APPENDIX * * NOTE: APPENDIX to this Recommended Order is a map which is available for review in the Division's Clerk's Office. COPIES FURNISHED: F. Philip Blank, Esquire 241 East Virginia Street Tallahassee, Florida 32301 Ronald L. Book, Esquire Sparber, Shevin, Shapo & Heilbroner 30th Floor AmeriFirst Building One Southeast Third Avenue Miami, Florida 33131 James M. Barclay, Esquire 1317 Winewood Blvd. Building 2, Suite 256 Tallahassee, Florida 32301 Thomas A. Sheehan, III, Esquire Jon C. Moyle, Esquire Donna Stinson, Esquire, and Thomas M. Beason, Esquire, of Moyle, Jones & Flanigan Post Office Box 3888 West Palm Beach, Florida 33402 David Pingree, Secretary Department of HRS 1323 Winewood Blvd. Tallahassee, Florida 32301
The Issue Whether policies of the Agency For Health Care Administration (Agency) which impose certain obligations upon hospitals with regard to classification in Prior Year Reports of activity related to certain home health agencies violate the requirement that those statements, rules by definition, be adopted as rules.1 Sections 120.54(1)(a) and 120.56(4), Fla. Stat. (1996 Supp). An additional issue for consideration is whether certain provisions of the Florida Hospital Uniform Reporting System (FHURS) Manual, incorporated by reference in Rule 59E-5.102, Florida Administrative Code, constitute invalid exercises of delegated legislative authority as otherwise set forth in Section 120.52(8), Fla. Stat. (1996 Supp.)
Findings Of Fact In accordance with stipulation of the parties, all parties to this proceeding have standing in, and are parties to, each of the consolidated cases. Background Hospital Regulatory System Overview Under Florida law, hospitals are subject to a regulatory program commonly known as the budget review or hospital cost containment program. The cost containment program is currently administered by the Agency. Under the cost containment regulatory system, the State of Florida regulates a hospital's gross revenues per adjusted admission ("GRAA") and net revenues per adjusted admission ("NRAA"). GRAA is defined in statute and refers to a hospital's average charges per case. NRAA is defined in statute and refers to the average amount which a hospital collects per case. The Florida regulatory system does not directly regulate hospital charges. Florida hospitals must annually submit a budget to the Agency for its review. The statute creates a process for the detailed review of those budgets for hospitals which are requesting a rate of increase in GRAA or NRAA greater than the "maximum allowable rate of increase" as defined in statute. The maximum allowable rate of increase ("MARI") is different for various hospitals, based upon hospital-specific inputs of data as delineated in statute. Hospitals which exceed the MARI are subject to administrative fines and/or penalties. As part of the review process for hospital budgets or budget amendments, the Agency groups hospitals to attempt to compare like hospitals to like hospitals for analysis purposes. The Agency's cost containment regulatory process and actual report review process applies only to hospitals. Section 408.07, et al., Fla. Stat. "Hospital" is defined as an entity which holds a license to operate a hospital in the State of Florida. Section 408.07(33), Fla. Stat. A hospital must be licensed to operate in the State of Florida. Hospital licenses in Florida are issued by the Agency under Chapter 395, Fla. Stat.2 A hospital license does not permit a hospital to offer home health services. A hospital is not a HHA. Hospitals and HHAs are licensed by the State to provide different types of services in different locations. A HHA is required to operate under a separate license from a hospital license. A hospital cannot bill for home health services. Home Health Agencies A HHA is an agency that is licensed by the State of Florida under Chapter 400, Fla Stat., to provide home health services. The State of Florida has various rules and regulations governing the operation of HHAs. The budget review and penalty system which applies to Florida hospitals is not applicable to HHAs. The HHA license does not permit a HHA to offer hospital services. There are three types of HHAs operating in the State of Florida: stand alone agencies, hospital affiliated agencies, and chain-affiliated home health agencies. Stand alone agencies are those with no affiliation with another entity. All three types of agencies are licensed by the State, and are authorized to provide similar services. There is great competition among HHAs for the provision of those services. Marketplace changes have resulted in more patients receiving more treatment in the home. The rise of managed care has also resulted in an increase in home care in Florida and throughout the nation. Medicare The Medicare program is a federal program designed to pay for the cost of services provided to the elderly by healthcare providers. The Medicare program covers home health services provided to Medicare-eligible patients. For a provider to participate in the Medicare program, it must be certified by Medicare under applicable federal statutes and regulations. Every Medicare provider is issued a provider number by the Health Care Financing Administration (HCFA), the federal agency which administers the Medicare program. Medicare-certified home health agencies have separate Medicare provider numbers from hospitals. The three types of HHAs operating in Florida can be designated by HCFA as Medicare-certified. Only Medicare-certified HHAs are able to provide services to Medicare patients, bill Medicare recipients, and receive payment from the federal government for the provision of services to Medicare-eligible patients. In addition, hospital-based home health agency (HBHHA) is a federal Medicare reimbursement term. A HBHHA is not a defined term under Florida Statutes or regulations. The Medicare reimbursement system for home health care is a cost reimbursed system. The federal government reimburses home care providers based upon their allowable costs, up to a certain cost cap. The Medicare program utilizes a cost allocation process to allocate costs by comparison to costs incurred by similar organizations that provide home health services. There are similar cost allocation processes applied to HBHHAs and Medicare-certified chain affiliated HHAs. These costs are subject to audit, and providers must submit an annual Medicare Cost Report pursuant to applicable federal regulations. The Medicare program then subjects allowable costs to a cost limit, which is the maximum payment which will be made by the federal government for home health visits. It takes only a few seconds to determine if a Medicare Cost Report includes the activity of a Medicare-certified HBHHA. It is HCFA's decision whether or not to certify a given HHA as being a HBHHA. The applicable federal regulations governing certification of home health agencies as hospital-based are found in the 1980 Federal Register. As applied, HCFA has certified agencies as HBHHAs if these agencies have common control and ownership with the affiliated hospital.3 HHAs bill for Medicare services on HCFA Form 1500. Hospitals bill on form UB-92. HHA charges do not appear on a hospital bill. AHCA Hospital Prior Year Reports In addition to filing budgets or budget letters, hospitals are required under statute to file with the Agency an annual report known as the Prior Year Report. Section 408.061, Fla. Stat. A hospital Prior Year Report is made up of three distinct parts: 1) the hospital's prior year actual report, which consists of a standardized set of forms; 2) the hospital's audited financial statements; and 3) the hospital's Medicare Cost Report. The prior year actual reporting forms are found in the FHURS Manual. The Agency began collecting the Medicare Cost Report as part of the Prior Year Report in approximately 1988. The FHURS Manual, a uniform reporting system utilized by the Agency governing the filing of Prior Year Reports, was developed in approximately 1980. The FHURS Manual contains the prior year actual report forms which hospitals file with the Agency. In all material respects, the current version of the FHURS Manual is substantially similar to its predecessors. If the hospital prior year actual reporting forms do not tie to the audited financial statements, the hospital must provide a reconciliation. The hospital prior year reporting forms contain Worksheet X-4, which is a blank form to be utilized for detailed explanations including any reconciliation’s between the prior year actual report forms and the audited financial statements. There is no statute or rule requiring the prior year actual reporting forms to be reconciled to the Medicare Cost Report. The statute governing reporting for Prior Year Reports defines hospitals and HHAs as two separate types of health care facilities. Sections 408.061(3), 407.07(27), (31), (33), Fla. Stat. The Agency does not require HHAs to file Prior Year Reports. The Agency has the responsibility to review hospital Prior Year Reports, and to determine that the Prior Year Report has been filed in compliance with applicable rules and regulations. The Agency is required to determine that a hospital's Prior Year Report has been "accepted." Accepted is a defined term in Florida Statutes.4 After a hospital's Prior Year Report has been "accepted" by the Agency, the Agency then calculates penalties, administrative fines and Public Medical Assistance Trust Fund (PMATF) and Health Care Cost Containment Trust Fund (HCCCTF) taxes based upon the Prior Year Report. The regulatory system governing hospital Prior Year Report review is not a voluntary system. Although it is the hospital that decides how to classify items on its Prior Year Report for filing, it is the sole responsibility of the Agency to determine whether or not the report is to be "accepted." As part of its review process, the Agency typically asks hospitals a series of detailed questions that are provided to the hospital in a form known as a Notice of Violation. The Agency sends a Notice of Violation on virtually every hospital Prior Year Report. If a hospital does not respond to a Notice of Violation, the hospital can be subject to administrative fines. Audited Financial Statements The audited financial statements included as part of the hospital's Prior Year Report submission must, by law, be examined by an independent certified public accountant. In preparing audited financial statements, auditors opine on the financial statements of management, and issue what is known as a "clean opinion" if, in the auditor's opinion, management's financial statements do not materially misstate the financial position of the entity being audited and if the statements are prepared in accordance with generally accepted accounting principles. Financial statements can be issued for a division of an overall corporation, provided that appropriate disclosures are made in the footnotes to the financial statements. The standard place for a footnote disclosing the organization being audited and related organizations is in footnote 1 to the audited financial statements. Generally accepted accounting principles allow management the discretion to determine what are the principal and central ongoing operations of the entity being audited. PMATF and HCCTF The PMATF was established in 1984 to fund certain expansions to Florida's Medicaid program. Chapter 84-35, Laws of Florida. Under Section 395.701, Fla Stat., hospitals are taxed 1.5 percent of their annual net operating revenue, with the assessments to be based upon the hospital's Prior Year Report filed with the Agency. The HCCTF tax was established to fund certain data collection functions of the Agency. Section 408.20, Fla. Stat. Those revenues and expenses which appear on the hospital's Prior Year Report as "operating" are subject to PMATF and HCCTF tax. Those revenues or expenses which appear as "non-operating" or are excluded from a hospital Prior Year Report are not subject to PMATF and HCCTF tax. In 1991, the Florida Legislature expanded the PMATF tax base to include certain other specified health care providers. These specified providers included clinical laboratories, ambulatory surgery centers, and diagnostic imaging centers. See, Section 395.7015, Fla. Stat. HHAs were not included in the list of expanded taxable entities by the Legislature. HHAs do not pay PMATF or HCCTF tax. Hospital-Home Health Agency Relationships As the healthcare marketplace has evolved, hospitals have increasingly established relationships with HHAs. The operational and structural relationship between hospitals and HHAs varies from hospital to hospital and agency to agency. Corporate organizational structure and operational relationships between the hospitals and affiliated HHAs will vary. A variety of corporate structures can be employed, including separating the HHA and the hospital into separate corporations, parent/subsidiary relationships, sibling corporations, or one corporation with more than one operating division. Some hospitals have affiliations with both a Medicare- certified and a non-Medicare certified HHA. Not every hospital affiliated HHA is designated as a Medicare-certified HBHHA. A hospital can have the same operational relationship with two home health agencies, with one being a certified agency and one being non-certified. Not every relationship between a hospital and related HHA results in increased reimbursement or a dollar benefit to the hospital. While the Agency has never adopted a uniform reporting system for HHAs, uniform reporting systems covering the four types of health care facilities that were included in the increased PMATF assessment beginning in 1991, have been adopted by the Agency. A hospital does not always control which HHA will treat a patient after discharge from the hospital. HBHHA’s compete with other HHAs for patients. Some HBHHAs are located far from the affiliated hospital, and serve virtually none of the patients who were patients of the hospital.5 There are several HHAs in Florida which have been certified as HBHHAs to hospitals which are located outside the State of Florida. Memorial Hospital Savannah has in the past been affiliated with numerous HHAs in Florida. Flowers Hospital in Dothan, Alabama has also maintained an affiliation with a HHA located in Florida. Separate Reporting for Separately Licensed Facilities Under Florida law, separately licensed health care facilities must separately report financial data to the Agency. Section 408.061(3), Fla. Stat. The definition of "health care facility" applicable to this reporting requirement was changed in 1992, and now specifically refers to "hospitals" and "home health agencies" as two separate types of health care facilities.6 The Way We Were -- Agency Prior Action The Agency has reviewed and "accepted" the Prior Year Reports of Florida hospitals for more than a decade. The Agency reviews between 320 and 325 Prior Year Reports every year. The applicable definition of an "accepted" report is one that is determined by the Agency to have been filed in a manner conforming with applicable rules and the FHURS Manual in force at the time of filing the report. The Agency has accepted hospital Prior Year Reports which classified HHA activity as "operating" activity of the hospital, has accepted hospital Prior Year Reports in which home health activity was reported as "non-operating" activity of the hospital, and has accepted reports where HHA activity was excluded entirely from the report. In all such cases, the hospital made disclosure to the Agency that the hospital was related in some fashion to a HHA. The Agency has accepted reports presented in a variety of manners, and has interpreted its applicable rules and the FHURS Manual to allow all such filings. The "accepted" reports have all been used by the Agency for regulatory purposes including the calculation of hospital MARIs, the review of hospital budgets and budget amendments, the formation of hospital peer groups for budget review, and the calculation of penalties for hospitals potentially exceeding allowable levels of GRAA and NRAA. All of the accepted reports have also been utilized for the purposes of taxing hospitals under the PMATF assessment and the HCCCTF assessment. Hospitals have reasonably relied upon the acceptance of these reports as evidencing that the reports were filed in a manner conforming to Agency rules. The Petitioners presented extremely extensive documentation, all drawn from public records, to establish the Agency's prior actions regarding the classification of HHA activity on Agency accepted hospital Prior Year Reports. This documentation included more than 40 notebooks which were accepted into evidence.7 Although detailed findings of fact could be made regarding each of the items in each of the books, this would result in unnecessary cumulative findings of fact. In place of such findings, the following summary findings are made: Acceptance of Hospital-Only Reports The Agency accepted the Prior Year Reports of numerous hospitals in numerous years in which the prior year actual report forms were prepared on a hospital-only basis, excluding all HHA activity. Many hospitals excluded HHA activity from the hospitals' audited financial statements, but provided disclosure of the existence of a related HHA.8 These hospitals submitted prior year actual report forms which excluded HHA activity from the report. The following hospital Prior Year Reports were accepted by the Agency prepared in the above-described manner: Morton Plant Hospital, FY 1986 - FY 1994 (Pet. Ex. 35); Sarasota Memorial Hospital, FY 1986 - FY 1994 (Pet. Ex. 36); Winter Haven Hospital, FY 1989 - 1994 (Pet. Ex. 37); Manatee Memorial Hospital, FY 1989 - FY 1994 (Pet. Ex. 38); Cedars Medical Center, FY 1991 - FY 1993 (Pet. Ex. 23, 47); Memorial Hospital of Hollywood, FY 1993 - FY 1995 (Pet. Ex. 39); Orlando Regional Medical Center, FY 1990 - FY 1994 (Petitioners Ex. 40); Leesburg Regional, FY 1989, FY 1990, FY 1993, FY 1994 (Pet. Ex. 41); St. Joseph's Hospital Tampa, FY 1991 - FY 1995 (Pet. Ex. 42); Mt. Sinai Medical Center, FY 1993, FY 1994 (Pet. Ex. 43). The accepted hospital reports referenced above were all "hospital only" reports, and all provided disclosure to the Agency of the existence of a HHA that was related in some fashion to the hospital.9 In addition to the reports accepted as described above, the Agency has also accepted "hospital only" reports in which the audited financial statements included the activity of a HHA as operating activity of the entity being audited, and in which the audited financial statements included what is known as "other financial information" or "OFI" which separated out the HHA, the hospital, and other activities. However, the prior year actual reports of the hospitals excluded the home health activity from hospital "operating" activity, and provided a reconciliation to the audited financial statements on Worksheet X-4. The following hospital reports were accepted by the Agency prepared in the above- described manner: Morton Plant Hospital, FY 1984 - FY 1985 (Pet. Ex. 35); Mease Hospital, FY 1994 (Pet. Ex. 51); Lee Memorial Hospital, FY 1990 - FY 1994 (Pet. Ex. 44); Hialeah Hospital, FY 1989 - FY 1994 (Pet. Ex. 45); Mt. Sinai Hospital, FY 1992 (Pet. Ex. 23, 43); Suncoast Hospital, FY 1990 - FY 1994 (Pet. Ex. 46); Cedars Medical Center, FY 1990 (Pet. Ex. 47, 23); Leesburg Regional, FY 1991 - FY 1992 (Pet. Ex. 41). The Agency accepted the Prior Year Reports of numerous hospitals in numerous years in which the audited financial statements included HHA activity as operating activity of the entity being audited without OFI, but in which the prior year actual report forms excluded HHA activity, with a reconciliation on Worksheet X-4. The following reports were accepted by the Agency that were presented in this manner: Cedars Medical Center, 12/31/93 Partial Prior Year Report (Pet. Ex. 23, 47); University- Tamarac, FY 1993 and FY 1994 (Pet. Ex. 48); Doctors Hospital of Sarasota, FY 1993 and original 5/31/94 Partial Year Report (Pet. Ex. 49); Florida Hospital, Revised FY 1993 Report, FY 1994 Report (Pet. Ex. 50); Mease Hospital, Revised FY 1993 Report (Pet. Ex. 51); Palms of Pasadena Hospital, FY 1994 Report (Pet. Ex. 52); Shands Teaching Hospital, FY 1994 Report (Pet. Ex. 53; Resp. Ex. 71 at p. 32). Prior to accepting the above-referenced reports, the Agency would have had to reconcile the prior year actual report which excluded HHA activity to the audited financial statements which included HHA activity as operating with or without OFI. To perform this reconciliation, the Agency analyst would have reviewed Worksheet X-4, and would have been aware of the hospital's disclosure of a relationship to a HHA. The Agency has accepted "hospital only" reports in contexts other than those involving HHAs. The Agency has instructed numerous Community Mental Health Centers ("CMHCs") to exclude certain activity not provided in hospital-licensed beds from the Prior Year Reports submitted to the Agency. The Agency instructed CMHCs to exclude certain outpatient revenues from the hospital Prior Year Report, even though this activity was included in the entity's Medicare Cost Report. The Agency has instructed at least one of these facilities that it should also have its own audit for the hospital only (Pet. Ex. 74, p. 248).10 Victoria Montanaro served as the Bureau Chief and Regulatory Analyst Supervisor for the Agency for a two-year period covering May 1993 through June 1995. In these roles, Ms. Montanaro was the senior person responsible for the review and acceptance of hospital Prior Year Reports. Ms. Montanaro was aware that the Agency had accepted hospital Prior Year Reports prepared on a hospital-only basis, with HHA activity excluded. The Agency does not know how many hospital Prior Year Reports it accepted in which home health activity was excluded. There is no electronic data base which currently captures this information. Acceptance of Hospital Prior Year Reports as Non-Operating The Agency has accepted the reports of numerous hospitals in which hospitals submitted their prior year actual report forms with HHA activity reported as non-operating activity. The Agency accepted the following hospital reports in which HHA activity was included as operating activity on the audited financial statements, but in which HHA activity was reported as non-operating on the prior year actual report forms, with a reconciliation provided on Worksheet X-4: Westside Hospital, FY 1994 (Pet. Ex. 54); Largo Medical Center, FY 1994 (Pet. Ex. 55); St. Petersburg General Hospital, FY 1994 (Pet. Ex. 56); Columbia Hospital Palm Beaches, FY 1994 (Pet. Ex. 57); Northwest Regional, FY 1994 (Pet. Ex. 58); Doctors Hospital of Sarasota, 6/1/94 - 12/31/94 Partial Prior Year Report (Pet. Ex. 49); Winter Park Memorial Hospital, FY 1994 (Pet. Ex. 59); Lake City Medical Center, FY 1994 (Pet. Ex. 62); Clearwater Community Hospital, FY 1994 (Pet. Ex. 63); South Bay Medical Center, FY 1994 (Pet. Ex. 64); Bay Medical Center, FY 1994 (Pet. Ex. 65); South Miami Hospital, Revised FY 1994 (Pet. Ex. 66); Palmetto, Revised FY 1994 (Pet. Ex. 67); Mercy Hospital, Revised FY 1993 and FY 1994 (Pet. Ex. 68); Cedars, FY 1994 (Pet. Ex. 47). For the Agency to accept the above-referenced hospitals' Prior Year Reports, the Agency would have reconciled the prior year actual report to the audited financial statements, and in so doing would have been aware of the existence of the HHA.11 The Agency does not know how many hospital Prior Year Reports it accepted in which HHA activity was included as non- operating activity. There is no current data base from which the Agency can determine how many hospitals had their reports accepted in this fashion. The Agency has in at least one case not involving home health revenues, directed a hospital to record certain non-hospital activity in non-operating revenues. The Agency instructed The Willough at Naples to include those activities which were not related to hospital activities, but rather related to separately- licensed activities, as hospital non-operating activity in its Prior Year Reports (Pet. Ex. 69). Acceptance of Hospital Reports as Operating The Agency has also accepted the reports of numerous hospitals in which home health activity was classified as operating in both the audited financial statements and prior year actual report forms. The Agency is able to capture a complete list of reports that were accepted in this fashion, based upon existing data bases. The Agency presented a summary table of this information which was admitted into evidence as Respondents' Exhibit 1. Respondents' Ex. 1 lists all of the hospital Prior Year Reports which were accepted in which HHA activity was reported as operating from 1982 through the present.12 Agency-Industry Communications Regarding Home Health Agency Reporting Prior to filing the FY 1993 short period Prior Year Report for Cedars Medical Center, healthcare consultant Sarah Fitzgerald met with Victoria Montanaro, who at that time was the Agency Chief in charge of the review of hospital Prior Year Reports. At that meeting, the issue regarding how Cedars Medical Center would report HHA activity was discussed, as well as similar reporting for University Hospital-Tamarac. Ms. Fitzgerald was told by Ms. Montanaro that reporting as non-operating would be acceptable and was preferred (See Pet. Ex. 21). The Cedars and University-Tamarac reports were accepted by the Agency (Pet. Ex. 47, 48). Mills Smith, a healthcare consultant, also inquired of Ms. Montanaro regarding the classification of HHA activity on hospital Prior Year Reports (Pet. Ex. 20). Ms. Montanaro informed Mr. Smith by letter dated March 2, 1994, that hospitals should not include HHA activity as hospital operating activity in the hospital Prior Year Report (Pet. Ex. 20). Prior to her leaving the Agency, Ms. Montanaro prepared an internal memorandum to Diane Berryhill, who was at the time employed by the Agency as a regulatory analyst reviewing hospital Prior Year Reports (Pet. Ex. 21). This memorandum reflected Ms. Montanaro's understanding of the Agency's position regarding HHA reporting as of the date of the memo. At the time that Ms. Montanaro wrote her memorandum, she had purview over the acceptance of Prior Year Reports, had the authority to accept reports, and had the authority to respond to questions from hospitals regarding how to fill out Prior Year Reports. The memo, a copy of which was sent by Ms. Montanaro to Ms. Fitzgerald, stated that the Agency's position was not to require that HHA activity be reported as hospital operating activity. The memorandum also states that a legal opinion was going to be sought by the Agency, and that prior to any changes in policy, a work plan would be implemented. The legal opinion was requested by Ms. Montanaro because she was concerned about whether reporting HHA activity as "hospital operating" activity was even an option after the 1992 statutory changes. The legal opinion referenced in Ms. Montanaro's memorandum was never provided. The work plan referenced in Ms. Montanaro's memorandum was never implemented. Acceptance of Hospital Revised Prior Year Reports Florida Hospital revised its FY 1993 report to exclude HHA activity. This report was accepted by the Agency (Pet. Ex. 50, pp. 65, 90, 109). Mease Hospital also revised its FY 1993 report, and highlighted the changes in the revised report (Pet. Ex. 51; p. 78). In each of these cases, the Agency was aware of changes in the reporting, and accepted the reports as filed. In FY 1993, Mercy Hospital filed its Prior Year Report and included revenues and expenses associated with a HBHHA as hospital operating revenues (Pet. Ex. 68). The Agency accepted this report. The Hospital then filed with the Agency a revision to its FY 1993 Prior Year Report, moving the HHA activity from operating to non-operating. The Agency accepted the revised report. After the revised FY 1993 report was accepted, Mercy Hospital asked the Agency for a refund of PMATF assessments which had been calculated and paid based upon the inclusion of HHA activity as hospital operating activity in the original accepted FY 1993 Prior Year Report (Pet. Ex. 68, p. 128). The Agency issued a refund check to Mercy Hospital to reimburse it for the PMATF assessment which it had paid based upon HHA activity. This is Now--New AHCA Policy and Actions AHCA's Statements and Actions Evidencing New Policy or Rule Interpretation Beginning with the FY 1994 Prior Year Reports of 14 hospitals owned by Columbia/HCA who are Petitioners in this case, the Agency changed its practice regarding the acceptance of Prior Year Reports. Where in the past the Agency accepted Prior Year Reports classifying home health activities in the numerous ways described above, the Agency determined that it would only accept hospital Prior Year Reports that include HHA activity as "hospital operating" activity. Beginning with the 14 Columbia hospital FY 1994 Prior Year Reports, the Agency has sent out numerous notices of violation involving hospital Prior Year Reports which were filed with the Agency and which classified HHA activity as non-operating or which excluded HHA activity from the Prior Year Report with disclosure of the existence of a hospital-related HHA (Pet. Ex. 53). This change in practice has not been accompanied by any change in statute or the FHURS Manual. Prior to the review of these fourteen FY 1994 Prior Year Reports, the Agency never told a hospital that it had to report HHA activity as operating in order to have its Prior Year Report accepted. By requiring hospitals to include HHA activity as hospital operating activity in Prior Year Reports, the Agency is also requiring that hospitals pay PMATF and HCCTF taxes on HHA activity. The Agency has admitted that its new practice is a statement of general applicability (Pet. Ex. 8, Tabs A, B, C, Requests 2, 3, 7, 8, 9 and 10). Dudek April 5 and 9 Letters On April 5 and April 9, 1996, the Agency sent letters to every Florida hospital concerning the reporting of HHA activity in FY 1995 Prior Year Reports. These letters were signed by Liz Dudek, AHCA Chief of Certificate of Need and Budget Review (Pet. Ex. 15, 16). The letters state that if a hospital includes the activity of a HHA on its Medicare Cost Report, it must be included as operating activity in the Hospital's FY 1995 Prior Year Report submitted to the Agency. The April 9 letter does not refer to any factors to be considered aside from the Medicare Cost Report. The Agency's New Practice As Applied The Agency's new practice is to require that every hospital that includes a HBHHA on its Medicare Cost Report must report to the AHCA the activity of home health agencies as "operating" activity on the hospital Prior Year Report (Pet. Ex. 15, 16, 35, 41, 45, 46). The Agency's reliance upon the Medicare Cost Report as the basis for requiring such reporting with the Agency is a new practice. The Medicare Cost Report is a document submitted to the federal government for review by HCFA. The Medicare Cost Report itself has not been adopted as a rule in the State of Florida. Phil Detweiler, a regulatory analyst whose primary duty at the Agency is to review Prior Year Reports, testified that the Agency now looks for evidence that HHAs have a relationship to the hospital, but that this was not an area of inquiry before the fall of 1995. Mr. Detweiler was told by his supervisor in late December 1995 or early January 1996 to send notices of violations to all hospitals if a HBHHA is included in its Medicare Cost Report and HHA activity was classified as other than operating activity in the hospitals' Prior Year Report. Mr. Detweiler testified that he did not need to know anything about the operational relationship between a hospital and a HHA in order to send out a Notice of Violation requiring that a hospital reclassify HHA activity to operating activity. In determining that the FY 1995 budget amendment of Osceola Regional Hospital was incorrect in its classification of HHA activity as non-operating, the sole factor relied upon by Chris Augsburger, who was reviewing this report for the Agency, was the inclusion in the Medicare Cost Report of a HBHHA. Mr. Augsburger testified that he considered the inclusion on the Medicare Cost Report to be conclusive evidence of the relationship such as to require reporting as hospital "operating," and that he did not ask any additional questions of the hospital regarding the relationship of the hospital to the HHA, or rely upon other information which could relate to that relationship. Mr. Augsburger stated that the determinative factor for reporting is whether the HBHHA is included on the Medicare Cost Report, not whether the hospital "operates" a HHA.13 Hospital "Operation" of Home Health Agencies There is no definition in Florida law of what it means for a hospital to "operate" a HHA. The Agency never attempted to define the term "operated by" or "operated as a part of" a hospital. Nothing in the FHURS Manual offers any test or guidance to determine what it means for a hospital to operate a HHA, or to describe any factors which would be utilized in determining whether any given relationship between a hospital and a HHA meets this supposed test. Although the Agency maintained through some of its witnesses that in addition to the Medicare Cost Report, hospitals must report on HHAs if the hospital "operates" a HHA, the Agency has no formalized set of factors by rule to provide any standards regarding how this test would be applied. The Agency has never made inquiry of a hospital, outside of this proceeding, regarding the nature of the operational relationship between a hospital and any HHAs. In addition, the Agency has never asked any hospital, in the course of the review of a hospital Prior Year Report, whether a HHA was operated as a department of the hospital. Not all HHAs related to a hospital are Medicare- certified. Non-Medicare-certified HHAs will not appear on any hospital's Medicare Cost Report. For non-certified HHAs, the Agency maintains that such agencies are required to be reported as "operating" on a Prior Year Report, if there is a close enough operational relationship between the hospital and the HHA. There is, however, nothing in rule to provide any guidance as to how such a requirement would be implemented, and there is nothing from the factors delineated by Agency witnesses in this case which would provide the answer of whether reporting is required in a given instance or not. Rulemaking is Feasible and Practicable The new Agency practice described above has not been promulgated as a rule. The Agency has been receiving and reviewing hospital Prior Year Reports for over a decade. The Agency has accepted reports, and was made aware through disclosure of the existence of relationships between hospitals and home health agencies, for more than a decade. The Agency's new practice is distinguishable from its old practice only in the result of whether a given report is to be accepted, not in the information required by the Agency to make that decision. The Agency's witnesses testified that the Agency could have "discovered the inconsistency" between Medicare cost reporting and AHCA prior year reporting earlier than it did. When the FHURS Manual was created, the Agency was required to go through a process prior to adopting the Manual which included obtaining the input of Hospital personnel and industry representatives in the promulgation of the Manual, as required by Section 408.061 (2), Fla Stat. The Agency went through the required process. Based upon the 1992 change in the legislation, the Agency is required to go through a similar process if it wishes to collect data from other types of health care facilities, including HHAs. The Agency has chosen not to go through the process required by statute. The Agency presented the testimony of Chris Augsburger that the Agency had not discovered any problem with HHA activity reporting earlier because the disclosure by hospitals in Prior Year Reports was "too subtle to get anyone's attention." This contention regarding disclosure is specifically found to be not credible, given the overwhelming weight of evidence presented by Petitioners to the contrary. Rulemaking in this matter would be feasible and practicable. Affect of Changed Policy/Rule Interpretation The Agency's requirement regarding the filing of HHA activity as "operating" activity on hospital Prior Year Reports will substantially affect hospitals and HHAs in the State of Florida. Among the impacts of the Agency's new practice are increased penalties, administrative fines, and taxes on hospitals which are required to report HHA activity as "operating" activity. There are additional regulatory impacts regarding the budget review process, as found in greater detail below. Penalties The Agency annually calculates regulatory penalties and administrative fines based upon whether a hospital has generated "excess" GRAA and NRAA in a given fiscal year, based upon Prior Year Reports accepted by the Agency. The inclusion of HHA activity in hospital's operating activity could increase or create a penalty, when the Agency reviews a hospital Prior Year Report. Petitioners gave two examples of the potential penalty impact on specific hospitals. In the case of Southwest Florida Regional Medical Center, the effect of including HHA activity in both the FY 1995 and the FY 1994 Prior Year Report would be to create a $2,000,000 penalty, where none existed based upon a comparison of the reports without home health activity (Pet. Ex. 28). If the Agency were to compare the 1995 report for Southwest Florida Regional Medical Center including home health activity to the accepted FY 1994 Prior Year Report of Southwest Florida Regional Medical Center which did not include such activity as operating, the penalty increases from $2,000,000 to $9,000,000. The potential penalty impact on Morton Plant Hospital should the Agency require Morton Plant to report HHA activity as operating in 1995 would exceed $12,500,000. This penalty would have a substantial and adverse impact on Morton Plant, and would result in a permanent reduction to Morton Plant. Morton Plant Hospital has had its Prior Year Reports accepted by the Agency for more than 10 years in a manner which excluded HHA activity from the Prior Year Report, with disclosure. Morton Plant Hospital is not in a penalty situation if its 1995 Prior Year Report is compared to its FY 1994 Prior Year Report, with both reports excluding HHA activity, as has been accepted by the Agency for more than 10 years. Southwest Florida Regional Medical Center and Morton Plant Hospital are only two examples of the potential penalty impact of an Agency requirement that HHA activity be reported as "operating" -- many more hospitals would be affected. Ms. Dudek was not aware of the potential penalty impact involving Morton Plant, and stated that the amount of the fine or penalty was "beyond her control." Administrative Fines Relating to Filing In addition to the penalties described above, the Agency has notified hospitals that, if it prevails in this litigation, hospitals would be subject to fines up to $1,000 per day for failing to file FY 1995 Prior Year Reports including HHA activity as "operating" (Pet. Ex. 33). Ms. Dudek sent such a letter to Morton Plant, although she was not aware of how Morton Plant had reported HHA activity in the past. Regulatory Impact on Budget Review In addition to the penalty and fine implications described above, including HHA activity as "hospital operating" activity would also have an impact on the regulatory program through which hospital budgets are reviewed by the Agency. The inclusion of HHA activity for certain hospitals could increase those hospitals' NRAA and cost per adjusted admission, and could result in those hospitals artificially appearing less cost efficient as compared to other hospitals in their peer group. The finding of inefficiency would affect the budget review process for the hospitals in question. In addition to increasing the NRAA and cost per adjusted admission of those hospitals with HHA relationships, the comparability of hospital to hospital upon which the peer group system is based would be impacted, as HHA activity is not a variable utilized in the creation of hospital groups. Increased PMATF and HCCTF Taxes Under Florida Law, the Agency imposes a 1.5 percent PMATF tax on the operating revenues reported to the Agency by hospitals (Section 395.701, Fla. Stat.). This tax, which is not assessed against stand alone or chain-related HHAs, is based upon the operating revenues of hospitals reported in their Prior Year Reports. If hospitals are forced to include HHA activity as operating revenue on their Prior Year Reports, the PMATF tax would be increased. The Agency also imposes the HCCTF tax on hospital operating expenses as reported to the Agency. If HHA activity is required to be included in operating expenses, this would result in increased HCCTF taxes for hospitals so reporting. Imposing PMATF assessments on HHA activity would raise the costs to those home health agencies by 1.5 percent. For Morton Plant Hospital alone, the additional PMATF tax would be approximately $750,000 in additional taxes annually. The overall increased taxes as a result of this classification change would be approximately $10,000,000 to $20,000,000 annually. Retrospective Application of New Practice In the past, when the Agency has made changes in rules or policy, these changes have been applied prospectively. The Agency knows how to make prospective changes in rules, and has done so in other cases. The Agency has recently decided to change how it would require Community Mental Health Centers to report in hospital Prior Year Reports, and has notified affected providers that this change in policy or practice would be applied prospectively only. The prospective application of rules is especially important in a case such as this where a hospital cannot take corrective action to avoid penalties or fines after the close of a given fiscal period. In this instance, the Agency has rejected the FY 1995 actual reports of numerous hospitals which were filed in the same manner as accepted 1994 reports. The Agency has notified numerous hospitals of the change in practice after the conclusion of the hospital's fiscal year 1995. The Agency did not notify these hospitals of the requested change in time for the facilities to file a FY 1995 budget amendment. The Agency did not notify these hospitals early enough to enable the hospitals to lower charges to remove or lower any potential penalty caused by the Agency's change in practice. Anti-Competitive Effect The marketplace for HHA services is very competitive. Imposing PMATF assessments on certain HHAs would raise costs to those agencies by 1.5 percent of net operating revenues. The tax would negatively impact competition, as it would impair the taxed HHAs' ability to compete against other HHAs not subject to tax. In the current marketplace, the additional 1.5 percent tax could be the difference between HHAs obtaining or not being able to fairly compete for managed care contracts. In addition to the inequity of taxing only certain HHAs based upon whether they are related to a hospital, the Agency's proposal is anti-competitive in that there are HHAs which are associated with hospitals that are not located in the State of Florida. The Agency does not have authority to impose PMATF taxes on hospitals located outside of the State of Florida. It would be a competitive disadvantage to HHAs having to pay the tax to compete against other hospital-based HHAs which do not have to pay the tax simply because the hospital to which the HHA is related is located out of state. New Agency Practice Reviews The Same Information And Reaches A Result Different Than That In The Past. The Agency has accepted Prior Year Reports filed by numerous hospitals for more than a decade with HHA activity reported in ways other than as "hospital operating" activity. The Agency is now taking the same information, and without promulgating a rule, changing its interpretation to require that all hospitals report as operating. The Agency's Actions in this Case are not "Mistakes" Over the course of more than 10 years of accepting hospital reports in manners classifying home health agencies as other than "operating," a number of AHCA staffers have been involved in the review and acceptance of these reports. The acceptance of these reports has spanned many administrations at the Agency. In the case of Leesburg Regional Hospital, at least twelve different analysts, supervisors, or bureau chiefs reviewed Leesburg's Prior Year Reports, all of which were accepted for 1988- 1994, with no questions asked regarding the classification of HHA activity until 1995. Ms. Montanaro, the former Bureau Chief and Regulatory Analyst Supervisor responsible for the acceptance of reports, testified that the Agency accepted reports in three separate manners, and that the Agency did not require that any individual hospital with a HBHHA relationship identified in its Medicare Cost Report report HHA activity as "operating" on the hospital's Prior Year Report. Agency witnesses characterized the acceptance of Prior Year Reports in a manner other than "operating" as being a mistake. Mr. Augsburger testified that he did not know why certain reports had been accepted that he reviewed in prior years. The contention by current Agency staffers that all past actions of the Agency regarding the acceptance of these reports were "mistakes" is not credible, given the overwhelming weight of evidence presented by Petitioners in this case. In accepting hospital Prior Year Reports in these manners for over 10 years, the Agency has declared that such reports were conforming to applicable rules including the FHURS Manual. Section 408.07(1), Fla. Stat. The Agency's actions demonstrate that the Agency now seeks to consciously change its practice regarding the acceptance of hospital Prior Year Reports. The Agency's requirement that HHA activity be classified as hospital operating activity is not found in existing rules, and is a new policy which has the effect of rule. It is extremely easy to determine, from the Medicare Cost Report, whether a HBHHA is included in the cost report. The existence of a HBHHA is disclosed on pages 1 and 2 of a typical cost report. The information available to the Agency regarding hospital relationships with HHAs has not changed. The Agency has been collecting Medicare Cost Reports since 1988, and not until 1995 has it sought to equate the filing of the Medicare Cost Report with a requirement to classify activity as "hospital operating" in the Prior Year Reports filed with the Agency. FHURS Manual Provisions The FHURS Manual has been in place since 1980, and is incorporated by reference in Rule 59E-5.102, Florida Administrative Code. The Manual has not been changed significantly regarding references to HHA activity. The FHURS Manual does not clearly describe the circumstances under which hospitals must report HHA activity as "operating activity." The FHURS Manual contains numerous lines and spaces that are never used by the Agency. The FHURS Manual is, on its face, a hospital manual, and not a manual which was designed to capture information from or about HHAs. The present statutory definition of “[h]ealth care facility” includes HHAs. Section 408.07(27), Fla. Stat. The definition in the FHURS Manual is more restrictive, providing only that a health care facility is “[a] hospital, skilled nursing facility, or intermediate care facility.” The Manual does not define hospital department nor does it define operations of a hospital. The definition of ambulatory services is unclear under the FHURS Manual as it relates to HHA activity.14 The FHURS Manual is a hospital manual and covers services that are provided by hospitals. The FHURS Manual does not use or define the terms "controlled by a hospital" or "integral and subordinate part of a hospital." There is nothing in the FHURS Manual that offers factors to instruct a reader as to what it means for a hospital to "provide" services. The terms "hospital-based HHA," "operated by a hospital," "component of a hospital," and "department of a hospital" are not defined in the FHURS Manual. Referenced federal regulations involving the filing of Medicare Cost Reports have not been promulgated as rules in the State of Florida, although specific provisions for adoption of federal standards are set forth in Section 120.54(6), Fla. Stat. (1996 Supp). The Agency has presented numerous factors which it states that it could utilize in determining whether the operational relationship between a hospital and a HHA is close enough so that reporting as “operating” would be required. None of these factors are contained in current rule or in the current FHURS Manual. In addition, none of these factors have ever been utilized by the Agency in its review of a Prior Year Report, nor was it explained how these factors would be applied to reach a final decision.15
Conclusions THE PARTIES resolved all disputed issues and executed a Settlement Agreement. The parties are directed to comply with the terms of the attached settlement agreement. Based on the foregoing, this file is CLOSED. DONE and ORDERED on this the g 1 day of reg , 2013, in Tallahassee, Florida. Ld). he. le E BETH We Ye j Agency for Health Care Administration Filed May 14, 2013 1:00 PM Division of Administrative Hearings A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO A 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 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. Copies furnished to: Beverly H. Smith Assistant General Counsel Agency for Health Care Administration Office of the General Counsel (Interoffice Mail) Bernard P. Coniff, Esquire 760 Ponce De Leon Boulevard Coral Gables, Florida 33134 (U.S. Mail) Jessica E. Varn Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 Ken Yon, Acting Bureau Chief, Medicaid Program Integrity Finance and Accounting Health Quality Assurance CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing has been furnished to the above named addressees by U.S. Mail or other designated method on this the / day of A Ay , 2013. Richard Sop, Esquire Agency Clerk State of Florida Agency for Health Care Administration 2727 Mahan Drive, MS #3 Tallahassee, Florida 32308-5403 (850) 412-3630/FAX (850) 921-0158
The Issue Whether Respondent Cleveland Clinic Florida Hospital's Motion to Dismiss the Petition in this case, for lack of standing, should be granted.
Findings Of Fact The facts necessary for disposition of the Motion to Dismiss are not in dispute. The Public Health Trust of Miami-Dade County operates Jackson Memorial Hospital ("JMH") in Dade County (AHCA District 11). In its Petition for Formal Administrative Hearing, certified to have been served on August 19, 1998, the Trust alleged that JMH is the only provider of adult kidney transplantation services within Florida Transplant Service Planning Area 4, which includes AHCA Districts 8, 9, 10 and 11. The Trust described itself in both the Petition and an amended Petition which followed as: [A]n agency and instrumentality of Miami-Dade County, which is organized and operated pursuant to Chapter 154, Part II, Florida Statutes, and Chapter 25A of the Code of Miami-Dade County. It governs and operates Jackson Memorial Hospital and other designated health care facilities. Its address is 1611 N.W. 12th Avenue, Miami, Florida 33136. Amended Petition, paragraph 2, p. 2. The Trust and Jackson Memorial Hospital are both in Dade County, AHCA District 11. With regard to CCFH, the Petition alleged the following. CCFH is located in Fort Lauderdale, Broward County (AHCA District 10). CCFH has CON approval to construct a new facility in Weston, also in Broward County. It submitted an application for an adult kidney transplantation program at the new Broward County facility which was awarded preliminary CON approval as noticed in the Florida Administrative Weekly on July 31, 1998. It is the application for the adult kidney transplantation program at the Weston facility in AHCA District 10 which the petition seeks to have denied contrary to AHCA's preliminary approval. The Petition's allegations with regard to standing are contained in paragraphs seven and eight: As the sole provider of adult transplantation services in Transplant Area 4, Petitioner has standing to file this petition because its substantial interests will be directly affected by the Agency action for which this petition seeks review. The adverse affects to the PHT if the preliminary approval of CON No. 9026 is upheld include but are not limited to: A decrease in the number of procedures performed at JMH, which may impair research objectives and medical proficiency; A loss of needed revenue to JMH, the largest provider of indigent hospital care in Florida; An increase in the competition for professional staffing, thereby driving up the costs of performing these hospital services; and An increase in the cost to the health care system for performing transplant services through he unnecessary duplication of services. Petition for Formal Administrative Hearing, p. 3 and 4. CCFH moved to dismiss the Petition on the basis that the Trust had not alleged facts sufficient to meet the standing requirement in CON proceedings found in Section 408.039(5), Florida Statutes. In essence, CCFH asserted that the Trust had failed to allege that its adult kidney transplantation program in District 11 was within the same district as the challenged kidney transplant program of CCFH approved by AHCA for District 10. In response, the Trust informed the Agency that it had on the same date filed an Amended Petition which, differs substantively from the original petition only in paragraphs 4 and 8, concerning the issue of standing. By filing its Amended Petition, the Trust adds an additional basis for standing, and does not in any manner retreat from the basis for standing asserted in its original Petition. Public Health Trust's Response to Cleveland Clinic Florida Hospital's Motion to Dismiss, p. 2, paragraph 2. The new paragraphs four and eight in the Amended Petition, state: PHT's medical staff (including its transplantation physicians) is provided by the university of Miami School of Medicine, doing business as the University of Miami Medical Group (UMMG), under an affiliation agreement between the PHT and the University of Miami. Through the UMMG, JMH conducts various activities in Broward County as part of its adult kidney transplantation program, including but not limited to the following: UMMG sees approximately one third of all its post transplant patients at two satellite clinics in Fort Lauderdale; and UMMG through the University of Miami's Organ Procurement Organization maintains agreements with various Broward donor hospitals and provides in-service training to hospital personnel involved in organ procurement, including kidney procurement. * * * As the sole provider of adult transplantation services in Transplant Area 4, as an existing health care facility with an established adult kidney transplant program operating in both Districts 10 and 11, Petitioner has standing to file this petition because its substantial interests will be directly affected by the Agency action for which this petition seeks review. Amended Petition, pages 2 and 3. The Amended Petition was filed with the Department Clerk for AHCA on September 4, 1998, prior to the case's referral by AHCA to DOAH. Argument on the Motion to Dismiss was heard on September 28, 1998. Ruling was reserved until entry of this order.
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 dismissing the amended petition in this case of the Public Health Trust of Miami-Dade County, Florida. DONE AND ENTERED this 14th day of October, 1998, in Tallahassee, Leon County, Florida. DAVID M. MALONEY Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 14th day of October, 1998. COPIES FURNISHED: Jack P. Hartog, Esquire Assistant County Attorney Jackson Memorial Hospital West Wing 109 1611 Northwest 12th Avenue Miami, Florida 33136 Robert A. Weiss, Esquire Karen A. Putnal, Esquire Parker, Hudson, Rainer & Dobbs LLP 118 North Gadsden Street, 2nd Floor Tallahassee, Florida 32301 Richard A. Patterson, Esquire Agency for Health Care Administration 2727 Mahan Drive, Building 3 Tallahassee, Florida 32308 Sam Power, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive Fort Knox Building 3 Suite 3431 Tallahassee, Florida 32308
Conclusions THIS CAUSE comes before the AGENCY FOR HEALTH CARE ADMINISTRATION (the "Agency”) concerning the Certificate of Need (“CON”) 10111 Application which was filed by BAY HOSPITAL, INC. d/b/a GULF COAST MEDICAL CENTER (hereinafter “Gulf Coast”) to establish a 6- bed Level III NICU in Bay County, Florida. The Agency preliminarily approved Gulf Coast’s application. On July 14, 2011, Tallahassee Memorial Healthcare, Inc. d/b/a Tallahassee Memorial Hospital (hereinafter “TMH) filed a Petition for Administrative Hearing challenging the Agency’s approval. This petition was forwarded to the Division of Administrative Hearings (‘DOAH”), by the Agency and assigned to an Administrative Law Judge. Filed November 21, 2011 9:11 AM Division of Administrative Hearings A 9 Ae 253 On October 27, 2011, the parties entered into a settlement agreement and a Joint Motion to Relinquish Jurisdiction was filed. On October 28, 2011, the Department of Administrative Hearings (hereinafter “DOAH”) issued an Order Relinquishing Jurisdiction and Closing the File. Prior to Final Hearing, the parties entered into a Settlement Agreement (Exhibit 1) which is attached hereto, and the Agency being otherwise well advised in the premises: It is ORDERED AND ADJUDGED: 1. The attached Settlement Agreement is approved and adopted as part of this Final Order, and the parties are directed to comply with the terms of the Settlement Agreement. 2. | The Agency shall issue CON 10111 to Gulf Coast. 3. The Parties shall abide by the terms and conditions of the Settlement Agreement. 4. Each Party shall be responsible for its respective own costs and attorney’s fees. 5. | The above-styled case is hereby closed. DONE and ORDERED this _/4/ day of Nive-d- , 2011, in Tallahassee, Florida. oo 2
Findings Of Fact Counts Three and Four: Rose Mary Smith Dr. Keedy's examination of Rose Mary Smith On March 13, 1978, Rose Mary Smith, a married, heavy set, forty-six year old female employed as a computer control clerk in Key West, Florida, visited Dr. Christian Keedy, a neurosurgeon practicing in Miami, Florida, complaining of back problems which had persisted for over twenty years. Mrs. Smith told Dr. Keedy that her back went out frequently when she bent or turned slightly. Some radiation existed into her hip and left knee, but there was no radiation into her legs. Her pain was concentrated to the left of her midline with numbness and tingling in the left hip. Sitting for any extended period of time resulted in an aching and tingling sensation in her left hip and both lower extremities. Mrs. Smith further complained of being tired continually and of feeling fatigued when she awoke each morning. Upon examination of Mrs. Smith, Dr. Keedy noted that she was tender to deep pressure just to the left of the midline over the area L4-5 and L5-S1. He noted no noticeable muscle atrophy, no definite sensory loss, no evidence of bony change, no evidence of scoliosis, and no evidence of spondylolisthesis or spondylolysis. Her tender reflexes were active and equal, and x-rays of the lower back showed her inner spaces to be fairly well preserved. There was induration of the articulate facets at L4-5 and marked asymmetry of the articulating facets at L5-S1, the one on the right being on a sagittal plane while the one on the left was in a completely frontal plane. It was Dr. Keedy's opinion that Mrs. Smith's problem was caused by the facets at L5-S1, particularly centering on the left facet, which was at a ninety degree angle as compared to the relatively normal forty-five degree angle on the right side. Such a condition creates a slued type of movement in the back which frequently becomes symptomatic and produces back pain. Following his examination,Dr. Keedy recommended that Rose Mary Smith take an anti-inflammatory medication for two weeks which would be followed with a rhizotomy if no improvement was noted. Dr. Keedy next heard from Mrs. Smith on April 27, 1978, when she paid the remainder of her bill and sent a note stating she felt better. Based on his initial examination of Rose Mary Smith, Dr. Keedy did not at that time believe surgery was indicated. After April 27, 1978, Dr. Keedy never heard from Rose Mary Smith nor was he consulted by any physician concerning his examination of Mrs. Smith prior to any surgical procedure being performed. Dr. Gershanik's examination of Rose Mary Smith In March of 1979, Rose Mary Smith consulted the Respondent Gershanik regarding her continuing lower back problems. Her chief complaint centered on radicular pain which had increased over the previous seven month's. The pain radiated to the back, thigh, knee, calf, foot and big toe. She also complained of tingling, numbness and cramps, intractable pain, rigidity, increased weakness, inability to bend over and constipation. Additionally, Mrs. Smith informed the Respondent that she had suffered a back injury approximately ten years before, which resulted' in a long history of lumbosciatica which was no longer responding to rest, medication or heat. Respondent Gershanik performed a physical examination of the patient and wrote an office report dated March 15, 1979, which revealed the following findings: In relation to the cervical spine, the flexion was up to 30 degrees and the extension, 40 degrees; the right lateral rotation was 75 degrees, the left lateral rotation was 60 degrees with pain. The right lateral flexion was 20 degrees while the left lateral flexion was 15 degrees. In relation to the hands, the grip was six pounds on her right hand and ten on the left. Tender jerk reflex; bicep, two plus; brachial radialus, two plus. Also bilateral tricep, one plus, bilateral. In relation with the lower extremities, knee reflexes were decreased bilaterally more on the left side and ankle reflexes were decreased bilaterally to almost negative on both sides, with more evidence in the left. (See Transcript, Vol. 6 at 189-190 and Respondent's Exhibit 2) Additionally, the Respondent performed a Lasegue test which was 25-30 degrees on the left and 35-40 degrees on the right and the Bragard test which was two plus, bilaterally. Sensory functions were tested with a pinwheel which demonstrated decreased sensation in both legs which was more evident at both sides of the L5 and 51 nerve root. According to the Respondent, the patient was unable to walk on her heels or toes. Following the physical examination, the Respondent gave Mrs. Smith an informational sheet concerning back problems, prescribed Soma and physical therapy, and agreed to admit her to a hospital for additional tests and possible surgery. The Respondent Gershanik next encountered Mrs. Smith at DePoo Memorial Doctors' Hospital when she was admitted March 19, 1979. An admission history and physical examination form which was completed by the Respondent for the patient, indicated that her chief complaint was .... increased and intractable lumbosciatalgia, weakness which started again progressively and worst the last few months without improvement with conservative treatment". [See Petitioner's Exhibit 20(3)] As indicated by progress notes dated March 19, 1979, the Respondent Gershanik examined Mrs. Smith and noted no discernible change in her condition from his previous examination of March 15, 1979. The nurse's admission notes confirmed that upon admission to DePoo, Mrs. Smith complained of ". . . pain in the cervical spine and lumbosacral spine radiating down to both legs with quote emphasis placed on the left leg". [See Petitioner's Exhibit 20(80)] She was admitted to DePoo with a diagnosis of acute and intractable lumbosciatalgia and cervicobraqualgia." [See Petitioner's Exhibit 20 at (2) and (6)] The Respondent Gershanik recommended that the patient be given pain medication and physical therapy, including ultrasound, to see if she would respond to conservative treatment. When Mrs. Smith failed to respond to the conservative treatment prescribed, a cervical and lumbar myelogram was ordered and performed in conjunction with x-rays of the cervical spine. The myelogram film, which was first presented to the radiologist for interpretation on May 11, 1979, failed to reveal any demonstrative abnormalities. The x-rays of the chest, cervical spine and lumbar spine were entirely within normal limits according to the radiological report of John D. Kreinces, M.D., radiologist at DePoo Hospital, dated March 20, 1979. [See Petitioner's Exhibit 20(38)] Prior to the operation, the Respondent Gershanik apparently disagreed with Dr. Kreinces' interpretation of the x-rays and concluded that Mrs. Smith's cervical spine was abnormal in that an asymmetry was present at L5 and S1, and a degree of subluxation or partial dislocation existed at L5-S1, as did some degree of spondylolysis. [Petitioner's Exhibit 20(2)] Based on his belief that Mrs. Smith suffered from nerve root compression as indicated by his physical examination and interpretation of the spinal x-rays of the patient, the Respondent Gershanik recommended surgery. Prior to the surgical procedure, scheduled for March 26, 1979, the patient was cleared for surgery by an anesthetist at the hospital and her family physician, Dr. Herman Moore. Dr. Gershanik's surgical procedure On March 26, 1979, at approximately 8:44 a.m., a decompressive lumbar laminectomy, L5-S1, partial, L4 and S1, bilateral, lateral herniated nucleus pulposus L5-S1, left side, foraminotomy both levels and cauterization of enlarged tremendous venous plexus, both levels, was begun on Rose Mary Smith. [Petitioner's Exhibit 20(57)] The surgery was performed under magnification loops, with the patient in a prone position on a lamina frame. According to the surgery report dated March 27, 1979, the Respondent Gershanik made a vertical incision from L3 to 51. Abnormal movement was found at L5 and a laminectomy was performed at L5, partially at L4 and 51, bilaterally with preservation (complete) of the spinous process. Ligament was dissected and removed with a Kerrison ronguer. The laminas at L5, 51 and L4 were shaved and partially removed with a large ronguer and Kerrison ronguer. Later a very lateral disc was removed from the left side at L5-S1. A foraminotomy, both sides, bilaterally was performed to free up the nerves. [Petitioner's Exhibit 21(57)] When the Respondent was preparing to close, the anesthetist, Peter Carey, indicated that the patient's blood pressure was a little low. Anesthesia was halted at approximately the same time that the surgery was completed, 10:45 a.m. At approximately 10:55 a.m., the patient was administered Ephedrine Sulphate, a medication used to increase blood pressure by increasing cardiac output. After the patient failed to respond to the Ephedrine, Decadron, a steroid drug used to assist a patient who may be going into shock, was given at 11:30 a.m. At 12:00 p.m., Rose Mary Smith was turned over onto a stretcher. Almost immediately, her blood pressure dropped significantly. A second dose of Ephedrine, a Dopamine drip and Levophed were administered at 12:05, 12:20 and 12:25, p.m., respectively. Dr. Herman Moore, the patient's family physician, was called to DePoo around noon to consult with Dr. Gershanik concerning an emergency at the hospital. Upon his arrival, Dr. Moore, after assessing the situation, suggested that Mrs. Smith be given medication to raise her blood pressure, stated that her problem appeared to be cardiac-related, and left. At approximately 12:20 p.m. the patient's blood pressure became inaudible. The Respondent Gershanik and Peter Carey, the anesthetist, discussed the possible causes for the significant and sudden loss of blood pressure and began to eliminate possible causes for the condition. Carey's first hypothesis was that the patient had suffered a pulmonary embolism and ordered a blood gas analysis which showed excellent arterial-oxygen saturation. Also eliminated was myocardial infraction. The Respondent ordered a hemoglobin and hematic study which indicated the volume of blood in circulation. This latter test indicated that Mrs. Smith was bleeding internally and Dr. Gershanik ordered additional blood. The patient was taken from the operating room to the Intensive Care Unit at approximately 12:40 p.m., where her blood pressure could be read with a Doppler device. At approximately 1:00 p.m., Dr. Calleja, a specialist in internal medicine, examined Mrs. Smith in the recovery area, stated that she had. . . an acute anemia from some type of blood loss" and that there ". . . may have been internal vascular injury causing internal bleeding." (Transcript, Vol. 4 at 122) He suggested that a laparotomy be performed. Once Dr. Calleja diagnosed the patient's problem, he telephoned Dr. Lester, a general surgeon, for assistance. Dr. Lester told Dr. Calleja that he could not assist in the laparotomy, concurred in the diagnosis that the probable cause of the shock was an injury to a major vessel anterior to the vertebral column, probably the aorta, and suggested that Dr. Lazarus, the only vascular surgeon in the community, be contacted. 3/ Dr. Rainero, a general surgeon, was called at his home by Dr. Calleja between 2:00 p.m. and 2:30 p.m., to assist. At 2:40 p.m., Dr. Rainero arrived at DePoo, went straight to the operating room, where after scrubbing, began an exploratory laparotomy of the patient at 2:50 p.m. After clearing the abdomen of accumulated blood, Dr. Rainero discovered an area where a retroperitoneal hematoma had developed. A clamp was placed above this point at approximately 3:00 p.m., by Dr. Rainero, who then waited for Dr. Lazarus, who arrived shortly thereafter. 4/ Mrs. Smith was not heparinized prior to any clamps being placed on her aorta by Dr. Rainero. Dr. Lazarus' efforts to halt the patient's internal bleeding After the patient's peritoneal hematona was opened and evacuated by Dr. Lazarus, the area where the aorta was bleeding, which was lateral and posterior, was discovered. The area of the bleed was a cup or crescent-shaped defect in the posterior lateral wall of the vessel, approximately 1/2 to 1 centimeter in size. The wound was sharply demarcated, but toward the lateral wall of the vessel it became more ragged. It was located on the posterior left lateral surface of the distal aorta at the bifurcation of the left common iliac artery. Dr. Lazarus had never encountered this type of vessel damage before. He did not believe it was caused by either an aneurysm or any other vascular disease. The problem confronting Dr. Lazarus was how to close the defect, since it was partly composed of a hole with a piece of vessel wall missing rather than a clean tear. Following a consultation with Dr. Rainero, Dr. Lazarus elected to surgically remove the damaged left common iliac artery, oversew the arterial end of the incision and run a graft from the anterior surface of the aorta to the left common iliac artery. After completing this procedure, a palpable pulse existed in the aorta but was absent below the graft, which was caused by some sort of blockage. A Foley catheter was inserted in the patient's femoral artery and clot material was removed from the incision. The catheter was reinserted and run towards the patient's head. It ran into resistance at the area of the distal anastomosis. The tip of the catheter went through an interstice between sutures on the back wall of vessel due to a defect in the suture line at the graft. 5/ The original graft was removed and a new one inserted using the same hole in the aorta at the upper end and bypassing into the common femoral artery instead of the common iliac artery. At 10:45 p.m., the second procedure ended. During the course of both procedures performed by Dr. Lazarus, the patient received approximately 36 units of whole blood. 6/ Throughout both procedures, Mrs. Smith had neither an audible pulse for blood pressure. When Dr. Lazarus concluded the second operation, he noted that the patient had developed disseminating intravascular coagulopathy, probably as the result of the multiple transfusions she had received, and was oozing blood from all cut surfaces. She was returned to the Intensive Care Unit in very critical condition and was pronounced dead on March 27, 1979, at 9:45 am. Dr. Gershanik's diagnosis and justification for surgery, surgical procedure and postoperative diagnosis Based on Rose Mary Smith's complaints, set forth supra, and his examination of the patient, the Respondent Gershanik concluded that she suffered from nerve root compression, L5, 51, and a possible lateral disc, L5-S1. This was based in part on the existence of an acute, intense radicular pain involving both legs, with emphasis on the left leg, accompanied by tingling, numbness, cramps, motor weakness, inability to walk on heels and toes and changed reflexes. As noted by Dr. Aronson, the Department's expert witness, these symptoms ordinarily would not be relieved by; the removal of a lateral disc at L5-S1. However, some of the symptoms exhibited by the patient indicated nerve root impairment caused by a lateral disc. As summarized by Dr. Aronson, Mrs. Smith exhibited diffuse and contradictory complaints which, when considered in conjunction with a negative myelogram, failed to justify the surgical procedure performed only eleven days after the Respondent initially examined the patient and deviated from the acceptable and prevailing neurosurgical practice. Although the Respondent Gershanik testified that it was impossible for him to injure a major vessel due to the special technique he used when performing this type of surgery, the evidence indicates that the technique described by the Respondent was neither unusual nor did it eliminate the possibility of injury to a major vessel. The weight of credible evidence supports the conclusion that a cause-and-effect relationship exists between the surgery performed by the Respondent and the injury which occurred at the bifurcation of the aorta and the left common iliac artery during the operation. Such an injury is the major life-threatening complication of this particular surgery. Any surgeon who after performing this procedure is confronted with a patient in shock should presumptively diagnose an injury to a great vessel. 7/ When Rose Mary Smith's blood pressure failed to respond to the drugs administered to raise the same and eventually became inaudible, the Respondent failed to immediately recognize that the source of the problem was shock caused by internal vascular bleeding. 8/ That the Respondent failed to recognize or treat this major complication is demonstrated by his failure to immediately contact a vascular surgeon for assistance once the problem with Rose Mary Smith became evident. 9/ Instead, thee Respondent contacted a family physician, Dr. Moore, and some two hours after problems with her blood pressure and pulse had begun and one hour after they could no longer be detected, a specialist in internal medicine, Dr. Calleja, was contacted. Dr. Calleja, after consulting Dr. Lester, another surgeon, correctly diagnosed the patient's vascular injury and, at this point, meaningful procedures .were begun to attempt to save her life. Additionally, prior to the surgery, the Respondent made no arrangements to have a vascular or other surgeon present or otherwise available to assist in the event this major complication occurred. Accordingly, the Respondent's treatment of Rose Mary Smith following the lumbar laminectomy, deviated from acceptable and prevailing neurosurgical practice. Counts One and Two: Gary Sherertz Gary Sherertz's admission to the emergency room at the Florida Keys Memorial Hospital and subsequent treatment for lower back pain On August 21, 1977, Gary Sherertz, a twenty-year-old married truck driver, was involved in a single-vehicle automobile accident in the Florida Keys at which time he sustained a twisting injury to his lower back. He was taken to the emergency room at Florida Keys Memorial Hospital in Key West, Florida, where he was examined by Dr. Ronald Schwert, the emergency room physician. Dr. Schwert did a neurological evaluation of the patient and ordered x-rays. The examination took approximately ten minutes and included checking reflexes, motion and sensation in the lower extremities and ability of the patient to stand and walk. The patient was told by Dr. Schwert that, in his opinion, the x-rays of the lumbosacral spine showed "no essential pathology." [Petitioner's Exhibit 5 at 7] He diagnosed ". . . mild or severe muscle spasm of the lumbar area," [Petitioner's Exhibit 5 at 8], ordered medication and bedrest, and discharged the patient. The patient was taken to the discharge area by Patricia Johnson, a nurse, and was then returned to the emergency room for further examination by the Respondent. The Respondent's examination of the patient revealed a history of back pain radiating into both upper extremities as well as evidence of nerve changes to the lower extremities. As a result of this examination, the patient was readmitted to the hospital for conservative treatment including pelvic traction, ultrasound and analgesic medication. While at the hospital, Sherertz underwent a number of nerve blocks, none of which provided any significant relief of pain. After several days of conservative treatment that was not effective in relieving the patient's pain, a myelogram was performed by the Respondent. Dr. Kreinces, the radiologist at the hospital, and Dr. Aronson, the Petitioner's expert, both interpreted the film as negative. The Respondent's experts, Drs. Ortiz, Correa and Dujovny, all agreed that the myelogram was abnormal. Based on his interpretation of the myelogram, together with the patient's clinical signs and symptoms suggestive of neurological impairment and the patient's failure to respond to conservative treatment, the Respondent decided to operate on Sherertz. This decision was made approximately ten days after the patient's admission. Gary Sherertz's back surgery. On August 31, 1977, a decompressive lamihectomy bilateral, L5, partial at L4 and S1, disc excision and removal at L4-5 and L5-S1 (right side), and bilateral foraminectomy both levels, was performed on Gary Sherertz by the Respondent. The patient's diagnosis was lumbar spinal stenosis, subluxation S1 in L5, H.N.P. [herniated nucleus pulposus] L4-5, L5-S1. [Petitioner's Exhibit 3 at 104] The Respondent described the procedure he utilized on the patient as follows: With the patient under endotracheal anesthesia in the prone position with laminectomy frame, the patient was prepped with betadine and draped. A longitudinal incision was made from L3 to 51 which was carried down through subcutaneous tissues and fascia. The fascia was incised and the paraspinal muscles were decollated on both sides. Abnormal movement (Dandy sign +) was more evident at L5. Bilateral laminectomies were done L5, partial L4 and 51 with preservation on the spinal processes. There were almost no spaces between L5 and 51 laminas which were very thick. Dissection and removal was done with the big ronguer wide open. Kerrison shaving was done to narrow down the laminas. The' canal was found to be tight and dissection laborious. The bulging discs were removed L4-5 and L5-S1 right side. A foraminotomy was performed to free up the nerve roots on both sides and both levels. Enlarged and hypertrophic vein plexus was cauterized. The incisional wound was closed with 2-0 dexon for the fascia, 3-0 dexon for the subcutaneous tissues and 4-0 nylon for the skin. The patient was sent to the recovery room in good condition. (Petitioner's Exhibit 3 at 104) The Respondent's findings contained in the surgery report included: Spinal lower lumbar stenosis, narrowing lumbar canal; subluxation of S1 in L5; upon exposure of the dura, it was found to be right at level L4-5 and L5-S1 right side; Nerve roots L4 and L5 very hyperemic at these levels and compromised with big bulging discs which were removed; Cauterization of enlarged venous-lexus. id. The Respondent's justification for surgery on Sherertz Regarding this patient, all of the experts who testified differ in varying degrees concerning the diagnosis and surgical procedure performed. The pivotal issue, however, is what the Respondent believed to be the cause of Gary Sherertz's back problem and whether that diagnosis and surgical procedure deviated from acceptable medical standards. A significant problem in determining whether the Respondent's care and treatment of Gary Sherertz deviated from acceptable medical standards has been the lack of certainty that the myelogram films and x-rays in evidence are complete and fairly depict the conditions which confronted the Respondent prior to the operation. Florida Keys Memorial Hospital does not have the original hospital records, including progress notes, for this patient. Apparently, the originals have been removed from the hospital and court files and, as of this date, are unavailable for review by any of the parties or experts in this proceeding. 10/ Accordingly, the undersigned is unable to ascertain with any reasonable degree of certainty, that the Respondent's decision to perform surgery on Gary Sherertz, based on the records available to him at that time, deviated from acceptable medical standards. Count Five: Rebecca Glover Rebecca Glover's admission to Florida Keys Memorial Hospital On March 29, 1979, Rebecca Glover, a twenty-nine year-old, unmarried attorney, was involved in a serious automobile accident in Key West, Florida. Her father, Herbert F. Glover, was a passenger in the automobile which she was driving when they were struck by another car. Both Glover and her father were taken by ambulance to the emergency room at Florida Keys Memorial Hospital where she was initially examined and treated by Dr. Ronald Schwert, the emergency room physician, at 10:10 p.m. Dr. Schwert diagnosed a severe concussion due to the disoriented state of the patient. He established an airway, immobilized the neck, started an IV line, and called in Drs. Gershanik and Rainero for assistance. Dr. Gershanik was called due to the patient's marked neurologic deficit coupled with signs of a severe concussion at the time of admission. Dr. Raniero was called to treat the patient's chest and abdominal pathology. Dr. Calleja also responded and began to treat her respiratory problems which included a severely flailed chest from multiple fractured ribs and subcutaneous emphysema. The patient developed the subcutaneous emphysema from a blunt trauma she had experienced during the automobile accident. Prior to the time either Drs. Gershanik or Rainero arrived, Dr. Schwert ordered chest x-rays which confirmed extensive multiple rib fractures of the first through sixth ribs, bilaterally, and subcutaneous emphysema with no evidence of pneumothorax. Mrs. Glover remained in the emergency room from 10:00 p.m. until 12:00 midnight. During this period, the patient showed a marked improvement. Within one or two hours, her neurologic signs were normalized, she became calmer and while breathing quietly, no flailing of the chest was evident, although she frequently complained of difficulty breathing and wanted to sit up. Most importantly, she was able to respond to questions and act appropriately in response to verbal commands. During the time that the patient was in the emergency room, her condition, although extremely serious due to her multiple chest injuries, was stabilizing and improving. Upon her admission to the emergency room, Dr. Schwert had packed and controlled bleeding caused by a large deep wound on Glover's forehead which she had sustained in the accident. Cuts were also evident on her lip and both knees. None of these lacerations were life-threatening and were treated by Dr. Schwert in the emergency room prior to the arrival of either Dr. Gershanik or Rainero. The plastic repair of Glover's lacerations Shortly before midnight, the Respondent decided that it was necessary to repair the lacerations on Glover's forehead, lip and knees. Prior to this decision by the Respondent, Dr. Calleja and Mark Williams, chief respiratory therapist, had discussed a conservative course of treatment for Glover which included careful monitoring of blood gases and excluded intubation. However, once the decision was made by the Respondent to open, clean and repair Glover's forehead laceration, Calleja concurred in the decision to intubate and anesthetize the patient so she would not become agitated and flail her chest during this time-consuming and painful procedure. At approximately midnight, anesthesia was begun. The surgery report prepared by the Respondent on March 30, 1979, describes the procedure utilized as follows: When under endotracheal assistance, the patient's head was placed in the proper position. The skin was prepared with Betadine, Peroxide, large amounts of normal saline and then again with Betadine. Furthermore, beneath the detachment and lacerated skin it was irrigated and foreign bodies were removed. The area was outlined and towel sutured to strategic points. Later, formal draping of the patient was completed and the large lacerated wound 10 cm. on forehead and wide excision of traumatized edges was done. Afterwards, undermining of scalp with periosteal elevator to allow mobilization of scalp and for closure with advanced flat. The bone was visualized throught (sic) the inflicted wound and it had been inspected before visually and by palpation for possible fracture. Later, the wound was closed with 5-0 and 6-0 nylon. The lacerated wound of the lower lip was repaired with 6-0 nylon sutures. When we started to repair the lacerated wound of her right leg, the patient suddenly experienced cardiac arrest which was followed by extensive emphysema. CPR was done STAT with no results. The patient expired. (Petitioner's Exhibit 17, at App. p.18) The hospital records indicate that the patient went into cardiac arrest at 2:10 a.m., a little more than two hours after anesthesia was begun. Before any CPR was begun, Glover developed massive subcutaneous emphysema. Around 2:30 a.m., Dr. Schwert was called to surgery for a condition "gray". When he arrived, the Respondent and Dr. Beltranena, the anesthesiologist were present and were administering CPR. The patient was cyanotic and exhibited massive swelling of the head, upper chest and neck. 11/ She was pronounced dead at 2:45 a.m. Justification for the plastic repairs and procedure used during and subsequent to the operation In deciding to operate on a patient, the surgeon in charge, who is ultimately responsible for making the decision to operate, is required to weigh the possible benefits of surgery against the possible risks to the patient. In the case of Rebecca Glover, the benefits of this surgery, i.e., prevention of infection and lessening of possible scarring from a large forehead laceration, were minimal when compared to the risks of anesthetizing her while she exhibited bilateral flailed chest and evidence of subcutaneous emphysema. By definition, such a patient has an injury to major airways and is at risk of developing a pneumothorax or tension pneumothorax depending on treatment. While one of the accepted treatments for flailed chest is intubation when a patient is no longer able to exchange air, the intubation must be accompanied by appropriate support in order to avoid creating a tension pneumothorax which is a life-threatening condition. The accepted treatment for a patient with a flailed chest and subcutaneous emphysema who must be placed on a respirator, is the insertion of chest tubes into the pleural space by the surgeon to drain blood or air and re-expand the lung if a pneumothorax begins to develop. Prior to the insertion of chest tubes in such a patient, x-rays' should be ordered by the surgeon or anesthesiologist. No evidence was presented in this case to indicate that any x-rays of Glover were taken during surgery. Additionally, during the surgery it is necessary to take frequent arterial blood gas readings to check the patient's course under anesthesia and ensure that the lungs are properly oxygenating blood. There is no evidence in the record that any blood gases were ordered by Dr. Gershanik or Dr. Beltranena to monitor Glover during the time she was anesthetized. The procedure itself took an inordinate amount of time to perform, largely because of the decision by the Respondent to do a plastic repair to minimize scarring. This required the patient to remain anesthetized for over two hours, thus increasing the risk of developing a pneumothorax. Indeed, the repairs to Glover's knees were not even begun when she went into cardiac arrest. The autopsy performed on Glover indicated that her lungs were collapsed with minimal lung parenchyma identified. [Petitioner's Exhibit 11, App. I at 2] Dr. Aronson interpreted this finding as massive bilateral pneumothorax with total compression of the lungs, both sides, so that the patient had no way of oxygenating air. When this condition occurs, cardiac arrest and possibly death ensues. As stated previously, prior to surgery, it was noted that Glover had subcutaneous emphysema, multiple fractured ribs, bilaterally, and, accordingly, was in danger of developing a tension pneumothorax. To monitor her lungs to ensure that a tension pneumothorax was not developing, arterial blood gas readings were necessary. Without such tests, neither the Respondent nor the anesthesiologist had any accurate way of guarding against this condition developing and recognizing it once it did develop. When the patient went into cardiac arrest, chest tubes should have been inserted immediately to remove the air or blood in the pleural space. This would have instantaneously relieved the tension pneumothorax so that her lungs could be reinflated. The second major possible cause of the arrest, cardiac tamponade 13/ should have been dealt with after the chest tubes were inserted by tapping the pericardial sac and removing any blood. That neither the Respondent nor the other doctors attending Glover at Florida Keys Memorial Hospital recognized the possibility that this patient could develop tension pneumothorax is a reasonable inference from the records in this case and the actions of the Respondent as well as the other doctors who attempted to treat her. Nothing in the hospital records indicates that, prior to surgery, any of the doctors involved in the decision to intubate and anesthetize this patient recognized the life-threatening complications which could develop as a result of flailed chest and bilateral subcutaneous emphysema. Neither x-rays, blood gases, nor chest tubes were utilized during the procedure. When the patient went into cardiac arrest, neither the Respondent nor any doctor present recognized the likely cause of the arrest, and, accordingly, meaningful steps to immediately attempt to save the patient were never instituted. Dr. J. Parker Mickle, a neurosurgeon, testifying via deposition for the Petitioner noted his "amazement" and "astonishment" that no doctor who consulted with the Respondent prior to surgery advised against putting this woman to sleep in order to perform what was essentially an elective procedure. However, the fact that no other physician present objected to the Respondent's plan, neither excuses nor mitigates the responsibility of the Respondent toward this patient. The initial decision to perform the surgery, presumably because of outwardly stabilizing indicators, was the Respondent's. 14/ Finally, even assuming that Glover's condition was terminal upon admission, such a factor is not relevant to this proceeding. None of the doctors who treated her, including the Respondent, believed that she was terminal up until the time she expired. While she was alive, Glover was entitled to careful and competent medical care including proper evaluation and treatment for her recognized symptoms.
Recommendation The Respondent Gershanik came to the United States from Argentina in 1975 to practice medicine in his specialty, neurosurgery. He obtained his training in Argentina, which included a seven-year medical degree from the Rosario University School of Medicine, with specialty training in neurosurgery and a doctorate in forensic medicine. Following his specialty training, the Respondent became affiliated with the Acute General Surgery Hospital in Buenos Aires, Argentina, where he was an instructor in neurosurgery and published articles and conducted research in his specialty area. The Respondent became board certified in Argentina in 1971. Although he is not board certified in the United States, he is certified by the American Board of Neurological and Orthopaedic Surgeons. While practicing as a surgical resident at American Hospital, in Miami, Florida, in 1975, he took training at the University of Miami School of Medicine and later passed the examination of the Educational Council for Foreign Medical Graduates. In 1976, he passed the Florida State Board examination and became licensed in Florida. The Respondent moved to Key West, Florida, where he resided from 1976 until 1982. He presently resides in Miami, Florida, and until recently, was the Chief of the Department of Neurosurgery for the Clinica Associana Cubana, one of the largest Health Maintenance Organizations in South Florida. Additionally, he has been on the medical staff of Westchester General Hospital, Miami, Florida, since March 1982, with privileges in neurosurgery and neurology. In determining an appropriate penalty in this case, careful consideration has been given to the well-established principle that the state's power to revoke a license to practice a profession should be exercised cautiously and directed only toward those who, by their conduct, have forfeited their right based upon substantial causes. Reid v. Florida Real Estate Commission, 188 So.2d 846 (Fla. 2d DCA 1966); Pearl v. Florida Estate Commission, 394 So.2d 189 (Fla. 3d DCA 1981). In specific regard to the medical profession, the state's interest in protecting the public health and safety by ensuring competency is unquestioned. In return for the powers which the profession enjoys pursuant to Chapter 458, Florida Statutes,. the state has required that such powers be exercised in a reasonable and competent manner. In this case, the Petitioner demonstrated by clear and convincing evidence that the Respondent failed to treat two patients with the level of competence and professionalism required by law. The Respondent's testimony at the final hearing when considered in conjunction with what actually occurred during the two procedures, and his apparently well-intended belief that both patients were handled correctly, indicate that the Respondent lacks the requisite judgment and competence to continue to act as a licensed medical doctor in this state. Pauline v. Boer, 274 So.2d 1 (Fla. 1974). Therefore, based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That the Petitioner Board of Medical Examiners enter a Final Order finding the Respondent Ricardo O. Gershanik, M.D., not guilty of violating counts one, two and three of the Amended Administrative Complaint, guilty of violating counts four and five, and revoking his license. DONE and ENTERED this 6th day of May, 1983, in Tallahassee, Leon County, Florida. SHARYN L. SMITH, 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 6th day of May, 1983.
