The Issue The basic issue in this case is whether Deering Hospital's application for a certificate of need to operate an inpatient cardiac catheterization program should be granted or denied.
Findings Of Fact Deering Hospital, formerly known as Coral Reef Hospital, is located at 9333 Southwest 152nd Street, Miami, Florida, in HRS District 11, Dade County. Deering Hospital has a total of 260 beds: 170 medical/surgical, 54 adult psychiatric, 16 adolescent and child psychiatric and 20 substance abuse beds. It is an acute care hospital. Deering's primary geographic service area is north to the town of Kendall, west to the Everglades, east to Biscayne Bay and south to 232nd Street. The secondary service area is south to the Florida Keys. Deering's primary service is defined by 62 percent of its admissions, its secondary service area by 17 percent, and all other areas, including North Monroe County, comprise 21 percent of all its admissions. Competitors in Deering's primary and secondary service areas include Kendall Regional Medical Center, Baptist Hospital, South Miami Hospital, and South Miami-Homestead Hospital, which was previously called James Archer Smith Hospital. These hospitals have shared a service area as long as they all have existed. South Miami-Homestead Hospital does not have a cardiac catheterization laboratory. Deering is within 30 minutes travel time of three full service cardiac catheterization programs located in facilities with open heart surgery, including two of the challengers to its application. On June 18, 1990 South Dade Health Care Group, Ltd., was formed in order to acquire Coral Reef Hospital. South Dade Health Care Group, Ltd., at the time of the application was and is currently licensed by HRS to operate Deering Hospital. Columbia Hospital Corporation of South Dade ("Columbia') is the general partner of South Dade Health Care Group, Ltd. Columbia, acting on behalf of South Dade Health Care Group, Ltd., acquired Coral Reef on September 26, 1990. Coral Reef changed its name to Deering Hospital on April 2, 1991. Deering's CON application in this batch cycle was submitted on March 25, 1991. The June 18, 1990, audited balance sheet for South Dade Health Care Group, Inc., was prepared for a development stage enterprise and is an audit of costs to start up the hospital after the acquisition by Columbia. The December 31, 1990, audit covers a 97 day period from September 26, 1990, (date of acquisition) to December 31, 1990, and included development and organizational costs. Since the applicant/entity/licensee did not exist before June 18, 1990, and the hospital was not acquired by that entity before September 26, 1992, there are no other financial statements that could have been prepared before the Deering application was submitted on March 25, 1991. South Dade Health Care, Group, Ltd., submitted a timely and valid letter of intent and a timely application for Certificate of Need ("CON") 6664 to provide in the July 1993 planning horizon inpatient cardiac catheterization services at Deering Hospital. South Dade Health Care Group, Ltd., and Columbia have authorized Deering Hospital's participation in this case. The capital projects list in the application is complete. When Deering was purchased by Columbia in 1990, Deering had a special procedure room that was apparently equipped and had the capacity to provide diagnostic coronary catheterizations as well as peripheral (i.e., the extremities) vascular diagnostic and therapeutic procedures. Although outpatient catheterizations had been performed in the special procedure room in the past, none were being done when Columbia acquired the hospital in September 1990. In late 1990, following evaluation of the equipment, Deering recruited an experienced CCRN cardiac catheterization laboratory nurse, hired a qualified CV tech, and began offering outpatient cardiac catheterization services. The decision to begin outpatient cardiac catheterization services was based in part on the idea that there would be no capital costs since the equipment to perform the procedures already existed. In December of 1990, the existing outpatient cardiac catheterization laboratory did about nine procedures and experienced some equipment failures. As a result of the equipment failures, Deering temporarily stopped doing outpatient cardiac catheterization, but was able to continue doing special procedures (vascular and arterial catheterizations, not coronary) in the room. After exploring various possibilities, Deering entered into a lease to obtain new equipment for its existing outpatient cardiac catheterization laboratory and signed a renewal lease to continue the lease of the equipment that was already in the outpatient laboratory. In January of 1992 the hospital resumed doing outpatient cardiac catheterization procedures and ten outpatient cardiac catheterizations have been performed in the room since January 31, 1992. From 1985 through April of 1991 the Deering outpatient cardiac catheterization program has done a total of twenty-nine outpatient procedures. The lab was closed temporarily to outpatient cardiac catheterization procedures from March 1991 through January 1992 in order to bring in new equipment. The hospital has been diligent and persistent, from the date Deering was acquired by Columbia to the present, in its efforts to maintain and enhance its outpatient cardiac catheterization program. Currently, however, if a Deering inpatient needs a cardiac catheterization, that patient must be taken past an active outpatient catheterization laboratory at Deering, only to be transferred to another hospital with an inpatient cardiac catheterization certificate of need. In health planning, it is generally desirable to use existing facilities and equipment to do additional procedures. By its application in this case, Deering proposes to use its existing outpatient cardiac catheterization laboratory to perform inpatient cardiac catheterization. For calendar year 1991, about 50 cardiac catheterization inpatients were transferred from Deering to other hospitals. Patients requiring inpatient cardiac catheterization or open heart are transferred from Deering to South Miami Hospital, Baptist Hospital, or Kendall Regional Medical Center. At Deering the spatial relationships between the existing outpatient cardiac catheterization laboratory and related services such as telemetry and intensive care appear to be adequate. Deering has 16 telemetry beds and they can be easily increased if needed. An uncomplicated inpatient cardiac catheterization typically results in one day in telemetry. Deering has ample capacity for over 300 additional telemetry patient days. At Deering the intensive care unit and the coronary care unit are collectively referred to as the critical care service (CCS). Deering has 14 CCS beds where a patient can be directly connected to a cardiovascular monitor allowing monitoring of any clinical changes. The current CCS average daily census is ten (10). Deering's application is not by or on behalf of an HMO. No evidence was presented to show that HMO's in District 11 have unmet cardiac catheterization needs or that Deering's application would fulfill any needs of HMO's. To the contrary, HMO's have a tendency to prefer cardiac catheterization services at facilities with open heart surgery. Typically an uncomplicated diagnostic cardiac catheterization does not require a CCS stay. Even if 50 percent of Deering's cardiac catheterization inpatients required CCS during their stay, Deering has the capacity to accommodate the 150 additional CCS patients annually. The physical space which comprises the existing outpatient cardiac catheterization laboratory is clinically adequate in its current configuration to facilitate communication during the procedure and time savings. The dark room, computer room and procedure room are all adjunct. There are no medical or clinical reasons why the space is not adequate. According to the medical director, who has extensive experience at other hospitals and who has performed outpatient cardiac catheterizations in Deering's procedure room, Deering's procedure room is more than adequate for performing inpatient cardiac catheterization. If the inpatient certificate of need is granted, the procedure room where outpatient catheterizations are currently performed will continue to be a mixed used room, i.e., peripheral angioplasties and coronary catheterizations will be scheduled in the same room. Deering Hospital is JCAHO accredited. It received a three year accreditation in 1991. The laboratory currently used for outpatient procedures was surveyed by JCAHO as a special procedure room. Deering has never been cited in any JCAHO or HRS licensure survey for any inadequacy in life, safety, or fire codes in the outpatient cardiac catheterization special procedure room. Deering currently has all of the equipment, staff and ancillary services described in, and required by, the applicable rule. Deering has two physicians on staff that serve and are compensated as co-directors of the existing outpatient cardiac catheterization laboratory. Dr. Palomo is co-medical director of the existing outpatient cardiac catheterization program and will be co-medical director of the inpatient program if the program is approved. Dr. Palomo is Board certified in internal medicine and Board certified in cardiovascular diseases. He was previously an assistant professor of medicine at the University of Miami and ran the cardiac catheterization lab at the Veteran's hospital in Miami. Last year Dr. Palomo performed 300 cardiac catheterizations in the Miami area. Dr. Palomo has cardiology staff privileges at six Miami hospitals, including two of the challengers to this application, Baptist Hospital and South Miami Hospital. He lives ten minutes from Deering Hospital and his office is located eight minutes from Deering. There is no industry standard for credentialing cardiac catheterization laboratory nurses, but it is generally agreed that all cardiac catheterization personnel should be ACLS trained. All Deering nurses who are cross-trained for the cardiac catheterization laboratory are ACLS certified. Deering has also cross-trained an ECHOvascular technician into the scrub roll in the laboratory. All current cardiac catheterization laboratory staff and all cross-trained cardiac catheterization laboratory staff are already full time Deering employees. Current staff can accommodate the projected volume of inpatient cardiac catheterizations and the current rate of peripheral and outpatient catheterizations. If awarded the service, Deering would be able to implement the service the day of the award. The current staff is adequate regardless of whether they are performing an inpatient, outpatient, or peripheral procedure. The staffing of the inpatient lab would be the same as the current outpatient laboratory; i.e., a physician, RN and a CVT. There would not be any need to add staff if the number of procedures increased between 300 and 1,000 annually. Accordingly, Deering does not intend to recruit additional professional personnel from the local market. The capacity of Deering's existing laboratory, when used for inpatient cardiac catheterization procedures, can conservatively be calculated as follows: 1 hour from arrival at the procedure room to departure from the procedure room, times an 8 hour day, times a 5 day week, times 52 weeks a year equals 2,080 case theoretical capacity. One-half that theoretical capacity is four cases a day or 1,040 cases a year. A cardiac catheterization laboratory can typically do between 1,000 and 1,500 cases per year. Four cases per day (1,040 cases per year) is a reasonable number to express the capacity of Deering's existing laboratory to accommodate inpatient procedures with current space, equipment and staff. The existing inpatient cardiac catheterization laboratories in District 11 have similar capacities. With additional staffing, Deering or any of the existing laboratories might have even greater capacities. If granted inpatient cardiac catheterization services, Deering would not do coronary angioplasties because it does not have open heart surgery in the same facility. Deering maintains transfer agreements with other facilities for services that Deering does not provide. Deering has developed an adequate protocol outlining how an open heart or angioplasty backup patient would be transferred. Deering has established medically appropriate criteria for granting and maintaining privileges in its outpatient cardiac catheterization laboratory that would be suitable for the proposed inpatient cardiac catheterization program. Deering has developed adequate and appropriate forms to manage its patient care in the outpatient program which would be suitable for the inpatient program. Deering has developed clinically adequate and appropriate protocols for temporary pacemaking, recording hemodynamic data, and insuring the emergency availability of staff in the cardiac catheterization laboratory. Deering has a policy and procedures statement to orient new employees to the cardiac catheterization laboratory. Generally, there is no alternative to cardiac catheterization when catheterization is medically indicated. However, there are alternatives to Deering's application, such as allowing existing providers to achieve efficient levels of utilization. Deering is not proposing joint, shared, or cooperative health care services. Deering is not proposing to provide services for research or teaching purposes. Deering does not propose to provide a substantial portion of its services to individuals not residing in the service district. Indeed, inpatient cardiac catheterization services are readily available in adjoining service areas. Deering is not proposing any new construction in its application. Deering is not proposing to add nursing home beds. No service reductions will occur as a result of this proposal. Financial feasibility of a project means the project can be accomplished within the financial resources of the overall institution. Short- term financial feasibility means the applicant can cover the start-up project costs. Long-term financial feasibility means the project will generate a surplus of operating revenue over operating expenses within two years. The proposed project would most likely be financially feasible in the short and long-term, even though (for reasons addressed below) it is unlikely to achieve the results projected in the pro formas. This is because Deering is already operating an outpatient cardiac catheterization laboratory and would have very little additional expense if it began performing inpatient cardiac catheterizations using the existing staff and the existing equipment. If the project were to be approved, the hospital as a whole would probably have a positive cash flow in the first and second year, because with a mere four or five inpatient procedures it would recover the additional costs associated with converting the existing outpatient lab to an inpatient lab. A contribution margin is the difference between the variable expenses and variable revenues on a per unit basis or in the aggregate. For additional inpatient cardiac catheterization services on a per case basis, Deering projects a positive contribution margin of $2,500 per procedure. This is similar to the contribution margins of other hospitals performing inpatient cardiac catheterizations in Deering's service area. Break-even analysis determines how many procedures must be done before incremental fixed costs are covered. Since incremental fixed costs are $10,000, after only 4 or 5 inpatient procedures the service would break-even. For a number of reasons mentioned below, it is very unlikely that Deering would be able to achieve its projected utilization levels. Specifically, it is unlikely that Deering would be able to achieve a utilization level of 300 admissions per year by the end of its second year of operation. The analysis on which Deering bases its much higher utilization projections appears to be flawed in several respects and is also contrary to reasonable expectations based on the average historical performance of diagnostic-only cardiac catheterization programs in District 11. In an effort to demonstrate that Deering would perform in excess of 300 procedures per year, Deering's health planning expert, undertook the following analysis: The number of MDC-5 (circulatory diagnoses) at Deering in 1990 was approximately 750. It was assumed, from data in the Winslow report and the Dade County actual data that one third of the MDC-5 admissions would receive a cardiac catheterization. Multiplying 750 times one third results in 250 admissions at Deering who would receive a catheterization, or approximately 20 per month. Because some people would refuse to have a catheterization, or would undergo it at another facility, it was assumed that 17 patients per month, or approximately 195 per year, would be cathed at Deering in the first year of operations. It was assumed that the growth at Deering between year one and year two of operations at Deering would be equal to the projected growth in catheterizations in Dade County between July, 1989 and January, 1994. It was assumed that all of the cases projected above would be inpatients. Based on this analysis, it was projected that Deering would be able to do in excess of 300 cases per year starting in its second year of operations. The greater weight of the evidence indicates that this methodology suffers from a number of flaws. The "one third" factor applied in step 2, above, is erroneous and was incorrectly applied even if correct. The Winslow paper provides no support for the proposition that one third of all MDC-5 admissions will require catheterization. The actual statistic from Dade County is that all inpatient catheterizations, including those done in anticipation of open heart surgery and for angioplasty, constitute 21 percent of the number of MDC-5 admissions. Of the catheterizations done in Dade County, 9 percent (1,382 catheterizations out of a total of 16,155) were performed in conjunction with open heart surgery and 16 percent (2,700 of 16,155) were angioplasties. Because Deering will be unable to do either open heart surgery or angioplasty, a full 25 percent of the catheterization case load is unavailable there. Applying the 21 percent factor (percent of actual inpatient catheterizations to MDC-5 admissions) would result in 158 potential catheterizations. Dropping out 25 percent of those (the percent requiring open heart surgery and angioplasty) results in 118 potential cases. Using then the 85 percent figure (to reflect those who refuse to be catheterized or must go elsewhere because of managed care agreements, etc.) leaves approximately 100 inpatient cases in the first year, or roughly half of what Deering projects. There is no persuasive support for the idea advanced by Deering that its growth between year one and year two of operations would be the same rate of growth that all Dade County providers experienced between 1989 and 1994. To the contrary, such an experience is most unlikely. First, the projected rate of growth assumes that Dade County's use rate will continue at the same rate. This is optimistic. Second, it assumes that Deering will reflect the growth in the number of cardiac catheterizations in Dade County even though it is only providing diagnostic catheterizations (i.e. no angioplasties or catheterizations during open heart surgery). Finally, it assumes that Deering's rate in providing cardiac catheterizations will be the same as four and one half years experience in Dade County. If the actual annual rate of increase in Dade County were applied to Deering's own projected first year utilization, it would still only be likely to do 230 cases in the second year. The actual number of patients transferred from Deering for inpatient catheterizations plus its actual number of outpatient procedures provides a more accurate guide to the number of cases Deering could be expected to do. Based upon these figures, Deering might be expected to do between 70 and 150 cases the first year and less than 200 the second. One assumption made by Deering to support its utilization projections was that there would be a growth in the utilization of cardiovascular services at Deering. The historical use pattern at Deering fails to reveal any trend that would suggest such an increase. According to data reported to the HCCCB, there was an overall decline in the number of intensive care days at Deering between 1985 and 1991. Similarly, emergency room visits have also declined during the same period. Emergency room admissions account for 60 percent of all admissions to Deering. As a result, the total number of patient days at Deering has declined from 47,089 in 1985 to 40,975 in 1991. Thus, although Deering is projecting a large increase in utilization to project satisfactory utilization of its proposed laboratory, the historical record does not support that record. According to Deering, indicators of cardiac volume include the following services: EKGs; echocardiograms; holter monitors; treadmills; pulmonary function tests; thallium exams; and, coagulation studies. According to data presented by Deering, none of those "cardiac volume indicators" showed an increase in utilization between 1988 and 1990. In its financial analysis, Deering assumed that all of the 195 procedures in the first year and all 360 in the second year would be inpatient procedures. In Dade County for the 12 months ending September 30, 1991, 39 percent of all catheterizations were done on an outpatient basis (6,240 outpatient procedures out of 16,165 total cases). That percentage would be even higher at facilities that are unable to provide open heart surgery. (For example, currently 80 percent of the cardiac catheterization procedures at Doctors' Hospital are outpatient procedures.) In all of Florida approximately 50 percent of all cardiac catheterizations are inpatient. The trend in Dade County, in Florida, and nationally is that the number, and percentage, of outpatient procedures is increasing. The significance of this fact as it relates to Deering's financial projections is that Deering did not make any adjustment in its utilization projections to account for outpatient utilization and projected the pro formas by assuming that income associated with each case would be the income associated with a full inpatient admission. Thus, the pro forma projections are overstated to the extent that the projected procedures will actually be performed on an outpatient basis. At least 35 percent of Deering's procedures are likely to be on an outpatient basis with the trend indicating that outpatient utilization will actually be much higher. In projecting the average length of stay to be attributed to each inpatient catheterization at Deering, it was assumed that it would be the same length of stay as the District 11 average. The District 11 average includes the average inpatient stay associated with open heart surgery, which is much longer than for a routine diagnostic catheterization. Thus, Deering has overstated its projected average length of stay. In addition, the average length of stay for inpatient catheterizations has been dropping. This compounds the extent to which the number of inpatient days associated with catheterizations has been overstated in Deering's pro formas. One assumption in Deering's financial analysis is that patient days at Deering would increase at the same rate as the population increase in Dade County. This assumption finds no support in the evidence presented at hearing. In fact, it was demonstrated that the actual number of patient days have been declining at Deering since 1985. In 1985, Deering has 47,089 patient days; in 1991 it had 40,975 patient days, a drop of 13 percent. This drop occurred even though Dade County has had continuous steady growth. The financial assumption that Deering's inpatient days will grow at the same rate as the population as a whole is found to be unsupported. One reality check of Deering's projection that it will perform in excess of 300 procedures in its second year of operations is to measure its proposed "capture rate" against that of the other hospitals it will be competing against. In 1990 there were a total of 491 cardiac catheterizations performed on patients who reside in Deering's primary service area. Of these, Baptist, which is a full service provider, was able to capture only 203 cases, or 41 percent. If Deering, with one catheterization lab which is also used to do peripheral procedures, were to capture 300 procedures from its primary service area, this would represent in excess of 60 percent of the procedures from that area, or one and one half times better than Baptist is able to do with a full service catheterization facility, three dedicated catheterization laboratories, four full catheterization teams, and angioplasty and open heart capabilities. It is most unlikely that Deering can achieve such a projection. Deering proposes to provide a diagnostic-only program. Of the 13 cardiac catheterization programs in Dade County, nine are traditional and four are diagnostic-only. The diagnostic-only laboratories in District 11 have historically operated at significantly lower volumes than the laboratories in facilities with open heart surgery. During calendar year 1991 the four diagnostic-only providers performed the following number of procedures: Doctors' Hospital 301 Humana Hospital-Biscayne 55 Palmetto General Hospital 432 Parkway Regional Med. Center 262 TOTAL 1050 The total of 1050 procedures constitutes an average of 262.5 procedures for each of the four existing providers. If this pool of 1050 procedures were to be divided five ways to accommodate a new provider, there would be an average of 210 procedures per diagnostic-only provider. It would require an increase of almost 50 percent in the number of procedures being done by diagnostic-only laboratories for five such laboratories to be performing an average of 300 procedures per year. This is yet another reason for which it is most unlikely that Deering would achieve the utilization levels it projects. There appears to have been little physician acceptance of the outpatient catheterization laboratory at Deering. From 1985 through the date of hearing, Deering only performed 29 cardiac catheterizations. Dr. Palomo is the medical director of the Deering cardiac catheterization laboratory. One of his duties as medical director is "promoting" the laboratory. In 1992, through June 16, Dr. Palomo performed only two or three cardiac catheterizations at Deering; in calendar year 1991, he did four to six cardiac catheterizations at Deering. Dr. Palomo does approximately 300 catheterizations per year. It is unlikely that Deering will perform over 300 catheterization cases per year when its own medical director is doing less than 2 percent of his cases there. South Miami is an acute care hospital located in Dade County. South Miami has a open cardiac catheterization program which means any physician within the community can apply for privileges, and, if granted, perform cardiac catheterizations at South Miami. Until recently, it was a closed program. Baptist is a large, full service acute care hospital located in South Miami, Dade County, District 11. Baptist provides a full array of cardiac services at its Miami Vascular Institute. These include cardiac catheterization, open heart surgery, and angioplasty. Baptist is within the primary service area of Deering. It is approximately eight minutes drive from Deering. Deering currently transfers its cases needing inpatient catheterizations to other hospitals, including Baptist. If Deering were to be approved, and if it were able to perform 360 cases in its second year of operations as it projects, it would most likely be performing something in the neighborhood of 150 cases that otherwise would have been done at Baptist. 3/ This was calculated as follows: There were a total of 491 catheteriza- tions performed in 1990 on patients residing in Deering's primary service area. Of those 491 cases, Baptist performed the catheterizations for 203 patients. If Deering were to perform 360 inpatient catheterizations in its second year of operations, it is projected that Baptist would lose cases in the same relation as its current market penetration, i.e. 41 percent. This equates to 149 cases. This methodology presents a reasonable projection of the number of cases that Baptist would be likely to lose if Deering's application for inpatient cardiac catheterization were approved and Deering were able to achieve its projected utilization levels. Baptist has a contribution margin of approximately $2,560 per cardiac catheterization. This figure is the average revenue per case less the variable costs per case. Using the methodology described above, it is projected that the net annual loss at Baptist, if Deering were approved, would be in the neighborhood of $380,000.00. If Deering were to achieve its projected utilization levels, it is likely that it would also be performing a substantial number of cases that otherwise would have gone to South Miami Hospital or one of the other nearby existing providers. Doctors' Hospital is a 255-bed acute care hospital located in Coral Gables, Dade County, Florida. Doctors' has had a cardiac catheterization program since December of 1986, and is authorized to perform diagnostic catheterization on both inpatients and outpatients. With its current staffing compliment, the Doctors' cardiac catheterization laboratory could comfortably perform four catheterizations per day or between 800 and 900 per year. Doctors' performs cardiac catheterization on all patients regardless of ability to pay. Since 1988, the Doctors' cardiac catheterization laboratory has experienced declining utilization. The following chart represents the utilization of Doctors' cardiac catheterization laboratory since 1988: TOTAL INPATIENT AND CALENDAR YEAR OUTPATIENT CARDIAC CATHS 1988 484 1989 400 1990 380 1991 295 1992 240 (estimated) The Doctors' inpatient cardiac catheterization program is at a crossroads. The current volume is well below the minimum quality threshold which is acceptable for cardiac catheterization laboratories. In its early years of operation, the Doctors' cardiac catheterization laboratory generated a profit. Such is no longer the case. Several factors have resulted in the declining utilization of Doctors' cardiac catheterization laboratory. One of the factors is that more of the existing laboratories have become open staff versus closed staff. Doctors' laboratory has always had an open staff policy. At the time that Doctors' established its cardiac catheterization laboratory, it was one of only two that had an open staff policy. Another factor in the decline of utilization at Doctors' has been a shift from inpatient to outpatient cardiac catheterization. Therefore, the opening of outpatient-only cardiac catheterization laboratories, including the one at Deering, has resulted in a reduction in the number of outpatient cardiac catheterization procedures done at Doctors'. Doctors' does not offer angioplasty or open heart surgery. Doctors' diagnostic-only cardiac catheterization capability has contributed to its declining utilization since Doctors' is unable to compete with full service hospitals for cardiac catheterization patients that require the services of a full service hospital. Another factor which has resulted in the decline in utilization at the Doctors' cardiac catheterization laboratory is a change in HMO service patterns to facilities that can provide full-service cardiology services, including cardiac catheterization, angioplasty, and open heart surgery. The primary reason Doctors' Hospital catheterization laboratory is now losing money is its decrease in utilization. As utilization of a cardiac catheterization laboratory declines, the per unit cost of providing a catheterization increases. Based upon the current market share of inpatient cardiac catheterization patients in District 11, and assuming Deering would be able to achieve its projected year two utilization of 360 new inpatient cardiac catheterization patients, a small number of those patients probably would have otherwise gone to Doctors' Hospital. Because of the declining utilization at the Doctors' cardiac catheterization laboratory, and the fact that its program is not co-located with open heart surgery, the loss of even a small number of patients may be significant to the future viability of the cardiac catheterization program at Doctors' Hospital. If the Deering inpatient program were to be approved, both the Deering and Doctors' programs would likely be low volume programs operating at utilization levels well below the minimum for maintaining quality standards and well below the minimum for economic efficiency. There are 13 providers of inpatient cardiac catheterization services in Dade County which operate a total of 24 catheterization laboratories. These providers are geographically well dispersed in the population centers of the county. The existing inpatient cardiac catheterization providers in District 11 are available, provide high quality care, are appropriate, and are accessible. In District 11 there is an ample excess capacity to provide additional inpatient cardiac catheterizations at existing facilities. The existing catheterization laboratories are not producing sufficient numbers of cases to be operating efficiently. The practical capacity of a typical catheterization laboratory is somewhere between 1,000 and 1,500 cases per year. Given that there are 24 existing catheterization laboratories and four more expected to come on line soon, the existing providers are operating at approximately half of their capacity. These programs have not reached a level of optimal efficiency in terms of operations. Optimal efficiency for health planning purposes should be measured at a level of approximately 80 or 85 percent of capacity. The economic efficiency of the existing providers of inpatient cardiac catheterization would be enhanced if new entries into the market were precluded until existing providers were operating at approximately 80 or 85 percent of their practical capacity. It is well accepted in health planning that a catheterization laboratory must perform at least 300 cases per year in order to maintain proficiency and quality. There appears to be a relative correlation between the number of cases performed in a laboratory and the skill of the staff. In District 11, HMO's and PPO's have shifted their service patterns to facilities that can provide full cardiac services including angioplasty and open heart surgery. The shift in use patterns has had a significant effect on cardiac catheterization laboratories unable to provide angioplasty and open heart surgery. This effect would likely be felt at Deering Hospital if its inpatient lab were approved and supports the conclusion that Deering, as a provider of diagnostic catheterizations only, would be unlikely to achieve its utilization projections. Cardiac catheterization services are highly competitive in District As such, the approval of Deering's application will have little beneficial improvement by way of increased competition. Additionally, the trend in District 11 is for third party payers to contract for the provision of cardiac services at full service providers. As such, Deering would be unable to effectively compete with the nine full service providers of which three, Baptist, South Miami, and Kendall, are in Deering's primary service area. There is no evidence that any patient has had, or is likely to have, problems accessing inpatient catheterization services if this proposal is not approved. The geographic access standard contained in the applicable rule is met by the existing providers. Additionally, none of the programs or doctors have been unable to schedule catheterizations because of heavy utilization at any District 11 catheterization provider. Accordingly, patients are not likely to experience any difficulty in accessing inpatient cardiac catheterization services if Deering's application is denied. Currently and historically, cardiac catheterization has been regulated by HRS as an inpatient institutional health service, not a tertiary service. On February 8, 1991, HRS published official notice of the need for one more inpatient cardiac catheterization program in District 11 for the 1993 planning horizon, calculated in accordance with the methodology in the applicable rule. The fixed need pool in this case was never challenged by Petitioners. The projected number of procedures by population in the planning horizon using the methodology in Joint Exhibit 1 and actual data collected by HRS show that there are enough procedures in the marketplace for Deering to perform 300 in the second year of operation and for the protestants in this case to maintain their annual current volumes. However, major portions of that rule- based methodology have been found to be invalid in the Final Order issued this same day in the related rule challenge cases.
Recommendation On the basis of all of the foregoing, it is RECOMMENDED that a Final Order be issued in this case denying the subject certificate of need application. DONE AND ENTERED this 1st day of April, 1994, at Tallahassee, Leon County, Florida. MICHAEL M. PARRISH, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 904/488-9675 Filed with the Clerk of the Division of Administrative Hearings this 1st day of April, 1994.
The Issue The issue for determination is whether Respondent’s rule is an invalid exercise of delegated legislative authority, and/or whether Respondent’s agency statement constitutes a rule and has not been adopted pursuant to the statutory rulemaking procedure.
Findings Of Fact Several children attending schools in the Broward County School Board’s (Respondent’s) district require the performing of medical procedures, among them daily catheterization, also referred to as intermittent urinary catheterization or clean intermittent catheterization, using the clean technique. 2/ Respondent ensures that such medical needs of each student are met. Catheterization (clean intermittent catheterization) is an invasive medical procedure. An invasive medical procedure is a medical procedure that invades or goes within a body orifice or opening for the purpose of providing care for the infirm, the promotion of wellness, maintenance of health, and/or prevention of illness. Catheterization involves the insertion of a tube into a student’s bladder through the urethral opening for the purpose of eliminating urine from the student’s body. Respondent's teacher aides and teacher assistants are paraprofessionals. They are primarily designated to specifically meet the needs of those students who require daily catheterization. For more than 15 years, Respondent has continuously engaged in a practice of using paraprofessionals to provide health-related services, including catheterization. Such practice by Respondent is a policy of Respondent. Respondent’s principals assign paraprofessionals to catheterize students, who have a disability or infirmity, and cannot deviate from this practice without the approval from the Area Superintendent. Principals are permitted to use licensed nursing personnel to catheterize students only when the principals receive approval from the Area Superintendent. Respondent has a standard procedure, even though there are no written guidelines, for servicing students who need catheterization because of disability or infirmity. The standard procedure is compulsory and each principal must adhere to it. The following process comprises this standard procedure: The medical situation of the student with a disability or infirmity must be reviewed by an Individual Educational Plan (IEP) committee. The IEP committee determines what services the student needs. If the IEP committee determines that a student requires catheterization, the principal selects a paraprofessional from the school’s staff and assigns that paraprofessional to perform the catheterization. If no paraprofessional is available, the principal declares a vacancy and advertises the vacancy. Until a paraprofessional is hired to fill the position, the School Board contracts with an outside agency to have a licensed nurse provide the service. In advertising for the paraprofessional vacancy, the principal specifies on the job listing that the applicant must be willing to accept the responsibility to provide individual care for the student, including daily catheterization. The applicant’s willingness to catheterize the student is a condition of hiring and of continued employment. When the paraprofessional is identified, the paraprofessional is given child-specific training. The training usually takes approximately two hours and is required to catheterize a student without direct supervision. (The training is provided primarily to show the individual paraprofessional the proper technique based on the child’s specific condition.) Cassandra Bennett (Petitioner Bennett) is a teacher aide employed by Respondent at Thurgood Marshall Elementary School (Thurgood Marshall). Broward Paraprofessional Association (PPA) is the certified bargaining representative for teacher aides employed by Respondent. Petitioner Bennett is a member of the PPA. Petitioner Bennett received child-specific training. The principal at Thurgood Marshall assigned duties to Petitioner Bennett, which included, but were not limited to, catheterizing a student at Thurgood Marshall. Petitioner Bennett did not feel comfortable catheterizing the student because she believed that catheterization was a medical procedure which required a licensed individual, which she was not. Petitioner Bennett notified her principal of her position. Regardless, the principal at Thurgood Marshall required Petitioner Bennett to catheterize the student. Petitioner Bennett complied with the principal’s directive because Petitioner Bennett believed that a refusal to perform the catheterization would result in the loss of her job. Respondent assured PPA that no paraprofessional would be forced to perform catheterization on a student. Moreover, Respondent assured PPA that, if a paraprofessional refused to attend training or to perform a catheterization, no disciplinary action would be taken against the paraprofessional. After being contacted by the PPA regarding Petitioner Bennett’s situation, Respondent notified the principal at Thurgood Marshall, by memorandum dated October 23, 1997, that no paraprofessional, including Petitioner Bennett, could be forced or required to perform catheterizations, but that paraprofessionals could only volunteer to perform catheterizations. Thereafter, Petitioner Bennett was notified that she was not required, and would no longer be required, to perform catheterization. Respondent employs a Clinical Nursing Supervisor, Marcia Bynoe, who is responsible for the paraprofessional training program. She has been a practicing nurse for over 20 years and has been a nursing school instructor. Ms. Bynoe is unaware of any other situation, besides the case at hand, wherein non-medical professionals are given catheterization training with the expectation that they will perform the medical procedure in the course of their employment. Paraprofessionals were and are utilized by Respondent for the catheterization of a student with a physical disability or infirmity as follows: To administer the treatment to the student to maintain the student’s health as directed by the School Board’s [Respondent’s] principal at Thurgood Marshall Elementary School, with the approval of Ms. Bynoe, and the School Board’s [Respondent’s] Coordinator of Health Education Services (who is also a registered nurse). To observe and evaluate the student’s physical condition, behaviors, signs and symptoms of illness associated with the catheterization and reactions to the treatment; and to make a determination as to whether such conditions, behaviors, signs, symptoms and reactions represent a deviation from what is considered normal. Paraprofessionals were trained and [Petitioner] Bennett was instructed to observe the student, measure the quantity of urine, and to look for signs of cloudiness, blood, mucus, strong or unusual odor, or other signs of trauma or infection. The paraprofessionals administer the treatment, including catheterization, with the approval of Respondent’s nurse. Periodic monitoring of the treatment being provided to the disabled students is conducted by Respondent’s nurse. Catheters that are used to catheterize the students are reusable. The catheters must, therefore, be washed and put away after each use in accordance with the training provided by Respondent. Paraprofessionals come in contact with body fluids due to catheterizing a student on a daily basis. Failure of a paraprofessional, because of lack of knowledge, training, or experience, to follow universal safety precautions or dispose of waste properly in performing the catheterization of a student who may have a contagious or infectious disease, can cause a life- threatening risk of contamination to other staff members, other students, the paraprofessional’s family, and the general public at large. Respondent is not aware of any other setting where unlicensed persons, other than the patient’s family members or the patients themselves, are trained to perform medical procedures like catheterization with the expectation that the unlicensed persons will be permitted to perform invasive medical procedures. Respondent’s non-medical personnel are not even permitted to give students injections. Some paraprofessionals are designated as surplus or excess and are placed on a surplus or excess list. Respondent’s representative who is responsible for the surplus or excess list of paraprofessionals requires these paraprofessionals to perform catheterization, if needed, in order to work. A list of vacancies is forwarded by Respondent to these paraprofessionals. The list of vacancies may contain positions which require a paraprofessional to perform catheterization. The excess paraprofessional must choose one of the listed positions, even a position that requires catheterization, or face termination. This requirement is contrary to Respondent’s pronounced position of not requiring paraprofessionals to perform catheterizations but making catheterization a voluntary act on the part of paraprofessionals. At some of Respondent’s school sites, paraprofessionals and other non-medical personnel are also being permitted or allowed to provide catheterization or supervise self- catheterization for students who have physical disabilities or infirmities. Paraprofessionals and the other non-medical personnel are monitored periodically by a nurse. Respondent has a policy, which includes its standard procedure, of utilizing paraprofessionals to catheterize students who have physical disabilities or infirmities. Respondent’s policy substantially affects its paraprofessionals, who are PPA members, at Respondent’s school sites attended by students, whose physical disability or infirmity requires catheterization. Respondent’s policy also substantially affects the special-needs children, themselves, and their parents. Chapter 232, Florida Statutes, is applicable to the case at hand. During the 1996 Legislative Session, the Florida Legislature passed an amendment to Chapter 232, by way of Committee Substitute for House Bill 483 (CS/HB 483), which became law without the governor’s signature and which took effect on July 1, 1996. The amendment is found at Chapter 96-294, Laws of Florida, and embodied in Florida Statutes at Section 232.465. The Final Bill Analysis for CS/HB 483 states, in pertinent part, as follows: SUMMARY: * * * [The bill] also prohibits certain medical services by nonmedical school district personnel in order to ensure that such nonmedical school district personnel are properly trained in the administration of medication and that these personnel refrain from performing invasive procedures. Invasive procedures include, but are not limited to: cleaning intermittent catheterization; providing sterile catheterization; cleaning and maintaining a tracheostomy; providing gastrostomy tube feeding; monitoring blood glucose; and administering injectable medications. SUBSTANTIVE ANALYSIS: PRESENT SITUATION: * * * In many situations, teachers are administering medical procedures, and there is a feeling that this goes beyond their "scope of academics" [sic]. Many instances exist where there are special needs children, requiring such procedures as catheterization, gastrostomy tube feeding (inserting tubes for feeding into the stomach), and the injection of medications. EFFECT OF PROPOSED CHANGES: The bill requires school district nonmedical personnel who administer prescribed medication to be trained by medical personnel. It also requires review of cases in which medications are administered and prohibits nonmedical personnel from performing invasive medical services such as cleaning intermittent catheterization, providing sterile catheterization, cleaning and maintaining a tracheostomy; providing gastrostomy tube feeding; monitoring blood glucose; and administering injectable medications. * * * SECTION-BY-SECTION ANALYSIS: * * * Section 2. Creates s. 232.465, F.S., to indicate that nonmedical school district personnel shall not be permitted to perform invasive medical services, including, but not limited to, cleaning intermittent catheterization; providing sterile catheterization; cleaning and maintaining a tracheostomy; providing gastrostomy tube feeding; monitoring blood glucose; and administering injectable medications. Provides that each school board shall establish emergency procedures for life- threatening emergencies. Section 232.465, Florida Statutes (Supp. 1996), provides in pertinent part: Nonmedical school district personnel shall not be allowed to perform invasive medical services that require special medical knowledge, nursing judgment, and nursing assessment. The procedures include, but are not limited to: Sterile catheterization. Nasogastric tube feeding. Cleaning and maintaining a tracheostomy and deep suctioning of a tracheostomy. Nonmedical assistive personnel shall be allowed to perform health-related services upon successful completion of child-specific training by a registered nurse, a licensed practical nurse, a physician licensed pursuant to chapter 458 or chapter 459, or a physician assistant certified pursuant to chapter 458 or chapter 459. All procedures shall be monitored periodically by the nurse. Those procedures include, but are not limited to: Cleaning intermittent catheterization. Gastrostomy tube feeding. Monitoring blood glucose. Administering emergency injectable medication. For all other invasive medical services not listed in subsection (1) or subsection (2), a registered nurse, a licensed practical nurse, a physician licensed pursuant to chapter 458 or chapter 459, or a physician assistant certified pursuant to chapter 458 or chapter 459 shall determine if nonmedical school district personnel shall be allowed to perform such service. CS/HB 483 was amended at the committee level in the Florida House of Representatives, and subsections (1), (2), and (3) of Section 232.465, reflect that amendment. The Florida House of Representatives substituted CS/HB 483 for CS/SB 1114 which contained the same wording as the aforementioned amendment. The Senate Staff Analysis and Economic Impact Statement for CS/SB 1114 states in pertinent part: 3/ Summary: This bill requires district school boards to have certain qualified medical professionals train school-based personnel . . . Non- medical assistive personnel, who have successfully completed child-specific training by an RN or LPN, may perform certain health-related services (e.g., cleaning intermittent catheterization; gastrostomy tube-feeding; monitoring blood glucose; or administering emergency injectable medications). A RN must determine whether nonmedical school district personnel may do other invasive procedures. . . . . * * * This bill amends s. 232.46, Florida Statutes, and creates s. 232.465, Florida Statutes. * * * III. Effect of Proposed Changes: Nonmedical school district personnel are prohibited from performing invasive medical services (e.g., sterile catheterization, nasogastric tube-feeding, or cleaning and maintaining a tracheostomy) that require special knowledge or nursing judgement/assessment. Nonmedical assistive personnel, who have successfully completed child-specific training by an RN or LPN may perform health-related services, such as cleaning intermittent catheterization; gastrostomy tube-feeding; monitoring blood glucose; or administering emergency injectable medications. An RN must determine whether other invasive medical services may be done by nonmedical school district personnel. Each school board must establish procedures for life-threatening emergencies. The changes made by this bill protect the health, safety, and welfare of both public school students and school district personnel. The Senate Staff Analysis also contained the following statement on the last page: "This Senate staff analysis does not reflect the intent or official position of the bill’s sponsor or of the Florida Senate. 4/ Attached to the Senate Staff Analysis was a one-page document entitled "STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN COMMITTEE SUBSTITUTE FOR SB 1114," which states in pertinent part the following: 5/ [P]rohibits nonmedical school district personnel from performing certain invasive medical procedures that require medical or nursing knowledge. Allows nonmedical assistive personnel to perform health-related services upon successfully completing child-specific training by an RN and with periodic monitoring by the nurse. Requires an RN to determine whether nonmedical school district personnel may perform other invasive medical services. It is clear that the staff analysis for CS/HB 483 is inaccurate, regarding the prohibition of non-medical personnel from performing invasive techniques upon completing child- specific training by a nurse, with periodic monitoring by the nurse, and the nurse approving non-medical personnel performing other invasive techniques. The staff analysis failed to reflect that there was no prohibition under the conditions aforementioned. Catheterization performed by the paraprofessionals requires some degree of special medical knowledge, nursing judgment, and nursing assessment. However, the catheterization is permitted by Section 232.465, Florida Statutes (Supp. 1996). Respondent has not engaged in rulemaking regarding the implementation of Subsection 232.465(2), Florida Statutes (Supp. 1996).
The Issue The issue is whether the application for the certificate of need for a cardiac catheterization laboratory filed by Humana Hospital Bennett should be approved. The proceeding is governed by Section 381.705(1), Florida Statutes (1987), and Rule 10-5.011(1)(e), Florida Administrative Code. Humana Bennett and the Department maintain that Section 381.705(2), Florida Statutes, is inapplicable to this matter, but the other parties believe that statute applies. Not all subsections of these statutes or rules are in dispute, however. According to the prehearing stipulation, the following are either not in dispute or inapplicable: 1. Section 381.705(1) (c) , (e) , (f) , (g) (h) [except for the applicant's ability to recruit health manpower resources], (i),(j),(k),(m) 2. As to Section 381.705(2), subsection (e) is not in dispute. 3. As to Rule 10-5.011(1) (e), the following subparagraphs are not in dispute: 7.a., 7.b., 7.c., 7.d., 8.a., 8.b., 9.a., 9.c., 9.d., 9.e. (II) and (III), 13., 14., and 15.b. The parties dispute whether the application of Humana Bennett meets the following statutory and rule criteria for a certificate of need: 1. Section 381.705(1) (a), (b) , (d) , [as to health manpower] (1), and (n). As to Section 381.705(2), the following: (a) , (b) , (c) , and (d). 3. As to Rule 10-5.011(1) (e) , the following: 8.c., 9.b., 9.e.(I), 10., 11., 12., 15.a., and 15.c. FINDINGS OF FACT Description of the parties and their characteristics Humana Hospital Bennett is a 204-bed, acute care medical surgical hospital located in west central Broward County. It is the westernmost facility in Broward County. It is owned by Humana, Inc., and operated or profit. Western Broward is growing faster than the mature communities on the Atlantic Coast. Humana Bennett is fully accredited by the Joint Commission on Accreditation of Hospitals, and provides an array of services for the diagnosis and treatment of coronary disease including electrocardiology, echocardiology, nuclear medicine heart studies, stress testing, and other non-invasive procedures. It does not offer open heart surgery. Humana Bennett also has a 14-bed intensive care/coronary unit, a 22-bed intermediate care unit, and a progressive cardiac rehabilitation program. The Humana medical staff is composed of 460 physicians, 28 of whom specialize in the treatment of cardiovascular disease; 24 of these 28 are board- certified in cardiology. An additional 12 physicians are board-certified in cardiovascular and thoracic surgery. About 63% of all discharges at Humana are cardiac- related. This percentage has increased over time. In fiscal year 1985 52.3% of discharges were cardiac-related. Humana Bennett has contracts with health maintenance organizations for hospital services. These include the Humana Care Plus and International Medical Center health maintenance organizations which are owned and operated by Humana, Inc. About 65,000 Broward County residents are subscribers to these plans. The Humana Bennett catheterization laboratory would involve 2,500 square feet of new construction and 750 square feet of renovation. The hospital projects that the laboratory will be operational by September 1989. The laboratory would be capable of providing a full range of diagnostic cardiac catheterization procedures, which would include a cardiac catheterization laboratory, a control area, a storage area, a darkroom, and other related preparation, recovery and support areas. The total project cost would be approximately $1,302,600. There are both diagnostic and therapeutic uses for catheterization; the therapeutic uses include angioplasty. By Department rule, only a hospital with an open heart surgery program may perform angioplasty. Humana Bennett's laboratory could perform only diagnostic catheterizations. The South Broward Hospital District was created by a special act of the 1947 Florida Legislature, Chapter 24415, Laws of Florida, as an independent taxing authority. It does not operate to produce a profit. It was created to provide health care services to the residents of south Broward County by constructing and operating health care facilities serving all types of health care needs within its boundaries. It provides services without regard to the ability of district residents to pay for health care. The service areas of South Broward's hospital (Memorial Hospital) and Humana Bennett overlap, and numerous physicians are on the staff of both facilities. If the Humana Bennett application is approved, the number of cardiac catheterizations performed at Memorial Hospital will be reduced. The catheterization laboratory at Memorial Hospital generates a substantial amount of income for South Broward Hospital District. The initiation of catheterization services at Humana Bennett would reduce revenues at Memorial Hospital without any offsetting reduction in costs at Memorial. The substantial interests of the South Broward Hospital District are affected by the application filed by Humana Bennett. Over the years, Memorial Hospital has been expanded from a 100-bed facility to a 737-bed full service hospital. It is the only hospital in south Broward County which provides cardiac surgery, cardiac catheterization, physical rehabilitation with a distinct comprehensive unit, psychiatric services, pediatric surgical services, pediatric intensive care, full service neonatology, new born intensive care and progressive care, high-risk obstetric maternity care, and residential substance abuse programs. Some of the services Memorial Hospital provides are operated at a loss. Uncompensated care amounted to 22.1% of South Broward Hospital District's gross revenue in fiscal year 1987. The District projects that $44.9 million will be spent in the current fiscal year for uncompensated care. Operating revenues and the District's power to levy property taxes pay for the services provided to indigents. Memorial Hospital is the primary provider of services to the indigent and medically needy in south Broward County. Florida Medical Center is a 459-bed acute care hospital. It provides a broad range of cardiology services, including cardiac catheterization. It currently operates three separate cardiac catheterization laboratories. The first laboratory opened in 1974, the second two were equipped in 1983. The second laboratory was fully staffed at that time but the third was only fully staffed in December 1987. FMC has the present ability to perform three cardiac catheterization procedures simultaneously in its laboratories and the staff to perform procedures in that manner. Its third laboratory was opened primarily to accommodate the desire of physicians to perform catheterizations in the morning and is also used for other purposes. Florida Medical Center is located within five to six miles of Humana Bennett and under normal driving conditions the drive between the facilities takes 15 to 20 minutes. Florida Medical Center and Humana Bennett compete for patients within the same geographic area. Approximately 73% of the cardiac catheterizations performed at Florida Medical Center during 1987 were performed by physicians who are also on the staff of Humana Bennett. If the new cardiac catheterization service for Humana Bennett is approved, Florida Medical Center will lose patients and will therefore perform fewer catheterization procedures. Florida Medical Center would lose revenue without any offsetting reduction in its costs. The interests of Florida Medical Center are substantially affected by the CON application filed by Humana Bennett. Plantation General Hospital is a 264-bed general acute care hospital located in Plantation, Florida, which is in central Broward County. It is owned by and operated for profit by HealthTrust, Inc. It offers a broad range of cardiology services including cardiac catheterization. Its cardiac catheterization laboratory opened in April 1985. Plantation General is located approximately three and a half miles from Humana Bennett. Plantation General and Humana Bennett compete for substantially identical service areas and have overlapping medical staffs. Of the 37 cardiologists on the staff of Planation, 24 are also the on staff of Humana Bennett. Ten of 14 physicians performing cardiac catheterization procedures at Planation are on the staff of Humana Bennett. Approval of a cardiac catheterization service at Humana Bennett would result in fewer catheterizations being performed at Plantation. Plantation would suffer a loss of revenue without any offsetting reduction in costs. The interests of Plantation General Hospital are substantially affected by the CON application filed by Humana Bennett. FACTUAL FINDINGS CONCERNING THE APPLICABLE CRITERIA AGAINST WHICH THE APPLICATION MUST BE EVALUATED The criteria to be used in evaluating the application are found in statutes, and in the rules of the Department of Health and Rehabilitative Services which implement those statutes. The application will first be analyzed for consistency with Section 381.705(1), Florida Statutes, and, to the extent the rules make those criteria more specific, those considerations will be discussed in a later portion of this order. Consistency with Statutory Criteria Consistency with the state health plan and the District X local plan. Section 381.705(1) (a), Florida Statutes. a. The district health plan The District X Health Plan for 1985 is the most recent complete plan, and was the plan in effect when the Humana Bennett application was filed. it contains three recommendations relevant to approval of cardiac catheterization services. These are: Applicants for certificate of need approval should document either their intention and/or experience in meeting or exceeding the standards promulgated for the provision of cardiac catheterization and/or cardiac surgery by the appropriate national accreditation organization(s). Applicants proposing to initiate or expand cardiac catheterization or cardiac surgery must make their services available to all segments of the population regardless of the ability to pay. The provision of new cardiac catheterization or cardiac surgery programs should not be approved unless they meet or exceed the standards and criteria set forth by HRS. Humana Bennett is currently accredited by the Joint Commission on the Accreditation of Hospitals, and proposes to seek accreditation of its cardiac catheterization laboratory if approved. In 1985, Humana Bennett provided 1.2% of the total uncompensated care provided by Broward County hospitals. Humana Bennett's application, as revised in June 1987 in response to an omissions letter from the Department, proposed to provide 1% of patient days to Medicaid patients, 45% of patient days to Medicare patients, 43% of patient days to insurance patients, and 11% of patients days to private pay patients (Humana's exhibit 3, page 87).1/ Humana Bennett also has a Medicaid contract. Humana has the following emergency care policy for its hospitals Facilities will provide emergency care without regard to the patient's ability to pay. An indigent patient will be treated just as any other patient, and will receive whatever care is required to stabilize his/her condition. Non-emergency patients must make payment or arrangement for payment, before health services are delivered to them. (Humana exhibit 3, page 54.) For purposes of the Humana Bennett emergency care policy, indigent patients include "patients who are not eligible for Medicare or Medicaid, who do not have private or employer- provided health insurance, and who are unable to pay for their health care." Emergency patients are defined as patients "in a life or health threatening situation who require immediate treatment or hospitalization." After an attending physician determines that an indigent patient is stabilized, the patient is transferred to a hospital which receives government funds for indigent care; the Humana Bennett manager must approve this action before it is taken. All actions, including the attending physician's approval, are documented and maintained in the patient's business office folder. These policies indicate no substantial commitment to indigent care. Cardiac catheterization is not ordinarily an emergency procedure, but a diagnostic one. The existing emergency care policy, therefore, indicates that practically no catheterization will be done for indigents. This is inconsistent with the local health plan's requirement to make catheterization services available to all segments of the population. The application update submitted by Humana (exhibit 6, pro forma income statement) shows initial total patient revenues of $543,750, with a deduction of $27,188 for "indigent care/bad debt." This allowance is an indication of the amount the hospital expects to be unable to collect from patients it admitted with the expectation of payment. It is not the result of any community outreach to provide catheterization services to indigent residents of Broward County. The State Health Plan The 1985-87 State Health Plan discusses cardiac catheterization at pages 94 through 96. In the portion entitled "Criteria and Standards," the State Health Plan quotes from the Inter-Society Commission on Heart Disease Resources concerning the need for physical proximity and relationships between diagnostic catheterization facilities and open heart surgery programs. According to the Inter-Society Commission: ... there can be little justification for the development of these highly specialized facilities (cath labs) unless expertise in cardiology, cardiovascular radiology, and cardiovascular surgery are immediately available. Optimally therefore, catheterization laboratories should be located only in institutions with well organized and closely related programs of cardiovascular surgery. ... such an arrangement not only facilitates close inter-disciplinary cooperation and minimizes unnecessary, repetitive, inadequate, or unsafe diagnostic studies, but it also allows prompt intervention should life threatening complications develop during catheterization studies....it should be emphasized... that separation of the diagnostic laboratory from the surgical facility is less than optimal and may present serious problems. The National Health Planning Guidelines supports this emphasis through a recommendation that no new cardiac catheterization unit be opened in any facility not providing open heart surgery. (Humana exhibit 8) (emphasis supplied) Because there is no open heart surgery program at Humana Bennett, the proposal is inconsistent with the State Health Plan's clear preference for locating catheterization laboratories at facilities where open heart surgery is available. As discussed in section II B.3. of this order infra, the absence of a written referral agreement in the Humana Bennett application, identifying a facility with open heart surgery capability to which patients needing immediate open heart surgery will be transferred, is a serious deficiency in the application. 2. Availability, quality of care, efficiency, appropriateness, accessibility, extent of utilization and adequacy of existing services. Section 381.705(1)(b), Florida Statutes There is no contention that existing cardiac catheterization laboratories in District X failed to provide quality care, and there is no geographic problem with the availability of catheterization services. Nothing in the Humana Bennett application would expand the availability of these services to segments of the population that are not currently being served for economic reasons. The issue of the efficiency and extent of utilization of existing services raises the question whether there is additional capacity in existing catheterization laboratories which ought to be utilized in preference to incurring the capital expenditure involved in constructing and equipping a catheterization laboratory at Humana Bennett. This consideration is related to the need calculation made under the Department rule discussed in a later portion of this order. When the Humana Bennett application was filed there were 10 existing laboratories in District X: one at Broward General, two at FMC, two at Holy Cross Hospital, two at North Ridge Medical Center, one at Plantation General, one at North Broward Medical Center, and one at Memorial Hospital. Shortly before the final hearing, Holy Cross Hospital reported that the physician who operates the catheterization laboratories there under contract with the hospital, Dr. Zachariah, had added a third laboratory. That physician opened the third laboratory for his own convenience, not because the volume of his practice required it. Florida Medical Center also added an additional laboratory for the convenience of cardiologists who practice there, which it also uses for other procedures. Expansion by existing providers can take place without certificate of need approval when the capital expenditure needed for expansion is less than one million dollars. These existing providers were able to add laboratories without the necessity of HRS approval. An additional laboratory also has been added to District X by the approval of the lab for imperial Point Medical Center, which had applied in the same batching cycle as Humana Bennett. No party objected to the issuance of that certificate of need, and therefore it should be considered in determining the statutory issue of the extent of the utilization and adequacy of like and existing health care services, because its services will be available at the planning horizon year, 1989 Humana Bennett could have prevented the consideration of that capacity by objecting to the grant of the certificate of need to Imperial Point and requiring a comparative hearing on the competing applications of Humana Bennett and Imperial Point but it decided not to do so. Some of the existing providers have argued that existing unused capacity at their facilities should be taken into consideration in determining whether there is a need for the Humana Bennett laboratory. Rule 10- 5.011(1)(e)12., Florida Administrative Code, provides in part that: The need for cardiac catheterization capacity in a service area shall be determined by computing the projected number of cardiac catheterization procedures in the service area. The capacity issue is therefore controlled by the provisions of the rule and will be discussed under the rule calculation. That competitors maintain they can provide more catheterizations than the rule projects for each provider is not legally relevant under this subsection of the statute. 3. The availability and adequacy of other health care services which may serve as alternatives to the services to be provided by the applicant. Section 381.705(1) (d), Florida Statutes. There is no persuasive evidence that there are other diagnostic procedures which serve as an alternative to cardiac catheterization which should be utilized in preference to catheterization. 4. Availability of resources including health manpower. Section 381.705(1) (h), Florida Statutes Nurses and technicians who work on cardiac catheterization teams have specialized skills and these skilled employees are difficult to recruit and retain. The proof demonstrates, however1 that Humana Bennett can staff the positions necessary for its catheterization laboratory by national recruitment and by cross-training of in-house nursing and radiology personnel. A catheterization lab requires cardiac care R.N.s, radiology technicians, and a specialized procedure/cardiovascular technician. Critical care nurses at Humana Bennett have already expressed an interest in becoming cardiac catheterization R.N.s and critical care nurses can easily be trained as cardiac catheterization nurses. Similarly, cross-training of existing radiology employees can fill the radiology technician positions. Humana Bennett has already received three resumes from cardiovascular technicians. 5. Probable impact of the proposed project on the cost of providing health services proposed by the applicant upon consideration of factors including, but not limited to, the effects of competition on the supply of health services being proposed. Section 381.705(1) (1), Florida statutes Humana Bennett projects gross revenue charges during the first year of operation of the catheterization laboratory of $1,450 and a net revenue per procedure in the first year of $913. The net revenue figure is lower because it reduces gross revenue by contractual allowances due to HMO/PPO discounts, and the difference between the hospital's customary charge and the amount reimbursed by Medicare or Medicaid for catheterization procedures. The gross charge for the second year of operation is $1,500 with a net revenue per procedure of $945. These projected charges are about the same as those charged by existing providers; FMC charges currently about $1,400-$1,500 with a net revenue of about $1,200-$1,300 for inpatient catheterizations. During the first four months of calendar year 1987, South Broward Hospital District (Memorial Hospital) charged about $1,431 for catheterizations. Plantation General charged approximately $2,300. Thus, there will be no increase in the charge for such procedures due to additional competition. There was no evidence from any existing provider that entry of Humana Bennett into the catheterization market would cause it to lose revenue to the point where any existing provider would withdraw from the catheterization market and thereby contract the supply of catheterization services. Providers do not have the option of simply raising charges to compensate for diminished market share because Medicare, Medicaid, and HMO/PPO charges are fixed, and open market competition will drive private pay patients to lower cost providers. Obviously, the entry of an additional provider into the market will reduce the current market share which existing providers enjoy. The certificate of need statute is not meant to protect competitors' incomes. While existing providers will be affected, the increased competition would be a positive impact, with the exception of the impact on the public health care provider, South Broward Hospital District. If the Humana Bennett catheterization laboratory is approved, South Broward Hospital District would lose approximately 50% of the catheterization procedures it now provides to persons who live in Humana Bennett's service area, and also would lose 10% of the referrals for open heart surgery or therapeutic catheterizations (angioplasty) for patients it would have served, but for the laboratory at Humana Bennett. The South Broward Hospital District would lose about $324,000 of net revenue. In 1987, South Broward Hospital District provided $41,392,000 in uncompensated care. Approximately 11 million dollars was provided by tax revenues and 30 million dollars was provided from profitable operations. This $324,000 probable loss in net revenue would add to the public hospital district's burden, but this revenue loss is not grave enough to restrict the entry of another competitor into the catheterization market in and of itself. 6. The applicant's past and proposed provision of health care services to Medicaid patients and the medically indigent. Section 381.705(1) (n), Florida Statutes Humana Bennett maintains a Medicaid contract and does admit and treat Medicaid patients who present themselves. In fiscal year 1987, 5.31% of Humana's gross revenues were provided for uncompensated care, which equates to 3.15 million dollars. There is, however, no proof that this figure is anything other than money which the hospital had expected admitted patients to pay, but which, for whatever reasons, went unpaid. Accordingly, the proof is not persuasive that any portion of that 3.15 million dollar amount was generated by a conscious commitment on the part of Humana Bennett to provide hospital services to indigents on a charity basis. While prudent accounting requires a for-profit hospital to have a reserve for bad debts, it is not entitled to have its application viewed more favorably by passing off its bad debt reserve as if it were charity care. This factor, therefore, does not enhance the Humana Bennett application; neither does it detract from it. Consistency with rule criteria Service accessibility to undeserved population groups. Rule 10-5.011(1) (e)8.c. Florida Administrative Code This rule criteria requires little additional analysis to that already expressed above in Section II. A.1 and 6 of this order under Section 381.705(1)(b) and (n), Florida Statutes. While the applicant does propose to serve all persons needing catheterizations, including Medicare and Medicaid patients, the Medicaid projected utilization is only 1%, which is essentially cosmetic. It shows no real commitment to serve the medically needy and shows no commitment to indigent patients, as distinct from that group of patients which may be served but who may not pay their bills, thereby producing "bad debt" on the hospital's books. The emergency policy of the hospital is such that indigents would be eligible to be served in the unlikely event catheterization was needed on an emergency basis. The application, therefore, is sufficient to meet the requirements of this portion of the rule. The means by which it does so, however; does not enhance the application when balancing all of the statutory and rule criteria to determine whether the application should be granted. 2. Availability of health personnel. Rule 10- 5.011(1) (e)9.b., Florida Administrative Code The proof demonstrates that Humana Bennett has documented the ability to staff its cardiac catheterization laboratory under the standards in this rule. 3. Coordination of services. Rule 10-5.O11(1)(e)9.e.(I) Florida Administrative Code The rule requires that proposed cardiac catheterization laboratories and facilities not performing open heart surgery must submit, at the time of certificate of need application, a written referral agreement with a facility providing open heart surgery services which is within 30 minutes' travel time by emergency vehicle under average travel conditions. (emphasis supplied) It is undisputed that no referral agreement was included when Humana Bennett filed its application. Humana argues that it sought referral agreements with hospitals in the service district which offered open heart surgery, including Broward General Hospital, North Ridge Medical Center, Holy Cross Hospital, and Memorial Hospital, but none of those hospitals agreed to accept transfers from Humana Bennett. The executive director of Humana Bennett personally contacted an official of Florida Medical Center to obtain a referral agreement. That official specifically declined to enter into a referral agreement in order to prevent Humana Bennett from competing with FMC for cardiac catheterization services. There is no evidence that the other hospitals declined to enter into a referral agreement simply to block Humana Bennett's application. It may be that those other hospitals had other valid reasons for declining to enter into referral agreements. Nothing to the contrary was proven. Eventually, Humana Bennett did receive a referral agreement from the executive director of North Ridge Medical Center. It is dated January 8, 1988, six months after the Department of Health and Rehabilitative Services declared the Humana Bennett catheterization laboratory application complete. (Humana exhibit 30) Due to the absence of a referral agreement, the Humana Bennett application should have been rejected by the Department as incomplete when submitted. 4. Service costs. Rule 10-5.011(1)(e)10. Florida Administrative Code 43. The cost for cardiac catheterizations to be provided by Humana Bennett is projected to be about the same or less than the charges of current providers. The projected charges are reasonable. The application meets this portion of the rule. 5. Relationship with the state and local health plans. Rule 10-5.011(1) (e)11. Florida Administrative Code 44. This matter has already been discussed in Section II A.1. of this order with respect to statutory criteria 381.705(1) (a), Florida Statutes, and will not be repeated, except to say that the application is not consistent with the local and state health plans and therefore does not meet this rule criteria. 6. Need determination. Rule 10-5.011(1)(e)12. and 15. Florida Administrative Code The Department's rule provides that it will "not normally" approve applications for new cardiac catheterization services unless need is shown as calculated through an algorithm. See Rule 10-5.011(1)(e)6., Florida Administrative Code. The algorithm is found at Rule 10-5.011(1)(e)12., Florida Administrative Code. Several versions of how the formula should be applied were presented at the hearing. Witnesses for Humana Bennett and the Department of Health and Rehabilitative Services found need for an additional catheterization laboratory in Broward County according to their analysis of how "need" is defined in the algorithm. Health planners for FMC and South Broward Hospital District applied the algorithm in a manner demonstrating that there is no need for an additional catheterization service. The interpretations differed in two respects. First, the health planners disagreed on the number of catheterization procedures that were performed during the 12- month period that is used under the rule to establish an historical use rate, i.e., the number of procedures performed per 100,000 population in the district in the past. They also disagreed as to the number of catheterization laboratories presently operating in Broward County. The algorithm projects the number of catheterization "procedures" that will be performed for the year in which the catheterization laboratory will begin service. The laboratory obviously will not open on the date the application is filed; but at some date in the future. That future time is the "planning horizon" for which a projected use rate in the service area is determined. An actual use rate is first determined. It is the number of catheterizations performed per 100,000 population during the 12-month period which begins 14 months prior to the date the health care facility must file its letter of intent to file an application for a new service. This actual use rate is multiplied by the projected population at the planning horizon and then divided by 100,000. The result is the projected number of procedures at the planning horizon. The projection is divided by 600 in order to establish the number of catheterization laboratories that can be approved in the District. The number of existing laboratories is subtracted from that number to determine how many, if any, additional laboratories should be approved. It is important to determine the number of "procedures" performed in the applicable 12-month period to determine the actual use rate. The higher that number, the higher will be the number of projected procedures, and therefore the more likely it will be that additional laboratories may be approved. Rule 10-5.011(1) (e)2. and 4., Florida Administrative Code, defines the terms "cardiac catheterization" and "procedure" as follows: 2. Cardiac Catheterization. Cardiac catheterization is defined as a medical procedure used as a diagnostic and therapeutic tool for heart and circulatory conditions.... * * * 4. Procedure. Procedure means an angiographic study, a physiologic study or a therapeutic activity within a cardiac catheterization laboratory which utilizes the equipment customarily used in cardiac catheterization. These definitions are unclear because they are circular--a catheterization is defined as a procedure, and a procedure means a study utilized in cardiac catheterization. The term "study" is not defined by rule. Florida Medical Center contended that when a patient visited a cardiac catheterization laboratory, more than one study might take place as tubes are inserted into a blood vessel in the patient's arm or leg to diagnose circulatory conditions. Even if a patient undergoes multiple studies during one visit to the laboratory only one catheterization "procedure" takes place. In contrast, the Department of Health and Rehabilitative Services and Humana Bennett argued that if one patient underwent multiple studies during one visit, each should be counted as a different procedure. The substantive portions of Rule 10-5.011(1) (e) variously use the term catheterization or procedure. For example, in setting a minimum service volume for laboratories, Rule 10-5.011(1) (e)9.d. requires a minimum service volume defined in terms of cardiac catheterizations. On the other hand, in the need algorithm, the calculation is based upon the number of cardiac catheterization procedures. See Rule 10-5.011(1)(e)12., Florida Administrative Code. Rule 10-5.011(1) (e)15.a.(I), and c. further add to the difficulty in interpreting the rule by using the words "catheterization" and "procedure" interchangeably: There shall be no additional adult cardiac catheterization laboratories established in a service area unless: (i) The average number of catheterizations performed per year by existing and approved laboratories performing adult procedures in the service area is greater than 600;.... * * * Applications proposing to establish cardiac catheterization laboratories will not be approved if they would reduce the average volume of procedures performed by laboratories in the service area below 600 adult procedures. ...(Emphases added) The State Health Plan, Volume II, at page 95 contains a discussion which is informative on the issue of whether, in applying the need algorithm, one should count individual studies on a patient or patient visits, stating: Up until 1977 the literature showed a consensus on the need for minimum caseloads. Since 1977, expert opinion has become more divided on the issue, with many provider representatives advocating that the standards now reflected in federal and many state laws are no longer necessary and justifiable. However, a general opinion among the medical profession is that a certain minimum caseload is essential to assure quality results. ...The established federal and state minimum standards of 300 procedures annually for adult [patients] ... are believed to be adequate to maintain the expertise of the professional team engaged in this highly specialized service. (Humana exhibit 8) (Emphasis added) Thus, the term "cases," which focuses on number of patients, and "procedures" appear to be used synonymously. The National Health Planning Guidelines are referenced in the State Health Plan and were influential in the drafting of the catheterization rule. The Guidelines were published in the Federal Register on March 29, 1978, and Section 121.208(a) (1) of the Guidelines stated: There should be a minimum of 300 cardiac catheterizations,...within 3 years of initiation. in subsection (b), the Guidelines stated: Based on recommendations from the Inter-Society Commission on Heart Disease Resources, the Department [of Health, Education and Welfare] believes that a minimum level of 300 catheterizations per year is indicated to achieve economic use of resources. The report of the Inter-Society Commission on Heart Disease Resources, referenced in both the State Health Plan and the National Health Planning Guidelines, also assist in interpreting the use of the terms "catheterizations" and "procedures" in the Florida rule. That entity publishes a journal, Circulation, in which it is stated: To maintain adequate performance levels and to minimize risks, each team of physicians should perform, on the average, at least 600 adult examinations* a week, or 300 cases per annum. *An examination includes all cardiac diagnostic procedures (angiographic and physiologic studies) performed on a patient during one session in the laboratory. Report of the Inter-Society Commission for Heart Disease Resources. Circulation, Volume 53, No. 2, page 8-9 (1976) The Society's publications indicate an understanding that many patients have multiple procedures and specifically rejected a further breakdown of their caseload recommendation: in considering this matter, we have decided against further breakdown of caseload recommendations. The number of patients requiring only angiographic or physiologic evaluation is rapidly decreasing: in most cases both angiographic and selected hemodynamic studies are now performed. Therefore, in the hands of an appropriately trained and experienced team these "mixed" caseloads generally should be adequate to maintain an acceptable level of performance. Id. The Inter-Society Commission reports used the terms "procedure" and "case" interchangeably: Laboratories supporting an active coronary surgical program may generate a caseload close to 9 procedures a week or 450 cases per annum. Id. The representative of the Department of Health and Rehabilitative Services testified at the hearing, and stated her view that when referring to a minimum service volume of 300 catheterizations annually, Rule 10-5.011(1) (e)9.d. was speaking of the number of procedures, which could be 100 patients receiving 3 procedures, 150 patients receiving 2 procedures, or 300 patients receiving 1 procedure. Clearly more than one "procedure" can be performed during a visit to a laboratory, often through a single catheter inserted into a patient on a single occasion. Many of these "procedures" take just a few minutes. Each procedure or study may generate a separate billing to the patient, however. The more persuasive proof on how to properly county "procedures" under the rule was presented by FMC's expert health planner, Mr. Konrad, whose opinions are credited. Mr. Konrad had been employed with the Department of Health and Rehabilitative Services and had developed the first State Health Plan. He testified that the existing rule on cardiac catheterization came from the Inter-Society Commission for Heart Disease Resources Report, which is referenced in the Federal Health Planning Law. While the Florida rule has been amended since its first promulgation, no amendment has altered the original concept regarding the definition of procedure. According to Mr. Konrad the procedure means "a case" and all studies performed during one visit to the catheterization lab constitute one procedure. The number of cardiac catheterization procedures that were performed in laboratories in HRS District X during 1986 was 7,611. The laboratories then operating were located at Broward General, FMC, Holy Cross Hospital, North Ridge, Plantation General, North Broward Medical Center, and Memorial Hospital. The counts for the numbers of procedures performed at these laboratories were reported by the facilities to the District X Local Health Council. FMC originally reported it performed 2,166 procedures in 1986. Subsequently, officials at FMC realized their figures were erroneous and notified the Local Health Council and the Department that the correct number of procedures was 1,840. The lower figure is correct. The difference in figures is accounted for by the confusion over whether a single cardiac catheterization was a "procedure" or whether a single patient catheterized for a number of studies should have been recorded as the number of "procedures" equal to the number of studies performed. This reduces the total number of procedures performed in District X during 1986 to no more than 7,611. Fewer procedures than that were likely performed, because the Local Health Council never defined the term "procedure" for the hospitals reporting to it. Consequently the numbers are probably inflated somewhat because some hospitals incorrectly counted each study as a procedure, rather than counting only the number of patient visits for catheterization as one "procedure". The July 1986 population of Broward County was 1,165,922. This figure is divided by 7,611 to produce an actual cardiac catheterization use rate per 100,000 for District X in 1986, of 652.78. The total projected population for District X during 1989, the year in which Humana Bennett intends to open its service, is 1,234,484. When the 1986 use rate is applied to this population, the estimated number of procedures for 1989 is 8,058. This figure is then divided by 600 according to Rule 10- 5.011(1)(e)15.a.(I), Florida Administrative Code, to produce the number of laboratories needed in the District at the planning horizon, which is 13. At the time the application was submitted, there were 10 existing cardiac catheterization laboratories in the district. North Broward Hospital District filed in the same batch as Humana its application for a catheterization laboratory at Imperial Point. As stated earlier, that application was approved giving a total of 11 existing or approved laboratories. There is, therefore, a need projected by the algorithm for an additional laboratory which Humana Bennett can fill. None of the cardiac catheterization laboratories in Broward County are providing fewer than 300 adult catheterizations per year. The limitation on additional laboratories found in Rule 10-5.011(1) (e)15.a.(II), Florida Administrative Code, therefore does not prohibit the approval of an additional laboratory. Findings with respect to Section 381.705(2), Florida Statutes The prehearing stipulation indicates that Humana Bennett and HRS maintain that Section 381.705(2), Florida Statutes, is not applicable to this proceeding, while the other parties maintain that it does apply. Nothing in the prehearing stipulation explains the basis on which any party argues that this statute does or does not apply. The application discloses the total cost for the project is approximately $1,300,000. Consequently, it would appear to be a "capital expenditure proposal" as that term is used in Section 381.705(2) , Florida Statutes. The definition of capital expenditure found in Section 381.702(1), Florida Statutes, refers to the dollar limit of 1 million dollars found in Section 381.706(1) (c), Florida Statutes. Section 381.705(2) does apply, and the following findings of fact are made. 1. Less costly, more efficient or appropriate alternatives to inpatient services. Section 381.705(2)(a), Florida statutes 65. No party has proven that outpatient catheterization services are a more appropriate alternative to the catheterization laboratory purposed by Humana Bennett. Moreover, all parties have stipulated that the design and construction costs, as well as equipment costs and other miscellaneous costs in Humana Bennett's proposal are reasonable. Prehearing stipulation, section D. 4 and 5. 2. Use of the existing inpatient facilities in an appropriate and efficient manner. Section 381.705(2) (b), Florida Statutes 66. Existing catheterization laboratories are performing more than the minimum service volume prescribed in Rule 10-5.011(1)(e)9. d., Florida Administrative Code, of 300 catheterizations annually. On the average, they were also performing more than the 600 catheterizations annually required by Rule 10-5.011(1)(e)15. A. (I), Florida Administrative Code. 3. Alternatives to new construction such as modernization or sharing arrangements. Section 381.705(2) (c),Florida Statutes Given the demonstration of need pursuant to the need algorithm, the establishment of a new service is one appropriate method of meeting that need. Existing catheterization laboratories do have the capacity, however, to serve many additional patients. More extensive utilization of these facilities avoids the additional capital construction and equipment costs of opening a new cardiac catheterization laboratory. The ten existing cardiac catheterization laboratories each have the ability to perform, on the average, at least 1,000 catheterizations per year. The new laboratory at Imperial Point will also have a similar capacity. The laboratories in Broward County, therefore, have an ability to provide approximately 11,000 catheterizations per year (this ignores the intermittent use of the third "convenience" laboratories at Holy Cross and at FMC). Assuming the need for 8,060 catheterization procedures at the 1989 planning horizon, there is still an excess capacity, using only existing or approved laboratories, to provide annually an additional 2,940 catheterizations. More intensive use of existing and approved facilities would certainly be a more efficient way of providing catheterization services than is spending approximately $1,300,000 to construct and equip the laboratory at Humana Bennett. 4. Problems in obtaining inpatient care in the absence of the proposed new service. Section 381.705(2)(d), Florida Statutes There is no evidence that patients will have difficulty in obtaining cardiac catheterization services in Broward County if the proposed laboratory at Humana Bennett is not approved.
Recommendation It is recommended that the application of Humana Hospital Bennett for a certificate of need to establish a cardiac catheterization laboratory be denied. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 30th day of September, 1988. WILLIAM R. DORSEY, JR. Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1050 (904) 488-9765 Filed with the Clerk of the Division of Administrative Hearings this 30th day of September, 1988.
The Issue Whether disciplinary action should be taken against the license to practice medicine of Respondent, Howard E. Gross, M.D., based on allegations that he violated Subsection 458.331(1)(t), Florida Statutes, as alleged in the Administrative Complaint in this proceeding.
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing and the entire record in this proceeding, the following findings of fact are made: Petitioner is the state agency charged with regulating the practice of medicine in the State of Florida pursuant to Section 20.43, Florida Statutes, and Chapters 455 and 458, Florida Statutes. At all times material to this proceeding, Respondent was a licensed physician in the State of Florida, having been licensed in 1971 and issued license number ME 0017039. Respondent has never been disciplined previously. Respondent is board-certified in internal medicine (1970) and cardiovascular diseases (1973). He is an interventional cardiologist. He has practiced medicine in Orlando since 1971. For the past 10 years, he has done a high-volume catheterization practice. In the most recent one-year period, he did approximately 500 interventional procedures and 400 diagnostic procedure, and in almost all instances, the catheterization involved a ventriculogram. On or about February 18, 1997, patient L. D. L., an 84-year-old male with a history of coronary artery disease, presented to Orlando Regional Medical Center, for catheterization and possible rescue angioplasty to be performed by Respondent. Respondent performed a cardiac catheterization on the patient. During the catheterization procedure, Respondent advanced a 6-French pigtail catheter into the patient's left ventricle and performed a ventriculogram by injecting what he thought was approximately 20cc of ionic dye, utilizing a MEDRAD injector. During the catheterization procedure, Respondent noted that he did not obtain opacification of the left ventricle and noted that free air was in the left ventricle. In fact, Respondent injected the patient with approximately 15cc to 20cc of free air rather than dye. As a result, the patient suffered cardiac arrest, and his blood pressure fell to zero. Respondent initiated various life-saving measures to counter the effects of the injection of free air, which were unsuccessful, and the patient was pronounced dead at approximately 1:55 p.m., as a result of cardiac arrest brought on by an air embolus. At the time, Orlando Regional Medical Center (hereinafter "ORMC") had a policy/procedure (No. 3233-MEDRAD- 0001) for Cardiac Catheterization Laboratory (hereinafter "Cardiac Cath Lab") personnel (Respondent's Exhibit 1). It delineated specific procedures to ensure "the use and safe applications of the power injector." In particular, it states the procedure to be employed by Cardiac Cath Lab staff in loading the MEDRAD injector. At ORMC and other hospitals, Cardiac Cath Lab personnel load the MEDRAD injectors without physician supervision. As explained by both expert witnesses, loading the syringe with dye is a very simple task for a nurse or scrub tech to perform. In the instant case, the nurse loading the MEDRAD injector interrupted the loading procedure because she was concerned about the patient's lab values (kidney function) and was uncertain about what type of dye Respondent would order. Respondent was not yet in the Cardiac Cath Lab. The nurse anticipated asking Respondent which type of dye he wanted and then loading that type dye into the MEDRAD injector. When she interrupted the loading procedure, the nurse left the plunger positioned in the syringe where it appeared that the syringe had been loaded with 20 to 25cc of dye and the injector arm pointing upward. The nurse then left the Cardiac Cath lab to get her lead apron anticipating only a monetary absence from the lab. Unknown to her, Respondent entered the Cardiac Cath Lab within seconds after her departure. Respondent was not in the Cardiac Cath Lab at any time while the nurse was manipulating the MEDRAD injector. As the nurse secured her lead jacket, she was called to another patient to administer medication which required the presence of a registered nurse per hospital procedures. In the nurse's absence, the catheterization and ventriculogram of the patient proceeded. The Registered Cardiovascular Technician (hereinafter "RCT"), observing the MEDRAD injector in what appeared to be a prepared state, wheeled it to the patient's side and lowered the injector arm into a position to receive the catheter. The RCT testified that a MEDRAD injector would never be left as she found it, plunger at the 20 to 25cc mark and arm elevated, if the machine was not loaded with dye. The ionic dye used in the procedure is clear and, due to the nature of the MEDRAD plunger and casing, it is extremely difficult to tell if dye is in the syringe. Further compounding the difficulty in observing dye in the syringe is the fact that the lights in the Cardiac Cath Lab are lowered during the procedure to allow better visualization of the video monitor. While the RCT positioned the MEDRAD injector at the patient's side, Respondent was in the process of entering the catheter into the patient, manipulating the catheter in the patient, visualizing its position in the patient's heart on the video monitor and monitoring hemodynamics. Petitioner's expert witness testified that Respondent did justifiably rely on the Cardiac Cath Lab personnel to follow the procedure outlined in Respondent's Exhibit 1. The nurse and cardiovascular technician did not follow the policy/procedure and, as a result, allowed the presence of air in the MEDRAD injector. After the catheter is properly located in the patient's heart, the external end of the catheter is attached to the MEDRAD injector. Petitioner's expert witness opined the Respondent should have used extension tubing to effect the connection between the catheter and MEDRAD injector. Testimony revealed that extension tubing is used by many physicians who perform cardiac catheterization. Respondent's practice was not to use extension tubing. Both Petitioner's and Respondent's expert witnesses agreed that Respondent's choice not to use extension tubing was a "technique" choice and did not fall below the "standard of care." Petitioner's expert opined that Respondent should have been present in the Cardiac Cath Lab to observe the loading of the MEDRAD injector. Testimony revealed that at ORMC and other hospitals it was the Cardiac Cath Lab staff's responsibility to load the MEDRAD injector without the direct supervision of physicians and that physicians are rarely in the lab when the MEDRAD injector is loaded. The "standard of care" does not require the physician to watch the loading of dye or the expulsion of air from the syringe in the loading process. Petitioner's expert opined that Respondent should have performed a test injection (a process where a small amount of dye is injected into the heart prior to the main injection). Respondent's expert testified that under certain circumstances (none of which is applicable to the instant case) test injections were appropriate; those circumstances occur less than 5 percent of the time. Electing not to perform a test injection in the instant case does not fall below the "standard of care." Petitioner's expert opined that Respondent should have observed a "wet to wet" connection between the catheter and the MEDRAD injector to ensure that no air is in the system. This is accomplished by withdrawing a small amount of blood from the catheter into the MEDRAD injector. Small air bubbles may appear between the blood and dye and are then "tapped" to rise to the top of the syringe. However, Respondent performed the "wet to wet" connection and did not observe anything unusual. He has historically performed some "wet to wet" connections where no air bubbles were present between the blood and dye as it appeared in this case. The RCT confirmed that Respondent performed the "wet to wet" connection, looked for air in the syringe, and tapped on the syringe to loosen and expel air bubbles. Respondent's expert witness testified that he performed an experiment creating a "wet to wet" connection with air in the MEDRAD injector syringe instead of dye. He found that the miniscus formed by blood and air in the syringe has an identical appearance to blood contacting dye in the syringe. The "wet to wet" connection between blood and air in the syringe has the same appearance as a "perfectly clean", "wet to wet" connection between blood and dye in the syringe. Respondent's expert witness testified that from five to ten percent of the time a "perfectly clean", "wet to wet" connection occurs in which no air bubbles appear between the blood and dye. Petitioner's expert witness testified that the physician must make absolutely certain that no gross amount of air is injected into the patient, and, relying on his view that the Respondent as the physician was the "captain of the ship," he testified that "the injection of this volume of air during the ventriculogram fell below the cardiology "standard of care." Petitioner's expert rendered his opinion based upon his examination of the hospital records. Respondent's expert rendered his opinion based upon his examination of the following: Administrative complaint with supporting documents. Dr. Allen Seals' (Petitioner's expert) report and deposition. Agency for Health Card Administration investigative report. ORMC's Code 15 report. Respondent's February 21, 1997 memo for peer review purposes. Hospital records. Death résumé. ORMC's MEDRAD policy/procedure. Experimentation with a catheter and MEDRAD injector. Respondent's expert testified that Respondent met the standard of care in the instant case because he practiced medicine with that level of care, skill, and treatment which is recognized by a reasonably prudent similar physician as being acceptable under similar circumstances. Based on the totality of the evidence presented, the undersigned rejects the expert opinion of Dr. Allen Seals, M.D., Petitioner's expert witness, and accepts as being more credible the testimony of David P. Browne, Jr., M.D., Respondent's expert witness.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a final order finding that Respondent is not guilty of violating Subsection 458.331(1)(t), Florida Statutes, as alleged in the Administrative Complaint. DONE AND ENTERED this 13th day of February, 2001, in Tallahassee, Leon County, Florida. JEFF B. CLARK Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 13th day of February, 2001. COPIES FURNISHED: Ephraim D. Livingston, Esquire Agency for Health Care Administration Post Office Box 14229 Tallahassee, Florida 32317-4229 Robert D. Henry, Esquire Martin D. Buckley, Esquire Ringer, Henry & Buckley, P.A. Post Office Box 4922 Orlando, Florida 32801-4229 Tanya Williams, Executive Director Department of Health Board of Medicine 4052 Bald Cypress Way, Bin A02 Tallahassee, Florida 32399-1701 Theodore M. Henderson, Agency Clerk Department of Health 4052 Bald Cypress Way, Bin A02 Tallahassee, Florida 32399-1703 William W. Large, General Counsel Department of Health 4052 Bald Cypress Way, Bin A02 Tallahassee, Florida 32399-1703
Findings Of Fact Petitioner, Bayonet Point Regional Medical Center, (Bayonet Point), has applied for a certificate of need in part for a cardiac catheterization laboratory and for open heart surgery. Bayonet Point is an existing hospital located in Hudson in the northwest corner of Pasco County, part of District V of Respondent, Department of Health and Rehabilitative Services (HRS). District V also includes Pinellas County. Hillsborough County, part of HRS District VI, is adjacent to District V. Hillsborough County is southeast of Pasco County and east of Pinellas County. Bayonet Point has five board certified cardiologists on its staff. It also has the nursing and other support staff needed by those cardiologists. If a cardiac catheterization laboratory and open heart surgery is added at Bayonet Point, Bayonet Point will be able to attract the additional needed specialists and staff. Under the rule methodology for determination of need for cardiac catheterization laboratories set out in Rule 10- 5.11(15)(1) through (o), Florida Administrative Code, there is no need for an additional cardiac catheterization laboratory in District V. However, the rule methodology referred to in the immediately preceding paragraph incorporates 1981 cardiac catheterization use rates. The 1981 use rates are out of date and lower than actual use rates. Using actual 1985 use rates, the rule methodology would demonstrate a need for one additional cardiac catheterization laboratory in District V. In addition, even the actual 1985 cardiac catheterization use rates do not include or account for substantial utilization of Hillsborough County cardiac catheterization laboratories by residents of Pasco County. There is a need for at least one additional cardiac catheterization laboratory in District V by the year 1986. The two existing cardiac catheterization laboratories in District V are both in Pinellas County. Within District V, there is a need for a cardiac catheterization laboratory in Pasco County. New Port Richey is centrally located both in terms of geography and in terms of population within Pasco County. Hudson, being in the northwest corner of Pasco County, is not. Hudson does have better access to the eastern and northeastern portions of Pasco County because of better arterial road access. Hudson also is more accessible to southern portions of Hernando County, part of HRS District III, which also are within Bayonet Point's primary service area. Hernando County also is without a cardiac catheterization laboratory and the southern portion of Hernando County needs one too. There is no need for additional open heart surgery services in District V under the rule methodology for determination of such need set forth in Rule 10-5.11(16), Florida Administrative Code. The rule methodology employs 1981 utilization rates which project an average of approximately 342 open heart surgery procedures per year in the three existing open heart surgery programs in District V in the year 1986. Using 1985 utilization rates, the average utilization drops to approximately 317 procedures per year. None of the three existing open heart surgery programs in District V are projected to do 350 or more open heart surgery procedures in 1986. The rule methodology requires that all existing open heart surgery programs must be projected to do 350 or more procedures per year in 1986 before an additional open heart surgery program can be approved. There is no open heart surgery service available at Bayonet Point at this time, and there is currently no open heart surgery service within 30 minutes travel time from Bayonet Point by emergency vehicle under average travel conditions. Approximately 1200 Pasco County residents per year are being sent out of District V for cardiac catheterization, mostly to Tampa General Hospital. It can be estimated that 300 of those patients also undergo open heart surgery.
Recommendation Based on the foregoing Findings Of Fact and Conclusions Of Law, it is recommended that Respondent, Department of Health and Rehabilitative Services, enter a final order granting the portions of the application of Petitioner, Bayonet Point Regional Medical Center, CON Action No. 3083, for a certificate of need for a cardiac catheterization laboratory and open heart surgery. RECOMMENDED this 30th day of May, 1986, in Tallahassee, Florida. J. LAWRENCE JOHNSTON Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 30th day of May, 1986.
The Issue The basic issues in these consolidated cases concern whether Rule 10- 5.032, Florida Administrative Code, is an invalid exercise of delegated legislative authority. The validity of the rule has been challenged on both procedural and substantive grounds.
Findings Of Fact South Miami is an acute care hospital located in Dade County. South Miami has a open cardiac catheterization program which means any physician within the community can apply for privileges, and, if granted, perform cardiac catheterizations at South Miami. Until recently, it was a closed program. Doctors' Hospital is an acute care hospital located in Coral Gables, Florida. Doctors' has had a cardiac catheterization program since December of 1986, and is authorized to perform diagnostic catheterization on both inpatients and outpatients. Baptist is a 500 bed full service hospital located in Dade County. Baptist has a cardiac catheterization program serving both inpatients and outpatients. Approximately 2,000 cardiac catheterizations are performed at Baptist each year. Deering is a 260 bed hospital in Miami, Florida. The agency has noticed its intent to grant Deering a CON to initiate a cardiac catheterization program. The Agency for Health Care Administration ("AHCA") is designated as the single state agency to issue, revoke, or deny certificates of need and to issue, revoke, or deny exemptions from CON review in accordance with the district plans, the statewide health plan, and present and future federal and state statutes. In 1987, the certificate of need statute was amended to deregulate all outpatient services. At the same time, the capital expenditure cap was raised from $500,000 to $1 million, and the meaning of "major medical equipment" was redefined to include only equipment which has been approved by the United States Food and Drug Administration for less than three years for general usage. These changes had a major impact on the ability of health care providers to acquire and replace equipment. They could now acquire equipment virtually at will, with the Legislature only expressing a limited interest in controlling expensive emerging technologies. This legislative expression was a major policy change with respect to planning for the distribution of health care resources. Prior to these statutory changes, all cardiac catheterization services had been treated as inpatient institutional health services requiring a certificate of need. With the deregulation of outpatient services, without exception, outpatient cardiac catheterization laboratories were deregulated by the statutory changes. With cardiac catheterization equipment being totally deregulated, and the capital expenditure threshold raised, inpatient cardiac catheterization providers could now expand their catheterization facilities and completely replace their equipment without a certificate of need. For these reasons, the then existing cardiac catheterization rule could not be applied because the policy constraints articulated in it were no longer recognizable by the underlying statewide policy expressed in the amended CON statute. The rule then in effect controlled the expansion of existing laboratories in many cases because the necessary equipment for expansion exceeded the then existing capital expenditure threshold. Furthermore, that rule simply did not contemplate the development of unregulated outpatient cardiac catheterization services. These facts led AHCA to conclude that they could no longer control the capacity of existing providers to offer cardiac catheterization services. The rule in existence at that time was believed to be inoperable because it was based upon the assumption that an inventory of laboratories could be established and predicted for future horizons. Under the statutory changes, this assumption was believed to be no longer valid because the number of laboratories was subject to change without constraint at any given time. Initially, the rule amendment process began with internal discussions. Next, a work group was convened to discuss these specific issues. Next, various possible need methodologies were modeled using a variety of assumptions. An updated literature search was undertaken and the comments of the work group were considered. Subsequently, a rule was developed and circulated for internal review at AHCA. Finally, in April of 1988, the proposed amendment was published in the Florida Administrative Weekly. Administrative challenges were brought against the rule. Based upon concerns of the challengers, changes were made to the rule. The rule, with the changes, was filed for adoption with the Secretary of State on July 18, 1988. It became effective, according to the certification of the Secretary of State, on August 7, 1988, and remained in effect until November of 1991. On July 29, 1988, The changes were published in the Florida Administrative Weekly. Within 21 days of the Notice of Change publication in the Florida Administrative Weekly on July 29, 1988, but after the rule became effective, several challenges were launched against the Notice of Change. These challenges purported to be Section 120.54 challenges to proposed amendments. A final order was issued on June 30, 1989, on the challenges to the changes in the 1988 rule amendments. See Florida Medical Center, et al. v. Dept. of Health and Rehabilitative Services, 11 FALR 3904 (June 30, 1989). In the closing paragraphs of the Final Order in the FMC case, the Hearing Officer ordered the following: That the amendments to Rule 10- 5.011(1)(e), F.A.C., published by the Department of Health and Rehabilitative Services on July 29, 1988, with the exception of the amendments to paragraph 2(h), paragraph 3(c)III, and paragraph 6(a) and the amendment regarding the definition of "inpatient visit", are an invalid exercise of delegated legislative authority, because they were adopted by the Department without adhering to the proper procedures for adoption delineated in Section 120.54, Florida Statutes. That should the Department seek to proceed with the other revisions to the rule previously published on July 29, 1988, it must afford interested parties an opportunity to comment on the merits of those proposed revisions in the manner provided for in Section 120.54, Florida Statutes, with a new point of entry. An appeal of the Final Order was taken by AHCA. On April 9, 1991, the District Court of Appeals upheld the final order of the Hearing Officer, holding that, as to those changes which AHCA was without authority to make, it must either withdraw the changes or reinstitute the rulemaking process. AHCA worked closely with its attorneys and with the Joint Administrative Procedures Committee to come to agreement on the interpretation of the appellate court decision and on the procedure to follow to comply with the court's decision. On July 5, 1991, AHCA published its interpretation of the rule resulting from the Final Order affirmed by the District Court of Appeals, by withdrawing the portions of the rule which had been invalidated. A Section 120.54 challenge was mounted against this publication by South Miami Hospital and others, but the challenges were later voluntarily dismissed. On August 9, 1991, AHCA published the amendments it proposed to adopt to replace those which had been withdrawn. This publication was not challenged. These amendments were filed for adoption with the Secretary of State on October 22, 1991, and became effective November 11, 1991. The current version of the challenged rule, Rule 10- 5.032, Florida Administrative Code, reads as follows, in pertinent part: 3/ Departmental Intent. This rule amendment implements the provision of section 381.706 (1)(c), F.S., which provides that a certificate of need shall not be required for an expenditure to provide an outpatient service. This rule defines the requirements for the establishment of inpatient cardiac catheterization services, including minimum requirements for staffing, equipment, and a need methodology for cardiac catheterization programs. A certificate of need for the establishment of inpatient cardiac catheterization services shall not normally be approved unless the applicant meets all relevant statutory criteria, including the standards and need determination criteria set forth in this rule. A cardiac catheterization program which is established and utilized for the purpose of serving outpatients exclusively is not regulated under this rule. A cardiac catheterization program which provides services to inpatients, regardless of the reason for their admission, including but not limited to coronary angioplasty, valvuloplasty, or ablation of intracardiac bypass tracts, or pediatric cardiac catheterization, requires a certificate of need. Hospitals operating more than one hospital facility under the same hospital license in the same district, shall obtain a separate certificate of need for the establishment of a cardiac catheterization program in each health care facility. Definitions. Cardiac Catheterization. Cardiac catheterization is defined as a medical procedure requiring the passage of a catheter into one or more cardiac chambers of the left and right heart, with or without coronary arteriograms, for the purpose of diagnosing congenital or acquired cardiovascular diseases, or for determining measurement of blood pressure flow. Cardiac catheterization also includes the selective catheterization of the coronary ostia with injection of contrast medium into the coronary arteries. Coronary Angioplasty. Coronary angioplasty is defined as a hospital inpatient procedure requiring the dilation of narrowed segments of the coronary vessels, via a balloon-tipped catheter. Catheterization Program. A cardiac catheterization program is defined as an institutional health service which is provided by or on behalf of a health care facility and which consists of one or more laboratories which comprise a room or suite of rooms, and has the equipment and staff required to perform cardiac catheterization serving inpatients and outpatients. A cardiac catheterization program approved for angioplasty services, or other types of therapeutic cardiac procedures shall have the additional necessary equipment and staff to perform angioplasty procedures. Approved Program. A proposed cardiac catheterization and angioplasty program, not operational as defined by this rule, for which a certificate of need, a letter of intent to grant a certificate of need, or a final order granting a certificate of need was issued, consistent with the provisions of 10- 5.008 (2)(b), Florida Administrative Code, on or before the most recent published deadline for agency initial decisions prior to publication of the fixed need pool, as specified in 10-5.008 (1)(1), Florida Administrative Code. Cardiac Catheterization Annual Program Volume. The cardiac catheterization annual program volume equals the total number of inpatient and outpatient admissions to the cardiac catheterization program, for the purpose of cardiac catheterization or angioplasty, for the 12-month period specified in paragraph (8)(c). A single admission is equivalent to one patient visit to the cardiac catheterization program. Each patient visit will be counted in determining the actual program volume regardless of whether the patient is an inpatient or outpatient at the facility performing the procedure, or has been admitted as an inpatient or outpatient at another facility. Inpatient. An inpatient is defined as a person who has been admitted to a hospital for bed occupancy for purpose of receiving inpatient hospital services. A person is considered an inpatient if he was formally admitted as an inpatient with the expectation that he would remain at least overnight and occupy a bed, even though it later develops that he can be discharged or that he is transferred to another hospital and does not actually use a hospital bed overnight. An inpatient of a hospital cannot be considered an outpatient of that or any other hospital at the same time. Outpatient. An outpatient is defined as a person who receives cardiac catheterization in a health care facility and does not meet the definition of inpatient in paragraph (e) [sic]. Service Planning Area. The service planning area for a cardiac catheterization program is the applicable HRS district unless cardiac catheterization subdistricts have been defined by the respective local health council and promulgated into rule by the department. . . . Operational Program. A new cardiac catheterization and angioplasty program approved by the department that has performed at least one inpatient or outpatient cardiac catheterization as of 3 months prior to the beginning date of the quarter of the publication of the fixed need pool; or, in the case of programs which performed only outpatient cardiac catheterization prior to departmental approval, a program that has performed at least one inpatient cardiac catheterization as of 3 months prior to the beginning date of the quarter of the publication of the fixed need pool. Scope of Service. Each cardiac catheterization program shall be capable of providing immediate endocardiac catheter pacemaking in cases of cardiac arrest, and pressure recording for monitoring and to evaluate valvular disease, or heart failure. Applicants for cardiac catheterization programs shall document the manner in which they will meet this requirement. A range of non-invasive cardiac or circulatory diagnostic services must be available within the health care facility itself, including: Hematology studies or coagulation studies; Electrocardiography; Chest x-ray; Blood gas studies; and Clinical pathology studies and blood chemistry analysis. At a minimum a cardiac catheterization program shall include: A special procedure x-ray room; A film storage and darkroom for proper processing of films; X-ray equipment with the capability in cineangiocardiography, or equipment with similar capabilities; An image intensifier; An automatic injector; A diagnostic x-ray examination table for special procedures; An electrocardiograph; A blood gas analyzer; A multichannel polygraph; and Emergency equipment including but not limited to a temporary pacemaker unit with catheters, ventilatory assistance devices, and a DC defibrillator. Service Accessibility. Travel Standard. An adult inpatient cardiac catheterization program shall be available within a maximum automobile travel time of 1 hour, under average travel conditions, for at least 90 percent of a service planning area's population provided that the cardiac catheterization program can meet other applicable statutory and related rule criteria. Hours of Operation. Every cardiac catheterization program shall have the capability of rapid mobilization of the study team within 30 minutes for emergency procedures 24 hours a day, 7 days a week. Applicants for new cardiac catheterization programs shall document the manner in which they will meet this requirement. Underserved Population Groups. Applicants for a cardiac catheterization program shall indicate the projected number of medically indigent and Medicaid patients to be served annually. Applicants shall indicate their past provision of health care services to medically indigent and Medicaid patients. Service Quality. Accreditation. Any health care facility providing inpatient catheterization only, or inpatient and outpatient cardiac catheterization, or angioplasty, must be fully accredited by the Joint Commission on Accreditation of Health Care Organizations (JCAHO) for special care units, or be accredited by the American Osteopathic Association. Availability of Health Personnel. Any applicant proposing to establish a cardiac catheterization program must document that adequate numbers of properly trained personnel will be available. At a minimum, a team involved in cardiac catheterization consists of a physician, one nurse, and one or more technicians. An applicant for a new cardiac catheterization program shall document that the following staff are available: A program director, board-certified or board- eligible in internal medicine, or radiology with subspecialty training in cardiology or cardiovascular, radiology; . . . A physician, board-certified or board- eligible in cardiology, radiology, or with specialized training in cardiac catheterization and angiographic techniques who will perform the examination; Support staff, specially trained in critical care of cardiac patients, with a knowledge of cardiovascular medication and an understanding of catheterization and angiographic equipment; Support staff, highly skilled in conventional radiographic techniques and angiographic principles, knowledgeable in every aspect of catheterization and angiographic instrumentation, with a thorough knowledge of the anatomy and physiology of the circulatory system; Support staff for patient observation, handling blood samples and performing blood gas evaluation calculations; Support staff for monitoring physiologic data and alerting the physician of any changes; Support staff to perform systematic tests and routine maintenance on cardiac catheterization equipment, who must be available immediately in the event of equipment failure during a procedure; Support staff trained in photographic processing and in the operation of automatic processors used for both sheet and cine film; and A Medical Review Committee which reviews medical invasive procedures such as endoscopy and cardiac catheterization. Coordination of Services. Cardiac catheterization programs proposed in a facility not performing open heart surgery must submit a written protocol as part of their certificate of need application for the transfer of emergency patients to a hospital providing open heart surgery, which is within 30 minutes travel time by emergency vehicle under average travel conditions. Cardiac catheterization programs which include the provision of coronary angioplasty, valvuloplasty, or ablation of intracardiac bypass tracts must be located within a hospital which also provides open heart surgery. * * * Service Cost. Cost data for cardiac catheterization programs, among similar institutions, shall be comparable when patient mix, cost accounting methods, labor market differences and other extenuating factors are taken into account. Need Determination. In order to assure patient safety and staff efficiency and to achieve maximum economic use of existing resources, the following criteria shall be considered in the approval of certificate of need applications for new adult cardiac catheterization programs. The minimum annual projected net program volume need for the establishment of a new adult cardiac catheterization program shall be at or exceed an annual program volume of 300 admissions for the service planning area. Applicants shall demonstrate that they will be able to reach an annual program volume of 300 admissions within 2 years after the program becomes operational. Need Determination. A new adult cardiac catheterization program may be approved if the difference between the projected program volume and the number of adult cardiac catheterizations performed in the service planning area during the 12 months ending 3 months prior to the beginning date of the quarter of the publication of the fixed need pool, minus the number of approved adult programs times 300, is at or exceeds a program volume of 300 for the applicable service planning area. This need formula is expressed as follows: NN = PCCPV - ACCPV - APP Where: NN is the 12-month net adult program volume need in the service planning area projected 2 years into the future for the respective planning horizon. Net need projections are published by the department as a fixed need pool twice a year. The planning horizon for applications submitted between January 1 and June 30 shall be July of the year 2 years subsequent to the year the application is submitted. The planning horizon for applications submitted between July 1 and December 31 shall be January of the year 2 years subsequent to the year which follows the year the application is submitted. PCCPV is the projected adult cardiac catheterization program volume which equals the actual adult cardiac catheterization program volume (ACCPV) rate per thousand adult population 15 years and over for the 12 months ending 3 months prior to the beginning date of the quarter of the publication of the fixed need pool, multiplied by the projected adult population 15 years of age and over 2 years into the future for the respective planning horizon. The population projections shall be based on the most recent population projections available from the Executive Office of the Governor which are available to the department 3 weeks prior to the fixed need pool publication. ACCPV equals the actual adult cardiac catheterization program volume for the 12 months ending 3 months prior to the beginning date of the quarter of the publication of the fixed need pool. APP is the projected program volume for approved adult programs. The projected program volume for each approved program shall be 300 admissions. Irrespective of the net need calculated under paragraph (c), no additional cardiac catheterization program shall normally be granted unless ACCPV divided by the number of operational programs for the service planning area is at or exceeds a program volume of 300 patient admissions. * * * (g) Actual inpatient and outpatient migration from one service planning area to another shall be considered in the review of Certificate of Need applications. Decisions on certificate of need applications for the expansion of existing programs shall be made on the basis of the applicant's justification for the level of the proposed capital expenditure and the utilization of existing laboratories in the facility. The approval of an additional laboratory(ies) in a facility with an operational or approved inpatient program shall not reduce the net program need as calculated according to the formula contained in paragraph (8)(c). Briefly summarized, the current rule projects a number of anticipated admissions to cardiac catheterization programs in the horizon year by multiplying the current use rate (number of admissions per thousand adult population) times the projected population. If the difference between the current volume and the projected volume is greater than 300, a new program may be awarded, so long as all of the existing programs, plus the proposed program, are projected to perform an average of 300 admissions each. An approved program is assigned a value of 300 for purposes of determining the average. The rule takes into consideration the demographic characteristics of the population by establishing a use rate for cardiac catheterization services in a given service area. The use rate identifies the number of individuals per one hundred thousand who used the service in a defined recent historical period. If the demographics of an area cause the service to be used at a greater or lesser rate than the State as a whole, that fact will be revealed in the use rate. In the same way, the use rate takes into account the health status of the individuals seeking services in the service area because a deviation from normal health status will typically result in a higher or lower use rate than the State as a whole. Since the use rate is based on place of access to the service it is reflective of district-wide gross service use patterns. The rule need methodology does not take into account differences in service use patterns as between numbers of inpatient and numbers of outpatient cardiac catheterization procedures, nor does it take into consideration differences in service use patterns as between number of procedures performed in cardiac catheterization programs in facilities performing open heart surgery and numbers of procedures performed in cardiac catheterization programs in facilities not performing open heart surgery. An example of relevant service use patterns that are not taken into account by the rule methodology is the significantly higher utilization of cardiac catheterization laboratories located in facilities that also offer open heart surgical back-up. Cardiac catheterization laboratories in facilities that do not offer open heart surgical back-up receive only seven percent of the inpatient admissions from the MDC-5 patient pool, compared to thirty-eight percent in cardiac catheterization laboratories with open heart surgery back-up in the same facility. Similar differences in service use patterns are reflected at Tab "D" of SMH Exhibit 10, which shows that there were a total of 9,362 inpatient admissions in the laboratories with open heart surgical back-up, compared with only 553 total inpatient admissions in cardiac catheterization laboratories without open heart surgical back-up. The rule addresses quality of care standards at paragraph (5), headed "Service Quality." Within that section, applicants must document accreditation for special care units, availability of adequate numbers of specified properly trained personnel, and medical review procedures. Paragraph (6) of the rule, entitled "Coordination of Services", also establishes quality standards by requiring a written protocol for the transfer of emergency patients to a hospital providing open heart surgery by providing that only hospitals authorized to perform open heart surgery can perform angioplasty, and providing that pediatric cardiac catheterization can only be performed in hospitals performing pediatric open heart surgery. Paragraph (8) of the rule, which contains the various considerations in determining need, also attempts to address quality of care considerations. The extent to which such considerations are adequately treated is addressed further below. Minimum cost efficiency standards are addressed in the need methodology at subparagraphs (8)(a) and (8)(b) of the rule where it requires that applicants must demonstrate that they will be able to reach an annual program volume of 300 admissions within two years after the program becomes operational and net need must equal a minimum of 300 admissions before a new adult program may be established. The extent to which these standards are adequate is addressed further below. Trends in total usage are taken into account by the rule in that the use rate is updated every six months. If a service area is experiencing a significant increase, that trend will be reflected in the updated use rate which is used to project need. But, as noted above, the rule methodology does not take into account certain usage trends related to type of patient or type of facility. The rule contains a geographic access standard at subparagraph (4)(a) where it provides that adult inpatient cardiac catheterization shall be available within a maximum automobile travel time of 1 hour, under average travel conditions, for at least 90 percent of a service planning area's population. The rule addresses market economics in several ways. First, by utilizing the number of admissions to the service area programs, second by projecting population into a future horizon, third, by subtracting the existing volume of providers and fourth by prohibiting, generally, the addition of a new program unless the average patient volume within the district is at least 300. Through the use of this data, the rule looks at current market conditions, and purports to protect current market share while projecting future need. The extent to which the rule is adequate in this regard is addressed further below. The rule does not take into consideration the number of individual catheterization laboratories, rather it considers the number of cardiac catheterization programs. The difference is that an individual hospital will have only one program, but it may have more than one laboratory in each program. Because of the ability of existing providers to expand to add new laboratories without certificate of need approval in most cases, it has become difficult for AHCA to establish and maintain an inventory of existing laboratories for the purpose of projecting need. This difficulty caused AHCA to reject any methodology based upon the number of existing laboratories because AHCA felt there was no way the number of existing cardiac catheterization laboratories could be predicted in the horizon year. AHCA does have the ability to control the growth of programs, however, and, therefore, can establish a reliable inventory of programs and predict their number in the horizon year. The agency's thinking in this regard overlooks the obvious fact that programs are, by definition, comprised of one or more cardiac catheterization laboratories and that existing programs can in most cases continue to add laboratories to their program without going through certificate of need review. Such being the case, the ability to regulate and reliably predict the number of future programs does not in any way enhance the ability to predict the number of future laboratories. Further, because programs are comprised of one or more laboratories, one can reach useful conclusions regarding such things as the efficiency or capacity of existing programs only by considering the number of existing laboratories within each of the existing programs. The extent of usage of any individual laboratory cannot be predicted in advance with certainty because it depends on many variables. This uncertainty is supported by the Florida data which demonstrates that laboratory admissions vary greatly from a very low volume after several years to volumes of 1800 to 2000. But because programs, by definition, are comprised of one or more laboratories, it is equally difficult, for the very same reasons, to predict the extent of future usage of programs. Difficult and uncertain as it may be to do so, any effort to predict future need for new cardiac catheterization services must take into account the capacity of the existing laboratories that make up the existing programs. The rule takes into account the recent usage volume of existing providers by subtracting existing volume of catheterizations performed from projected volume, and by protecting an average of 300 admissions to all inpatient programs, and a minimum of 300 for all approved programs. The rule does not, however, address the capacity of existing cardiac catheterization programs or the capacity of existing cardiac catheterization laboratories. The pre-1988 cardiac catheterization rule used a different formula entirely to predict need. As a minimum threshold requirement, it utilized an average of 600 procedures per lab. The National Guidelines For Health Planning 4/ upon which the previous standard of 600 procedures was based include the following provisions: Sec. 121.208 Cardiac catheterization. Standard. (1) There should be a minimum of 300 cardiac catheterizations, of which at least 200 should be intracardiac or coronary artery catheterizations, performed annually in any adult cardiac catheterization unit within three years after initiation. * * * There should be no new cardiac catheterization unit opened in any facility not performing open heart surgery. There should be no additional adult cardiac catheterization unit opened unless the number of studies per year in each existing unit in the health service area(s) is greater than 500. . . . Discussion. The modern cardiac catheterization unit requires a highly skilled staff and expensive equipment. Safety and efficacy of laboratory performance requires a case load of adequate size to maintain the skill and efficiency of the staff. In addition, the underutilized unit represents a less efficient use of an expensive resource and frequently reflects unnecessary duplication, Based on recommendations from the Inter-Society Commission on Heart Disease Resources, the Department believes that a minimum level of 300 catheterizations per year is indicated to achieve economic use of resources. Several State health planning agencies, such as New Jersey, suggested a higher minimum level and the Department will be considering whether a higher level should be established in the future. The Department has also determined the existing units should be performing more than 500 cardiac catheterizations or 250 pediatric cardiac catheterizations before a new unit is opened. The 500 level is based on an average of two catheterizations a day, a rate that is in the Department's judgement readily achievable in most institutions providing these services and that will foster more effective uses of current resources prior to the development of additional resources. More than 600 procedures are performed annually in some institutions. Pediatric cardiac catheterizations require special facilities and support services. Lower target numbers are presented in these cases because of the special conditions and needs of children. The established levels are consistent with the recommendations of the Section on Cardiology of the American Academy of Pediatrics and the Inter-Society Commission on Heart Disease Resources. The patient studied in the cardiac catheterization unit is frequently recommended for open heart surgery. While acceptable inter-institutional referral patterns exist in some areas, cardiac catheterization units should optimally be located within a facility in which cardiac surgery is performed. Other guidelines regarding the utilization and establishment of new cardiac catheterization laboratories appear in the 1983 Report of Inter-Society Commission for Heart Disease Resources. Page 898A of the Inter-Society Report includes the following: Although the rate of development of new cardiac catheterization laboratories has declined in recent years, there is concern that the performance of many laboratories is less than optimal. This represents a duplication of resources that may seriously compromise quality and safety of studies and increase cost of care. Study of costs of each laboratory on a per-procedure basis does not adequately characterize the total costs and/or needs of a region. A footnote to the above quoted language notes the following: Results of a recent survey suggest that many available laboratories are underutilized. Data indicate that 40 percent performed fewer than 300 catheterization studies per year in the 350 hospitals surveyed. Fifty-five percent of 310 hospitals performing open heart surgery did fewer than 200 operations per year. Additional relevant comments at pages 898A-899A of the Inter-Society Report include the following: There is also a compelling economic reason for high utilization of facilities (fig. 1). The cost of equipping and supporting laboratories is extraordinarily high. Equipment life is relatively short and must be amortized within 5 - 7 years and be included in the cost of the laboratory. If case loads are low, there will be an inadequate depreciation fund for new and replacement equipment. *** Laboratories performing adult studies should maintain a minimal case load of 300 per year to justify the financial outlay for the laboratory and personnel and to keep the skills of the personnel, both physician and non-physician, up to date. (Emphasis added) *** Laboratories supporting an active coronary surgical program should have a case load of approximately nine procedures a week, or 450 cases per year. In many hospitals, economic operation of the laboratory will require this level of use. (Emphasis in original) Figure 1 at page 898A of the Inter-Society Report illustrates the equipment amortization cost per examination and clearly shows that the cost per examination decreases as the number of examinations per year increases. The illustration shows that this decrease continues at least to the point of 1,000 examinations per year. Examples derived from Figure 1 are as follows: Examinations per year Amortized equipment cost each exam 200 Approximately $575.00 300 Approximately $400.00 400 Approximately $350.00 600 Approximately $275.00 1000 Approximately $250.00 Also, the ACC/AHA Guidelines for Cardiac Catheterization and Cardiac Catheterization Laboratories published in 1991 by the American College of Cardiology/American Heart Association Ad Hoc Task Force On Cardiac Catheterization include the following at page 1167: For optimum laboratory performance and cost- effectiveness, an adequate caseload is required for the staff to maintain their skills and efficiency. The laboratory should be used only for cardiac catheterization procedures; use as a general or multi-purpose radiology room is no longer acceptable. If catheterizations are not performed on a daily basis, then the laboratory should not continue to exist as a cardiac catheterization laboratory. Laboratories for adult studies should maintain a minimum caseload of 300 per year. AHCA modeled several working drafts of the rule using different minimum standards. The standard of 300 was settled on because, according to the agency's interpretation of the Intersociety Commission guidelines, a cost efficient program can operate at the 300 level. Cost efficiency is a major goal of the certificate of need program. Since the agency believed the goal could be achieved at 300, and given the statutory changes which prompted the rule changes, it was felt by the agency that a higher number would be unduly restrictive. The agency's decision to use 300 as the threshold number of procedures is an unexplained deviation from the earlier 600-procedure standard, an unexplained departure from the National Guidelines For Health Planning, and an unexplained departure from other published guidelines recognized as authoritative. 5/ Unlike open heart, which does contain a provision providing a minimum threshold at which all existing programs must be operating, the agency felt such a provision was not appropriate for cardiac catheterization. Although the literature regarding cardiac catheterization generally supports the notion that a laboratory should perform at least 300 procedures per year to maintain proficiency and enhance quality, and most health planners agree that 300 procedures is aa appropriate minimum level to maintain proficiency and quality, because there did not appear to be any empirical evidence of quality differences above and below the 300 level, the agency felt that requiring all existing laboratories to be operating at the 300 level was not warranted. The literature also contains proficiency and quality guidelines for minimum numbers of procedures to be performed by physicians. The use of the number 300 as the threshold average number of procedures to approve additional programs results in the unnecessary duplication of services when the existing cardiac catheterization laboratories are operating below their capacity or below their practical utilization level. This has an obvious adverse effect on the existing laboratories. An essential ingredient of any functional need determination methodology is a method for identifying unmet need. In order to function rationally, the methodology must not only identify a reasonable estimate of future need, but must also identify a reasonable estimate of the future capacity of existing providers to meet that need. The subject rule fails to address the future capacity of existing providers, because in the normal course of events the capacity of an existing program, even a program comprised of a single laboratory, will be much greater than 300 procedures per year. As a general rule, the practical capacity of a cardiac catheterization laboratory is in the range of 1000 to 1500 procedures per year. 6/ Up to the point of practical capacity, there is a direct, but diminishing, relationship between increased numbers of procedures and increased cost efficiency. 7/ Cardiac catheterization laboratories can be operated very efficiently at a level of 80 or 85 percent of capacity. The failure of the subject rule to consider the future capacity of existing providers in calculating future need has an adverse effect upon the ability to accurately predict future unmet need and also has a potential for adverse effect upon the quality of care offered by the existing providers. The rule authorizes the approval of a new inpatient cardiac catheterization program even though many of the existing programs may be operating substantially below their capacity. The addition of new programs under such circumstances has the adverse effect of tending to reduce utilization of existing facilities that are already functioning well below capacity.
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found: The petitioners and intervenors each own and operate hospitals in Broward or Dade Counties. Each facility has applied to the respondent for a Certificate of Need for approval to construct and operate a cardiac catheterization service at their respective bSopitals. Each application was denied on the ground that the challenged Rule 10-5.11(15), Florida Administrative Code, did not reveal a need for further cardiac catheterization laboratories in the respective service districts. A cardiac catbeterization laboratory is a specialized x-ray room designed for taking pictures of the heart or doing procedures referrable to the heart. Cardiac catheterization encompasses both diagnostic and, more recently, therapeutic procedures or maneuvers. As a diagnostic procedure, cardiac catheterization is the most reliable test for determining the presence of coronary disease. Within the last 3 to 5 years, cardiac catheterization labs have been used to perform therapeutic procedures, such as the installation of an enzyme to dissolve a clot, the use of PTCA (percutaneous transluminal coronary angioplasty) to open up blockages and the placement of permanent and temporary pacemakers. With wider acceptance of bypass surgery and new advances in anpioplasty, the use of cardiac catheterization has increased in recent years. At this point in time, the effect of other emerging technologies, such as NMR (nuclear magnetic resonance), upon the use of the cardiac catheterization technique cannot be determined. Prior to the adoption of the current challenged rule, HRS's predecessor rule reguired denial of an application for a Certificate of Need for a proposed new cardiac catheterization laboratory unless all existing labs in the service area were performing more than 500 catheterizations per year. The prior rule also reguired the existence of or approval for an open heart surgery service at the applicant's facility. In August or September of 1982, HRS started a review of this rule which ultimately led to the adoption of the oresent challenged rule. As pertinent to the issues raised in this proceeding, the challenged Rule 10-5.11(15) contains a formula methodology for determining the need for new cardiac catheterization laboratories in a service area. The formula requires the utilization of a base year use rate (the number of procedures per hundred thousand population in the service area) to be multiplied by the projected population in the service area in the year in which the proposed lab would initiate service, said year not to be more than two vears into the future. Such multiplication results in the number of catheterization procedures projected to be delivered at the time of initiation of the proposed new service. The rule further provides that no additional cardiac catheterization laboratories may be established in a service area unless the average number of catheterizations performed per year by existing and approved labs performing adult procedures in the service area is greater than 600. The challenged rule specifically states that HRS will consider applications in context with applicable statutory and rule criteria, and will not normally approve new labs unless additional need is indicated by the above formula and unless the 600 average procedures per lab reguirement is met. Rule 10-5.11(15)(f). The current rule deletes the requirement for open heart surgical potential at the applicant's facility. During the rule-making process which spanned from July or August of 1982 through January, 1983, the HRS Office of Health Planning and Development held informal meetings with representatives of the medical community and health planners, and considered the criteria and standards included in the national guidelines, in other states and in various health systems plans. Medical journals were consulted and numerous written comments were received from interested perSons. Several variations of the rule evolved, and a public hearing was held on December 10, 1982. Based on the manv public comments received, changes in the rule were made. These changes were published, the final rule was filed with the Secretary of State on January 24, 1983 and Rule 10-5.11(15) became effective on February 14, 1983. Throughout the rule-making process, HRS weighed and considered different methodologies for predicting the future need for cardiac catheterization services. The use of an historical base year as opposed to the most current or recent year use rate was considered and was the subject of considerable public comment. It was finally determined that a 1981 base year use rate figure would be adopted, and a one time data collection effort was under taken by HRS for this purpose. This effort was not completed until after the challenged rule was adopted. Although recognizing that the use of a current or most recent year use rate would be preferable to and more accurate than the use of a static use rate, HRS was hampered by the fact that it no longer had the data gathering mechanism or manpower to obtain ongoing current information regarding cardiac catheterization utilization. Therefore, 1991 is the latest and most current year for which a complete data base of utilization is available. There is some support for the proposition that the continued increase in the utilization of cardiac catheterization procedures may tend to level off or even decrease as a result of emerging technologies and a decline in the rate of coronary disease. Balanced against this are the factors of increasing population, increased aging of the population and a wider acceptance of catheterization procedures, both diagnostic and therapeutic, on the part of physicians and patients. It is therefore difficult to predict with any degree of certainty whether utilization in the future will increase or decrease. It was the intent of HRS to design a need determination methodology which would pace the approval of new cardiac catheterization labs while observing what is occurring in that area of medicine. The actual experience in Broward and Dade Counties has been a steady increase in the use rate of catheterization procedures performed from 1977 through 1983. The rate of increase for the United States as a whole, while present in each year between 1977 and 1981, with the exception of 1978, has not been as great as that experienced in Broward County. The application of the rule's need determination formula to Broward County, while permitting one additional lab, appears to under-estimate the need for cardiac catheterization services in that area. By employing the 1981 use rate, the formula projects fewer procedures for Broward County in 1984 than actually occurred in the year 1982. The estimated number of procedures for 1983, based upon the actual procedures performed during the first eight or nine months of 1983, exceeds the 1982 number by almost 1,000. Broward County's rate of increase in the utilization of cardiac catheterization procedures is much greater than the rate of increase either for the United States or for the State of Florida. This may be at least partially explained by the fact that the neighboring Palm Beach area has only one cardiac catheterization lab and there is a need in that area, even under the rule's methodology, for as many as five labs. There was no evidence presented that the existing labs in Broward County are overcrowded or unavailable to area residents. A cardiac catheterization procedure takes, on the average, one to one- and-a-half hours. Therefore, the actual capacity of any particular laboratory is well in excess of 1,000 procedures per year. In 1981, the statewide average for annual number of procedures performed per lab was 581. For quality of care reasons, a minimum of 300 procedures per year per lab is necessary. Studies regarding the cost effectiveness of labs at different levels of usage indicate that the main economies of scale accrue up to the number 400 and additional, less pronounced economies of scale continue to accrue to as high as about 700. Any consideration of costs must also include the costs of trans-porting a patient from a facility without a lab to an existing lab and the costs of increased lengths of hospital stay if delays occur because a lab is not available. As long as the cost of instituting a new lab does not exceed the capital expenditure threshold of Section 381.494(1)(c) Florida Statutes, (presently $600,000.00), an existing facility which presently offers cardiac catheterization capabilities could open a second laboratory without going through the Certificate of Need process and thus be exempt from the challenged rule and its method for determining need. This, of course, would allow an existing facility to have an advantage over new competitors who seek to enter the market to fill a demonstrated need. As a practical matter, such a situation would only occur when an existing facility already has a special procedures room and is willing to forfeit that room for the purpose of performing cardiac catheterization. Such a "loophole" is not a result of the challenged rule. The Certificate of Need thresholds are set by statute and the rule comes into effect only when a Certificate of Need is required. The Economic Impact Statement (EIS) prepared for the challenged rule, (as well as for Rule 10-5.11(16) pertaining to open heart surgery programs) does not attempt or purport to analyze the overall financial impact upon providers, prospective providers or consumers of regulating the number of cardiac catheterization labs in a service area. Instead, it attempts to give an estimate of the economic impact which the amended rule will have in comparison to the prior rule on the subject. Given the fact that the prior rule reguired a facility to have existing or approved open heart surgical capabilities and required every existing lab in the service area to perform at least 500 procedures per year before a new lab could be approved, it can be concluded that the new rule actually liberalizes the need demonstration requirements for a Certificate of Need. The EIS concludes that, other than the printing and distribution costs of the rule to the agency, no economic impact is anticipated as a result of this amendment. The EIS states that "Though the full extent of the economic impact is indeterminable, the rule is expected to contain health care costs by assuring optimal utilization of existing cardiac catheterization . . ., and by avoiding large capital outlay expendi- tures for unnecessary, duplicative services." The effect on competition and the open market is estimated as follows: "Consistent with the purpose of the Certificate of Need law, the proposed rules will restrain the development of costly excess cardiac catbeterization and open heart surgery capacity. The proposed rules permit the development of competitive new services among area cardiac catbeterization laboratories and open heart surgery programs when need for additional capacity is indicated by the need formula and the level of utilization of existing capacity." Absent from the EIS is a detailed statement of the data and method used in making the estimates of costs and benefits to persons directly affected and the estimate of impact on competition and the open market. However, the record of the rule-making proceeding clearly reveals that cost and benefit considerations were reviewed by those responsible for promulgating the challenged rule. It is clear from the testimony adduced in this hearing, as well as the documents received into evidence pertaining to the public comments and letters received by HRS in the rule-promulgation process, that factors involving cost efficiency, increased patient costs, optimal and actual utilization, lab capacity and guality of care were considered by HRS. Such considerations led to numerous changes in the language utilized in the rule. While the EIS perhaps could have been more explicit in specifying the possible economic impacts of these considerations, the fact that actual dollar amounts are not assigned to these considerations does not render the EIS inadeguate. The challengers to the rule offered no more specifics than that contained in the EIS as to the economic impact resulting from the rule. The impacts enumerated by the economic expert presented by the challengers in this proceeding result more from the fact of regulation itself than from the operation of the challenged rule.
Findings Of Fact A. whether the "Grandfather" Issue Should Be Determined. The Petitioner, Mease Hospital and Clinic (Mease), operates a 278 bed hospital in Dunedin, a 100 bed hospital in Countryside, and a medical clinic. All are located in north Pinellas County, in the North Pinellas subdistrict of HRS District 5. In 1982, Mease applied for a certificate of need to equip and operate a cardiac catheterization laboratory (CCL). At the time, Mease was of the view that a CCL would be a new service and would therefore require a certificate of need. When Mease determined that approval would not be likely under then current rules, Mease withdrew its application because it understood that a final denial legally would preclude Mease from re-applying for three years. On July 11, 1986, the Respondent, HRS, entered a Final Order adopting a Recommended Order and acknowledging that Humana Hospital Northside, also located in Pinellas County, HRS District 5, continuously had been providing cardiac catheterization services since before July 1, 1977, the effective date of certificate of need regulation of CCLs, and therefore was not required to obtain a certificate of need for a CCL as a new service. Final Order, Humana Hospital Northside v. Department of Health, etc., 8 F.A.L.R. 3910 (DHRS July 11, 1986). When Mease reviewed the Humana Northside Final Order and final hearing transcript, it concluded that it, too, should be "grandfathered." Mease was doing the same type catheterization procedures as Humana Northside. Mease decided to re-apply for a certificate of need both on the basis of need for a CCL at Mease and on the basis of the "grandfather" claim. In October, 1986, Mease filed the pending certificate of need application. In addition to the more typical components of a CON application, the Mease application states in pertinent part: EQUIPMENT/SERVICE TYPE: Mease Hospital and Clinic maintains that the Cardiac Catheterization Program is not a new service, as procedures similar to those performed at Humana Northside, which was recently approved on a grandfathering basis for cardiac catheterization have been performed at Mease Hospital and Clinic in Dunedin for more than 20 years. * * * ADDITIONAL PROJECT DETAILS/REMARKS: Mease Hospital and Clinic believes its historic performance of procedures identical to those for which Humana Northside was grand fathered a cardiac catheterization lab is sufficient to justify similar action, resulting in approval of Mease' proposal. HRS' State Agency Action Report (SAAR) was completed in April, 1987. It evaluated the Mease proposal as a typical certificate of need application and denied it on the basis of lack of need. There was no direct mention of the "grandfather" claim, but the SAAR concludes in pertinent part: "Deny a certificate of need for [the Mease] project [among others] in its entirety... Reasons for decision: Insufficient need for an additional cardiac cath lab." Mease's petition for formal administrative proceedings on the denial does not specifically address the "grandfather" claim, either. During the pendency of this proceeding, Mease continued to seek a "grandfather" exemption apart from this proceeding. But Mease's prehearing proceedings in this case were conducted in a way that indicated its assumption that the "grandfather" issue would be determined by final agency action in this case, if not before by informal means. The other parties recognized this assumption and were not prejudiced by Mease's failure to formally specify the issue in its pending petition for formal administrative proceedings or by amendment to it. By letter dated November 23, 1987, HRS finally responded to Mease's continued efforts to obtain "grandfather" status and denied the request. Mease still did not amend its petition for formal administrative proceedings (nor did it file a new, separate petition in response to the November 23 letter.) But it continued to conduct prehearing procedures in a manner so as to have the "grandfather" claim heard as part of this case. HRS and the Intervenor, Morton Plant Hospital, Inc. (Morton Plant) first objected on the record to consideration of the "grandfather" issue in this case in the Prehearing Stipulation filed on January 6, 1988. The "grandfather" issue should be determined in this proceeding. Whether Mease Has A "Grandfathered" CCL. Before July 1, 1977, and continuously since, Mease has operated a special procedures room at its Dunedin hospital. The special procedures room is the largest room in the x-ray department, with adjoining rooms that contain sinks for sterile technique and housing computers. Equipment in the room includes an x-ray generator with a high MA capability to do moderately rapid sequence films and fluoroscope. There is a table of special design to allow movement in all directions to facilitate fluoroscopy. Three different film changers are used. The room contains a large array of catheters, wires and needles for use in the catheterization process. There is a defibrillator monitor, pressure monitors, and various physiologic monitors also in the room. Finally, there is a digital vascular imaging ("DVI") machine to facilitate the computerized processing of digital subtraction studies. The DVI machine has been used to perform coronary arteriographies. During the time the special procedures room has been operational, it has been staffed with persons specifically trained in critical care of patients, with special knowledge of cardiovascular medication and catheterization type equipment. There has always been ample support staff available for patient observation, handling blood samples, performing blood gas evaluations and monitoring physiological data. The catheterization team usually consists of the physician, a special procedures nurse (an R.N. with critical care training) and at least two dedicated radiographer technologists with special knowledge of the equipment. A special procedures log is maintained by physicians using the special procedures room. Procedures typical of those contained on the log prior to and consistently since 1977 include renal arteriograms, pulmonary arteriograms, cerebral arteriograms and femoral arteriograms. Pulmonary arteriograms involve passing a catheter through a right side chamber of the heart into the lungs; the other procedures do not involve passing a catheter into the heart. Pulmonary angiograms, right ventriculography and right atrial injections are all currently performed at Mease in the radiology laboratory. Right heart catheterization procedures are being performed in the CCU units and the special procedures lab at Mease. The special procedures room is not used by radiologists or cardiologists to do any therapeutic or diagnostic studies of the left chambers of the heart. Unlike procedures such as pulmonary arteriograms, in which the catheter is inserted into or through a chamber on the right side of the heart, fluoroscopy is required for insertion of a catheter into a chamber of the left side of the heart. With fluoroscopy, left heart catheterization procedures involve no significantly increased danger to the patient. Left heart catheterization procedures require faster film sequencing equipment for fluoroscopy because the left heart is a higher pressure (faster flow) system than the right heart chambers. Mease's cardiologists perform these procedures in a CCL at either Morton Plant or Largo Medical Center in Clearwater. The Mease special procedures room does not have, and has not had, the more sophisticated equipment needed to perform catheterization procedures in the left chambers of the heart. The sophisticated equipment needed for left heart catheterizations customarily is part of a CCL. It is commonly understood that a CCL is a laboratory which includes this equipment and uses this equipment for left heart catheterizations. Mease shared this understanding until it learned of the Final Order in Humana Hospital Northside. It never contested the omission of cardiac cath services from its hospital license, never reported cardiac cath procedures to the local health council and applied for a CON for a CCL in 1982. On review of the Humana final order and the record of the case, Mease correctly concluded that its special procedures room was being operated in the same way as Humana Northside's. Mease also concluded that it, too, was entitled to "grandfather" status. But the Humana final order points out: The respondent HRS offered no evidence to dispute the fact that petitioner has indeed been providing cardiac catheterization services on a regular and continuous basis from pre-July 1, 1977 to the present time. Instead, HRS takes the position that since petitioner never reported to the Local Health Council that it was performing such services, it is now somehow estopped from claiming a "grandfather" exemption from Certificate of Need review. There is competent and substantial evidence demonstrating that petitioner began performing cardiac catheterization procedures prior to July 1, 1977, at a time when Certificate of Need review was not required, and has continued to perform such services on a regular basis. Accordingly, petitioner was exempt from Certificate of Need review when it initiated such services and continues to maintain that exempt status so long as it regularly and continuously performs such services. In this case, there was persuasive evidence disputing that Mease has been operating a CCL. Mease's special procedures room had some, but not all, of the equipment customarily used in cardiac catheterization. Its special procedures room is not the kind of room customarily used to perform cardiac catheterization procedures. This is why Mease never before claimed entitlement to "grandfather" status but rather presumed that it did not have a CCL and would need a CON to open a CCL. Mease has not been operating a CCL continuously since July 1, 1977. Need For Mease's Proposed CCL. Mease filed the pending CON application in October, 1986. At the time, the local health council for District 5 was reporting an inventory of four CCLs: St. Anthony's; Morton Plant; Largo; and All Children's. Mease also knew that HRS had entered a final order in July, 1986, recognizing "grandfather status" for Humana Northside and allowing Humana Northside to upgrade its CCL by adding up-to-date equipment required for left heart catheterization procedures. At the time of the State Agency Action Report (SAAR) denying Mease's application in April, 1987, HRS was aware of, and also counted in the inventory at the time of the SAAR, a second CCL at Morton Plant which was added without CON review. The second Morton Plant CCL became operational in July, 1986, but was not reported to the local health council until early 1987, and was not reported by the local health council until September, 1987. A second CCL also opened without CON review at Largo Medical Center. But the evidence was not clear when the second Largo lab opened. It was not reported to, or by, the local health council before the SAAR either, and HRS did not count it in the inventory for purposes of the SAAR. Since the SAAR, two additional CCLs have been approved without CON review at Bayfront Hospital/All Children's Hospital in St. Petersburg. Finally, on November 24, 1987, the District Court of Appeal, First District, rendered an opinion reversing HRS' final order denying an application for a CON for a CCL at Bayonet Point Regional Medical Center in Pasco County in District 5. This CCL was approved for purposes of meeting the need existing as of 1986. The actual District 5 CCL use rate for the period July, 1985, through June, 1986, using local health council data, was 308.47 procedures per 100,000 population. The year in which the proposed CCL would initiate service, but not more than two years into the future, is July, 1988. The District 5 population in July, 1988, is projected to be 1,124,986. The number of procedures projected for District 5 in July, 1988, is 3470. Allocating 600 procedures per CCL, 3470 procedures would create a numerical need for 6 CCLs in District 5 in July, 1988. The local health council did not report any procedures done at the "grandfathered" CCL at Humana Northside, and none were included in the data for the time period July, 1985, to June, 1986. Counting the "grandfathered" Humana Northside CCL in the inventory at the time of the SAAR without attributing any procedures to it for purposes of calculating the use rate for July, 1985, to June, 1986, amounts to a recognition that Humana Northside, while given "grandfather" status based on the facts presented in DOAH Case No. 84-4070, was not in fact operating a CCL continuously since July, 1977. Refusal to attribute procedures to Humana Northside reflects a rational policy decision in this case not to perpetuate the error resulting from the apparently less-than-adequate HRS presentation of its case in the Humana Northside case. There was evidence officially recognized in this case without objection--namely, the Final Order, Bayonet Point Medical Center v. Department of Health and Rehabilitative Services, 8 F.A.L.R. 4342 (DHRS 1986)--that 1200 Pasco County (District 5) residents were being referred to Tampa for cardiac catheterization and open heart surgery in the year preceding June, 1986. (300 were open heart surgery patients.) But there was no evidence to prove how many of the 900 cardiac catheterization patients who were referred to Tampa in the period July, 1985, to June, 1986, would have had the procedure performed in District 5 if Bayonet Point had a CCL. It necessarily follows that there was no evidence to prove that any additional cardiac cath procedures for Pasco County patients performed in District 5 as a result of the Bayonet Pont CCL will not be absorbed by and performed at the Bayonet Point CCL. District 5 has the highest percentage of 65 and over population in the state (29.7 percent for calendar year 1986), but next to the lowest number of catheterizations per thousand of all the districts in the sate. District 5 also has a large cohort of population age 45 to 64. Over 50 percent of the population in District 5 is in the age cohort for which cardiac catheterization is most frequently needed as a diagnostic or therapeutic tool. Seasonal fluctuations increase the elderly winter population. Resident death rate from heart disease is almost 50 percent higher in District 5 than it is for the state of Florida. These factors combine to create an actual use rate in District 5 that, for the past two years (1986 and 1987) has exceeded (or, for 1987, was projected to exceed) the projected horizon year (July 1988) use rate derived from using the 1985 use rate data. The actual use rate for January through September 1987, when extrapolated for the entire calendar year of 1987, shows that the number of procedures expected to be actually performed in District 5 in 1987 is 46 percent (approximately 1,000 procedures) greater than the number of procedures projected to be needed in July 1988 using the 1985 use rate. The projection of procedures for July 1988 is 700 procedures less than actually occurred in District 5 in 1986. Use of July, 1985 to June, 1986, use rate in a demographic configuration like that found in District 5 underestimates projected procedures for July, 1988. Some trends in health care and area population growth do not support the addition of a cath lab at Mease. While the population of north Pinellas County, where Mease is located, is equal in age distribution to south Pinellas County, the new growth in north Pinellas and Pasco is younger than south Pinellas. Increased use of non-invasive diagnostic procedures, such as MRI and CAT scan, will reduce the growth of cardiac cath procedures in the future. The growth in the use rate in cardiac caths is in the number of therapeutic caths, which by rule are required to be done in a facility with open heart surgery and therefore cannot be done at Mease at this time. Indeed, the number of right heart caths being done at Mease has remained constant over the past several years. Also, death from heart disease is decreasing due to improvements in life style. All the cath labs in District 5 are within a two hour drive time of 90 percent of the population in District 5. Morton Plant is six miles from Mease Dunedin. Mease Countryside is twelve miles from Morton Plant and eight miles from Mease Dunedin. One-third of the Mease cardiologist's patients are at Mease Countryside and for catheterization these patients would have to be admitted at or transported to Mease Dunedin where the proposed lab would be located. There is sufficient capacity in the existing cath labs to serve growth in the near future. Approximately 600 more procedures could be done at Morton Plant. There is no problem scheduling caths at Morton Plant. There has been some difficulty getting beds for Mease patients before and after the procedure, but Morton Plant just opened new ICU beds with specially trained nurses to accommodate Dr. Gibbs' patients. The existing labs in District 5 are financially accessible. A significant number of the labs are located in not- for-profit hospitals that serve all types of patients. E.g., Morton Plant, which has an overlapping service district with Mease, offers twice the number of Medicaid days as Mease. In addition, as previously mentioned, new approved labs at Bayfront/ALL Children's (2) and Bayonet Point (1) will be coming on line to provide additional capacity (and bring the total number of CCLs in District 5 to ten.)
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that HRS enter a final order: (1) denying Mease's request for recognition of a "grandfathered" CCL at its Dunedin hospital; and (2) denying its application for a CON for a CCL at its Dunedin hospital, CON Action No. 5108. J. LAWRENCE JOHNSTON Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 12th day of May, 1988.
