Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found: On September 14, 1977, respondent received petitioner's (BMA) application for approval of a capital expenditure proposal to establish a new twenty-station chronic renal dialysis facility in Clearwater, Florida. Petitioner is a subsidiary of National Medical Care, Inc., which is the largest provider of chronic dialysis services, operating some sixty facilities nationwide. BMA currently operates two facilities in the Florida Gulf Health Systems Agency (FGHSA) region -- a twenty-five station facility in Tampa and a twenty station facility in St. Petersburg. BMA also operates facilities in Sarasota, Gainesville and Orlando, Florida. The present application proposes to spend $470,000.00 for leasehold improvements and $140,000.00 for equipment for a total capital expenditure of $610,000.00. The proposed facility is designed to provide outpatient hemodialysis treatments to medically stable, ambulatory patients suffering from end state renal disease (ESRD). Such patients suffer negligible kidney functions and require either regular chronic dialysis treatment or transplantation. Those patients who undergo hemodialysis generally have three treatments per week, each treatment lasting from four to six hours. By letter dated December 12, 1977, the respondent's administrator notified petitioner that its capital expenditure proposal was not favorably considered for two reasons, both relating to the need for such services within the applicable service area. The first reason cited by the respondent was the finding by the FGHSA that only five additional stations would be needed in the year 1978. Due to the fact that the FGHSA failed to provide respondent with its recommendation within sixty days, respondent was required, pursuant to F.S. Section 381.494(5)(e), to deem that the proposal was recommended for approval by the FGHSA. The second reason for disapproval listed by the respondent was its own determination that a surplus of eleven stations would exist in the service area of 1978. This figure of eleven was amended at the hearing to four. Subsequent to the time that petitioner's application was considered at the local and state levels, respondent approved the application of Kidneycare of Florida, Inc. for the establishment of a ten station chronic renal dialysis facility in Clearwater, Florida. This action occurred on February 15, 1978, after an administrative hearing was held in which petitioner BMA was an intervenor. That case (Case No. 77-2203) is presently on appeal in the District Court of Appeal, Second District. Apparently, the BMA and the Kidneycare applications were submitted to and considered by the local and state reviewing authorities during the same period of time. The generally accepted formula for arriving at a projected need for additional dialysis stations is not in dispute. The starting point is the actual number of persons who are ESRD patients within the service area. To this number is added the number of patients expected to develop ESRD during the planning period. This sum is then reduced by the number of successful kidney transplants expected to occur and by the number of patients expected to die within the planning period. For planning purposes, veteran administration patients and dialysis machines are not to be included in the projections. In order to arrive at a valid project patient population figure for the planning period, it should be appropriate to add the number of transient patients or winter visitors to the area and subtract the number of patients trained for home dialysis. To arrive at the number of stations (machines) required to serve the project patient population at the end of the planning period, the projected patient pool is divided by the station utilization factor (a ratio of number of patients per station). The number of existing stations in the area is then subtracted from this figure, thus yielding the number of additional stations needed. Thus the ideal formula reads as follows: current patient pool + new patients successful transplants mortality factor home trainees + winter visitors V.A. patients = projected patient pool divided by station utilization factor number of existing non V.A. stations + additional stations needed This formula necessarily employs certain conjectural components and the dispute in this proceeding concerns the derivation and propriety of the statistics used to supply these conjectural components. It appears from the testimony and documentary evidence that the respondent relied exclusively on the data supplied by the FGHSA, with the exception of the station utilization factor. Therefore, it is presumed that the figures utilized by the FGHSA in its analysis were also utilized by respondent. In arriving at the projected patient pool, the petitioner and the HSA were in agreement with the number of new patients and the number of successful transplants. They were not in agreement with the projected morality figure or with the projected number of veterans administration patients. The HSA utilized the actual morality figure (21.8 percent) for the 1975-76 year. The petitioner utilized the figure of 15 percent. The actual morality rate for the 1976-77 year was 14.1 percent. Had the HSA had this more recent statistic available to it at the time, it would have utilized it. A more appropriate method would have been to average the two figures. This would have increased the number of deaths projected by the petitioner and decreased the number projected by the HSA. The evidence with respect to the patient cap at the V.A. hospital was based upon hearsay and thus is not sufficient to refute the HSA's projections in that area. Neither the HSA nor the petitioner took into account the number of transient patients or the number of existing patients who would undergo home dialysis training within the planning period. Each of these factors was deemed too speculative or conjectural for a meaningful computation of projected needs. Testimony was adduced to the effect that the intervenor Kidneycare had received a nine-year grant to establish home dialysis training in the subject service area, and that once this program was underway, it was expected that from 30 to 50 patients would be trained in home dialysis. The utilization factor per station or machine was also in dispute. In making their projections, both the petitioner and the HSA used a factor of 3.2. This result is obtained by assuming that each machine has a capacity for dialyzing two patients per day, and that each patient must be dialyzed three times per week. Assuming a capacity rate of 80 percent, the utilization factor is 3.2 patients per station. Using a capacity rate of 90 percent, the utilization factor is 3.6 patients per station. The respondent utilized the 3.6 factor in projecting future need. This 3.6 utilization standard has consistently been used by respondent in its review of other free-standing chronic renal dialysis facilities, and petitioner has failed to demonstrate that such a standard is unreasonable. The remaining area of the formula in dispute is the number of existing non-V.A. stations in the area to be served. The parties agreed that as of the end of 1977, there were 73 chronic renal dialysis stations in existence or authorized in the four county are covered by the FGHSA. The dispute arose over the actual utilization by Tampa General Hospital of its existing 14 stations. The assistant hospital administrator at Tampa General Hospital testified that it is the future intent of said hospital to reduce the number of stations available for stable chronic patients in order to make room for more unstable chronic and acute patients. This "future intent" is still in the recommendation stage and the testimony regarding this intent was not specific as to the actual number of stations to be withdrawn. The testimony established that a reasonable planning period for chronic renal dialysis equipment is one year. If one considers the one year period to commence at the time that the proposed facility can be operational, the testimony indicates that the one year period would run from the end of 1978 through the end of 1979. In applying the facts discussed above to the acceptable formula, it is found that the patient pool projected by the HSA must be increased by utilizing a lower mortality rate (18 percent in lieu of 21.8 percent) and that the petitioner's projected patient pool must be decreased by utilizing a higher number of deaths and a higher number of V.A. patients. The resulting figures must also be offset by applying a station utilization factor of 3.6 in lieu of 3.2 and by adding to the number of existing stations the ten stations for which the intervenor Kidneycare recently received approval from respondent. Applying these adjustments to the figures projected by the respondent, the projected patient pool for non-V.A. patients for the end of 1978 approximates 294, and the figure for the end of 1979 is somewhere close to 326. A utilization factor of 3.6 patients per station indicates an approximate need for 82 stations by the end of 1978 and 90 stations by the end of 1979.
Recommendation Based upon the findings of fact and conclusions of law recited above, it is recommended that respondent's denial based upon the ground of lack of demonstrated need for additional dialysis stations in the service area be reversed. It is further recommended that, a need having been shown for an additional seven stations in the planning period, petitioner be permitted to submit a revised or amended application within twenty days for approval of a seven station facility. Respondent should then act upon said revised application within fifteen days from receipt of the same. Respectfully submitted and entered this 9th day of May, 1978, in Tallahassee, Florida. DIANE D. TREMOR Hearing Officer Division of Administrative Hearings 530 Carlton Building Tallahassee, Florida 32304 904/488-9675 COPIES FURNISHED: Art Forehand, Administrator Office of Community Medical Facilities 1323 Winewood Boulevard Tallahassee, Florida 32301 Harold W. Mullis, Jr. Trenam, Simmons, Kemker, Scharf, Barkin, Frye and O'Neill Post Office Box 1102 Tampa, Florida 33601 Eric J. Haugdahl Assistant General Counsel 1323 Winewood Boulevard Building 1, Room 406 Tallahassee, Florida 32304 John H. French, Jr. 630 Lewis State Bank Building Tallahassee, Florida 32304
Findings Of Fact On or about December 13, 1984, Petitioner applied to Respondent for a CON for an ambulatory surgical center (ASC). Respondent assigned CON number 3677 to Petitioner's application. Petitioner seeks to construct a two operating room, free standing ASC at 1710 West Colonial Drive in Orlando, Orange County, Florida. The primary area to be served by this application is Orange County, and the facility as proposed is reasonably accessible to Orange County residents. Orange County is located within Respondent's District VII, which is also comprised of Osceola, Brevard and Seminole Counties. Stuart and Joseph Yachnowitz are owners of Y and S Management and are partners in the application here at issue. Y and S Management will provide medical management services at this facility, as it provides at nine other facilities throughout the country which performed approximately 17,500 outpatient surgical procedures in 1985, primarily gynecological. Two of the facilities managed by Y and S Management are licensed as ASCs under the laws of the states in which they are located. The chief operating officer of Y and S Management, Susan Hill, prepared the CON application which is here at issue. Financing for this project will be provided from the personal funds of Stuart and Joseph Yachnowitz. No funds will be borrowed for this purpose. They have sufficient liquid personal funds to fully finance the project cost of $473,000, as well as operating costs. Petitioner will lease 6,500 square feet on the first floor of a professional building to be constructed at 1710 West Colonial Drive in Orlando from West Colonial Properties, Ltd., at $12 per square foot. This property is owned by Stuart and Joseph Yachnowitz. An abortion clinic known as Orlando Women's Health Center, which they also own, is located next door at 1700 West Colonial Drive. The facility as proposed can reasonably be expected to meet licensure requirements for an ASC. Ambulatory surgical procedures to be performed at Petitioner's facility will include, but not be limited to abortions, tubal ligations, hernia repairs, diagnostic laproscopies, eye surgery for cataracts, hand surgery, plastic surgery, tonsillectomies, and dilatation and curettage. Equipment cost estimates for this project of $161,158 are realistic and complete. Staffing requirement estimates of 11.54 F.T.E., and salary requirements of approximately $182,000 annually are also realistic and complete. Petitioner estimates that for 1987 and 1988, 20% of all cases will be paid by Medicaid, 5% by Medicare, and 75% will be insurance and private pay, with 4% of this figure ultimately being bad debt or indigent care. With total cases estimated for 1987 and 1988 to be 1700 and 2100, respectively, total net revenues for 1987 and 1988 are estimated to be $732,000 and $903,000, respectively. Providing services to Medicaid patients in 20% of its cases would be beneficial to the community since this is a high level of service to patients who are typically underserved. Assuming that 20% of the cases handled at Petitioner's facility have multiple procedures, the projected charge rates for 1987 are $326 per case for Medicare and Medicaid, and $489 per case for private pay and insurance. These are reasonable and competitive charges. The projected charge rate for private pay and insurance is simply 150% of the Medicare and Medicaid rate, which in turn is based on the projected case mix considering the various levels of reimbursement. Petitioner will pay Y and S Management a fee of $50 per case for management services. The financial pro forma prepared for Petitioner demonstrates that using a conservative approach that somewhat overestimates expenses, Petitioner will reach the break-even point at 1400 cases, after allowing for management fees, depreciation and amortization. Using a less conservative, but more typical approach to estimating expenses, Petitioner will break-even at 1100 cases. Need in the service area exceeds the conservative break-even point and Petitioner estimates it will handle 1700 cases in its first year of operation and 2100 in its second. These are reasonable estimates. Respondent has not promulgated a rule setting forth a methodology for determining need for an ASC. However, Respondent has utilized an evolving non-rule policy in evaluating the need for such facilities. Reid Jaffe, Respondent's expert in health care planning, explained the methodology used in this case which resulted in his determining that in July, 1987, there will be a need for additional ambulatory surgical facilities in Orange County sufficient to recommend approval of Petitioner's CON application. Specifically, Jaffe's methodology is as follows: Acquire data from the local health council regarding the number of inpatient and outpatient procedures performed by existing providers, as reported for the current calendar year (1985) by hospitals in the appropriate service district (District VII). Acquire data from the Governor's Office of the population estimate for the appropriate service area (Orange County) for the current and planning horizon years. Using this data, calculate the current overall surgical and outpatient surgical use rates per 1000 population for hospitals in the service area. Using the projected population for the planning horizon year (1987) and the current use rates calculated in (c) above, calculate the projection of overall surgical procedures in the planning horizon year. Multiply projected overall surgeries by 40% to establish total number of out-patient surgeries to be performed in the planning horizon year. Subtract from (e) all outpatient surgical procedures to be performed in hospitals, other ASCs in the service area, as well as the financial break-evens of all CON approved free-standing outpatient surgery centers in the service area. After performing these calculations and subtractions, the number of outpatient surgical procedures remaining are compared to the break-even of the CON applicant at issue. If the remaining number is larger than the applicant's break even, a quantitative need is demonstrated. Applying Jaffe's methodology to this case and applying data he obtained from the Local Health Council of East Central Florida, as reported to it by hospitals in District VII for calendar year 1985, as well as population data for Orange County he obtained from the Governor's Office, it appears that a total of 83,054 surgical procedures were performed in District VII in 1985, with 21,084 of these being outpatient procedures performed in a hospital. Using a July, 1985, population estimate for Orange County of 556,384, the overall surgical use rate for Orange County is 83,054 divided by 556,384 over 1000, or 149.27 surgical procedures per 1000 population; the use rate for outpatient procedures performed in hospitals is 21,084 divided by 556,384 over 1000, or 37.89 outpatient procedures performed in hospitals per 1000 population. Multiplying the overall surgical use rate of 149.27 by 574,599 (projected Orange County population for July 1987) over 1000 and applying a factor of 40% yields a projection of 34,308 outpatient surgical procedures to be performed in 1987. The use rate of 37.89 for outpatient services performed in a hospital is then multiplied by 574,599 over 1000 to obtain 21,722 which is the projected number of outpatient procedures which will be performed in a hospital in 1987. By subtracting this number (21,722) from the projection of total outpatient surgical procedures to be performed in 1987 (34,308) you identify 12,536 procedures which could be performed in ASCs in 1987. The reported number of outpatient procedures being performed in existing ASCs and the break-evens of CON approved facilities are calculated to be 5,488 (Surgical Services 2,693; MediVision 903; AMI Single Day Surgery 1,832; Surgical Associates 60) which is then subtracted from 12,536 to leave a need of 7,048 outpatient procedures which could be performed in ASCs which are not now approved for this service area. Since Petitioner has a conservative break-even point of 1400 cases, and a more typical break-even point of 1100 cases, a quantitative need has been identified which far exceeds Petitioner's break-even point. Jaffe testified that in his experience this is the largest margin between break-even and available procedures he has seen in reviewing CON applications. A need analysis conducted by Howard E. Fagin, Ph.D., who was accepted as an expert in health care planning, facility planning and operations analysis, also confirms that there is a quantitative need for the ASC proposed by Petitioner. The methodology used by Dr. Fagin starts by calculating a target utilization for ambulatory surgical operating rooms. Assuming that a facility operates 250 days/year, 6 hours/day, it takes 1.25 hours/case and that there are 1.2 procedures/case with a utilization rate of 75%, a target utilization of 1,080 procedures/year for an ambulatory surgical room is thereby determined. In 1985 there were 10 approved hospital "dedicated" ambulatory surgical rooms in Orange County, and 9 approved rooms in free-standing ASCs (Surgical Services-5, AMI Single Day Surgery-2, MediVision-2) not counting the 2 rooms approved in CON 3313 for Surgical Associates which are used for no more than 60 cases per year. Multiplying these 19 rooms by the target utilization of 1,080 procedures/year results in a calculation of 20,520 total utilization in available dedicated and free-standing ASC rooms. Data from the Local Health Council of East Central Florida for 1985 indicates that 11,413 outpatient procedures were performed in hospital, non-dedicated, operating rooms. Therefore if we take Jaffe's projection of 34,308 outpatient surgical procedures to be performed in 1987, and subtract 20,520 (total utilization in available dedicated and free-standing ASC rooms) and also subtract 11,413 (outpatient procedures performed in hospital, non-dedicated, rooms), we arrive at a need of 2,375 procedures in 1987 and 3,770 procedures in 1989. Since Petitioner's break-even is conservatively 1400 cases, and again assuming 1.2 procedures per case, Petitioner's conservative break-even is 1680 procedures, which is within the need which will exist in 1987, and well within the need in 1989. The need methodology and opinion of Intervenor's expert, Dr. Deborah Kolb, is rejected because she incorrectly: (a) considered Orange and Seminole Counties as comprising a two county service area; (b) included all existing inpatient hospital based operating rooms, regardless of whether they are dedicated to outpatient surgery, in arriving at her conclusion that there is excess capacity; and (c) assumed all hospital operating rooms are available for outpatient surgery without modification. Ambulatory surgery is typically performed in three types of facilities: hospitals which utilize their operating rooms for both inpatient and outpatient surgery; hospitals which maintain separate "dedicated" outpatient operating rooms, sometimes even in separate facilities adjacent to the main hospital; and free-standing ASCs which are not associated with a hospital. There are definite disadvantages to serving outpatients in hospitals without "dedicated" outpatient operating rooms, including the "bumping" of outpatients in emergencies and increased costs to the patient for services. On the other hand there are advantages and disadvantages to the other two modes of delivering ambulatory surgical services. Hospital based "dedicated" rooms are obviously closer to a hospital in case an emergency develops, and some patients may prefer this proximity to additional equipment and emergency medical staff. On the other hand, costs at a free-standing ASC are generally lower, and some patients prefer to avoid a hospital atmosphere altogether. Surgical procedures performed at ASCs have grown from 10% of all procedures in the early 1970s to 40% currently, and are projected to grow to 50% in the near future. This growth is somewhat the result of a change in Medicaid/Medicare reimbursement policies which now pay 80% for procedures performed in a hospital and require a 20% co-payment by the patient, but which pay 100% for procedures performed in an ASC and require no patient co-payment. The decision to have outpatient surgery performed at one or the other of these types of facilities is primarily the result of patient preference. However, it is clear that the increasing utilization of ASCs is a market force that is driving the cost of hospital outpatient services down. Respondent issued its original notice of intent to deny Petitioner's application on or about May 17, 1985, and on June 14, 1985, Petitioner filed its Petition for Formal Hearing. Thereafter, Respondent reconsidered its position and on March 6, 1986, notified the parties that it intended to grant Petitioner's application. The reason for this reconsideration was that when the initial denial was made, Respondent's projections of procedures were premised on the use of a 30% outpatient surgical factor. Subsequently, the Respondent began using 40% in its projection of the total volume of surgical procedures which might be performed on an outpatient basis. Given the fact that the reason Petitioner was initially denied was due to insufficient procedures, and utilization of the new projection of outpatient volume indicated there would be sufficient volume to support the facility, Respondent determined to support Petitioner's application. The notice of change of position was prepared by Reid Jaffe, who based his testimony at hearing on the 40% factor, and was approved by Robert E. Maryanski, Administrator of Community Medical Facilities, and Marta V. Hardy, Deputy Assistant Secretary for Health Planning and Development. Since Respondent has not adopted a need methodology rule for ambulatory surgical centers, the increase in the factor used to calculate outpatient surgeries from overall surgeries performed was not accomplished through rule-making proceedings. In 1985 Respondent used a factor of 30%, but in early 1986 increased this to the 40% applied in this case.. Intervenor provides services similar to those which Petitioner will perform, and has four free-standing, "dedicated" operating rooms which are used for ambulatory surgery. It also has 17 operating rooms that are used for both in and out-patient surgery. The Intervenor opposes Petitioner's application. In 1985, Intervenor made a profit of $10.9 million on total revenues collected of $184 million; it had an actual total of $37.4 million in uncompensated care which includes partial or no payments, charity, bad debt, and contractual patients. For 1986, it projects an $18.9 million profit on collected revenues of $211 million, with projections of actual uncompensated care of approximately $52 million. In 1985, 2% of Intervenor's costs were for providing indigent care, and this totaled approximately $6 million. Petitioner projects net revenues of approximately $900,000, and it has not been established if this will have any impact on Intervenor's revenues. According to Billie June, Assistant Director of Operating Rooms at Florida Hospital who was accepted as an expert in surgical nursing, and the management and operation of surgical units from a nursing standpoint, Intervenor has had considerable difficulty attracting qualified nursing staff for its operating rooms, and has had to develop its own qualified staff through an internship program. However, Petitioner's facility will not contribute to this difficulty or result in higher salaries. Susan Hill testified based on her experience since 1973 of managing and hiring staff in the Orlando area of the type needed to operate an ASC, that she has had no difficulty obtaining the cooperation of physicians in the area and in attracting fully qualified staff. Based on Hill's experience with other ASCs managed by Y and S Management throughout the country as well as her experience in Orange County, it is found that the staffing needs of Petitioner's proposed facility can be met with nursing and medical staff available in the area. It is found as a matter of fact that there is a need in Orange County for the two operating room ASC proposed by Petitioner, that Petitioner has the ability and will provide quality care, the project is financially feasible, Petitioner will work with and help to meet the needs of health maintenance organizations and will promote cost effectiveness in Orange County. Petitioner's proposal is consistent with the goals, objectives and recommended actions in the 1985-87 Florida State Health Plan and the local health plan. The State Plan encourages the existence of ASCs and the removal of obstacles to the use of outpatient surgery; the local plan provides that applicants for an ASC must demonstrate a willingness to provide services to underserved patient groups and considers the provision of ambulatory surgery to the underserved population to be a desirable objective. In this case Petitioner intends to provide 20% of its cases to Medicaid patients, and another 4% to indigents.
Recommendation Based on the foregoing, it is recommended that the Department of Health and Rehabilitative Services issue a Final Order granting Petitioner's application for CON number 3677. DONE and ENTERED this 23rd day of October, 1986, at Tallahassee, Florida. DONALD D. CONN, 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 23rd day of October, 1986. COPIES FURNISHED: William Page, Jr., Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32301 Chris H. Bentley, Esquire Post Office Box 1739 Tallahassee, Florida 32302 Douglas Mannheimer, Esquire Post Office Drawer 11300 Tallahassee, Florida 32302 E. G. Boone, Esquire Jeffrey Boone, Esquire Gregory Roberts, Esquire Post Office Box 1596 Venice, Florida 34284. APPENDIX Rulings on Petitioner's Proposed Findings of Fact: 1. Adopted in Findings of Fact 1, 2. 2,3. Adopted in Finding of Fact 3. Adopted in Finding of Fact 6. Adopted in Finding of Fact 5. Adopted in Finding of Fact 7. Adopted in Finding of Fact 11. Adopted in Findings of Fact 11, 22. Adopted in Finding of Fact 9. Adopted in Finding of Fact 2. Adopted in Findings of Fact 2, 14. 12,13. Adopted in Finding of Fact 20. Adopted in Finding of Fact 7. Adopted in Finding of Fact 20. Adopted in Finding of Fact 8. Adopted in Findings of Fact 3, 8. Adopted in Findings of Fact 4, 7. Adopted in Finding of Fact 4. Adopted in Finding of Fact 2. Adopted in part in Finding of Fact 15 but otherwise rejected as cumulative and unnecessary. Adopted in Finding of Fact 19. 23-25. Rejected in Finding of Fact 18 and otherwise rejected as irrelevant and not based on competent substantial evidence. Rejected as cumulative and unnecessary. Rejected in Finding of Fact 18. Adopted in Findings of Fact 12-14. Adopted in Findings of Fact 12, 13. Adopted in Findings of Fact 13, 14. 31-35. Adopted in Finding of Fact 15. 36,37. Rejected as irrelevant and unnecessary. 38. Adopted in Finding of Fact 22. 39,40. Adopted in Finding of Fact 23. 41. Rejected as a Finding of Fact since this is a request for further ruling on Petitioner's Motion to Limine which was granted at hearing. Petitioner filed a Motion in Limine on June 11, 1986 to exclude depositions taken of John Hutchens on April 23, 1986 and June 5, 1986. This is the motion dealt with at the prehearing conference on June 23, 1986. The only deposition of John Hutchens offered by Intervenor and admitted was one taken on June 20, 1986 (I-2). Therefore, Petitioner's motion and the prior ruling is moot since the depositions to which the motion was directed were not offered at hearing. 42-45. Adopted in Finding of Fact 22. Rulings on Intervenor's Proposed Findings of Fact, as set forth beginning on page 3: 1. Adopted in Finding of Fact 12. 2-16. Rejected in Finding of Fact 15, and otherwise irrelevant and cumulative. 17,18. Rejected in Findings of Fact 12-14, 22. 19-26. Adopted in part in Finding of Fact 14, but otherwise rejected as contrary to competent substantial evidence. 27,28. Adopted in part in Findings of Fact 12, 13, but otherwise rejected as contrary to competent substantial evidence. 29. Rejected in Findings of Fact 12-15 and otherwise as argument rather than proposed findings of fact. 30-34. Adopted and rejected in part in Finding of Fact 16 and otherwise rejected as contrary to competent substantial evidence. Adopted in part in Finding of Fact 19, but otherwise rejected as irrelevant. Adopted in Findings of Fact 13, 14. 37,38. Rejected as irrelevant. 39,40. Adopted in part in Finding of Fact 16. Adopted in part in Findings of Fact 2, 3 but otherwise rejected as contrary to competent substantial evidence. Adopted in part in Finding of Fact 6, but otherwise rejected as irrelevant. 43,44. Rejected in Finding of Fact 22. 45-47. Rejected in Finding of Fact 7. Adopted in Finding of Fact 7. Rejected in Finding of Fact 7. Rejected in Findings of Fact 3, 5, 7 and 22. Adopted in part in Finding of Fact 3. Rejected as contrary to competent substantial evidence. 53,54. Adopted and rejected in part in Finding of Fact 21. Adopted in part in Findings of Fact 11, 22 but otherwise rejected as irrelevant. Rejected as cumulative and unnecessary. 57-59. Rejected as simply a summation of testimony, irrelevant and contrary to competent substantial evidence. Adopted in part in Findings of Fact 13, 14 and 16 but otherwise rejected as contrary to competent substantial evidence. Rejected as irrelevant. 62,63. Rejected in Finding of Fact 21 and otherwise irrelevant and contrary to competent substantial evidence. Rejected in Findings of Fact 4, 7. Adopted and rejected in part in Finding of Fact 8. Rejected in Findings of Fact 11, 22. Rejected in Finding of Fact 22 and otherwise irrelevant and contrary to competent substantial evidence. Adopted in part in Finding of Fact 20, but otherwise rejected as irrelevant. Rejected as irrelevant. Adopted in Finding of Fact 16; rejected in Finding of Fact 21 and otherwise rejected as contrary to competent substantial evidence. Rejected in Findings of Fact 4, 5 and otherwise rejected as irrelevant. 72-75. Adopted in part in Findings of Fact 19-21, but otherwise rejected in Findings of Fact 21, 22 and as irrelevant. 76-79. Rejected as irrelevant, cumulative argument which does not provide citations to the record contrary to Rule 221-6.31(3), Florida Administrative Code.
The Issue This case arises out of Orlando Regional Medical Center's objection to the issuance of a Certificate of Need to Surgical Services of Orlando, Inc., for the construction and operation of an ambulatory surgical center in Orlando, Florida. At the formal hearing, Orlando Regional Medical Center called as witnesses, Herbert E. Straughn, Norton Baker, Terry Weibley, Marlene Mariani, Michael L. Schwartz, Janice Smith, Richard Douglas Signer, Cathy Canniff Gillam, Jack Bradley, Barbara W. Miner, John Bozard and Stephen Haar. The Intervenor, Surgical Services of Orlando, Inc., called as witnesses, Steven Haar, Janice Smith, John Bozard, Michael Means, Jerry Senne, James Leveretee, Stephen Foreman, John S. Lord, Robert C. Klettner, Albert S. Bustamante, Pedro Diaz- Borden, Alberto J. Herran, Marianna Johnson, Richard Toole, Don Newton, Hank Gerken, Gordon Kiester, Leonard J. Levine, Rufus Holloway, Brenda Brinkman, Betty Barker, Wayne Deschambeau, Mark Richardson and Rick Knapp. Department of Health and Rehabilitative Services called as its only witness, Mr. Thomas Porter. Surgical Services of Orlando, Inc., offered and had admitted into evidence 33 exhibits. At the formal hearing, the Hearing Officer reserved ruling upon SSO Exhibit No. 14 and that exhibit is admitted. Orlando Regional Medical Center offered and had admitted into evidence, 9 exhibits. At the formal hearing, the Hearing Officer reserved ruling upon SSO Exhibit No. 14 and that exhibit is admitted. Orlando Regional Medical Center offered and had admitted into evidence, 9 exhibits. At the formal hearing, Orlando Regional Medical Center was given permission to file a late-filed exhibit with Surgical Services of Orlando, Inc., and the Department having the opportunity to object to said exhibit. That exhibit has been filed as Orlando Regional Medical Center Exhibit No. 9 and consists of excerpts from the Department of Health and Rehabilitative Services file relating to this application. That exhibit is admitted. The Department of Health and Rehabilitative Services offered and had admitted into evidence one exhibit. A map of Orlando reflecting the location of the various hospitals in Orange County was admitted as joint exhibit 1. Subsequent to the formal hearing, each of the parties submitted proposed findings of fact and conclusions of law for consideration by the Hearing Officer. To the extent that those proposed findings of fact and conclusions of law are inconsistent with this order, they were considered by the Hearing Officer and rejected as being unsupported by the evidence or as unnecessary to the resolution of this cause.
Findings Of Fact Surgical Services of Orlando, Inc., (hereafter referred to as SSO), is a Florida corporation based in Orlando, Florida. The stock of the corporation is owned in equal shares by Steven Foreman, Dr. Rufus Holloway and Randall Phillips. Mr. Steven Foreman is a life underwriter and financial consultant, and real estate investor in the Orlando area. He is secretary and director of SSO. Dr. Rufus Holloway is an otolaryngologist in the Orlando area and is treasurer and a director of SSO. Randall Phillips is a hospital administrator presently employed by American Medical International, Inc. Orlando Regional Medical Center, Inc. (hereinafter referred to as ORMC) is an existing hospital located in Orlando, Florida. It is a not-for-profit regional tertiary care center with 1035 beds and 24 operating rooms. ORMC has two main divisions, the Orange Division and the Holiday Division and is presently constructing a new facility, Sand Lake Division, which will open sometime in mid 1985. The Sand Lake Division will have 4 operating rooms and 150 beds. Dr. Rufus Holloway and Steven Foreman have committed their personal resources to provide financial support for the complete development and operation of the applicant's proposed ambulatory surgical center. The facility will be constructed by a partnership, the Kaley Avenue Medical Partnership of Dr. Holloway, Mr. Foreman and Richard Toole, a citrus owner in the Orlando area, and will be leased to SSO. Two banks in the Orlando area have given commitments to provide the necessary financing for the proposed facility and start-up expenses. Pan American Bank has committed to provide a $2.5 million loan for the construction and equipping of the building and $750,000 line of credit. Dr. Holloway and Mr. Foreman, and the parties of the Kaley Avenue Partnership have sufficient financial resources to fulfill their commitments to the proposed project. The proposed building will be a one floor building containing 15,000 square feet. The total cost for the project will be $2,737,636. The building is to be constructed and equipped by the Kaley Avenue Medical Partnership and leased to SSO at $16 per square foot. The proposed site of the facility is on Kaley Avenue within two or three blocks of ORMC. Its service area will include all of Orange County. The facility will contain five operating rooms with only three of the rooms being completely equipped initially. These rooms will be used for general and local anesthesia. The remaining two rooms will be equipped as demand requires. The applicant has budgeted $743,000 for initially equipping the facility with an additional $160,000 required to equip the two remaining operating rooms. The equipment proposed by the applicant is adequate to perform those procedures which the applicant proposed to perform at its facility. In addition to the five operating rooms, the center will include laboratory, x-ray, administrative areas, as well as holding and recovery areas for the patients. The applicant projects a total number of procedures in the first year of 1,800 and 2,760 in the second year of operation. Based upon a Medicare utilization rate of 15 percent SSO projects an operating loss in the first year of $223,000 with the facility making a profit in the second quarter of the second year and generating a total profit of $766,000 in the second year. The projected break-even point is 2,448 procedures within a year. Projected revenues are based upon an average charge per case of $575. SSO also intends to accept Medicaid patients. Presently, Medicaid does not reimburse freestanding ambulatory surgical centers. Medicaid charges would be included as charity cases in the projected bad debt of 6 percent of gross revenues. Based upon an inflation rate of 8 percent per annum when SSO begins operation in January, 1986, its average charge per case will be competitive with other facilities in the area providing ambulatory surgical services. Medicare now reimburses 100 percent of the facility charges in a freestanding ambulatory facility and 80 percent for outpatient surgery in a hospital setting. Prior to opening, SSO will implement a marketing program directed to four different target groups: physicians, consumers (patients), employers and insurance carriers. SSO has retained a marketing expert who has prior experience in marketing ambulatory surgical care in Florida. Similar marketing has proven successful for other freestanding ambulatory surgical centers in Florida. SSO has budgeted $20,000 for pre-opening marketing expenses and $35,000 for the first year of operation. It is difficult upon this record to make a truly accurate comparison of outpatient surgical rates in existing facilities to the proposed average charge of SSO. ORMC presented evidence that the present average charge in ORMC and three other hospitals per outpatient case is as follows: ORMC $417.19 Florida Hospital $469.86 Winter Park $512.21 Orlando General $560.81 No average charges were presented into evidence for West Orange Hospital, Lucerne Hospital, or Brookwood Hospital. The evidence established that 8 percent is a reasonable inflation or increase rate for health care charges over the next two years. Applying an 8 percent inflation rate to the above average charges these charges for 1986, SSO's first year of operation would be: ORMC $486.61 Florida Hospital 548.04 Winter Park 597.44 Orlando General 654.13 In calculating its present average charge of $417.19, ORMC did not include those outpatient surgeries performed at the Orange Division which are charged at inpatient rates. A memo dated January 19, 1984, to John Bozard, ORMC Vice President for Finance, from Steve Horr, ORMC Assistant Controller/Reimbursement, reflects that Holiday Division had 484 outpatient surgical cases which are estimated to generate gross revenues of $228,547. This results in an average charge per case for the month of December 1983 of $472.20. It is concluded that in 1986 the SSO projected average charge of $575 will be competitive with those existing facilities in the Orange County area. There is presently no rule which contains a specific methodology for determining need for ambulatory surgery centers. HRS uses a methodology which is based upon policy but has not been proposed or promulgated as a formal rule. The present methodology utilizes the total surgery cases for the most recent 12 month period to determine a surgical utilization rate per 1,000 population. By separating inpatient and outpatient surgeries for the same 12-month period, a percentage ratio of outpatient surgery cases to total surgeries is established. Applying the utilization rate to future projected population, HRS then determines the total projected surgeries for future years and from this number calculates the projected outpatient surgeries which will be performed in existing facilities. Literature relating to ambulatory surgeries projects that 18 to 40 percent of all surgical procedures performed could be performed in an outpatient setting. In calculating total potential surgeries HRS utilizes 29 percent as the potential surgeries that can be performed in an outpatient setting. The 29 percent factor is the mean of 18 percent to 40 percent and appears reasonable in light of the fact ORMC, Holiday Division, Winter Park Memorial and Orlando General had outpatient surgery of 29.4 percent, 30.1 percent and 30.6 percent respectively for 1983. Applying the 29 percent factor to projected total surgeries, HRS calculates the projected potential ambulatory surgery for a given year in the future. Subtracting those outpatient surgeries which will be performed in existing facilities from the total potential outpatient surgeries provides the unmet need for outpatient surgical care. This need is reflected in total cases. In evaluating ambulatory surgical applications, HRS utilizes a two year planning horizon. It is projected that SSO would begin operation January 1, 1986, and therefore under the HRS methodology, 1986 and 1987 become the relevant years for the HRS methodology, 1986 and 1987 became the relevant years for looking at projected need. Using the methodology described above, HRS projects the potential number of outpatient surgical cases which could be performed in other than a hospital setting to be 7,203 and 7,347 for 1986 and 1987, respectively. HRS projects the break-even level of the SSO facility at 2,693 surgical cases per year. Subtracting the SSO break-even factor from 7,203 and 7,347 results in an unmet need even after the SSO facility is in operation of 4,510 and 4,654 surgical cases in 1986 and 1987. HRS calculated the outpatient utilization rate in existing hospitals in 1983 to be 15.3 percent. If the unmet need of 4,510 and 4,654 in 1986 and 1987 was met by these existing facilities, that utilization rate would increase to 24 percent or approximately 1 1/2 times the 1983 rate. The projected utilization for the SSO facility for 1986 and 1987 will constitute only about 20 percent and 30 percent respectively of the unmet need for outpatient surgery in those years. The applicant in projecting need used a five year planning horizon to project need for ambulatory surgical services in Orange County for the year 1989. Under SSO's methodology, an outpatient utilization rate of 30 percent, 35 percent and 40 percent was used to project the total potential outpatient or ambulatory surgeries for the year assuming a total surgical utilization rate of 101.45 cases per thousand. Using these assumptions, the applicant projected unmet need for ambulatory surgeries in Orange County in 1989 as: Percentage of Ambulatory Surgery Unmet Need 30% 6,357 35% 9,246 40% 12,136 Although the projected unmet need is somewhat lower than that projected by HRS, it does reflect a need for the SSO facility. The methodology used by ORMC utilizes what ORMC's experts described as the "excess capacity theory." This methodology is based upon the assumption that no need exists for an ambulatory surgical center until such time as all excess capacity in the existing operating suites in Orange County is utilized. Using this approach, ORMC contends that of the 79 total operating suites in Orange County, there are presently 39 excess operating suites available to perform outpatient surgery. By multiplying total number of hours per day per operating room times 260 days, ORMC calculates the total available hours of operation of an operating suite and by multiplying this number times the total number of suites, the total available hours or operating room time for a facility is determined. The total available hours is then divided by the average operating room time for all procedures performed to determine the total number of potential procedures. Using this approach, ORMC's expert opined that there is potential for 95,513 - 98,980 total surgical cases in the existing 79 operating rooms in Orange County These 79 rooms include the 4 new operating suites in ORMC's Sand Lake facility as well as the 4 suite in Florida Hospital's new freestanding ambulatory surgical center. Subtracting the total procedures of 47,712 from the potential capacity, ORMC projects an available excess capacity for growth of 47,801 to 51,268 surgical cases in Orange County. Also using total available hours, hours per average procedure and total hours required for procedure presently being performed, ORMC's expert calculated the number of operating suites presently required. By subtracting this number from the number of existing suites, the ORMC expert concluded that there are presently 39 excess operating suites in Orange County. Once the ORMC Sand Lake facility and the Florida Hospital Freestanding Ambulatory Center (FAC) open, there will be a total or 79 operating suites in Orange County. These are divided as follows: ORMC, Orange Division 14 ORMC, Holiday Division 10 Winter Park Memorial 10 Orlando General 4 West Orange 3 Lucerne 8 Brookewood 5 Florida Hospital 17 Florida Hospital, FAC 4 ORMC, Sand Lake 4 79 At present, ORMC, Holiday Division, is the only facility operating dedicated ambulatory surgical suites. There are no applications pending for dedicated outpatient facilities within hospitals or for a freestanding ambulatory surgical facility. No such applications have been filed for these types of facilities since the SSO application was filed. Each of the existing facilities listed above performs outpatient surgery to some degree. On August 16, 1982, Florida Hospital was issued a Certificate of Need to construct a freestanding ambulatory surgical center. That facility will contain four operating suites and is expected to begin operation in mid 1984. Once this facility is complete, Florida Hospital will not perform outpatient surgery in its 17 other suites, except when special equipment which is available only in those suites is required. Outpatient surgery at Winter Park Memorial and Orlando General now comprises approximately 30 percent of the total surgeries performed at those facilities. Lucerne Hospital operates no separate ambulatory surgery unit and favors SSO's application. ORMC has been performing outpatient surgery for over 20 years. However, the specific facilities in which outpatient surgery has been performed have changed during this period of time. Prior to August 1979, outpatient surgery was performed at the Five North unit in the Orange Division as well as at the Holiday Division. At that time, Orange Five North was closed for renovation and outpatient surgery was concentrated in Holiday One East. In October 1981, an outpatient surgery review committee was established by ORMC to examine more efficient ways to conduct outpatient surgery and to improve utilization of certain departments at the Holiday Division. The end result was a decision to concentrate outpatient surgery at ORMC in one designated unit to be known as Outpatient Day Surgery ("ODS"), and to provide a financial incentive for physicians and patients to utilize the unit. One of the primary reasons for concentrating outpatient surgery in Holiday One East was the inefficiency and increased cost of staffing the units. Outpatient census counts were resulting in overstaffing the 3 to 11 shift. To encourage doctors and patients to utilize Holiday One East, ORMC reduced the rates for outpatient surgery in the ODS unit by approximately 40 percent. Although some outpatient surgery continues to be performed at the Orange Division the charge for such surgeries is at the inpatient rates rather than the reduced rates utilized by the ODS. The ORMC Board of Directors approved the capital expenditure to renovate the Holiday One East area into the ODS unit on September 20, 1982. The ODS unit was renovated at a cost of approximately $600,000, which was below the Certificate of Need threshold requirement. The ODS unit opened on November 28, 1983. The ODS unit is open Monday through Friday, and utilizes a ten hour day with general anesthesia administered to outpatients from 7:30 a.m. to 1:00 p.m. ODS patients use a separate and distinct entrance to the Holiday Division and have a designated parking area east of the hospital. There are sixteen semi- private holding beds and four recliner chairs located within the ODS unit. The average case load and length of stay are such that holding beds may be used for more than one outpatient per day. As a result of instances where there have been shortages of holding beds for outpatients, ORMC beginning April 2, 1984, established an overflow area of ten beds on the third floor of the Holiday Division. As of May 29, 1984, this overflow area had been utilized on three occasions. The ODS unit contains two dedicated operating rooms where only local anesthesia can be administered. Outpatient procedures requiring general anesthesia are performed in the eight general operating suites of the Holiday Division. These eight operating suites are also used for inpatient surgery. Outpatients are placed in the same holding and recovery areas where inpatients are held. The staff in these areas serve inpatients and outpatients. The ODS unit averages 15 to 16 outpatients per day. In 1983, outpatient surgery comprised 29.4 percent of the total surgeries performed at the Holiday Division. This was a slight increase over the 27.7 percent outpatient percentage for that same division for the previous year. Presently, the two dedicated local anesthesia rooms are being utilized approximately 40 percent of the time. The present utilization rate of the entire Holiday Division is approximately 50 to 55 percent to as much as 80 percent depending upon the particular day of the week. The 80 percent rate is attained on a regular basis at least once per week. ORMC has been issued a Certificate of Need for a children's hospital. As presently designed and approved, the construction of the children's hospital will require the demolition of Holiday One East where the ODS unit is located. It is uncertain where the ODS unit would be relocated. The master facility plan approved by the ORMC Board of Directors includes the construction of a freestanding ambulatory diagnostic center which will include ambulatory surgery. Depending upon the staff and its efficiency and the quality of care provided, a freestanding ambulatory center offers several advantages over outpatient units within hospitals. In such a freestanding facility, only outpatient surgery is performed and the staff and physicians, including anesthesiologists, can be specialized in outpatient surgery. In the freestanding facility, outpatients are not mixed with inpatients. A substantial portion of those patients utilizing outpatient surgery are well patients having elective surgery performed. By specializing in outpatient surgery only, overall operating costs are likely to be less and should result in reduced patient costs. In a hospital setting, there is on occasion a problem with "bumping" elective surgery for emergencies. This would not occur in a freestanding ambulatory surgery facility. Patients will have shorter waits in the facility and Medicare patients will be reimbursed 100 percent rather than the 80 percent reimbursed in a hospital setting. The 550 application is consistent with the applicable criteria enumerated in Section 381.494(6)(c), Florida Statutes and need for its facility exists in Orange County. Of the thirteen governing criteria, the parties have stipulated that the criteria contained in Subsections 6, 7, 10 and 11 of Section 381.494(6)(c), Florida Statutes, are not applicable to this proceeding. In addition, the parties stipulated that Subsection 1 of Section 381.494(6)(c), Florida Statutes, is not applicable to this proceeding to the extent that there is no applicable district health plan or state health plan pertaining to ambulatory or outpatient surgery.
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is, RECOMMENDED That HRS issue a Certificate of Need to Surgical Services of Orlando, Inc., to construct and operate a freestanding, five operating room ambulatory surgery center in Orange County. DONE AND ENTERED this 2nd day of July, 1984, in Tallahassee, Florida. MARVIN E. CHAVIS Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 3rd day of July, 1984. COPIES FURNISHED: Douglas L. Mannheimer, Esq. CULPEPPER, TURNER & MANNERED 318 North Call on Street Tallahassee, Florida 32302-3300 Fred W. Baggett, Esq. ROBERTS, BAGGETT, LaFACE, RICHARD, & WISER P.O. Drawer 1838 Tallahassee, Florida 32302 E. G. Boone, Esq. P.O. Box 1596 Venice, Florida 34284 Steven R. Bechtel, Esq. MATEER, HARBERT, FREY BECHTEL AND PHALIN, PA P.O. Box 2854 Orlando, Florida 32802 P. Joseph Wright, Esq. MURRAH AND DOYLE, P.A. P.O. Box 1328 Winter Park, Florida 32790 David Pingree, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32301
Findings Of Fact Galencare, Inc., d/b/a Northside Hospital ("Northside") and NME Hospitals, Inc., d/b/a Palms of Pasadena Hospital ("Palms") were litigants in administrative proceedings concerning the Agency For Health Care Administration's ("AHCA's") preliminary action on certificate of need applications. Northside moved to dismiss Palms' application based on defects in the corporate resolution. The resolution is as follows: RESOLVED, that the Corporation be and hereby is authorized to file a Letter of Intent and Certificate of Need Application for an adult open heart surgery program and the designation of three medical/surgical beds as a Coronary Intensive Care Unit as more specifically described by the proposed Letter of Intent attached hereto. RESOLVED, that the Corporation is hereby authorized to incur the expenditures necessary to accomplish the aforesaid proposed project. RESOLVED, that if the aforedescribed Certificate of Need is issued to the Corporation by the Agency for Health Care Administration, the Corporation shall accomplish the proposed project within the time allowed by law, and at or below the costs contained in the aforesaid Certificate of Need Application. RESOLVED, that the Corporation certifies that it shall appropriately license and immediately there- after operate the open heart surgery program. In its Motion, Northside claimed that the third and fourth clauses in the Resolution are defective, the third clause because it does not "certify" that the time and cost conditions will be met and the fourth for omitting "adult" to describe the proposed open heart surgery program. Northside relies on the language of the statute requiring that a resolution shall contain statements . . .authorizing the filing of the application described in the letter of intent; authorizing the applicant to incur the expenditures necessary to accomplish the proposed project; certifying that if issued a certificate, the applicant shall accomplish the proposed project within the time allowed by law and at or below the costs contained in the application; and certifying that the applicant shall license and operate the facility. Subsection 408.039(2)(c), Florida Statutes. Northside also relies on Rule 59C-1.008(1)(d), which is as follows: The resolution shall contain, verbatim, the requirements specified in paragraph 408.039 (2)(c), F.S., . . . Palms' filed the Motion For Sanctions against Northside on November 15, 1993, pursuant to Subsection 120.57(1)(b)5 for filing a frivolous motion for an improper purpose, needlessly increasing the cost of the litigation, with no legal basis. Northside's claims that the Resolution was defective were rejected in the Recommended Order of Dismissal of January 11, 1994, amended and corrected on January 26, 1994, and not discussed in AHCA's Final Order of March 15, 1994.
Findings Of Fact Petitioner is a board-certified physician radiologist. At the time of filing his Florida application, Petitioner had been licensed to practice medicine in Michigan since 1983 and New Mexico since 1986. Petitioner, who was born on June 21, 1956, received his undergraduate and medical education from Michigan State University where he received degrees in zoology and medicine, respectively. He received his Doctor of Medicine degree on June 11, 1982. Petitioner completed a four-year residency at the Henry Ford Hospital in Detroit, Michigan, in 1986. Petitioner's residency was devoted to radiology. In his final year, Petitioner's 25 fellow residents elected him as chief resident on the basis of his integrity, competence, and good moral character. Petitioner's duties as chief resident required him to communicate the problems of residents to the hospital administrators. Many of the residents' complaints centered around the gastrointestinal radiology program, which was headed by Dr. Stuart Simms. From time to time, Petitioner presented these grievances to Dr. Simms and other appropriate persons. As a result, the relationship between Petitioner and Dr. Simms gradually deteriorated. After completing the four-year residency, Petitioner accepted a one- year fellowship at the University of New Mexico Hospital. Petitioner was to divide his time equally between interventional radiology and magnetic resonance. Interventional radiology involves the placement of a dye into the affected part of the patient's body and the subsequent tracking of the dye within the body. Two interventional radiological procedures are the angiogram, which involves the placement of a tracking substance in the patient's arteries, and the myelogram, which involves the placement of a tracking substance in the patient's spine. Shortly before Petitioner's arrival at the University of New Mexico Hospital, the interventionist radiologist resigned from the staff. Petitioner therefore began performing unsupervised interventional radiology procedures immediately upon his arrival at the hospital. The working environment at the University of New Mexico Hospital was far different than that at the Henry Ford Hospital. In general, the radiology work was less sophisticated at the University of New Mexico Hospital where, for instance, one or two angiograms might be performed in a day as compared to 12 a day at the Henry Ford Hospital. Also, the equipment at the University of New Mexico Hospital was less sophisticated and the technical staff less experienced in the types of radiology common at the Henry Ford Hospital. In the face of these challenges, Petitioner displayed inadequate interpersonal skills. Before long, his impatience with the technical staff's resistance to change led to recurring conflicts between Petitioner and the staff. Petitioner became the target of complaints from non-physician staff persons. These complaints included his failure to flush catheters frequently enough and failure to follow proper procedures in obtaining patient consents. The complaints were insubstantial and generally involved the proper exercise of physician discretion. At no time during the one year that Petitioner worked at the University of New Mexico Hospital were his privileges regarding interventional radiology limited or restricted. At all times, Petitioner performed interventional procedures, including angiography. At one point during the year, Dr. Fred Mettler, who was director of internal radiology at the University of New Mexico School of Medicine, offered Petitioner a job in interventional radiology, including angiography. However, as a result of the above-described problems, Dr. Mettler later restricted the offer of employment to interventional radiology not involving angiography. After leaving the University of New Mexico Hospital, Petitioner accepted a fellowship at Johns Hopkins University Hospital where he has worked since June, 1988, in the area of neuroradiology. Petitioner has performed interventional radiology on almost a daily basis and, in the first six months of his fellowship, has performed under supervision approximately 20 angiograms and 60 myelograms. The Board of Medicine received several letters of recommendation concerning Petitioner. Most letters of recommendation are favorable, and such letters include the period during which Petitioner was a resident at Henry Ford Hospital and a fellow at the University of New Mexico Hospital. Two of these letters recommending Petitioner highly were from the successive chairmen of the diagnostic radiology department at Henry Ford Hospital. However, two letters were unfavorable. These were from Dr. Simms and Dr. Mettler. Dr. Simms rated Petitioner poor in the areas of integrity and his professional relationship with teaching staff and colleagues. He described Petitioner as "self-centered, egotistical, and devious." He recommended Petitioner with some reservation. Dr. Mettler initially recommended Petitioner with some reservation, although he later upgraded his recommendation to "qualified and competent," which is still one rank below "outstanding." Dr. Mettler did not rate Petitioner poor in any area, but rated him only fair in the areas of research potential and his professional relationship with teaching staff, colleagues, and nursing staff. Petitioner has proven that he is of good moral character and integrity. Petitioner has also proven that he has the competence to, and in fact does, practice medicine with the requisite skill and safety. The common complaint of Dr. Simms and Dr. Mettler concerning unsatisfactory professional relationships with non- patients, which is not borne out by other recommendations received by the Board of Medicine, is partially justified. Petitioner clearly suffers from an intellectual arrogance, which has at times interfered with his ability to deal with physicians and technical staff persons whom he deems to be his intellectual inferiors. However, there is no evidence that this annoying characteristic has contributed to anything more than, as Dr. Simms put it, a few burned bridges with respect to certain professional relationships. There is no evidence that this characteristic has impaired Petitioner's ability to practice medicine safely.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that a Final Order be entered granting Petitioner a license by endorsement to practice medicine. DONE and RECOMMENDED this 8th day of February, 1989, in Tallahassee, Florida. ROBERT E. MEALE Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 8th day of February, 1989. APPENDIX Treatment Accorded Petitioner's Proposed Findings 1-2. Adopted. First sentence adopted. Remainder rejected as subordinate or irrelevant. First sentence adopted. Remainder, except last sentence, rejected as recitation of testimony. Last sentence is rejected as against the greater weight of the evidence. On balance, Dr. Simms' evaluation is entitled to little weight in the face of other factors, such as Petitioner's election as chief resident and favorable recommendations from other persons involved in the Henry Ford Hospital program, including Dr. Simms' superiors, during the same period of time. However, Petitioner cannot be absolved of all blame given his proclivity toward intellectual arrogance. Rejected as subordinate. The recommendations of the two chairmen have been adopted. Remainder rejected as recitation of testimony and irrelevant. Rejected as recitation of testimony and irrelevant. Rejected as irrelevant. First sentence adopted. Reference to 20 angiograms and 60 myelograms in third sentence adopted. Remainder rejected as irrelevant and cumulative. 10-11. Rejected as irrelevant. Adopted in substance. First sentence adopted. Remainder rejected as against greater weight of the evidence. Treatment Accorded Respondent's Proposed Findings 1-6. Adopted. 7. First sentence rejected as irrelevant. Remainder adopted. 8-9. Rejected as recitation of testimony. 10-11. Adopted. 12. Rejected as recitation of testimony. 13-14. Adopted. 15. Adopted in substance. 16-17. Rejected as irrelevant. 18. First sentence adopted. Second sentence rejected irrelevant. as 19. Rejected as irrelevant. Adopted insofar as Petitioner has had difficulties with Dr. Simms, Dr. Mettler, and various staff persons at the University of New Mexico Hospital. Also adopted insofar as to suggest intellectual arrogance on the part of Petitioner. Rejected insofar as to suggest that these shortcomings have been sufficiently prevalent or serious as to impair Petitioner's good moral character or ability to practice medicine safely. Rejected as against the greater weight of the evidence. COPIES FURNISHED TO: JAMES F. PAGE, JR., ESQ. GRAY, HARRIS & ROBINSON, P.A. P.O. BOX 3068 ORLANDO, FL 32802 WILLIAM B. FITZGERALD, ESQ. 1000 FIRST FEDERAL BUILDING DETROIT, MICHIGAN 48226 ANN COCHEU, ESQ. ASSISTANT ATTORNEY GENERAL THE CAPITOL SUITE 1603 TALLAHASSEE, FL 32399-1050 KENNETH D. EASLEY, ESQUIRE GENERAL COUNSEL DEPARTMENT OF PROFESSIONAL REGULATION 130 NORTH MONROE STREET TALLAHASSEE, FL 32399-0750 DOROTHY FAIRCLOTH EXECUTIVE DIRECTOR BOARD OF MEDICINE 130 NORTH MONROE STREET TALLAHASSEE, FL 32399-0750
The Issue Is Respondent guilty of violating Section 458.331(1)(t), F.S., failure to practice medicine with that level of care, skill and treatment which is recognized by a reasonably prudent similar physician as being acceptable under similar conditions and circumstances; and/or, Is Respondent guilty of violating Section 458.331(1)(m), F.S., failing to keep written medical records justifying the course of treatment of the patient; and, If Respondent is guilty of the foregoing charge(s), what is/are the appropriate penalties?
Findings Of Fact At all times material, Respondent was a licensed medical physician, holding Florida license number ME 0027524. At all times material, Respondent was employed by the Department of Corrections and was responsible for primary health care at the sick bay of Berrydale Forestry Camp and at Century Correctional Institute Infirmary. Standard operating procedure was for Respondent only to see patients at Century Correctional Institute Infirmary. Century Correctional Institute is a major correctional institution. Its infirmary has basic primary care equipment. Berrydale is an ancillary work camp with about 280 inmates as opposed to the 1,000 or so at Century. At all times material, nurses routinely conducted sick call at Berrydale. After triage, the nurses would schedule those cases requiring a physician to see the Respondent physician at Century Infirmary. Respondent would then determine the care needed for each referred patient. He could prescribe medication, admit patients to the infirmary, or refer patients to Jay Hospital. Jay Hospital is the hospital that provides acute care for inmates who become acutely ill at either Berrydale or Century. Jay Hospital is not part of the Department of Corrections. Pursuant to the testimony of Charles A. Rosenberg, M.D., who was accepted as an expert medical physician, the standard for health care in prison is the same as for health care which would be delivered to anybody who seeks it in the community. While employed by the Department of Corrections, Respondent treated Patient S.M., a 33 year old male inmate assigned to Berrydale Forestry Camp. On September 17, 1991, Respondent saw S.M. who had presented with left foot pain and an acute upper respiratory infection. Respondent prescribed Motrin for the pain and an expectorant for S.M.'s cough. On September 20, 1991, and on September 23, 1991, Patient S.M. was seen by nurses at Berrydale sick call. At that time he was complaining of dizziness and night sweats. The dizziness had been of two weeks' duration. S.M. was mildly afebrile at the time of these visits. On September 20, 1991, S.M. presented to the nurses with a temperature of almost 101 degrees. On September 26, 1991, S.M. was complaining of fever, sore throat, and dry cough of several weeks' duration. He was sent, upon Respondent's orders, to the emergency room of Jay Hospital. Jay Hospital took a history from S.M. of dry cough, fever, vague abdominal pain and a sore throat for several weeks' duration. During the September 26, 1991 physical examination given by Jay Hospital's emergency room physician, Dr. Rummel, S.M. was noted to have a small white plaque on his hard palate. The emergency room physician questioned whether this might be a fungus infection known as candida albicans. The emergency room physician's diagnosis at that point was early bronchitis, or bronchitis upper respiratory infection, pharyngitis, and gastroenteritis. He felt something else was going on, but in the emergency room setting, he only took care of the acute problem. In his opinion, S.M.'s blood tests were essentially normal, showing an acute but not very severe infection and mild anemia. In his opinion, the remaining test results, including blood, urine and liver function, were non- specific, non-diagnostic, or consistent with gastroenteritis. S.M.'s chest x-ray revealed no acute changes, but there was some interstitial (between the lobes of the lungs) changes which might be early pneumonia. The emergency room physician prescribed Ceftin, a broad spectrum antibiotic, with rest and observation by the prison physician. He expected that S.M.'s condition would be followed up by Respondent within 48-56 hours to determine more specifically what further treatment S.M. needed. According to registered nurses Goetsch and Hoyt, broad spectrum antibiotics should begin to have an effect on the patient within 24 hours. Upon all evidence, the failure of an antibiotic to have an effect in that timeframe may be reason to further evaluate the patient or change antibiotics. A copy of the emergency room paperwork with lab results was given to the guard accompanying S.M. to take back to Century Correctional Institute. It was Dr. Rosenberg's expert testimony that if the white patch on S.M.'s hard palate were indeed candida albicans, it should have alerted Respondent to a lowered immune deficiency. To be certain a white patch is, in fact, candida albicans, a test is necessary, but it is common for medical physicians and registered nurses to act upon a sight evaluation. Dr. Rosenberg also opined that the interstitial changes showing up on S.M.'s September 26, 1991 chest x-ray are not uncommon in beginning pneumocystic carinnii pneumonia (PCP) and that S.M.'s symptoms, his minimally abnormal urine and liver function tests done at Jay Hospital, and his admitted prior intravenous drug use should have aroused Respondent's "level of suspicion" to do additional tests to determine if HIV-AIDS and/or PCP were present. PCP is the most common complication of undiagnosed AIDS. Contrary to Respondent's assertions, it is found upon Dr. Rosenberg's testimony that in an inmate population with a high HIV seropositivity, several percent of all inmates have positive HIV, a precursor to AIDS. Respondent knew at the very latest on September 27, 1991 that S.M. had a past history of unsafe sex and intravenous drug use, two indicators of high risk for HIV- AIDS. According to Dr. Rosenberg, it would have been appropriate and within the standard of reasonable medical practice if, no later than September 27, 1991, the day after S.M. visited Jay Hospital, Respondent had, in the Century Infirmary, taken a sputum examination for PCP and/or a lymphocyte CD-4 count to get an indication of lowered immunity. Respondent did not do either the sputum examination or CD-4 test which would have confirmed the presence of PCP, but not necessarily confirmed HIV or AIDS. Dr. Rosenberg further indicated that the standard of care under the circumstances would have been for the Respondent to have seen and examined S.M. the day after he was returned from Jay Hospital, that is, on September 27, 1991, and at that time taken a complete history and begun treatment with an antibiotic specific to PCP, preferably Bactrim. Although 100 percent of AIDS patients eventually die, those with the first one or first several attacks of PCP pneumonia get well from the pneumonia and go on, if they are treated properly. There is no appropriate medical record to show that Respondent ever actually took a full history or did a full physical examination of S.M. (See Findings of Fact 30,37,57-61) S.M. was not seen by Respondent upon his return to Century either on September 26 or 27. He was returned to the general prison population on September 26, 1991. On September 27, 1991, S.M. signed a form for an HIV-AIDS serology test and blood was drawn by a nurse at Century for that purpose and sent to a Jacksonville laboratory. S.M.'s form was countersigned by the nurse who counselled him and by Respondent. Thereafter, Respondent did not see or treat S.M. until September 30, 1991. On that date, Respondent diagnosed acute bronchitis and wrote in the patient's records that the medication prescribed at Jay Hospital should be continued. Respondent's notes do not reflect the taking of a history from S.M. or of his giving S.M. a physical. His notes are inadequate by reasonable medical standards. There is no firm evidence that the prescription for Ceftin from Jay Hospital was ever filled or administered to S.M. back at Century or Berryville. The fact that S.M. did not get the Ceftin did not make any difference in his condition, because it was not a specific therapy for his condition, such as Bactrim would have been. On September 30, 1991, S.M. was again put back into the general prison population. Respondent's explanation for why he did not personally evaluate or treat S.M. from September 17 to September 30, a total of 13 days, despite all indications of S.M.'s having both an acute and a chronic condition, seems to be that he did not have the results of the HIV- AIDS test, that the nurses did not schedule S.M. for the Infirmary and that Respondent was seeing approximately 40 patients daily in Century Infirmary during his 7:00 a.m. to 4:00 p.m. Monday through Friday shift. This explanation does not comport with good medical practice or professional standards. Contrary to Respondent's assertion that he could not treat S.M. for PCP or AIDS until he received a firm test result of HIV-AIDS, the undersigned accepts as more credible and compelling the testimony of Dr. Rosenberg and all of the nurses called to testify to the effect that Respondent should have begun aggressive treatment with specific antibiotics, such as Bactrim. Dr. Rosenberg's expert testimony also is accepted that it is common recommended medical practice with life threatening illnesses to treat in anticipation of receiving positive results from HIV serology, CD-4 lymphocyte counts, and sputum exams for PCP and to begin specific therapy while waiting for such test results to come back. If the diagnosis made prior to test confirmation is incorrect, the physician can discontinue the therapy with little harm to the patient, but when one waits until the tests come back and the patient has become terminally ill during the interim, it makes no difference if one has the diagnosis. If the disease has progressed so far that the patient is going to die, having the diagnosis confirmed by test results is moot comfort. While it would be outside the standard of care to have aggressively treated S.M. without any such tests, it would have been reasonable to make the tests and start the treatment with Bactrim while awaiting the test results. On October 2, 1991, S.M. was seen again at Berrydale sick call. The inmate complained of high fever (100.2 degrees), chills, and of feeling bad. He was coughing and bringing up a moderate amount of mucus. The lung examination by the nurse indicated some abnormalities. In the afternoon, S.M. began vomiting. For this reason and because of increased temperature elevation, he was transferred to the Century Infirmary for observation. Upon arrival, S.M.'s temperature was 105 degrees. On October 3, 1991, S.M. was admitted to Century Infirmary. There are no admitting notes, history, physical exam or progress notes by the Respondent. Respondent was notified, but did not personally examine the patient. Respondent ordered the continuation of cough medication and Tylenol. On the morning of October 3, 1991, the patient's temperature was below normal, but he was sweating profusely. It is not uncommon for people to have remitting and spiking temperatures with pneumonia and other acute infections. Minimal treatment was given to the patient: a tub bath and ice packs for the temperature, Phenergan for nausea and vomiting, and Tylenol for the temperature. That same evening, S.M. got worse. After several attempts, Respondent was notified by phone. He ordered an antibiotic called Keflex. On the morning of October 4, 1991, a nurse asked Respondent if they should start an I.V. to replace fluids. Respondent rejected that idea and ordered the nurses to just force fluids by mouth. Between October 2 and October 5, 1991, several nurses urged Respondent to try antibiotics by I.V. Respondent's explanation as to why he ordered no I.V. for any purpose was that he did not think an I.V. was available due to Century being a new facility under construction. This assertion is not credible, given the circumstances and responsibilities of his primary physician status and the repetitive requests by the nurses. The patient was unable to drink and was vomiting, so he could not take fluids by mouth. On October 4, 1991, S.M.'s symptoms continued to get worse. He complained of severe chills, nausea, fever (103 degrees) and being unable to take fluids. Candida albicans was again noted by a nurse's sight evaluation. When Respondent was phoned by the nurse on duty, Respondent said to give no treatment and monitor the temperature every 30 minutes. Later, when the Respondent was informed that the patient had a temperature of 104 degrees and was experiencing tremors, he ordered Tylenol and had the patient sent to Jay Hospital for x-rays and a complete blood count (CBC). S.M.'s chest x-ray at Jay Hospital on October 4, 1991 was only read by a radiology technician, not a radiologist M.D., but the technician's information that the x-ray revealed that S.M. had infiltrates in the lungs and other information that the CBC indicated that S.M.'s hematocrit was very low (probably profound anemia) was relayed to the Respondent by telephone by Jennifer Flower- King, the Century L.P.N. who had accompanied S.M. to Jay Hospital. She asked permission to take the inmate to Jay Hospital's emergency room and admit him because he was so very sick. Respondent ordered the nurse to "bring him back" to Century Infirmary. S.M. was returned to Century Infirmary later on October 4, 1991. On Saturday, October 5, 1991, S.M.'s temperature was 102.2 degrees. He also had heavy sweating and was very weak. Abnormal sounds were heard when the nurse listened to the patient's lungs. Respondent was notified, and he ordered Phenergan suppositories to suppress the nausea and vomiting. By 1:15 p.m., S.M.'s temperature was 105 degrees. On October 5, 1991, after much prompting from the nurses, Respondent gave telephoned instructions to send S.M. to Jay Hospital for admission because there was no improvement in his condition. According to Respondent's deposition testimony, by the time he sent S.M. to Jay Hospital on October 5, Respondent had "confirmatory tests" that S.M. was HIV- positive. At formal hearing, he testified that these test results were relayed to him at home by telephone by a nurse at Century. Respondent did not have the results of the HIV-AIDS serology report at any time. He got only the results of some type of confirmatory HIV tests on October 5, 1991 when he finally sent S.M. back to Jay Hospital where S.M. expired shortly thereafter on October 6, 1991. PCP in S.M. was not positively diagnosed until an autopsy was performed after S.M. died on October 6, 1991. The initial diagnosis at Jay Hospital on October 5, 1991 was pneumonia. On October 5, 1991, Jay Hospital's emergency room physician did not receive an adequate medical record or history of S.M. from Century upon his arrival at the Jay Hospital emergency room. He relied on S.M.'s oral history of his symptoms. That consisted of what has been related supra. S.M. also told the treating physician that he had no appetite and had approximately a five pound weight loss over the last month. S.M. admitted to abusing drugs in the past. Because S.M. had been an I.V. drug abuser and was acutely ill, the emergency room physician, Dr. Raney, thought there was a possibility that S.M. had PCP. At Jay Hospital, S.M. was given oral and I.V. antibiotics including Bactrim, and I.V. fluids. On Sunday, October 6, 1991, at 6:44 p.m., S.M. experienced respiratory arrest and died. A subsequent autopsy revealed PCP, positively. On Monday, October 7, 1991, the day following S.M.'s death, his records were sealed in accordance with the policy of the Department of Corrections. Subsequent to the records being sealed, Respondent sent two pages to the Department of Corrections to be added to the medical records of Patient S.M. showing that on Thursday, October 3, 1991 he had performed a physical on S.M. and diagnosed PCP at that time, and that S.M. was discharged from Century Infirmary on that date with his diagnosis of PCP. Respondent's explanation for this alteration or addition to S.M.'s medical records was that he could not find the records when he decided to make the late entry upon his return to work on Monday, October 7, 1991, since by that time the records had been sealed. The correct way to make a late entry in medical records is to indicate the date, the time, the annotation of late entry, and why it was a late entry. Respondent's two pages of late entries did not meet this standard of medical correctness. Moreover, Respondent's after-the-fact entries are clearly incorrect because they report that S.M. was transferred to Jay Hospital on October 3, when in fact, Respondent never personally saw S.M. on October 3, 1991 and S.M. was not transferred until October 5, 1991. Also, they show PCP as the discharge diagnosis from Century Infirmary when in fact, Respondent asserted directly contrariwise throughout formal hearing to the effect that he had never diagnosed S.M. with PCP until October 5 when he got telephoned confirmation of HIV-AIDS and shipped S.M. out to Jay Hospital. Respondent further asserted throughout formal hearing that he could not legitimately diagnose PCP without positive tests. Further, all other evidence confirms that the first recorded diagnosis of PCP was at the autopsy after October 5, 1991. (See Findings of Fact 33-34 and 50) On October 11, 1991, Respondent was terminated from his position as a physician from the Department of Corrections. Respondent was terminated for his failure to follow established agency policy regarding his treatment of inmate S.M. and because he had entered into S.M.'s record a physical form and discharge summary that were not only incorrect, but were late entries which were not identified as late entries. Upon the evidence as a whole, it is found that Respondent did not provide to S.M. health care commensurate with that to be found in the community at large. Upon the evidence as a whole, it is found that Respondent's medical records of S.M. did not justify his course of treatment of S.M.
Recommendation Upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Board of Medicine enter a final order that: Finds the Respondent guilty of violating Sections 458.331(1)(m) and (t) F.S.; Reprimands Respondent; Requires Respondent to pay an administrative fine in the amount of $6,500.00; Places Respondent on probation for a period of three years with terms to be determined by the Board of Medicine. RECOMMENDED this 29th day of May, 1996, at Tallahassee, Florida. 1550 _ ELLA JANE P. DAVIS, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399- (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 29th day of May, 1996. APPENDIX TO RECOMMENDED ORDER CASE NO. 95-5323 The following constitute specific rulings, pursuant to Section 120.59(2), F.S., upon the parties' respective proposed findings of fact (PFOF). Petitioner's PFOF: 1-15, 17-23, and 25-59 Accepted, except for unnecessary, subordinate, and/or cumulative material which is non-dispositive and not adopted. Also, immaterial matters have been excluded and some adjustments of text have been made to more accurately reflect the record as a whole rather than the isolated testimony/evidence referenced in the proposals. 16 The greater weight of the credible evidence is that additional tests should have been conducted by Respondent no later than 9/27/91. Therefore, the proposal is rejected as stated. 24 Rejected as immaterial. 60 Rejected as argumentation and/or facts subordinate to the facts as found. Petitioner's second set of paragraphs 1-27 under the sub-heading, "ARGUMENT," contain references to the record. However, having been designated by the proponent agency as mere "argument," rulings thereon will not be made pursuant to Section 120.59(2) F.S. Respondent's PFOF: None submitted. COPIES FURNISHED: William Frederick Whitson, Esquire Agency for Health Care Administration 1940 North Monroe Street Tallahassee, Florida 32399-0792 Jung Soo Liu, M.D. 1196-A Ellison Drive Pensacola, Florida 32503 Marm Harris, Executive Director Agency for Health Care Administration Board of Medicine 1940 North Monroe Street Tallahassee, Florida 32399-0792 Jerome W. Hoffman, General Counsel Agency for Health Care Administration 1940 North Monroe Street Tallahassee, Florida 32399-0792
Findings Of Fact The facts, as stipulated to by the parties and as set forth above, are hereby adopted.
